2015 (6) TMI 862 - AT - Customs

Levy of anti dumping duty - import of complete CFL - split the consignments and import through different ports - whether with the expiry of Notification 138/2002-Cus dated 10/12/2002 w.e.f. 20/12/2006, recovery proceedings for escaped anti-dumping duty could be initiated or continued or not - Held that - A similar issue came up for consideration by a Larger Bench of this Tribunal in the case of Surana Metals & Steels (I) Ltd. 2007 (9) TMI 288 - CESTAT, CHENNAI . Section 159A of the Customs Act is identical in its wordings and scope to Section 38A of the Central Excise Act, 1944 and was inserted into the Customs Act, 1962 vide Section 113 of the Finance Act, 2001 and vide Section 114 of the said Finance Act, 2001, the action taken were validated as if the provisions of Section 159A were in force at all material times w.e.f. 01/02/1962 onwards till the enactment of Finance Act, 2001, notwithstanding anything contained in any judgment, decree or order of any Court, Tribunal or authority. Anti-dumping duty Notification expired. Expiry is also one form of supercession or recission or repeal, the effect being the same as the latter. Therefore, the contention of the appellants that adjudication proceedings cannot continue after the expiry of anti-dumping duty Notification for recovery of any escaped duty liability or imposition if any penalty, is without any merit and we reject this contention totally. With the retrospective application of sub-section (8) of Section 9A of the Customs Tariff Act, the provisions of Section 159A of the Customs Act would apply in respect of the proceedings relating to anti-dumping duty as well and, therefore, the argument that after expiry of the anti-dumping notification proceedings cannot be initiated has no legal basis and we reject this contention. The clarification has been issued in 2006 in respect of a levy imposed in 2002. Therefore, the said clarification is not contemporaneous as to have any persuasive value. It is a settled position that the law has to be interpreted strictly in accordance with the language employed. Nothing has to be read in or nothing has to be excluded while interpreting the plain terms of the statute. Therefore, no reliance can be placed on the said circular for interpretation of the anti-dumping duty notification. - Merely because the levy of customs duty under Section 12 of the Customs Act, 1962 arise on the importation on the articles into India, it does not mean that the Customs Tariff Act cannot provide for the charging of any duty which is independent of the Customs duty leviable under the Customs Act. Anti-dumping duty is one such levy, which is independent of the duty of Customs charged under Section 12 of the Customs Act or the duty levied under Section 3 of the Customs Tariff Act. Goods have to be classified under the Customs Tariff Act first before levying anti-dumping duty. General Rules of Interpretation of the Schedule to the Import Tariff says classification of the goods in the schedule would be governed by the following principles - for the purposes of classification, an incomplete or unfinished article, if as presented, has the essential character of a complete or finished article, it would be covered by the heading pertaining to the complete or finished article. The second part of the Rule makes it clear that the reference would also include to the article presented unassembled or disassembled. Thus, for the purpose of Customs classification, these Rules shall apply and if by applying these Rules, the imported goods become classifiable under Chapter 85, the provisions of anti-dumping notification shall also apply, as per the clear and unambiguous wordings of the notification levying anti-dumping duty. Anti-dumping duty is levied on articles dumped into country of the description specified in the notification and falling under the corresponding tariff items mentioned against them. The General Rules of Interpretation of the Tariff would apply equally for the levy of basic customs duty under the Customs Act, Additional Duty of Customs under Section 3 of the Customs Tariff Act as well as Anti-dumping duty under section 9A of the Customs Tariff Act. Therefore, the contention of the appellant about the inapplicability of Rule 2(a) of the general interpretative rules for levy of anti-dumping duty has to be rejected as it is contrary to the statutory provisions, which are loud and clear. From the documents seized and the statements recorded, it is clear that the appellants intended to import complete CFL and they deliberately played a subterfuge to split the consignments and importing them under different consignments or through different ports. Such action on the part of the appellants is a fraud perpetrated on the exchequer. An act of fraud on Revenue is always viewed seriously. Argument that demand is hit by limitation is not tenable. - The ordinary meaning of circumvention is to go around, to by-pass or to avoid . It is different from tax evasion. There is a world of difference between tax avoidance and tax evasion. Tax avoidance implies complying with the provisions of law but defeating the intention of law by taking advantage of the loopholes in the law. Tax evasion means avoidance of tax through illegal means or fraud and is undertaken by employing unfair means. We have already noted that the transactions involved fraud or unfair/illegal means by manipulation of documents and by artificial splitting of consignments with a clear intent to evade anti-dumping duty. Therefore circumvention and evasion cannot be equated. Fine can be imposed only when goods are available for redemption. In case the goods are not available for redemption, the question of imposing any fine would not arise at all. Accordingly, we set aside the redemption fine imposed by the adjudicating authority in respect of the goods which are not available for confiscation. However, in respect of goods which have been seized and released provisionally to the appellant under bond and bank guarantee, fine is leviable and accordingly, in those situations, the imposition of fine has to be upheld. As regards the penalties imposed, once the demand is confirmed under section 28 read with section 9A on account of fraud, penalty under section 114A is mandatory and cannot be waived. Therefore, the imposition of penalty on the appellants can not be faulted. In as much as penalty has been imposed on the importing firm under section 114A, which is quite substantial, we are of the view that separate penalties on the partner/Director/employees of the appellant firm is not warranted. - Decided partly in favour of assessee.

