Customs Duty Exemption Allowable on Import Of Floodlight For World Cup and One Day International Matches: CESTAT [Read Order]

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the customs duty exemption is allowable on import of flood lights installed in the stadium for all matches, including the conduct of one-day international matches. It was found that the ad hoc exemption order does not make any distinction between the fact that the World Cup international match is for non-commercial purposes and the conduct of one-day international matches is for commercial purposes. The appellant/assessee, M/s. Tamil Nadu Cricket Association (TNCA), is affiliated with the Board of Control for Cricket in India (BCCI), which has its office at M.A. Chidambaram Stadium, Chennai. The assessee imported ground light equipment, flood light luminaries, lamps, and accessories (for the installation of flood lighting systems in the stadium), etc., under 5 Bills of Entry covering the total value and cleared them at the Nil rate of customs duty as per Adhoc Exemption Order No. 338/95 dated December 21, 1995, issued by the Govt. of India, Ministry of Finance, Department of Revenue. The goods were allowed for clearance at the nil rate of customs duty as well as additional duty, subject to the conditions available in the Adhoc Exemption Order as below and also on the execution of an undertaking to the effect that the importers would abide by the conditions of the Adhoc Exemption Order. Get a Copy of Learn the Essentials of Sections 269 and 271 , Click here The department viewed that on the basis of documents received from TNCA that they had conducted one-day matches under a flood lighting system in the Chidarambaram Stadium, Chennai. The documents proved that more than three one-day matches were played using the flood lighting system, which was imported in CKD condition and assembled and erected in the Chidambaram stadium. The materials and equipment imported under the cover of Adhoc Exemption Order No. 338/95 dt. 21.12.1995 and cleared at Nil rate of duty filing the undertaking that the same will not be used for commercial purposes have been used by the appellant for commercial purposes in respect of three one-day matches, which is a violation of condition (ii) of the adhoc exemption order. The department held that the assessee has violated condition No. (ii) of the Adhoc Exemption Order and ordered confiscation of the goods, giving an option to redeem the same on payment of a redemption fine of Rs. 28 lakhs. The duty demand was confirmed, and a penalty of Rs. 22 lakhs was imposed under Section 112(a) of the Customs Act, 1962. Get a Copy of Learn the Essentials of Sections 269 and 271 , Click here The assessee contended that the purpose of the import of the flood light equipment for the M.A. Chidambaram Stadium was to make it a world-class stadium and to meet the technical requirements of television broadcasting. The exemption is granted for the import of flood lights for the stadium, which is used for conducting matches. The exemption was not given for conducting only World Cup tournaments. The Department has erroneously interpreted the condition that the goods have been imported only for use in World Cup tournaments and cannot be used for any other matches. It was argued that once the flood lights are installed and embedded in the earth, they cannot be easily removed and refixed. The facility of flood lights can be used for all matches conducted in the stadium, and these lights have become a functional part of the stadium. There is nothing in the order that the use of flood lights has to be restricted only for the World Cup. On the other hand the department contended that the assessee had imported the flood light luminaries and connected materials at the time of the conduct of the World Cup match. The ad hoc exemption order was issued with certain conditions. The second condition of the order states that the goods shall not be used for commercial purposes. In the present case, the appellant has used the flood light during the conduct of three one-day matches in 1996, 1997, and 1998. The conduct of one-day matches is commercial in nature. The appellant has violated the ad hoc exemption order, so the demand of duty is proper. Get a Copy of Learn the Essentials of Sections 269 and 271 , Click here The two member bench of Sulekha Beevi C.S. (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that the ad hoc exemption order was issued with certain conditions. The second condition of the order states that the goods shall not be used for commercial purposes. In the present case, the appellant has used the flood light during the conduct of three one-day matches in 1996, 1997, and 1998. The tribunal has held that the department has erroneously assumed that the conduct of one-day international matches is for commercial purposes. The bench viewed that the ad hoc exemption order does not make any distinction between the fact that the World Cup international match is for non-commercial purposes and the conduct of one-day international matches is for commercial purposes. The entire Show Cause Notice has been issued on assumptions and presumptions, which are liable to be quashed and set aside. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates