KARACHI: Customs Appellate Tribunal Member Technical-III Syed Tanvir Ahmed settled appeal filed by M/s R.J. Corporation, M/s Sharif International, M/s BMW Electronics, M/s Tum Traders, M/s Right Way Trading Company and M/s Al Hafeez Electronics Traders.
Briefly, facts of the case are that Directorate General of Post Clearance Audit, Karachi during the scrutiny of data found that the appellant imported and declared “LED panel light” under PCT heading 9405.1090 vide Goods Declaration No. KAPW-HC-108808 dated 16.1.2015 through Appraisement West, Customs House, Karachi and claimed the benefits of customs duty vide Sr. No. 24 of Part I of the Fifth Schedule to the Customs Act, 1969 and exemption of sales vide Sr 15 (ii) of Table 2 of Sixth Schedule to the Sales Tax Act 1990 and that of Income Tax vide CL77 PT-IV of second Schedule to Income Tax Ordinance 2001. The exemptions are only available to SMD, LEDs with fittings and fixtures for promotion of the renewable energy technologies as per notification. The clause 77 part-IV of Second Schedule to the Income Tax Ordinance, 2001 was more restrictive and allows exemption to items with dedicated use, where the operable voltage of LED/SMD does not exceed 60 volts which is not applicable upon the past consignments cleared on dated 25.5.2016.
While the respondent department submitted para-wise comments under Section 194-A on the grounds that the contents of para I of grounds of appeal are incorrect/baseless in the light of Section 32, 179 and 193 of the Customs Act, 1969. Most of the comments were given in routine. It was stated that the renewable energy is generally defined as energy that is collected from source which are naturally replenished on a human time scale, such as sunlight wind, tides, waves and geo thermal heat. Therefore, scope consumption comes vide Schedule Fifth for customs duty. Schedule Sixth for Sales Tax and Second Scheme PT-IV CL-77 for income tax is limited to the goods which are dedicatedly used for promotion of renewable energy technology cannot be extended to the goods which may use the energy where the operable voltage of LED/SMD does not exceed 60 volts which is not applicable upon the past consignment cleared on 20.5.2015.
Member Technical after scrutinizing all record declared that thus in the light of the judgment, the clarification issued by the Board in the impugned case is not warranted under the law hence the same may not be relied upon. The SHC in a judgement dated 15.7.2016 in a suit no: 41/2015 of Artistic Denim Mills Ltd versus FBR and others has categorically set aside a clarification of the board dated 5.12.2014 (and allowed benefit of serial no. 10) earlier serial no. 11 of 5th Scheme to Customs Act 1969 and exemption of Sales Tax under 6th Scheme of Sales Tax Act 1990.
The appellant in this case contended that the board realized the omission and later issued a letter where all the bank guarantees were released. The language of 5th Schedule of Customs Act and 6th Schedule of Sales Tax act states “items for promotion of renewable energy technologies’. If LED lights are imported and used generally so it falls under the ambit of exemption. The Board later on in 2017-18 budget amended the Sales Tax Act, 1990 and the previous entry was amended.
