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Hon'ble Mr.Justice Syed Shah
Mohammad Quadri (Chairman)
Mr.Somnath Pal (Member)
Dr.B.A.Agrawal (Member)
Ruling No. AAR/28(Cus)/2006
in
Application No.AAR/02(Cus)/2006
Applicant
Mr. Akash Jain,
130, Rishabh Vihar
Delhi - 110092
Commissioner
concerned Commissioner of
Customs(Prev.)
Amritsar
Commissioner of Customs (Prev.)
Lucknow
Present for
the Applicant Mr. Kamal Mehta,
Advocate
Present for the
Commissioner Shri A.K. Roy, Joint CDR
concerned
CESTAT, New Delhi
Shri Sanjay Saran, Addl.
Commissioner, Amritsar
Shri Gaurav Kumar, Jt.
Commissioner, Lucknow
R U L I N G
( By Mr. Somnath Pal, Member )
The applicant, who
is setting up a joint venture with non-resident M/s Uniexcel Ltd., Far East
International
Plaza, Room No. 1206, No. 83, Loup Shah Guan Rd., Changning District New Town
Centre, Shanghai, China-200336, has filed this application seeking advance
ruling on three questions. In Annexure-I to the application, the applicant has
stated that the non-resident is interested in setting up a knitting/textile unit
in India and for this purpose he is interested in having a joint venture with
the applicant who is a resident in India. The proposed unit requires
consumption of Wool as raw material and therefore they are keen in taking the
benefit of Customs Notification Nos. 38/96 and 63/94 for importing duty free
wool from China from Gunji in Pithoragarh, Uttaranchal or Village Namgaya
Shipkila in Kinnaur District of H.P. The unit will be set up in Baddi, H.P. or
in Haryana with an estimated investment of US $ 2 millions in machinery.
In Annexure-II to
the application, the applicant has submitted that import of wool is allowed
under OGL (Open General Licence). By Notification No. 63/94, Government of
India has set up Gunji in Uttaranchal and Village Namgaya Shipkila in H.P. as
Customs Notified Stations for import/export of permitted goods or services. By
Notification No. 38/96, Government of India has exempted from import duty (both
basic plus CVD) on wool if imported from these stations from China. The
applicant has enclosed copies of these two notifications alongwith their
application. The applicant has further stated that the plain reading of the two
notifications does not put any limitations on the class of persons who can
import through these stations nor does it put any limitation on the use of goods
so imported for taking benefit of duty exemption. In the light of the above the
applicant has raised the following three questions for getting advance rulings
thereon :-
"(a) Are we
allowed to import through these stations in view of notification no. 63/94?
(b)
If we import wool from these stations, i.e.
Gunji in Uttranchal or Village Namgaya Shipkila in H.P., will we get the benefit
of duty free import under notification no. 38/96?
(c)
Is there any limitation under these
notification regarding the actual user of the goods so imported. Means, if we
import duty free wool from these station, can we sell the surplus in open
market, if so desired?"
2. In his comments, the
Commissioner has however, contended that the benefit of exemption Notification
No. 38/96 is not admissible to the applicant who intends to import the wool as
raw material for a knitting/textile unit. In support of his submission, the
Commissioner has referred to para 2.13 of the Foreign Trade Policy, 2004-09, ITC
Public Notice No. 33/92-97 dated 17.7.92 and ITC Public Notice No. 5/92-97(PN)
dated 20.7.92 regulating the border trade across Indo-China border, Office
Memorandum F.No. 2/9/2005-FT(NEA) dated
2.5.2005 clarifying that as per the MOU signed with
China, the border trade is meant only for local
residents of border on both the sides and permitting the import and export of
identified items, Board's letter F.No. 554/02/2005 - L.C. dated 12.8.2005
clarifying that India's trade with China has been allowed as border trade and is
meant only for Tribal communities living on either side of the border. It has
therefore been submitted by the Commissioner that the duty free import of wool
from China
through Namgaya-Shipkila-Shipki Jui Jiuba land route is permissible only for the
use of local residents and not for the commercial use of a manufacturing concern
or for the trade in open market.
