2026-VIL-1683-CESTAT-KOL-CU
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CUSTOMS CESTAT Cases

Customs - Exemption under Sl. No. 12 of Notification No. 24/2005-Cus. dated 01.03.2005 - Apparatus for the projection or drawing of circuit patterns on sensitised semiconductor materials - Appellant, a manufacturer of Solar Photovoltaic Cells and Modules, imported stringer, auto-layup, auto-bussing and laminator machines under tariff item 84862000 and claimed exemption from Basic Customs Duty - Revenue denied the exemption on the ground that the machines do not perform projection of circuit patterns as in photolithography, relying on the statement of the Chief Financial Officer and discarding the technical certificate - Whether the imported machinery is entitled to exemption under Sl. No. 12 of Notification No. 24/2005-Cus. - HELD - The entry does not qualify the expression 'drawing' by stipulating that the drawing must be effected through photolithographic exposure, nor does it state that the circuit pattern must be a micro-scale pattern of the kind associated with integrated circuits or printed circuit boards. The principle of strict construction does not authorise supplementation of the statutory language or the addition of a qualification which the notification-maker has not incorporated. No word in a notification can be rendered redundant, and interpreting 'drawing' as a mere synonym for optical 'projection' would make it otiose - The exemption is framed disjunctively by the use of 'or', so an apparatus may qualify if it is an apparatus for projection or an apparatus for drawing of circuit patterns, and the two are not cumulative conditions. The machines are sequential, complementary and functionally interdependent. Photovoltaic cells are electrically joined into strings, the strings are positioned in a predetermined configuration, the strings are interconnected by bus ribbons and soldered joints, and the assembly is integrated and protected by lamination, thereby giving physical expression to the electrical architecture of the module - The Revenue confused one recognised technological method of forming a circuit pattern with the statutory concept of a circuit pattern itself. The expression 'drawing of circuit patterns' is sufficiently comprehensive to encompass the physical establishment of a predetermined electrical circuit pattern by the machinery - The Appellant is entitled to the exemption and the differential duty demand with interest is set aside – The appeal is disposed of - Customs - Exemption under Sl. No. 18 of Notification No. 25/1999-Cus. dated 28.02.1999 - Multilayered sheets with tedlar base - Solar PV Backsheet imported for manufacture of solar modules containing a polyvinyl fluoride layer - Revenue denied the exemption on the ground that the expression 'Tedlar' is a proprietary trade mark and the foreign supplier had no authorisation from the owner of the mark - Whether the expression 'multilayered sheets with tedlar base' is confined to the proprietary product or denotes the polyvinyl fluoride material of the backsheet - HELD - The entry situates the expression in the specialised context of inputs for manufacture of solar cells/modules and does not say that the material must be manufactured by or under authority of the owner of the mark. The Central Government has itself used 'Polyvinyl fluoride (TEDLAR)' and 'Tedlar' together in the exemption scheme in connection with solar cell/module manufacture. The absence of an authorisation cannot by itself become the touchstone of eligibility, and the inference that use of 'Tedlar' imports an exclusive source condition is not accepted. Where a term used in a taxing statute is undefined, it is ordinarily understood in the sense recognised by those who deal with the goods, and the rule of common parlance includes trade, commercial and popular parlance - In the solar industry and technical literature, 'Tedlar' is used to identify polyvinyl fluoride used in backsheet structures, and the trade identifies the goods by their functional, structural and chemical characteristics rather than a proprietary source. The goods were multilayered backsheets possessing the relevant layer and intended for manufacture of solar modules. The Revenue cannot read a restrictive, manufacturer-specific condition into an exemption notification where none exists - The Appellant is entitled to the exemption and the differential duty demand with interest is set aside - Customs - Confiscation under Sections 111(m) and 111(q), redemption fine under Section 125 and penalty under Section 112(a)(ii) of Customs Act, 1962 - Whether confiscation, redemption fine and penalty can be sustained - HELD - For the goods covered by the dispute on IGST rate, there was no finding of concealment of goods, suppression of identity, production of fictitious documents or importation of goods different from those declared. The subsequent acceptance of a higher rate of tax cannot transmute a disclosed claim regarding classification or rate of tax into a misdeclaration warranting confiscation. For the goods covered by the two exemption disputes, the foundation for confiscation stands effaced once the demands founded on ineligibility of exemption fail. The goods had been finally assessed and cleared for home consumption before the Show Cause Notice and had neither been seized nor provisionally released against a bond, so invocation of the confiscatory provisions and imposition of redemption fine under Section 125 cannot be sustained. Penalty under Section 112(a) predicates liability to confiscation under Section 111, and where that finding does not survive, the consequential penalty loses its substratum - The order of confiscation, the redemption fine and the penalty are set aside, and the demand of differential IGST, being uncontested, is upheld along with consequential interest under Section 28AA.
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GST & Customs updates: Sep'26
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