2011 (4) TMI 518 - HC - Customs

Demand - Notification No. 25/1999, dated 28-2-1999 - The notice further mentions that the senior Officers of the assessee had accepted the lapses when their statements were recorded and they had agreed to pay differential duty on the shortage noticed - CESTAT found that even in the appeal before it the Department had not placed any evidence on record to indicate that there was any suppression on the part of the respondents - all the authorities below have found that the demand was hit by limitation, the fact that the appeal ought to have been filed under the Customs Act is not disputed by the Department - Decided in favour of the assessee

Summary

Issues:
1. Show cause notice for non-maintenance of records and shortage of imported plastic film.
2. Applicability of proviso to Section 28(1) of the Customs Act.
3. Appeal against Assistant Commissioner's order.
4. Appeal before Commissioner (Appeals) and dismissal.
5. Appeal before CESTAT and confirmation of lower authorities' orders.
6. Admissibility of Department's appeal and lack of substantial question of law.

Issue 1: Show Cause Notice:
The respondent received a show cause notice for not maintaining records of imported inputs under a concession and a shortage of imported plastic film. The notice demanded payment of differential customs duty, interest, and penalty for suppression of facts leading to duty payment shortfall.

Issue 2: Proviso to Section 28(1) Applicability:
The Assistant Commissioner held that the proviso to Section 28(1) was not applicable, limiting the duty demand to within six months from the date of duty payment under the bill of entry, dropping the notice due to limitation.

Issue 3: Appeal Against Assistant Commissioner:
The Department appealed the Assistant Commissioner's decision, contending contraventions in goods import. The Commissioner (Appeals) dismissed the appeal, citing a marginal shortage without evidence of clandestine removal justifying duty demand.

Issue 4: Appeal Before CESTAT:
The Department further appealed to CESTAT, which upheld lower authorities' decisions, noting the lack of evidence for malafide duty underpayment by the respondent, and dismissed the appeal due to limitation and absence of suppression proof.

Issue 5: Lack of Substantial Question of Law:
The High Court deemed the Department's appeal unworthy of admission, as no substantial legal question was raised. The authorities found the duty shortage marginal, discovered after the respondent reported it, with no jurisdictional errors noted.

In conclusion, the High Court dismissed the appeal, finding no substantial legal question raised, and no errors committed by the lower authorities. The duty demand was found to be marginal, with no evidence of malafide intent or suppression by the respondent, leading to the rejection of the Department's appeal.