2019 (1) TMI 575 - AT - Customs

Imposition of ADD - Alpha Dane Salt - Advance License scheme - non-fulfillment of export obligation - Notification No 43/2002-Cus dated 19/04/2002 - Held that - From the plain reading of the notification it is quite evident that the exemption has been granted from the payment of whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), and from the whole of the additional duty, safeguard duty and anti-dumping duty leviable thereon respectively under sections 3, 8 and 9A of the said Customs Tariff Act. For availing the said exemption importer is required to execute a bond binding himself to pay on demand an amount equal to the duty leviable, but for the exemption, on the imported materials in respect of which the conditions specified in this notification have not been complied with. The Bond that is thus executed, binds the importer to pay an amount equal to the duty leviable, but for exemption, on the imported material in respect which conditions as specified in the notification has not been complied with. The bond executed does not make any distinction between the duty leviable, but prescribes that what so ever duties that have been exempted in terms of this notification including the anti-dumping duty is required to be paid in case the conditions of notification are not fulfilled. We are not in position to agree with the contention of the appellant that the Bond/ LUT executed by them do not cover the anti dumping duty leviable on the imported material at the time of importation/ clearance of the imported material - The appellants have themselves admitted that they had not fulfilled the export obligation as specified in the Advance License issued to them by the Director General Foreign Trade. In fact they have themselves paid the duty in terms of the said bond due as per their determination on 23/10/2008. Demand is in respect of the duty short paid by the appellants on their own determination. We are not in position to agree with the submissions of the appellant. Section 28 of the Customs Act, 1962 - period of limitation - Held that - In the present case no duty has been short levied or short paid at the time of clearance, of goods as the same have been cleared in terms of exemption notification after fulfillment of the conditions of exemption notification. Admittedly this case is also not a case of provisional assessment under Section 18 or case of demand of amount erroneously refunded. Thus the case shall not fall in any of the category (a), (b) or (c) in the definition of relevant date under section 28, but shall be case under (d) - Thus the period of limitation for the purpose of section 28, accordingly shall have to be computed from the date of payment of duty. If that be so the demand has been made within the period of limitation from the relevant date which in the present case is the date of payment of duty i.e. 23/10/2008. Section 143A of the Customs Act, 1962 - Held that - Since we find that demand of anti dumping duty is sustainable in terms of the bond executed by the appellant, we are not considering the pleas raised under section 143A of the Customs Act, 1962. Appeal dismissed.

Summary

Issues Involved:
1. Applicability of Section 143A of the Customs Act, 1962.
2. Scope of LUT/Bond executed under Notification No 43/2002-Cus.
3. Inclusion of Anti Dumping Duty under the term "duty of customs".
4. Limitation period for demand of duty under Section 28 of the Customs Act, 1962.

Issue-wise Detailed Analysis:

1. Applicability of Section 143A of the Customs Act, 1962:
The appellants argued that Section 143A, which was relied upon by the Commissioner (Appeal) to confirm the demand, was never enforced. They contended that Duty Free Schemes under the Foreign Trade Policy have self-contained provisions for duty payment when conditions of the license are violated. The Tribunal, however, did not address this argument in depth as it found the demand sustainable under the bond executed by the appellants.

2. Scope of LUT/Bond Executed under Notification No 43/2002-Cus:
The appellants contended that the LUT/Bond executed did not cover Anti Dumping Duty and relied on para 4 of the LUT/Bond. The Tribunal examined Notification No 43/2002-Cus, which exempts materials imported under an Advance Licence from various duties, including Anti Dumping Duty, subject to certain conditions. The bond executed by the importer binds them to pay an amount equal to the duty leviable but for the exemption, including Anti Dumping Duty, if conditions are not fulfilled. The Tribunal concluded that the bond covered all duties exempted at the time of clearance, including Anti Dumping Duty.

3. Inclusion of Anti Dumping Duty under the Term "Duty of Customs":
The appellants relied on the decision of the Tribunal's larger bench in Caprihans India Ltd, which held that Anti Dumping Duty, levied under Section 9A of the Customs Tariff Act, is not considered a duty of customs under Section 2(15) of the Customs Act, 1962. However, the Tribunal noted that this decision was context-specific to refund provisions and was not agreed upon by the Bombay High Court in Kanakia Construction. The Tribunal clarified that Section 2(15) and Section 12 of the Customs Act include all duties levied under the Customs Tariff Act, thereby encompassing Anti Dumping Duty.

4. Limitation Period for Demand of Duty under Section 28 of the Customs Act, 1962:
The appellants argued that the demand was time-barred as per Section 28 of the Customs Act, 1962. They relied on the Bombay High Court's decision in Dharampal Lalchand Chug, which emphasized the limitation period. The Tribunal distinguished this case, noting that the demand arose due to non-fulfillment of export obligations specified in the Advance Licence, and the duty was paid by the appellants on 23/10/2008. The demand was made within the limitation period from the date of duty payment, as defined under Section 28(d) of the Customs Act.

Conclusion:
The Tribunal found that the demand for Anti Dumping Duty was sustainable under the bond executed by the appellants and dismissed the appeal, confirming the order of the Commissioner (Appeal). The judgment emphasized that the bond covered all duties exempted under Notification No 43/2002-Cus, including Anti Dumping Duty, and the demand was made within the permissible limitation period.