2015 (10) TMI 2088 - HC - Customs

Challenging the constitutional validity of Notification No.96/2009-Customs - Imports are exempted under Advance Authorisation from the whole of the additional duty, safeguard duty and anti-dumping duty; Safeguard duty not exempted - Revenue contends that petition is premature as only SCN issued - Held That - Adjudicating authority ought to apply notification in light of Office Memorandum dated 31 May 2013 - Affidavit-in-reply to be filed on behalf of Respondent within 2 months - Liberty given to Petitioner to move the Court as and when necessary - Decided in favour of assessee.

Summary

Issues:
Challenge to the constitutional validity of Notification No.96/2009-Customs exempting imports under Advance Authorisation from certain duties, specifically the safeguard duty under Section 8C of the Customs Tariff Act, 1975.

Analysis:
The petitioner challenged the constitutional validity of Notification No.96/2009-Customs, dated 11 September 2009, which exempted imports under Advance Authorisation from additional duty, safeguard duty, and antidumping duty under specific sections of the Customs Tariff Act, 1975. However, the safeguard duty under Section 8C was not exempted by this notification. The respondent argued that the challenge was premature as the Revenue had only issued a show cause notice to the petitioner on 3 October 2013. The petitioner, on the other hand, referred to an Office Memorandum dated 31 May 2013 by the Government of India, Ministry of Finance, Tax Research Unit, highlighting an anomaly in not granting exemption from safeguard duty under Advance Authorisation as per Section 8C of the Customs Tariff Act, 1975.

The Office Memorandum pointed out that the Foreign Trade Policy provided for exemption from safeguard duty for clearances against Advance Authorization, and the current notification exempted safeguard duty levied under Section 8B but not under Section 8C. It clarified that the intention was to exempt safeguard duty irrespective of whether it was levied under Section 8B or Section 8C. The petitioner argued that the adjudicating authority should apply Notification No.96/2009-Customs in light of the Office Memorandum dated 31 May 2013. The court scheduled the matter for further proceedings, allowing the petitioner to contend that the notification should be interpreted in line with the Office Memorandum. The respondent was directed to file an affidavit-in-reply within two months, indicating the decision taken on the Office Memorandum. The petitioner was granted liberty to approach the court as needed during the proceedings.