3. In the course of the
hearing before the Authority the Ld. Counsel appearing on behalf of the
applicant, after some initial submissions, fairly conceded that the question (a)
raised in the application is not covered by any of the clauses of Section 28H of
the Customs Act, 1962 and hence this question was dropped by him. Therefore,
the questions (b) & (c) alone remain for consideration of this Authority. They
are to be answered only with reference to the exemption Notification No. 38/96
dated 23.7.1996.
4. We observe that the
questions (b) & (c) are, in essence, to be treated as seeking applicability in
general terms of the exemption Notification 38/96. The comments submitted by
and on behalf of the Commissioner are primarily on the issue of whether the
applicant is end to import through the notified Land Customs Stations and
along the specific land routes from China. He has then read this aspect into
the exemption Notification No. 38/96 without touching the question of general
applicability of this Notification per se. Since the applicant has agreed and
rightly so, to drop the question (a) being outside the jurisdiction of this
Authority, we do not see any necessity to express our views on the submissions
of the Commissioner.
5. On a plain reading of
the exemption Notification No. 38/96, it is clear that this has been issued by
the Central Government in exercise of the powers granted to it under Section
25(1) of the Customs Act, 1962, exempting the goods specified in column (2) of
the Table annexed to the Notification and falling within the First Schedule or
the Second Schedule, as the case may be, of the Customs Tariff Act, 1975, from
the whole of the duty of customs leviable thereon under the said Customs Tariff
Act, which is specified in the corresponding entry in column (3) of the said
Table. The relevant entry under the heading "description of goods" given in
column (2) of the Table to which the applicant has made a reference is at (g)
against Serial No. 1 of the said Table. This reads as follows :-
"(g) Goat skin, sheep
skin, horses, goats, sheep, wool, butter, common salt, raw silk, yak tail, yak
hair, china clay, borax, szaibelyite and goat cashmere, when imported into India
from China through Gunji in Pithoragarh district of Uttar Pradesh along the
Gunji Pulan (Tibet) land route or through village Namgaya Shipkila in Kinnaur
district of Himachal Pradesh along the Namgaya-Shipkila-Shipki Jui Jiuba land
route."
Under column (3) of
the Table against the Sl. No.1, the following remark appears :-
"Duty of customs leviable
thereon under the First Schedule to the Customs Tariff Act, 1975 and Additional
duty leviable thereon under Section 3 of the said Act."
As can be seen from the above,
'wool' is one of the specified goods which has been exempted from duty of
customs leviable thereon under the First Schedule to the Customs Tariff Act,
1975 and also from additional duty leviable thereon under Section 3 of the said
Act, when imported into India from China through Gunji in Pithoragarh District
of Uttar Pradesh along the Gunji Pulan (Tibet) land route or through Village
Namgaya Shipkila in Kinnaur District of H.P. along the Namgaya - Shipkila -
Shipki - Jui Juiba land route. No other condition has been laid down in so far
as (g) in column (2) of the Table is concerned. The Central Government has been
given the power to issue general exemption by notification under Section 25(1)
of the Customs Act if it is satisfied that it is necessary in the public
interest so to do. Such exemption is in respect of the goods of any specified
description and can either be absolute or subject to such conditions (to be
fulfilled before or after clearance) as may be specified in the notification.
The exemption can be from the whole or any part of duty of customs leviable
thereon. Therefore, exemption notifications are to be interpreted and given
effect to only by (i) the exact identity of the goods specified in the
notification, (ii) condition(s), if any, given in the notification which is/are
to be fulfilled before or after clearance as may be specified in the
notification and (iii) the extent of exemption of duty which is also specified
in the notification itself. We make it clear that in so far as the goods
specified in category (g) of this exemption Notification are concerned, no
condition(s) has/have been stipulated therein excepting limiting the import of
such goods from China and specifying the notified Land Customs Stations and the
land routes through which alone the import has to take place for getting the
benefit of exemption of duty under the said Notification. We hasten to add
that this ruling does not preclude the concerned authorities from
verifying/satisfying themselves as to compliance of requirements under other
Acts/Rules.
