Judgment:
1. M/s. Karnataka Dairy Dev. Corpn. Ltd., Bangalore imported "Freeze and Accessories (Industrial Refrigerator)". They claimed benefit of Notfn. No. 70/81 for the item imported. Subseqently, however, a demand was raised and confirmed for short levy of duty on the ground that M/s.
Karnataka Dairy Development Corpn. is an organisation engaged in commercial activity and hence they are not eligible for duty free import and the benefit of Notfn. No. 70/81, and therefore, duty is chargeable @ 40% + 10% with C.V. Duty. Collector (Appeals) however, before whom the appeal was filed held that documents produced show that the impugned goods were procured and imported by the appellants for the use of the Institute of Animal Health and Veterinary Biologicals, Bangalore for production of vaccines for protection of livestock in the Karnataka State. The Institute of Animal Health and Veterinary Biologicals is registered as an Institute under the Karnataka Societies Registration Act, 1960. The goods were imported in pursuance of the request made by the Institute. He, therefore, held that the goods were eligible for total exemption from duty under Customs Notification 70/81. The Revenue are in appeal against this order of Collector (Appeals).
2. Arguing for the Revenue, the ld. DR submits that in terms of Notfn.
No. 70/81 dt. 26.3.1981, the import had to be by a research institution. The certificate had to indicate that the institution which imported the goods is not engaged in a commercial activity and the import of goods in respect of which the exemption is claimed is essential for Research and it shall be used only for such purposes.
Karnataka Dairy Dev. Corpn. is admittedly a commercial organisation and to the extent the imports have been made by them, the goods are not eligible for exemption under Notfn. No. 70/81.
3. Arguing for the respondent, ld. Consultant submits that institute had been requested to carry out research which would be useful and they had imported the impugned goods on behalf of the Research institute. In fact it could be considered that the research institute was the importer since they had obtained necessary certificate for import of these goods duty free. There is no denial that the impugned goods have been used for research purposes. They merely imported these goods for the use of institute and therefore, they would be covered under the relevant notification.
4. We have heard both sides. Notification 70/81 dt. 26.3.1981 exempts all scientific and technical instruments, apparatus and equipments imported by a research institution, from the whole of the duty of customs leviable thereon subject to the conditions that a duty authorised officer of the Directorate General of Technical Development certifies in each case that the goods in respect of which the exemption is claimed are such as are not manufactured in India and such certificate is produced at the time of clearance or within such period as the Asstt. Collector of Customs may allow and the research institution shall furnish a certificate from the authorised officer that the import of goods in respect of which the exemption is claimed is essential for research and the imported goods shall be used only for such purposes by the said institution and the said institution is not engaged in any commercial activity.
4.1. In the first place the notification lays down the condition that the apparatus and equipments etc. as are entitled for exemption have to be imported by research institution. It is contended before us that the import actually was on behalf of the research institution. In this view of the matter, therefore, it was strongly contended by Id. Consultant before us that the goods can be deemed to have been imported by the research institution and therefore, these would be eligible to exemption. We have given careful consideration to this submission. We note that Notification specifically refers to a research institution.
Bill of Entry was filed by Karnataka Dairy Dev. Corpn. claiming the benefit of exemption notification. Notification mentions the word "imported by research institution". The expression is not imported by or on behalf of the research institution. The Id. Consultant fairly concedes that L/C was opened by Karnataka Dairy Development Corpn. Ltd. and foreign-exchange for the import was also provided by them. In the case of Indian Telephone Industries Ltd. v. Collector of Customs, Madras this Tribunal distinguished Tribunal's earlier order in the case of M/s. Indian Telephone Industries Ltd. v. Collector of Customs, Madras . In that order a reference was made to a Notfn. No. 109/60-Cus. dt. 26.7.1969 and 211/76-Cus. dt.
2.8.1976 and it was held that the language used permitted import of the goods "by or against the order" of the Research Institution but exemption in Notfn. No. 70/81-Cus. refers only to the "goods imported by a Research Institution". The Tribunal therefore, held that in absence of expression "imported by or on behalf of the institution" the import has to be by the institution itself to be entitled to benefit of Notfn. 70/81. Here also we find that import as such was made by Karnataka Dairy Dev. Corpn Ltd. and it will not be possible to accept the plea that even if the import was on behalf of the Research Institution, they would be covered by exemption used in the notification. A reference was also made to the case of Collector of Customs, Bangalore v. R.V. College of Engg. 1996 (17) RLT 876. We are, however, of the view that the case is distinguishable. The appellants themselves had imported the goods and the only question to be decided was whether the institution was engaged in research activity and, in that context, the Tribunal held that the certificate given by the specified authority had to be accepted.
5. In view of this, we find considerable merit in the Revenue appeal.
We therefore, allow the revenue appeal and set aside the impugned order.