2013 (10) TMI 1100 - AT - Customs

Anti dumping duty - Import of injection moulding machines - Import of 2 injection moulding machines treated as import of 3 injection moulding machines - Penalty u/s 114A and 114AA - Commissioner set aside penalty - Held that - all the parts of both the Bills of Entry would show that the respondents imported parts of three injection moulding machines of model numbers PS-TECH 1300, PS-TECH 1600 and PS-TECH 2200 from M/s. Ningo Beston Mechanical Technology Co. Ltd., China. The case of the Revenue on the basis of e-mail communications, examination of the parts of machines along with statements, the bifurcation of imports is for the purpose of evading payment of anti-dumping duty - Commissioner (Appeals) merely proceeded on the basis of Chartered Engineer s certificate and the fact that the respondent was registered with the Central Excise authorities. It is observed that even after clubbing of the imported goods under both the Bills of Entry, the full and complete set of machine did not emerge. It has not considered the case of the Revenue about the application of Rule 2(a) of the General Interpretative Rules and other Notes of Chapter as stated in the show-cause notice - It is settled principles of law that while passing the order the authority must record the reasons, links between the materials on which certain conclusion are based and the actual conclusion. Recording of the reasons without considering the submissions of the parties is vague. Reasons must be adequate and proper, it must be sufficient, clear, explicit and based on the materials on records. In the present case, both the authorities below did not consider the materials on record insofar as the allegations in the show-cause notice and the submissions of the importer - matter remanded back - Decided in favour of Revenue.

Summary

Issues Involved:

1. Classification of imported goods.
2. Applicability of anti-dumping duty.
3. Alleged evasion of anti-dumping duty.
4. Validity of the adjudication order.
5. Examination of evidence and submissions by the Commissioner (Appeals).

Issue-wise Detailed Analysis:

1. Classification of Imported Goods:

The primary issue revolves around the classification of the imported parts of injection moulding machines. The original authority classified the goods under Tariff Item No. 8477 10 00 as complete injection moulding machines, rejecting the respondent's claim under Tariff Item No. 8477 90 00. The adjudicating authority concluded that the imported parts constituted complete machines presented in disassembled and partly incomplete conditions, thus subject to anti-dumping duty.

2. Applicability of Anti-dumping Duty:

The Department argued that the imports were split deliberately to evade anti-dumping duty imposed under Notification No. 47/2009-Cus. The adjudicating authority imposed an anti-dumping duty of Rs. 49,76,553/- under Section 28(1) of the Customs Act, 1962, along with interest, and confiscated the goods, allowing redemption on payment of a fine. The respondents contended that Notification No. 47/2009-Cus. had expired before the import dates and that the applicable Notification No. 39/2010-Cus. imposed a reduced duty rate of 174%.

3. Alleged Evasion of Anti-dumping Duty:

The Revenue alleged that the respondents imported parts in a manner to avoid anti-dumping duty. Evidence included email communications indicating that the imports were deliberately split and arranged to appear as individual components rather than complete machines. The adjudicating authority relied on these communications and the Chartered Engineer's examination, which indicated that the imported parts had the essential character of complete machines.

4. Validity of the Adjudication Order:

The respondents argued that the adjudication order violated principles of natural justice, as it merely reproduced the allegations from the show-cause notice without considering their submissions. The Commissioner (Appeals) set aside the adjudication order, but the Revenue contended that the Commissioner failed to examine the facts properly and relied excessively on the Chartered Engineer's certificate.

5. Examination of Evidence and Submissions by the Commissioner (Appeals):

The Tribunal found that the Commissioner (Appeals) did not adequately examine the factual aspects and the Revenue's case regarding the application of Rule 2(a) of the General Interpretative Rules. The Commissioner (Appeals) was criticized for not considering the totality of the case, including the allegations of subterfuge and the evidence provided by the Revenue.

Conclusion:

The Tribunal set aside both the orders of the adjudicating authority and the Commissioner (Appeals), remanding the matter back to the original authority for fresh consideration. The original authority was directed to consider all submissions by the respondents and decide the matter within three months. The Tribunal emphasized the need for adequate and proper reasoning in the adjudication process, ensuring that all materials and submissions are duly considered.