2015 (11) TMI 946 - AT - Customs

Benefit of concessional rate of Customs duty under Notification No.21/2002-Cus - Benefit of CVD - whether the show-cause notice dated 16.3.2011 issued by the authorities for demanding the differential CVD along with interest and also for imposition of penalties to all appellants is hit by limitation or otherwise - Held that - There is no answer as when the benefit of Notification 21/2002-Cus for the imported consignments was extended based upon the certificate issued by the Ministry of Environment and Forest, Govt. of India how the assessing officer failed to note that the goods are covered under MRP/RSP. We fail to understand how the assessing officer was not aware that the goods imported are covered by Notification No. 49/2008. It would be correct to say that the assessing officer of the Customs department should be aware of the duty liability of the goods imported and should have assessed the goods correctly by invoking the provisions of Notification 49/2008. It cannot be said that the appellant has suppressed any material fact from the Customs department, atleast in the case in hand. Demand in question in the case in hand and consequent penalty imposed is incorrect as provisions of Section 28(1) of the Customs Act, 1962 and the proviso thereof, may not be applicable on the facts as recorded by us herein above. It has to be hold that the there was no suppression of material fact by the appellant; and Customs authorities have also erred in not noting that the imported goods are covered for discharge of CVD based upon value determined by MRP/RSP. - Since the demands which have been raised is beyond the period of six months as per the Customs Act, 1962 and there is no evidence to show willful suppression of facts with intent to evade duty, we hold that the impugned order is unsustainable and liable to be set aside. - Decided in favour of assessee.

Issues: Determination of limitation aspect in a customs duty case involving imported goods declared as CNG kits and components under Customs Tariff, eligibility for exemption under Notification No. 21/2002, payment of CVD, and imposition of penalties.

Analysis:

1. Background and Facts:
The case involves appeals against Orders-in-Original related to the import of goods by the main appellant during August 2006 to July 2007, declared as CNG kits and components under Customs Tariff 8409 99 90. The main appellant claimed exemption under Notification No. 21/2002 and paid Customs duty at a concessional rate of 5%. An investigation alleged evasion of customs duty by not paying C.V.D. based on retail sale price (RSP) as required by law. A show-cause notice was issued demanding differential C.V.D, interest, and penalties, which the main appellant contested on both merits and limitation grounds.

2. Arguments by the Parties:
The appellant's counsel focused on the limitation aspect, emphasizing that the goods were correctly declared, and all necessary documents were submitted, including a certificate from the Ministry of Environment and Forest supporting the concessional rate of duty. Reference was made to legal judgments to support the argument that the impugned order should be set aside. The Departmental Representative argued that the goods fell under the Standards of Weights and Measures Act, requiring declaration of price under Maximum Retail Price (MRP) and that the appellant failed to comply with this requirement.

3. Decision on Limitation Aspect:
The key issue for determination was whether the show-cause notice for demanding differential C.V.D, interest, and penalties was barred by limitation. The Tribunal found that the main appellant had paid C.V.D on the declared transaction value, and the bills of entry accurately described the imported goods. The Tribunal disagreed with the adjudicating authority's findings, highlighting that the appellant had submitted the required certificate and that the assessing officer should have been aware of the duty liability based on the certificate issued by the Ministry of Environment and Forest.

4. Findings and Rationale:
The Tribunal held that the demand was beyond the statutory period of six months under the Customs Act, 1962. There was no evidence of willful suppression of facts by the appellant to evade duty. The Tribunal emphasized that the appellant had not concealed any material fact, and the Customs authorities erred in not recognizing the goods' eligibility for CVD based on MRP/RSP. Referring to a similar case decided in favor of the appellant, the Tribunal concluded that the demand and penalties imposed were unsustainable due to the lack of suppression of material facts and incorrect application of the law.

5. Decision and Outcome:
Consequently, the Tribunal set aside the impugned order, allowing the appeals filed by the appellants. The penalties imposed on the main appellant and other appellants were deemed not applicable due to the finding that the demands were hit by limitation and unsustainable. The judgment emphasized the importance of compliance with duty liability provisions and the assessing officer's duty to correctly assess goods based on applicable notifications and certificates.

This detailed analysis of the judgment highlights the legal intricacies and reasoning behind the Tribunal's decision on the limitation aspect in the customs duty case, providing a comprehensive understanding of the case's background, arguments, findings, and final outcome.

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