The Customs, Excise & Service Tax Appellate Tribunal, Chennai allowed the service tax exemption to Tamil Nadu Cricket Association while stating that flood light is a functional part of the stadium and can be used in world cup as well as one day international matches.
The tribunal noted that the appellant had requested to the Government for exemption from Customs duty for import of impugned goods during preparation for the World Cup, 1996.
It was further noted that the department has construed condition (ii) to mean that the appellant can use the flood lights only for the conduct of world cup matches. The adhoc exemption order does not say that the flood lights can be used only for world cup matches. Though the request was made during the preparation for the world cup matches, the intention was to uplift the infrastructure standards of the stadium.
“When the Government has granted exemption from Customs duty, the department has sought to deny the exemption by alleging that the flood lights have been used for cricket matches other than the world cup. It is thus assumed by the department that the conduct of world cup international matches is for non-commercial purpose and that the conduct of one day international matches is for commercial purpose. We do not understand what is the criteria to hold that the world cup international match is for non-commercial purpose and that the conduct of one day international matches is for a commercial purpose”, the court said.
The bench stated that the entire SCN has been issued on assumptions and presumptions. It did not find any factual or legal basis to hold that there is a violation of condition (ii) as alleged by the department. The issue on merits was answered in favour of the appellant and against the Revenue.
Facts
The appellant M/s.Tamilnadu Cricket Association, affiliated to the Board of Control for Cricket in India (BCCI) having its office at M.A. Chidambaram Stadium, Chennai imported Ground Light Equipments, Flood Light Luminaries Lamps and accessories (for installation of Flood Lighting Systems in the Stadium) etc. under 5 Bills of Entry covering the total value of Rs.2,85,19,880/- and cleared them at Nil rate of Customs duty as per Adhoc Exemption Order issued by Govt. of India, Ministry of Finance, Department of Revenue.
The said goods were allowed for clearance at Nil rate of Customs duty as well as Additional duty subject to the conditions available in Adhoc Exemption Order and also on execution of undertaking to the effect that the importers would abide to the conditions of the Adhoc Exemption Order.
It came to the knowledge of the Department on the basis of documents received from TNCA that, they had conducted one day matches under 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 has been imported in CKD condition and assembled and erected in the Chidambaram stadium.
From the above, it appeared that the materials / equipments 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 has been used by the appellant for commercial purposes in respect of three one day matches, which is violation of the condition (ii) of the adhoc exemption order.
Show Cause Notice was issued to the appellant raising the above allegation and proposing to demand duty under Section 28 (1) of the Customs Act, 1962 along with interest and for imposing penalty under Section 112 (a) of the Act ibid. The notice also proposed confiscation of the goods imported under 5 Bills of Entry.
After due process of law, the original authority held that the appellant has violated condition No. (ii) of the Adhoc Exemption Order and ordered for confiscation of the goods giving an option to redeem the same on payment of redemption fine of Rs.28 lakhs. The duty demand proposed in the SCN was confirmed and penalty of Rs.22 lakhs was imposed under Section 112 (a) of Customs Act, 1962.
Submissions
Counsel Ms. S. Sridevi for the appellant submitted that the purpose of import of the flood light equipments 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 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 the use in World Cup tournaments and cannot be used for any other matches.
A.R Ms. O.M. Reena for the Department submitted that the appellant had imported the flood light luminaries and connected materials at the time of conduct of the world cup match. The adhoc exemption order was issued with certain conditions. The second condition of the order states that the goods shall not be used for commercial purpose.
Issues raised
whether confiscation of the goods, imposition of redemption fine and penalty as well as the demand of customs duty alleging that the appellant has violated condition (ii) of the Adhoc Exemption Order No.338/95 dt. 21.12.1995 is legal and proper and whether the demand is hit by limitation.
Conclusion
The tribunal stated that theSCN has been issued under Section 25 (1) and also demanding duty under proviso to Section 28 (1) of the Customs Act, 1962. On perusal of the SCN, the bench did not find any whisper alleging that there is suppression of facts with intention to evade customs duty on the part of the appellant.
It was further observed that there is no evidence adduced by the department to show that the appellant has suppressed facts. In fact, the department has issued the SCN after collecting the documents from the appellant that they have conducted 3 one day international matches during the years 1996, 1997 and 1998. The SCN has been issued after a lapse of more than 7 years.
The bench held that the ingredients of proviso to Section 28 (1) are not present in the case on hand. The demand raised is therefore time-barred. The issue on limitation is also answered in favour of appellant and against the Revenue.
Case Details
Case Name: M/s.Tamilnadu Cricket Association v/s The Commissioner of Customs
Citation: Customs Appeal No.40979 of 2015
Tribunal: CESTAT Chennai
Coram: Ms. Sulekha Beevi.C.S., Member (Judicial) and Mr. Vasa Seshagiri Rao, Member (Technical)
Decision in favour of: Appellant
