2007 (12) TMI 76 - AT - Customs

Commissioner invoked larger period on the ground that the appellant has mis-declared the goods as Gas Oil while the same was High Speed Diesel Oil - Merely because the expression Gas Oil stands used by the appellant along with clear description of the goods as HSD, it cannot be said that there was any mis-declaration - HSD is classifiable u/h 2710.19.30, which also stands declared by the appellant in the certificate for procurement as also in B/E - case of confusion demand time barred

Summary

Issues:
1. Confirmation of demand of duty of Rs. 25,32,000 against the appellants for Additional Duty of Customs on High Speed Diesel Oil.
2. Applicability of Notification No.52/2003-Cus for exemption from basic Customs duty but not for Additional Duty of Customs on HSD oil.
3. Challenge to the impugned order on merit and limitation by the appellant.
4. Interpretation of the extended period of limitation invoked by the Commissioner based on mis-declaration of goods as 'Gas Oil' instead of 'High Speed Diesel Oil'.
5. Examination of the confusion regarding payment of additional duty of Customs on HSD and the absence of mala fide intention by the appellant.

Analysis:
1. The demand for duty against the appellants for Additional Duty of Customs on High Speed Diesel Oil imported during May 2003 to May 2004 was confirmed. The notification providing exemption from basic Customs duty did not extend to Additional Duty of Customs on HSD oil, leading to the confirmation of the demand.

2. The appellant challenged the order on merit and limitation, citing a Delhi Tribunal case where goods imported by a 100% E.O.U. and used for manufacturing final products were not deemed leviable to duty. The appellant argued that the demand was time-barred as they had been importing the goods since 1999 without any objection from the Revenue.

3. The Revenue contended that if goods warehoused in a 100% E.O.U. were not leviable to duty, there would be no need for an exemption notification. The Revenue also supported the extended period of limitation invoked by the adjudicating authority.

4. The Tribunal found that the demand was barred by limitation as the show cause notice was issued after the extended period. The mis-declaration of goods as 'Gas Oil' instead of 'High Speed Diesel Oil' was not deemed intentional, as the correct description was provided in the procurement certificate and bills of entry. The confusion regarding the payment of additional duty on HSD indicated a lack of mala fide intention to evade duty.

5. Ultimately, the Tribunal set aside the impugned order based on the limitation ground, without delving into the merits of the case, and granted relief to the appellant. The confusion surrounding the classification of the goods and the historical practice of customs clearance without additional duty demand supported the decision to bar the demand by limitation.