2011 (3) TMI 90 - AT - Customs

Demand - The period of limitation mentioned therein is one year. Sub clause (b) of Section 28(1) clearly mentions that in any other case, the period of limitation is within six months from the relevant date - The proviso also gives a different limitation period if the person commits the misrepresentation or suppression of facts at the time of import or export - When the Tribunal in its order dated 23.9.2005 has vividly held that no suppression of facts can be attributed to the assessee in relation to the excess quantity of scrap, this was not a fit case for invoking Section 114A of the Customs Act against the assessee The excess quantity has been arrived at on the basis of weighment slips and transportation charges were paid by the assessees on the basis of such slips - Since the excess was not declared to the Custom authorities, the extended period is available to the department for computation of duty as the assessees had suppressed the excess quantity with intention to evade payment of duty - The appeal is thus partly allowed by upholding duty liability

Summary

Issues:
1. Duty demand on excess quantity of scrap
2. Penalty imposed under Section 114A of the Customs Act, 1962
3. Interpretation of Section 28(1) (a) and (b) of Customs Act

Analysis:
1. The appeal involved a duty demand of Rs.5,35,066.48 on an excess quantity of scrap, determined based on weighment slips with a 2% allowance. The initial order upheld the duty demand but set aside the penalty under Section 114A of the Customs Act, 1962. The importer challenged this decision in the Hon'ble Madras High Court, arguing that the limitation period for duty demand should be six months as there was no suppression of facts regarding the excess quantity of scrap. The High Court directed the Tribunal to reevaluate whether the petitioner had committed suppression of facts and determine if the case falls under Section 28(1)(b) of the Customs Act. The Tribunal was given three months to conduct this assessment.

2. The Tribunal considered that the excess quantity was established through weighment slips, and as the excess was not declared to the Customs authorities, the extended period was applicable for duty computation due to the suppression of excess quantity with an intent to evade duty payment. The duty demand was upheld, despite the challenge based on the setting aside of the penalty under Section 114A. The Tribunal did not provide a finding on the penalty aspect due to the absence of an appeal by the Revenue against the penalty's setting aside.

3. The Tribunal partially allowed the appeal by confirming the duty liability, emphasizing that the duty demand was justified given the suppression of excess quantity. The judgment was pronounced on 10.3.2011, with the duty demand upheld and the penalty aspect left unaddressed due to the lack of appeal by the Revenue.