ORDER
V.K. Agrawal, Member (T)
1. The issue involved in these three appeals filed by M/s. Cincinnati Milacron Ltd. is whether the benefit of Notification No. 80/70-Cus., dated 29-8-1970 is available to the goods imported by them for replacement of defective articles or components.
2. Shri Ashok Arora, learned Advocate, submitted that the appellants manufacture Injection Moulding Machines for the manufacture of which they imported certain critical sub-assemblies; that the imports are covered by suppliers warranty for faultless performances inclusive of repair replacement free of charge; that they had imported certain control systems containing various printed circuit boards and modules through Ahmedabad Airport; that some of the imported goods developed defects during the manufacture, testing and accordingly, were returned to the supplier for replacement; that when the replacement goods were imported they claimed the benefit of Notification No. 80/70-Cus, which had been denied to them on the ground that the benefit of the said notification is available if the goods were brought from a place outside of India, are private personal property of the importer. The Department’s contention is that as the replacements are for trade goods and are not private/personal property of the person concern the benefit of notification cannot be extended; that the other condition of the notification that the repairs including replacement of defective parts are done free of charge by the manufacturer through his agent or branch in India has not been satisfied. The learned Advocate, further, submitted that the lower authorities have failed to appreciate the true and correct meaning of condition No. (iii) regarding repair including replacement through the agent or branch; that notification applies to two types of import; that in the first case, the defective articles itself is replaced and imported free of charge and in the second case in which part of the defective article is replaced and is imported free of charge; that the repair in India is applicable only to the latter case where repair cost is involved and not to the former; that their imports are covered by the first type of replacement of articles in which case condition No. (iii) is not applicable at all; that even in cases of import of components
which are printed circuit boards or modules, insertion of such parts in the slot of the control system does not involve any cost and the condition (iii) does not become applicable; that the principle of Lex non cogit ad impossibilia is applicable in such cases. Reliance has been placed on the decision in the case of Sundaram Fasteners Ltd. v. C.C.E, Madras – 1987 (29) E.L.T. 275 (T) wherein it was held that the condition under Notification that exemption shall be allowable on the observance after procedure set out in Chapter X of the Central Excise Rules is directory and such condition being impossible to comply with because of the action of the Revenue should be taken to have been dispensed with so long as there has been substantial compliance with the requirement of Chapter X procedure on facts. Learned Advocate also mentioned that the articles imported, which turn defective, were property of the appellants at the time of import and therefore, the requirement of the condition (i) has been satisfied; that it has been held by the Bombay High Court in the case of Echjay Industries Pvt. Ltd. v. Union of India, 1994 (52) ECR 366 (Bombay) that the expression “Person” under Section 3(42) of General Clauses Act includes any company or association or body of individuals. The notification grants benefit to the importer and had never contemplated that an importer would be an individual and not an association or a company. The Bombay High Court, therefore, held that the petitioners are entitled to the benefit of exemption notification in respect of replacement of articles.
3. Countering the argument Smt. Neeta Lai Butalia, learned SDR, submitted that condition No. (iii) of the notification has not been satisfied inasmuch as the manufacturer has neither a branch nor an agent in India for carrying out such repairs including replacement. She also submitted that the decision in the case of Sundaram Fasteners Ltd. is not applicable as the facts are different inasmuch as in Sundaram Fasteners Ltd. case the appellant was prevented from following the procedure of Chapter X as their goods were classified under Item 52 instead of Item 68 of the erstwhile Central Excise Tariff; that therefore, lex non cogit ad impossibilia is not applicable in the present matter. She finally, submitted that condition No. (i) has not been satisfied as Commissioner (Appeals) has not given any finding thereof in the impugned order.
4. We have considered the submissions of both the sides. Notification No. 80/70-Cus., exempts articles and component parts thereof when imported for the replacement of defective articles or component parts thereof subject to the following conditions, namely –
(i) The defective articles were brought into India earlier from places outside India and are private personal property of the importer; (ii) ..... (iii) repairs including replacement of the defective parts are done free of charge by the manufacturer through his agent or branch in India; and (iv) ...... The Commissioner (Appeals) in the impugned order has given his specific finding that Condition No. (iii) of the notification has not been satisfied because repair including replacement of defective parts cannot be done free of charge by the manufacturer through his agent or branch in India as they had neither a branch nor has agent for carrying out such repairs. We observe that the Commissioner (Appeals) in the impugned order has also
mentioned that “when the appellants were asked whether the manufacturers have a branch office in India or any agent working for the said manufacturer, they replied in negative.” It is settled law that benefit of notification can be availed of only on complying with the conditions specified therein. It has been held by the Supreme Court in the case of Rajasthan Spinning & Weaving Mils v. C.C.E., 1995 (77) E.L.T. 474 (S.C.) = 1995 (8) RLT 591 (S.C.) that the exemption notification is to be construed strictly and the assessee should bring himself clearly within ambit of notification. It has also been further held by the Apex Court that no extended meaning can be given to exempted item to enlarge the scope of exemption granted by the notification. Supreme Court recently in the case of C.C.E v. Cadila Lab (P) Ltd., 2002 (142) E.L.T. 279 has denied the benefit of procedure of Rule 56A of Central Excise Rules, 1944 as the conditions set out were not followed by the appellants. It has not been rebutted by the appellants that as required under Condition No. (iii) the replacement of defective parts was not done by the manufacturer through his agent or branch in India. As rightly contended by the learned SDR, the maxim ‘lex nan cogit ad impossibilia’ is not applicable to the facts of the present matter. The benefit of notification is subject to the conditions specified therein and if any manufacturer does not have his agent or branch in India to carry out repair including replacement the benefit of notification will not be available. Accordingly, we find no infirmity in the impugned order and accordingly, reject all the appeals filed by the appellants.
