2008 (7) TMI 697 - AT - Customs

Summary

Issues:
1. Denial of exemption from payment of Customs duty under notification No. 38/96-Cus.
2. Interpretation of conditions for exemption under the notification.
3. Allegation of anti-dumping duty liability.
4. Examination of goods at a location different from the specified Customs station.

Analysis:
1. The judgment deals with the denial of exemption from Customs duty under notification No. 38/96-Cus, concerning the import of raw silk from China. The applicant sought waiver of pre-deposit of duty and penalties amounting to Rs. 1,07,41,818/-, contending that the benefit of the notification was wrongly denied because the import was not made by a local tribal as required by the Revenue. The Revenue argued that the goods were not entitled to the exemption as the actual import was by a person who was not a local tribal.

2. The applicant argued that the notification did not specify that only local tribal people could import goods without payment of Customs duty. They relied on the practice of goods examination at a location 6 kms away from the specified Customs station, supported by the statement of the Superintendent of Customs. The Tribunal found that the notification did not impose a condition that imports must be made by tribal or local people, thus indicating a strong case in favor of the applicant.

3. The Revenue raised concerns about anti-dumping duty liability based on the grade of the goods, but the applicant pointed out that while the adjudication order discussed this issue, no specific demand was made. Additionally, the applicant cited a Trade Notice allowing the import of silk on border trade with China, further supporting their position.

4. An important aspect of the case was the discrepancy in the location of goods examination, with the goods being found at a village 6 kms away from the specified Customs station. Despite this, the Tribunal noted that all formalities were completed at the examination location. The Revenue's argument that the exemption applied only to goods imported by local people was not supported by the notification's language, leading to the waiver of pre-deposit of duty and penalties in favor of the applicant. Stay petitions were allowed based on the prima facie strength of the applicant's case.