2007 (4) TMI 511 - AT - Customs

Summary

Issues:
1. Liability to pay Special Additional Duty (SAD) under Section 3A of the Customs Tariff Act on goods imported, warehoused before 2-6-98, and cleared for home consumption after that date.

Analysis:
The appeal considered whether the assessee is liable to pay Special Additional Duty (SAD) under Section 3A of the Customs Tariff Act on goods imported, warehoused before 2-6-98, and cleared for home consumption after that date. The Customs Tariff Act's Section 3A came into effect on 2-6-1998, post the import and warehousing of the goods in question. The issue revolved around the applicability of SAD concerning the date of filing the into-bond Bills of Entry and the subsequent clearance for home consumption. Both lower authorities ruled against the assessee, leading to the present appeal.

The absence of representation for the appellants, who waived their right to be heard, led to a decision based on merits without their input. The Senior Departmental Representative (SDR) highlighted that the issue was unfavorably settled for the assessee by the Supreme Court's judgment in Kiran Spinning Mills v. CC [1999 (113) E.L.T. 753 (S.C.)]. The SDR referenced a specific paragraph in the cited judgment emphasizing the charging section nature of the Customs Act concerning the levy of additional duty under Section 3. The Apex Court's ruling clarified that the taxable event for customs duty occurs when goods cross the customs barrier, which is when they are removed from the bonded warehouse.

Based on the Apex Court's precedent, it was determined that the goods crossed the customs barrier upon clearance for home consumption under the ex-bond Bills of Entry, post the date when SAD became leviable. Consequently, the appellants were deemed liable to pay the duty on goods cleared from the warehouse for home consumption. The appellants attempted to rely on a Supreme Court judgment regarding excise duty, but the principles governing customs duty were deemed dissimilar. The appellants' argument that the Kiran Spinning Mills judgment was inapplicable to their case was dismissed, emphasizing the taxable event when goods cross the customs barrier.

Ultimately, the issue was deemed conclusively settled against the assessee by the Kiran Spinning Mills judgment, leading to the dismissal of the appeal. The impugned order was upheld, affirming the appellants' liability to pay the Special Additional Duty on goods cleared for home consumption post the specified date.

(Dictated and pronounced in open court)