2020 (2) TMI 1087 - HC - Customs

Demand of Customs duty - wastage/brokerage available within the factory premises - the wastage neither exported nor removed from the bounded warehouse - Imposition of Customs Duty - breach of Policy Sion Norms by the appellant/assessee - HELD THAT - The two main grounds urged by the appellants were not even adverted to, much less, considered by the Tribunal, it is only appropriate that the impugned judgment and orders made by the Tribunal are set aside and the appellant's appeals are restored before the Tribunal for fresh disposal on their own merits and in accordance with law. On this occasion, however, the Tribunal will have to address these two main grounds as also consider the appellant's contention based upon the Ministry's decision dated 23/9/2008 and 26/11/2008. We order accordingly. We, however, make it clear that we have not examined the merits of the rival contentions and, therefore, the Tribunal to examine such rival contentions on their own merits and in accordance with law in pursuance with this remand - The substantial questions of law are disposed of in the aforesaid terms, without we answering the same ourselves - These appeals are accordingly, disposed off.

Summary

Issues:
1. Justification of demanding custom duties on wastage/brokerage within factory premises.
2. Imposition of custom duties based on alleged breach of Policy Sion Norms.

Analysis:
1. The appeals were admitted based on substantial questions of law regarding the justification of demanding custom duties on wastage/brokerage within the factory premises. The main contention was that the demand of duty was premature as the wastage generated was still within the warehouse and not removed. This crucial issue was not addressed or decided by the Tribunal, despite being specifically raised by the appellants. The show cause notice supported the appellants' position, emphasizing the importance of this unaddressed issue.

2. Another significant issue raised was the imposition of custom duties alleging a breach of Policy Sion Norms by the appellants. The appellants argued that the SION Norms applied only to advance license holders and not to export-oriented units (EOU) like them. However, this issue was also overlooked by the Tribunal in their judgment and order, indicating a failure to consider crucial aspects of the case.

3. The appellants had filed rectification applications citing Ministry decisions that enhanced wastage percentage limits, but the Tribunal rejected the rectification application on the grounds that the Ministry's decisions were not highlighted during the original judgment. Consequently, the Tribunal's decision was deemed inappropriate as it did not address the core issues raised by the appellants.

4. In light of the Tribunal's failure to consider the main grounds raised by the appellants, the High Court ordered the impugned judgment and orders to be set aside. The appeals were restored before the Tribunal for fresh disposal, emphasizing the need to address the unexamined issues and consider the appellants' contentions based on the Ministry's decisions. The High Court clarified that they did not assess the merits of the rival contentions, leaving it to the Tribunal for further examination in accordance with the law.

5. The High Court disposed of the substantial questions of law without answering them, directing the parties to appear before the Tribunal for further proceedings. Emphasis was placed on expeditiously disposing of the appeals, highlighting the importance of acting upon the authenticated copy of the High Court's order for all concerned parties.