2021 (11) TMI 491 - AT - Customs

Extended period of limitation - Demand of differential duty alongwith ineterst and penalty - short paid customs duty - appellant had cleared the said goods without disclosing the retail sale price RSP - invocation of provisions of section 28(4) of the Customs Act - suppression of facts or not - HELD THAT - In the present case, the period involved is from 21.12.2012 to 25.05.2014, but the notice was issued to the appellant on 06.12.2016. It was, therefore, clearly beyond the stipulated period of one year. The show cause notice has, however, invoked the provisions of sub-section (4) of section 28 of the Customs Act and it has been stated that the importer (the appellant) had not disclosed the true facts on the Bills of Entry filed under section 47 of the Customs Act, as it failed to declare that the motor vehicle parts were for trading purposes and not for individual consumption and if this fact was declared on the invoices, the Assessing Officer would have checked and asked for the RSP of the motor vehicle parts before clearing the parts for home consumption. The appellant had, therefore, wilfully not declared the RSP of the imported goods with an intent to evade payment of appropriate customs duty on the imported goods. The provisions of section 11A of the Central Excise Act, which are pari materia to section 28(4) of the Customs Act came up for interpretation before the Supreme Court in PUSHPAM PHARMACEUTICALS COMPANY VERSUS COLLECTOR OF C. EX., BOMBAY 1995 (3) TMI 100 - SUPREME COURT . The Supreme Court observed that section 11A empowers the Department to reopen the proceedings if levy has been short levied or not levied within six months from the relevant date but the proviso carves out an exception and permits the authority to exercise this power within five years from the relevant date in the circumstances mentioned in the proviso, one of it being suppression of facts - It is, therefore, clear that the suppression of facts should be deliberate and in taxation laws it can have only one meaning, namely that the correct information was not disclosed deliberately to escape payment of duty. In EASLAND COMBINES VERSUS COLLECTOR OF C. EX., COIMBATORE 2003 (1) TMI 107 - SUPREME COURT , the Supreme Court observed that for invoking the extended period of limitation, duty should not have been paid because of fraud, collusion, wilful statement, suppression of fact or contravention of any provision. These ingredients postulate a positive act and, therefore, mere failure to pay duty which is not due to fraud, collusion or wilful misstatement or suppression of facts is not sufficient to attract the extended period of limitation. There is no mis-statement or suppression of facts by the appellant. The basic ingredients for invoking the extended period of limitation do not, therefore, stand satisfied - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:

1. Alleged non-disclosure of Retail Sale Price (RSP) of imported motor vehicle parts.
2. Invocation of the extended period of limitation under Section 28(4) of the Customs Act, 1962.
3. Applicability of the Standards of Weights and Measures Act, 1976 versus the Legal Metrology Act, 2009.

Issue-wise Detailed Analysis:

1. Alleged Non-Disclosure of RSP:

The appellant, an authorized dealer and service center of Bentley Motors Ltd., imported spare parts through courier mode. A show cause notice dated 06.12.2016 alleged that the appellant cleared goods without disclosing the RSP, leading to a short payment of customs duty amounting to ?14,29,047/- for the period 21.12.2012 to 25.05.2014. The appellant contended that the courier agent filed the requisite Bills of Entry based on invoices from the foreign consignor and that the appellant had no role in the declaration process. The Additional Commissioner and the Commissioner (Appeals) upheld the demand, asserting that the appellant knowingly did not declare the RSP despite being aware of the requirement.

2. Invocation of Extended Period of Limitation:

The show cause notice invoked Section 28(4) of the Customs Act, which allows for an extended period of limitation up to five years in cases of collusion, wilful mis-statement, or suppression of facts. The appellant argued that the extended period could not be invoked as they had no role in the assessment of the goods. The Tribunal noted that the duty was paid by the courier agent based on the assessment by the proper officer, and the appellant's role was limited to receiving the goods and paying the duty to the courier agent. The Tribunal found that there was no deliberate suppression of facts by the appellant, referencing Supreme Court judgments that suppression must be deliberate and with intent to evade duty. Consequently, the Tribunal held that the conditions for invoking the extended period were not met.

3. Applicability of Standards of Weights and Measures Act, 1976 versus Legal Metrology Act, 2009:

The appellant contended that the provisions of the Standards of Weights and Measures Act, 1976 were not applicable as they were superseded by the Legal Metrology Act, 2009 effective from 01.04.2011. However, the Tribunal did not find it necessary to address this contention, given that the primary issue of the extended period of limitation was decided in favor of the appellant.

Conclusion:

The Tribunal set aside the order dated 12.03.2020 passed by the Commissioner (Appeals), concluding that the extended period of limitation under Section 28(4) of the Customs Act was not applicable due to the lack of deliberate suppression of facts by the appellant. The appeal was allowed in favor of the appellant.