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PETITIONER: TATA TEA LTD.

       Vs.

RESPONDENT: THE COMMMISSIONER OF CUSTOMS, CHENNAI

DATE OF JUDGMENT:       25/11/1999

BENCH: S.P.Bharucha, A.P.Misra, R.C.Lahoti

JUDGMENT:

     R.C.  Lahoti, J.

     The  appellant is a tea company.  In the year 1982  it imported  two  decanter machines from Germany.  The  customs duty,  additional duty and the other duties leviable thereon were  duly  paid.   The machines were installed at  the  tea factory  of  the appellant situated at Munnar (Kerala).   In the  year  1992  some parts of the  machine  requiring  such repairs  as could not be carried out in India, were sent  to Germany   after  obtaining  previous   permission   of   the Government of India.  The parts were repaired and thereafter re-imported  in July, 1993.  The appellant claimed exemption from  payment  of customs duty under  Notification  No.13/81 which  was denied by the Assistant Collector of Customs.  An appeal preferred by the appellant before the Commissioner of Customs  (Appeals)  was  allowed.  The Revenue  preferred  a further  appeal before the CEGAT which has been allowed  and the  order  of the Assistant Collector of Customs  restored. Cross  appeal preferred by the appellant has been dismissed. Aggrieved  by the order of Tribunal, the appellant has filed these  appeals under Section 130 E of the Customs Act, 1962. The  only  question  arising  for decision  is  whether  the appellant  is  entitled to benefit of Notification  No.13/81 read  with  Export  Import   Policy,  1992-97   (hereinafter ‘Policy’,  for  short).   Export and Import  Policy  1992-97 announced  certain  benefits and privileges to  100%  export oriented  units (EOUs).  Vide order dated 9th June, 1992 the Government  of India declared the appellant a unit  entitled to  facilities  and  privileges admissible  under  the  100% export  oriented scheme by permitting the conversion of  the appellant from existing domestic tariff area (DTA) into 100% EOU  at Munnar in the State of Kerala for the manufacture of instant  tea powder and aqueous tea aroma (by-product)  upto the  specified capacity.  This decision of the Government of India  entitled  the appellant to import additional  capital goods  worth Rs.300 lacs CIF for the project as per the list enclosed  which  included decanters, two in number.  It  was also  specified  that  the  import  of  capital  goods,  raw materials  and  components for production under this  scheme shall  be exempt from customs duty.  Availing the benefit of EOU sanction letter the appellant had imported capital goods (other than those in issue) worth Rs.225 lacs.  A balance of Rs.75 lacs entitlement was still available to the appellant.

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According  to the appellant the cost of repairs incurred  in Germany  was  Rs.38,06,017/- which was declared by it to  be the  value of the goods for the purpose of re-importation in terms of Notification no.13/81.

     Notification  No.13/81 has been issued in exercise  of powers  conferred  by sub-section (1) of Section 25  of  the Customs  Act,  1962.   The Central Government  has  exempted capital  goods, inter alia, when imported into India for the purpose  of manufacture of articles for export out of  India by  100%  EOUs provided that the importer has  been  granted necessary  licence for the import of the goods for the  said purpose.   This  is  one of the several conditions  that  is required to be satisfied.

     The  Import  Export  Policy  1992-97,  vide  para  24, provides that second hand capital goods and any other second hand  goods  shall not be imported unless permitted by  this policy  or  in  accordance  with a licence  issued  in  this behalf.   Para  25  catalogues  (a) to (l)  sectors  of  the industry for which second hand capital goods may be imported without  a licence.  Admittedly, the appellant does not fall in  any of such categories.  Para 26 provides that any other second  hand capital goods (i.e.  other than those specified in  para  25) may be imported in accordance with  a  licence issued  in  that behalf.  Para 31 permits  imported  capital goods or parts thereof being sent abroad for repairs and re- imported  but subject to certain specified conditions.  Para 159  permits conversion of an existing domestic tariff  area (DTA)  unit into an EOU.  It is specifically provided -  "no concession  in  duties and tax shall, however, be  available under  the scheme for plant machinery and equipment  already installed".   Para 172 allows the units to re-import,  after repairs  abroad,  machinery equipment exported by  them  for this  specific  purpose and payment of foreign exchange  for this purpose.

     There  is  yet another notification  No.204/76  issued under Section 25(1) of the Customs Act whereby articles when re-imported  into  India  after  having  been  exported  for repairs  subject  to  compliance   with  certain   specified conditions have been declared liable to payment of duty only on  the value of such re-imported goods which would be  made up  of  the fair cost of repairs carried out plus  insurance and freight charges both ways.

     The  Tribunal has referred to and made analysis of all the  abovesaid provisions and then concluded that the Import Export Policy 1992-97 read with Notification

     No.13/81 gives exemption to the goods imported for the first  time  in India and does not cover the  goods  already imported and sent abroad for the purpose of repairs and then re- imported to India.

     Having  heard the learned counsel for the parties,  we are  of the opinion that the order of the Tribunal cannot be found fault with.  Under Section 20 of the Customs Act, 1962 read  with the definition of ‘import’ as given in clause  23 of Section 2, imported goods would include re-imported goods as  well  and therefore the goods sent out of India and  re- imported would also be liable to payment of duty in the same manner  in which they would have been liable if imported for the  first  time in India.  In the matter of goods sent  out for  repairs only there is exemption notification no.204/76.

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The  benefit  thereof  has been taken by the  appellant.   A perusal  of  Import  Export  Policy  1992-97  and  Exemption Notification No.13/81 clearly shows that the benefit thereof was not available to the appellant in the case at hand.  The machinery  parts  exported  for   repairs  and   re-imported thereafter did not require any licence for the import of the goods,  which licence is one of the conditions precedent  to attract applicability of Notification No.13/81.  Same is the inference  which  flows  from the  provisions  contained  in paragraphs 24, 25, 26 and 31 of the Policy.  Para 172 of the Policy  makes it legal to re-import after repairs abroad the machinery  and  equipment  exported   specifically  for  the purpose  of  repairs  and  also allows  release  of  foreign exchange payment for the purpose.  Both these things may not have  been permissible but for para 172 of the Policy.  This is  the only effect of para 172.  Reliance on para 172 so as to   link   the  Policy   with  Notification   No.13/81   is misconceived.   Para 159, while permitting conversion of  an existing  DTA into EOU, specifically excludes any concession in duties and tax (under the Policy) being made available to plant  and machinery already installed.  The parts  exported and  re-imported  by  the appellant were  of  the  machinery ‘already  installed’  on  the date of  promulgation  of  the Policy.  They were certainly not covered thereunder.

     For the foregoing reasons, the appeals are held liable to be dismissed and are dismissed accordingly though without any order as to the costs.