2006 (11) TMI 80 - AT - Customs

Demand- Limitation- Custom duty, excise duty and penalty were demanded under impugned order in number of cases- Authority after considering all factor allow the appeal with consequential relief

Summary

Issues Involved:

1. Demand of Customs Duty.
2. Demand of Excise Duty.
3. Imposition of Anti-Dumping Duty.
4. Inclusion of Anti-Dumping Duty in the assessable value for CVD and SAD.
5. Limitation and Penalties.

Detailed Analysis:

1. Demand of Customs Duty:
The Tribunal upheld the customs duty demand on the imported Ascorbic Acid and TMBA. The appellants claimed that they imported Ascorbic Acid of FCC grade-IV and converted it to IP grade, but the Tribunal found that no manufacturing activity was undertaken. The reliance on the test report from CIPL, Ghaziabad, which confirmed that both the raw material and final product conformed to IP grade, was deemed authoritative. The Tribunal rejected the appellants' argument that relabeling amounted to manufacturing under the Excise Law and EXIM Policy, as no repacking from bulk to retail containers was evidenced.

2. Demand of Excise Duty:
The excise duty demand of Rs. 14,13,208/- was upheld as the appellants did not contest it due to the small amount involved. However, the penalty imposed was reduced to 10% of the duty amount, considering the circumstances of the case.

3. Imposition of Anti-Dumping Duty:
The Tribunal was divided on the imposition of anti-dumping duty. The majority opinion, led by the President, held that the demand for anti-dumping duty for the period prior to 11-5-2001 was sustainable, but not for the period subsequent to 11-5-2001 due to the introduction of sub-section (2A) in Section 9A of the Customs Tariff Act, which exempted 100% EOUs from anti-dumping duty unless specifically made applicable. The dissenting opinion argued that the expiry of the anti-dumping notification did not obliterate the liability that had already arisen and could be enforced under Section 28 of the Customs Act read with Section 9A of the Customs Tariff Act.

4. Inclusion of Anti-Dumping Duty in the Assessable Value for CVD and SAD:
The Tribunal held that anti-dumping duty does not form part of the assessable value of goods for the purpose of levy of CVD and SAD. The anti-dumping duty, though a customs duty, is not the basic customs duty chargeable under Section 12 of the Customs Act and is imposed over and above such basic customs duty. Therefore, it could not be included in the aggregates indicated in Section 3 of the Tariff Act for computing additional duty.

5. Limitation and Penalties:
The Tribunal found that the appellants suppressed the fact of non-manufacturing and consequent infraction of the conditions of the Customs Notification under which they obtained duty-free goods. Therefore, the extended period of limitation was correctly invoked. The penalties imposed were reduced to 10% of the duty amount confirmed, considering the circumstances of the case.

Conclusion:
The Tribunal upheld the demands of customs duty and excise duty, reduced the penalties to 10% of the duty amount, sustained the demand of anti-dumping duty for the period prior to 11-5-2001, set aside the demand for the period subsequent to 11-5-2001, and held that anti-dumping duty does not form part of the assessable value for CVD and SAD.