2007 (2) TMI 375 - AT - Customs

Summary

Issues Involved:
1. Whether the benefit of Customs Notification No. 166/80 is available to the subject goods.
2. Whether, after allowing clearance of goods for home consumption u/s 47 of the Customs Act, it was open to the Department to issue show-cause notices u/s 28 of the Act without modification of the assessment order.
3. Whether the demand of duty is time-barred.

Summary:

Issue No. 1: Whether the benefit of Customs Notification No. 166/80 is available to the subject goods:
The appellants argued that the issue was outside the scope of remand ordered by the Hon'ble High Court. However, the Tribunal proceeded to hear the issue as per the High Court's directive. The Notification exempted "coking coal (low ash metallurgical coal)" from customs duty. The Chemical Examiner's report indicated that the imported goods were "low ash metallurgical coke" with 11% ash content. The Tribunal concluded that coke is not the same as coking coal, and thus, the exemption under Notification No. 166/80 was not available to the metallurgical coke imported by the appellants.

Issue No. 2: Whether, after allowing clearance of goods for home consumption u/s 47 of the Customs Act, it was open to the Department to issue show-cause notices u/s 28 of the Act without modification of the assessment order:
The appellants contended that show-cause notices were not maintainable without modifying the assessment order, citing Tribunal and Supreme Court judgments. The SDR argued that duty not levied or short-levied could be demanded u/s 28 even after final assessment and clearance. The Tribunal, relying on the Supreme Court's decision in Union of India v. Jain Shudh Vanaspati Ltd., held that show-cause notices could be issued to recover duty short-levied without revising the assessment order. Thus, the issue was answered in favor of the Revenue.

Issue No. 3: Whether the demand of duty is time-barred:
The Tribunal noted that the provisional assessments were finalized in April '87 and August '87. The show-cause notices issued on 2-9-1987 were within six months from the dates of finalization. However, the Tribunal found that clause (b) of sub-section (3) of Section 28 was not applicable as there was no "adjustment of duty" upon finalization. Instead, clause (d) was applicable, requiring the demand notice to be issued within six months from the date of payment of duty. The demand of Rs. 74,44,562/- was within the limitation period, while the demand of Rs. 15,22,741/- was time-barred.

Conclusion:
The appeal was partly allowed, with the demand of Rs. 15,22,741/- being time-barred and the demand of Rs. 74,44,562/- being upheld.