2019 (5) TMI 1587 - AT - Customs

Exemption from CVD - Import of 'Ore' - benefit of N/N. 4/2006-CE dated 01.03.2006 and N/N. 12/2012-CE dated 17.03.2012 - time limitation - HELD THAT - The distinction between ore and concentrate has been discussed in the numerous decisions. The Explanatory Notes available to HSN reproduced above also shows that the distinction is largely based on the nature of processes carried out on the ores. It is fact that the goods were described as ore by foreign supplier and the appellant have simply followed the said description. Moreover, the entire duty demand was available as cenvat credit to the appellant themselves. In these circumstances, we find that there is no intention to evade payment of duty. The appellant are not contesting the issue on merit. In view of above demand in so far as it relates to extended period is set aside. The corresponding interest also needs to be re-quantified. The redemption fine of ₹ 10 Lakhs in these circumstances appears excessive and the same is reduced to ₹ 10,000/- only. In view of lack of malafides, the penalty on M/s Panasonic Energy India Co. Ltd is set aside under Section 114(A). The penalty on Sh. Sunil S. Shah and S.K. Khurana is set aside under Section 112(a). The appellant have also undertaken not to seek refund of duty already paid as they have already claimed the cenvat credit of the same. Appeal allowed in part.

Summary

Issues:
1. Interpretation of the distinction between "Ore" and "Concentrate" for exemption from CVD.
2. Application of extended period of limitation for duty payment.
3. Imposition of penalty and redemption fine.

Analysis:
1. The appellant, M/s Panasonic Energy India Co Ltd, imported a product described as "Ore" and claimed exemption from CVD under Notification No. 4/2006-CE and Notification No. 12/2012-CE. The Revenue contended that the imported product was "Concentrate" and sought to deny the exemption. The appellant paid the duty and interest but argued that the distinction between "Ore" and "Concentrate" is contentious, relying on HSN explanatory notes. They maintained that they followed the foreign supplier's description and had no means to verify the processes carried out on the product abroad. The Tribunal found no intention to evade duty, set aside the demand for the extended period, reduced the redemption fine, and waived penalties due to genuine doubt and lack of malafides.

2. The Tribunal noted that the distinction between "Ore" and "Concentrate" is process-based, with previous decisions and HSN explanatory notes supporting this view. As the goods were labeled as "Ore" by the foreign supplier and the duty was available as cenvat credit, the Tribunal concluded that there was no intent to evade payment. Consequently, they set aside the demand for the extended period and reduced the redemption fine significantly. The interest amount was to be re-quantified based on this decision.

3. The penalty under Section 114(A) for M/s Panasonic Energy India Co. Ltd and under Section 112(a) for individuals was set aside due to the lack of malafides and the appellant's undertaking not to seek a refund of the duty already paid, having claimed cenvat credit. The Tribunal found the penalties and redemption fine excessive given the circumstances and the appellant's genuine doubt regarding the classification of the imported product. The appeal of M/s Panasonic Energy India Co. Ltd was partly allowed, while the appeals of the individuals were fully allowed.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the Tribunal's findings and decisions on each issue, ensuring a comprehensive understanding of the case.