Temporary movement of goods for servicing does not constitute 'supply' under GST; re-import exemption applies.

Per: Shri P. Dinesha

This Appeal is filed against the Order-in-Original No.102903/2023 dated 16.08.2023, whereby the Adjudicating Authority viz., the Commissioner of Customs, Chennai-II (Imports) has confirmed the demand of Customs duty [comprising Basic Customs Duty (BCD), Social Welfare Surcharge (SWS) and Integrated Goods and Services Tax (IGST)] in respect of re-import of certain goods apart from ordering confiscation of goods, redemption fine and penalties.

2. Brief, relevant and admitted facts as could be gathered upon hearing rival contentions and after going through the impugned Order-in-Original are that the Assessee is engaged in the business of providing logistics, transportation and supply chain management services to its customers located both within and outside India; is also holding valid Importer Exporter Code. The Assessee has claimed which is also undisputed by the Revenue that it undertakes large–scale logistics and transportation projects requiring deployment of specialized equipment like cranes, trailers, hydraulic axles, trucks and machinery; and it is also an undisputed fact that such equipment constitute capital assets of the Assessee- Company, who continues to hold control over or rather remain the property of the Assessee at all material times.

3. During the period under dispute, Vestas Asia Pacific A/s, Denmark undertook the setting up of a 103 MW Wind Power Project comprising 30 Wind Operated Electricity Generators in Sri Lanka and for execution of a portion of the said project, M/s.VESTAS Wind Lanka Private Limited (VWLPL), Sri Lanka [overseas entity] issued a purchase order dated 29.05.2019 to the Appellant for providing transportation and logistic services within Sri Lanka in relation to turbine equipment and parts. The scope of work under purchase order was limited to transportation services between the specified locations in Sri Lanka, but however, the same did not involve supply, sale, or transfer of ownership of any of the goods by the Assessee to the said overseas entity. For the purposes of executing for service contract abroad, the Assessee was required to deploy its own specialised equipment at the project site in Sri Lanka and accordingly, it moved certain goods such as cranes, trailers, trucks and tools from India to Sri Lanka. The movement of these goods apparently was undertaken under shipping bills filed with under NFE (No Foreign Exchange) with GR waiver and it is an admitted and undisputed factual position that there was no sale of these goods, no consideration was ever received towards supply of the goods in question, no transfer of title or ownership took place and the goods always remained the property of the Appellant. The only consideration received by the Appellant was towards provision of transportation services for which service invoices were raised on VWLPL, which were declared in the GST returns of the Assessee as ‘export of services’.

4. Upon completion of the above project work in Sri Lanka, it appears that the Assessee re-imported the said goods into India between May 2020 and December 2020 vide Bills of Entry, at the time of re-import the Appellant appears to have claimed exemption from payment of Customs duties under Sl.No. 5 of Notification No. 45/2017–Customs dated 30.06.2017 [‘Notification’] as the goods were undisputedly of Indian origin which were taken out of India otherwise than by way of supply and were being brought in or re-imported within the period prescribed under the Notification. It is a matter of record that the goods in question were assessed and cleared by the Customs authorities at the time of re-import.

5. It app