Applying this principle, we give
the rulings on the questions (b) & (c) as follows :-
Qn. (b) - On a plain reading
of the text of the category (g) in column (2) against Serial No. 1 of the Table
annexed to the Notification No. 38/96-Cus dated 23.7.96 the goods specified
therein which includes 'wool' are end to get exemption from duty when
imported into India from China through the specific Land Customs Stations and
along the specified land routes mentioned therein.
Qn. (c) - The category (g) in
the aforesaid exemption Notification does not have any actual user condition
after the specified goods are imported.
Pronounced in the open Court of the Authority on this 29th day of August, 2006.
Sd/-
Sd/- Sd/-
(B.A.Agrawal)
(Justice S.S.M.Quadri) (Somnath Pal)
Member
Chairman Member
Registered /A D
F. No. AAR/44/01(Cus)/2005
Dated: 29th August, 2006
(A) This copy is certified to be
a true copy of the Ruling and is sent to :-
1. Mr. Akash Jain, 130,
Rishabh Vihar, Delhi-110092
2. Commissioner of
Customs, Custom House, Central Revenue Building, The Mall, Amritsar-143001
3. Commissioner of
Customs, 5th & 11th Floor, Kendriya Bhawan, Sector-H,
Aliganj, Lucknow-226024
4
Member (Customs),
Central Board of Excise & Customs, North Block, New Delhi.
5. Mr.A.K.Roy,Joint
Chief Departmental Representative, Customs, Excise & Service Tax Appellate
Tribunal, West Block-2, R.K.Puram, New Delhi-66.
6. Guard File
(VIJAI KUMAR)
JOINT COMMISSIONER
Registered /A D
F. No. AAR/44/01(Cus)/2005
Dated: 5th September, 2006
(A) This copy is certified to be
a true copy of the Ruling and is sent to
:-
1. Mr. Akash Jain, 130,
Rishabh Vihar, Delhi-110092
2. Commissioner of
Customs, Custom House, Central Revenue Building, The Mall, Amritsar-143001
3. Commissioner of
Customs, 5th & 11th Floor, Kendriya Bhawan, Sector-H,
Aliganj, Lucknow-226024
4. Member (Customs),
Central Board of Excise & Customs, North Block, New Delhi.
5. Mr.A.K.Roy,Joint
Chief Departmental Representative, Customs, Excise & Service Tax Appellate
Tribunal, West Block-2, R.K.Puram, New Delhi-66.
6. Guard File
(VIJAI KUMAR)
JOINT COMMISSIONER
(B)
In view of the
provisions contained in Rule 25 of the Authority for Advance Rulings (Procedure)
Regulations, 2005, permission of the Authority is accorded for publication of
the Advance Ruling. Copy of the Advance Ruling is forwarded to:
1.
Centex
Publications Pvt. Ltd., 1512-B, Bhishma Pitamah Marg, Opp. ICICI Bank of Defence
colony, New Delhi-110 003
2.
Deeparchie
Publications, M-93, Marg-46, Saket, New Delhi-110 017
3. Excise
& Customs Cases, B-37, Sector-1, Noida-201301 (U.P.)
4. Cen-Cus
Publications, A-252, Shivalik, New Delhi-110 017
5. Taxindiaonline.com
Private Limited., B-XI/8183, Vasant Kunj, New Delhi-110 070
6. Taxmann
Allied Service Pvt. Ltd, 59/32, New Rohtak Road, New Delhi-110005.
7. www.allindiantaxes.com,
803, Kirti Shikhar, District Centre, Janakpuri, New Delhi-110058
(VIJAI KUMAR)
JOINT COMMISSIONER
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