2008 (10) TMI 187 - AT - Customs

Demand and Recovery of Customs Duty Antidumping Duty Misdeclaration of grade of Mulberry Raw Silk - On testing the sample of the imported goods, it was found that the Mulberry raw silk imported was of grade 2A as against the declared grade 4A. The original authority found that the appellants had misdeclared the grade of the imported silk in order to evade paying anti-dumping duty (ADD), which was leviable on Mulberry raw silk of 2A grade. In demanding the ADD, adjudicating a demand notice issued under Section 28 of the Act, the original authority had turned down the objection raised by the appellants that a demand following findings different from the assessment order could not be made without following the procedure of review under Section 131 of the Customs Act, 1962 Held that it is case of short payment of duty this case is not of non-payment of ADD further SCN is beyond normal period of limitation Demand u/s 28 is not maintainable Appeal allowed

Summary

Issues:
1. Misdeclaration of grade of imported silk to evade anti-dumping duty.
2. Bar on limitation for issuing demand notice.
3. Reliability of certificates and documents provided by the importer.
4. Applicability of relevant date for raising demand under Section 28(3) of the Customs Act.

Issue 1: Misdeclaration of Grade of Imported Silk to Evade Anti-dumping Duty:
The case involved an importer who declared Mulberry raw silk as grade 4A, but upon testing, it was found to be grade 2A. The original authority imposed anti-dumping duty (ADD) based on the actual grade. The appellant argued that the grade was declared as 4A based on the order placed and certificates from the supplier. The Tribunal considered various case laws where misdeclaration was not established due to bona fide belief. The Tribunal found that the importer acted in good faith based on the documents received, and there was no intentional misdeclaration to evade duty. Consequently, the demand for ADD was set aside.

Issue 2: Bar on Limitation for Issuing Demand Notice:
The appellant contended that the demand notice for ADD was time-barred as it was issued beyond the prescribed period from the date of payment of duty. The Tribunal analyzed the relevant provisions of Section 28(3) of the Customs Act to determine the applicable date for raising the demand. It was established that the demand notice served after six months from the payment of duty was barred by limitation. Since there was no wilful misdeclaration, the larger period for raising the demand could not be invoked, leading to the demand being set aside.

Issue 3: Reliability of Certificates and Documents Provided by the Importer:
The Commissioner (Appeals) had found deliberate misstatement and suppression of facts by the importer, leading to the imposition of ADD. However, the Tribunal disagreed, stating that the appellant had declared the goods as per the order and documents received from the supplier. The Tribunal emphasized that the importer's actions were based on bona fide belief, supported by the supplier's certificates and documents. The Tribunal concluded that there was no evidence to suggest intentional misdeclaration by the importer, thereby overturning the decision of the Commissioner (Appeals).

Issue 4: Applicability of Relevant Date for Raising Demand under Section 28(3) of the Customs Act:
The Tribunal delved into the interpretation of Section 28(3) of the Customs Act to determine the relevant date for raising the demand in the case of non-levy of ADD. It clarified that the relevant date under clause (d) of Section 28(3) applies to cases of non-levy of duty, not short levy. Since the appellant had paid duties but ADD was not levied, clause (d) was deemed inapplicable. Consequently, the demand notice served beyond the prescribed period was held to be barred by limitation, and the demand for duty was set aside.

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