Summary

Issues Involved:
1. Levy of anti-dumping duty on Compact Fluorescent Lamps (CFL) imported from China in SKD form.
2. Classification of imported goods under the Customs Tariff Act.
3. Applicability of Rule 2(a) of the General Interpretative Rules.
4. Validity of proceedings initiated after the expiry of the anti-dumping duty notification.
5. Imposition of penalties and confiscation of goods.

Detailed Analysis:

1. Levy of Anti-Dumping Duty on CFL Imported from China in SKD Form
The appellants imported CFL components from China in SKD form and declared them as parts to evade anti-dumping duty. The investigation revealed that the components imported were assembled to form complete CFLs, thus attracting anti-dumping duty under Notification No. 138/2002-Cus dated 20/12/2002. The adjudicating authority confirmed the anti-dumping duty demand along with interest and imposed penalties on the importing firms.

2. Classification of Imported Goods Under the Customs Tariff Act
The appellants classified the imported goods under CTH 8539 9010 as parts of CFL. However, the investigation concluded that the goods merited classification under CTH 8539 3110 as complete CFLs in SKD form, applying Rule 2(a) of the General Interpretative Rules of the Customs Tariff Act, 1975. This reclassification led to the imposition of anti-dumping duty.

3. Applicability of Rule 2(a) of the General Interpretative Rules
Rule 2(a) was invoked to classify the imported components as complete CFLs. The rule states that incomplete or unfinished articles, if they have the essential character of the complete article, should be classified as such. The appellants argued that Rule 2(a) should not apply to anti-dumping duty. However, the Tribunal held that Rule 2(a) is applicable for classification under the Customs Tariff Act, and thus, for the purposes of anti-dumping duty as well.

4. Validity of Proceedings Initiated After the Expiry of the Anti-Dumping Duty Notification
The appellants contended that the proceedings initiated after the expiry of Notification 138/2002-Cus were invalid. The Tribunal rejected this argument, citing Section 159A of the Customs Act, 1962, which allows for the continuation of proceedings even after the expiry of a notification. The Tribunal held that accrued liabilities continue even after the expiry of the notification.

5. Imposition of Penalties and Confiscation of Goods
The adjudicating authority imposed fines and penalties on the importing firms and their officials. The Tribunal upheld the penalties on the importing firms under Section 114A of the Customs Act but set aside the penalties on the officials. The Tribunal also set aside the redemption fine for goods not available for confiscation but upheld the fine for goods seized and released provisionally.

Conclusion:
1. Anti-dumping duty demand along with interest is upheld for M/s. Samay Electronics Pvt. Ltd., M/s. Wipro Limited, and M/s. Amar Energy Systems.
2. Penalties on the importing firms are upheld, but penalties on the officials are set aside.
3. Redemption fine is upheld for goods seized and released provisionally; set aside for goods not available for confiscation.
4. Demand for anti-dumping duty on M/s. Sunora Electronics Industries and penalties on M/s. Shell & Pearl Ceramics Ltd. and their officials are set aside.

The appeals are disposed of accordingly.