2019 (2) TMI 1802 - AT - Customs

Exemption under N/N. 67/2006-Cus., dated 30-6-2006 - crushed bones under 7 bills of entry from Pakistan - It appeared that as Pakistan is Appendix-2 of the notification and hence goods imported from that country were not eligible for the exemption - Revenue submits that Section 28 very clearly provides for issue of a show-cause notice to demand duty in respect of duties not levied or short levied. HELD THAT - There are no infirmity in the impugned order. Discernably, Section 28 of the Customs Act, 1962, provides for issue of a show-cause notice, inter alia, where duty has not been levied or short levied. Evidently, any non levy or short levy would only be by the assessing officer and not by the importer. There are also merit in the assertions of the Learned Authorised Representative that even in the Apex Court judgment in the case of M/s. Priya Blue Industries Ltd. 2004 (9) TMI 105 - SUPREME COURT has validated the disturbance of an order of assessment by review under section 28 of the Customs Act, 1962. Therefore, the ratio laid down by M/s. Priya Blue Industries Ltd., will not help the case of the appellant herein - There cannot also be any dispute that the exemption provided in the Notification No. 67/2006-Cus., would never have been eligible or applicable to goods imported from Pakistan. The appellant is only seeking to wrongly benefit indirectly what they are not entitled to directly - Appeal dismissed - decided against appellant.

Summary

Issues:
Import of crushed bones from Pakistan claiming exemption under Notification No. 67/2006-Cus., short-levy of duty, imposition of penalty under Section 112 of the Customs Act, 1962, appeal against penalty imposition, manual assessment of 4 bills of entry, demand for duty payment, interpretation of Section 28 of the Customs Act, 1962.

Analysis:
The appellants imported crushed bones from Pakistan under 7 bills of entry, seeking exemption under Sl. No. 6 of Notification No. 67/2006-Cus. However, as Pakistan was listed in Appendix-2 of the notification, goods imported from Pakistan were not eligible for the exemption. A show-cause notice was issued for short-levy of duty amounting to ?14,42,643/- with interest and penalty under Section 112 of the Customs Act, 1962. The original authority held that the exemption was not available, demanded the differential duty, and imposed a penalty. In the appeal before the Commissioner (Appeals), the penalty under Section 112(a)(ii) was set aside, but the demand for duty was upheld, leading to the current appeal.

During the hearing, the appellants argued that out of the 7 bills of entry, 4 were manually assessed by Customs officers who allowed the exemption under Notification No. 67/2006. They contended that had the ineligibility been pointed out during manual assessment, they would have paid the duty and not claimed exemption for the remaining entries processed through RMS. They cited the case law stating that once assessment is done, any changes require filing an appeal, which was not done in this case. They argued that the demand for duty on the manually assessed entries cannot be sustained.

The Revenue representative supported the impugned order, stating that under Section 28 of the Customs Act, 1962, a show-cause notice can be issued to demand duty for non-levied or short-levied amounts. The Tribunal found no infirmity in the impugned order, noting that Section 28 allows for show-cause notices in such cases. The Tribunal rejected the appellant's arguments, emphasizing that the exemption under Notification No. 67/2006-Cus. was not applicable to goods imported from Pakistan. The attempt to set aside the duty demand on the manually assessed entries was seen as an indirect attempt to benefit wrongly. Consequently, the appeal was dismissed.

In conclusion, the Tribunal upheld the demand for duty on the imported crushed bones from Pakistan, emphasizing the ineligibility for exemption and the validity of the show-cause notice issued under Section 28 of the Customs Act, 1962. The appellant's attempt to benefit indirectly from an exemption not entitled to directly was not accepted, leading to the dismissal of the appeal.