2021 (12) TMI 1280 - HC - Customs

Extended period of limitation - Certificate of Origin furnished by the petitioner was valid or not - actual Regional Value Content (RVC) of Tin Ingots - mis-statement or misdeclaration by the petitioner at the time of import or not - HELD THAT - The facts as to whether a case was made out for suppression of facts or wilful mistatement with an intent to evade of payment of duty or not is a question of fact which has to be decided by the hierarchy of the authorities under Customs Act, 1962. The petitioner has to establish the case for interference only before the Appellate Commissioner under Section 128 of the aforesaid Act. Even if the Appellate Commissioner does not accept the contention of the petitioner, the petitioner is not remedyless. The petitioner can recover the same from the 2nd respondent in accordance with the provisions of the Sale of Goods Act, 1930. The writ petition is liable to be dismissed and it is dismissed.

Issues:
Challenge to impugned order regarding customs duty exemption on imported Tin Ingots, validity of Certificate of Origin, jurisdiction of Show Cause Notice, invocation of extended period of limitation under Section 28(4) of the Customs Act, 1962, availability of alternate remedy through appeal under Section 128 of the Customs Act.

Analysis:

1. Challenge to Impugned Order:
The petitioner contested the impugned order confirming the demand proposed in a show cause notice regarding the import of Tin Ingots. The petitioner claimed exemption from customs duty under Notification No.46/2011, subject to complying with Customs Tariff Rules. However, the Department alleged that the Regional Value Content (RVC) of Tin Ingots was below 35%, rendering the Certificate of Origin invalid. The impugned order confirmed a differential customs duty, interest, and penalty under Section 28(4) of the Customs Act, 1962.

2. Validity of Certificate of Origin:
The petitioner imported Tin Ingots under a high sea sale from MMTC Ltd., endorsed Bills of Lading, and provided a Certificate of Origin from the Ministry of International Trade and Industry, Malaysia. The Department disputed the validity of the Certificate, alleging incorrect information from M/s. Malaysia Smelting Corporation (MSC). The petitioner argued that there was no misstatement or misdeclaration during import.

3. Jurisdiction of Show Cause Notice:
The petitioner contended that the Show Cause Notice issued by the first respondent lacked jurisdiction. The Department proposed to recover differential duty, interest, and penalty based on alleged discrepancies in the Certificate of Origin. The petitioner argued against the validity of the notice and challenged the subsequent order confirming the demand.

4. Extended Period of Limitation under Section 28(4):
The first respondent invoked Section 28(4) of the Customs Act, 1962, to confirm the differential customs duty, interest, and penalty. The petitioner argued that despite no wilful suppression of facts, the extended period of limitation was unjustified. Reference was made to legal precedents emphasizing the requirement of wilful intent for misstatement or suppression of facts to apply.

5. Availability of Alternate Remedy through Appeal:
The respondents argued that the petitioner should seek remedy through appeal under Section 128 of the Customs Act, 1962, instead of filing a writ petition. Legal precedents were cited to support the exhaustion of statutory remedies before resorting to writ jurisdiction. The petitioner was advised to approach the Appellate Commissioner within 30 days, subject to pre-depositing a percentage of the disputed tax or penalty.

In conclusion, the High Court dismissed the writ petition, granting the petitioner the liberty to appeal to the Appellate Commissioner under Section 128 of the Customs Act within a specified timeframe. The court emphasized the need to establish a case for interference before the appellate authority and highlighted the availability of remedies under the Sale of Goods Act, 1930, if necessary.

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