No customs duty payable on Commercial goods imported by research institutions for research: CESTAT [Read Order]

The Kolkata bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) allowed the appeal as customs duty cannot be levied from research institutions for the commercial goods imported for research purpose.

Both, the department as well as Hydraulic Study Department (of Kolkata Port Trust) were aggrieved against the order passed by the Commissioner of Customs (Port) Kolkata. The main issue in the matter was the admissibility of exemption Notification No. 70/81-CUS, and notice 152/94-CUS, benefit of which is dis-allowed by the adjudicating authority.

Kolkata Port Trust through its Research wing Hydraulic Study Department (HSD), that does research work in hydraulic behavior of Bhagirathi-Hooghly River system, which has been recognized as a Scientific Research and Development unit by the Ministry of Surface Transport, Government of India, imported certain goods for carrying out its objective. The importer availed duty concessions as per Notification No. 70/81-Cus and 152/94-Cus which exempts from payment of custom duty for goods that are imported by a research institution, subject to the research institution furnishing a certificate issued by the specified officer of the administrative ministry concerned, not below the rank of an Under Secretary.

The counsel who appeared on behalf of the appellant submitted that the commissioner had issued the order without complying with the directions given by the Tribunal and without verifying the correctness of the certificates issued by the Ministry and confirmed the duty amount of Rs. 7,07,77,168/- with penalty under Section 114A of the act.

The counsel also submitted that the Commissioner of Customs (Port) had failed to appreciate that the appellant was a research entity of the KoPT and proceeded erroneously with the understanding that the they had willfully suppressed the said fact and obtained the required certificates by misrepresentation. The counsel further submitted that there was evidence to the contention of the adjudicating authority that HSD was engaged in commercial activity and therefore the imported goods was not eligible to exemption benefit and further, the bill of lading and the export invoices were issued in the name of the appellant therefore, it was their rightful claim as importers to receive the exemption benefit.

The counsel who appeared on behalf of the revenue submitted that the benefit had to be strictly read into and its benefit was not accessible to the appellant as was engaged in commercial activity and the imported goods were put to commercial use.

The two-member bench consisting of R. Muralidhar (Judicial Member) and Rajeev Tandoon (Technical Member) after hearing both sides held that the appellants were eligible for the benefit and the exemption benefit had been inappropriately denied to the appellants. Therefore, the appeal filed by Hydraulic Study Department of Calcutta Port Trust was allowed and the appeal filed by the department was dismissed.

To Read the full text of the Order CLICK HERE

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