2015 (7) TMI 851 - HC - Customs

Demand of 1% countervailing duty - Import of muriate of potash - Held that - Notification No. 12/2012-C.E. dated 17th March, 2012 is quite explicit that the fertilizers imported for the purpose of use in the manufacture of other fertilizers are exempted from countervailing duty. This position is accepted by the department, but it disputes whether the petitioner is utilising such materials for manufacture of fertilizers. - importation of the goods cannot be held up - Respondent-authorities directed to provisionally release the above goods after filing of the manual bill or bills of entry by the petitioner, within five working days of arrival of the goods, upon the petitioner furnishing a bank guarantee to secure the 1% countervailing duty and upon payment of the basic duty. - Petition disposed of.

Summary

Issues:
1. Whether the countervailing duty claimed by Customs on the importation of muriate of potash is payable.
2. Whether the petitioner is entitled to an exemption from countervailing duty under Notification No. 12/2012-C.E.
3. Whether the petitioner can file a manual bill of entry for claiming the exemption.
4. Whether the goods can be provisionally released by the respondent-authorities.

Analysis:

Issue 1: The Court acknowledged that 5% basic duty is payable on the importation of muriate of potash, but the dispute revolves around the 1% countervailing duty claimed by Customs. The petitioner argued for an exemption from countervailing duty under Notification No. 12/2012-C.E., stating that the fertilizer imported for the manufacture of other fertilizers is exempted.

Issue 2: The petitioner's senior advocate cited the specific notification to support the claim of exemption from countervailing duty. Despite the petitioner's inability to file a bill of entry electronically due to system limitations, the Court directed the respondent-authorities to accept manual bills of entry for the impugned import, based on a communication from the Ministry of Finance allowing the acceptance of manual bills of entry.

Issue 3: The Customs contended that the utilization of imported materials for fertilizer manufacture was under scrutiny by the Commissioner of Customs (Appeals) in a previous importation. However, the Court upheld the petitioner's right to claim the exemption and directed the filing of manual bills of entry for the current import, ensuring the goods' provisional release within five working days upon furnishing a bank guarantee for the countervailing duty and payment of the basic duty.

Issue 4: The Court emphasized the explicit exemption under the notification for fertilizers imported for use in manufacturing other fertilizers, clarifying that the importation of goods cannot be delayed due to the ongoing dispute regarding material utilization. The respondent-authorities were instructed to conduct the final assessment within three months of the order, ultimately disposing of the writ application.

In conclusion, the judgment resolved the issues by affirming the petitioner's right to claim the exemption from countervailing duty, allowing the manual filing of bills of entry, and directing the provisional release of goods with specified conditions and timelines for assessment and compliance.