2011 (6) TMI 252 - AT - Customs

Leviability of safeguard duty - Import of phenol - Notification No.73/2001-Cus. dated 28.06.01 - a part of the phenol was cleared by the appellant before the imposition of safeguard duty and the Commissioner (Appeals) has held in their favour and has set aside that part of the safeguard duty - Merely because the goods were not cleared before the levy of the safeguard duty in respect of the second bill of entry should not be made a reason for confirmation of the said safeguard duty - Had the appellant cleared the phenol before the levy of safeguard duty the same was not payable by the appellant - Admittedly they could not have anticipated such levy by the legislature and as such could not have hurried up clearance of the same from the warehouse - The quantum of phenol covered by the second bill of entry is also required to be met with the same fete as quantum of phenol cleared under the first bill of entry - find no justifiable reasons to confirm the demand of safeguard duty against the appellant - Accordingly we set aside the impugned orders confirming the same along with interest and allow the appeal with consequential relief to the appellant.

Summary

Issues:
Leviability of safeguard duty on imported phenol from Singapore.

Analysis:
1. The appellant imported phenol from Singapore and filed ex-bond bill of entries. Initially, safeguard duty was not applicable to imports from developing countries like Singapore. However, a subsequent amendment made imports from Singapore liable to safeguard duty.

2. The dispute arose when the appellants were issued a show cause notice proposing to levy safeguard duty on the imports. The Assistant Commissioner confirmed the duty against the appellant based on the amendment to the notification.

3. On appeal, the Commissioner (Appeals) observed that the effective date of the amendment to the notification was crucial. For the bill of entry filed before the amendment date, safeguard duty was not leviable. However, for the bill of entry filed after the amendment date, safeguard duty was confirmed.

4. The Tribunal referred to a previous judgment regarding anti-dumping duty to establish that duty should be determined at the time of importation, not at the time of clearance from the warehouse. This principle was applied to safeguard duty as well.

5. The Tribunal distinguished a Supreme Court judgment related to additional duty of customs, emphasizing that safeguard duty falls under different provisions and should not be applied retrospectively without clear intent in the notification.

6. Citing another Supreme Court case, the Tribunal highlighted the need for strict interpretation of tax provisions in favor of the taxpayer. It was noted that the appellant could not have foreseen the levy of safeguard duty and should not be penalized for the timing of clearance from the warehouse.

7. Ultimately, the Tribunal found no justifiable reasons to confirm the demand for safeguard duty against the appellant and allowed the appeal with consequential relief.

This detailed analysis covers the issues surrounding the leviability of safeguard duty on imported phenol from Singapore, the timeline of amendments to the notification, the application of previous judgments, and the principles of tax interpretation in favor of the taxpayer.