2018 (8) TMI 1299 - AT - Customs

Imposition of anti-dumping duty - value addition on imported goods - goods originated in China, value addition made in Sri Lanka - who would be regarded as exporter country? - deemed exporter - contracting party. Held that - On identical issue relating to the same assessee for the earlier period, TILE ITALIA MOSAICS PVT. LTD. VERSUS COMMR. OF CUS. (APPEALS), BANGALORE 2006 (10) TMI 277 - CESTAT, BANGALORE , the Tribunal has taken a decision in favour of the assessee by holding that There is a value addition of more than 40% in terms of the said letter itself. Therefore, in terms of Rule 8 of Customs Tariff (DOGFTA between Sri Lanka and India) Rules, 2000, the goods are deemed to be imported from Sri Lanka as there is value addition of more than 35%. Therefore, the authorities below have overlooked the provisions of Rule 8 which clearly lays down that when there is an aggregate value addition in the territories of contracting parties of not less than 35% of FOB value of the product under export, then the export is deemed to be from the contracting party, that is in the present case Sri Lanka, which has exported the tiles. There is no infirmity in the impugned order which is upheld by dismissing the appeal of the Revenue - decided against Revenue.

Summary

Issues:
Revenue's appeal against the Commissioner (Appeals) order setting aside Order-in-original. Classification of imported goods under CTH 69079010. Origin of imported goods - China or Sri Lanka. Denial of benefit of Notification No. 72/2005-Cus. Demand for anti-dumping duty under Notification No. 73/2003-Cus. Confiscation of goods and imposition of penalty. Tribunal's decision in favor of the assessee based on Rule 8 of Customs Tariff (DOGFTA between Sri Lanka and India) Rules, 2000.

Analysis:
The appeal before the Appellate Tribunal CESTAT Bangalore was filed by the Revenue challenging the Commissioner (Appeals) order setting aside the Order-in-original. The case involved the classification of imported goods under CTH 69079010 and the dispute over the origin of the goods, whether they originated in China or Sri Lanka. The Revenue issued a show-cause notice for final assessment, demanding differential duty, denying the benefit of Notification No. 72/2005-Cus, and seeking anti-dumping duty under Notification No. 73/2003-Cus. The Department also proposed confiscation of the goods and imposition of a penalty.

The respondents imported polished Porceilein / Vitrified Floor tiles from a supplier in Sri Lanka, supported by commercial invoices, packing lists, and a certificate of origin issued by The Ceylon Chambers of Commerce. The Sri Lankan Customs confirmed that the supplier imported semi-finished tiles from China, processed them in Sri Lanka, and classified them under 69079090 of HSN. The Department contended that the goods originated in China and not Sri Lanka as claimed by the respondents. The lower authority ordered final assessment, levying anti-dumping duty and interest, and imposing a penalty, holding that the imported goods originated in China.

During the appeal, the learned AR for the Revenue argued that the impugned order was unsustainable as it did not appreciate the facts and the law. However, the Tribunal referred to its earlier decision in favor of the assessee based on Rule 8 of Customs Tariff (DOGFTA between Sri Lanka and India) Rules, 2000. The Tribunal held that there was a value addition of more than 40% in the goods processed in Sri Lanka, deeming them to be imported from Sri Lanka. Consequently, the imposition of anti-dumping duty was set aside, and the appeal was allowed in favor of the assessee.

The Tribunal upheld the impugned order based on the earlier decision, dismissing the appeal of the Revenue. The decision was pronounced in open court on 09/07/2018.