2022 (3) TMI 705 - HC - Customs

Exemption of goods - goods cleared from SEZ to DTA by way of stock transfer - no evidence to the effect that the assessee paid respective State Sales Tax/VAT on the said goods even at any subsequent stage of transfer of the said goods - interpretation of Circular No.44/2013 Customs dated 30th December, 2013 - invocation of extended period of limitation - Bill of Entries were countersigned by the customs official prior to clearance of goods - suppression of facts and/or any misstatement of the assessee/Respondent - N/N. 45/2005 Customs dated 16th May, 2005. HELD THAT - The adjudicating authority, namely, the Principal Commissioner of Customs (Airport and Administration), Kolkata was of the view that the respondent/assessee is not entitled to benefit of notification no.45/2005 Customs dated 16th May, 2005 in the light of the circular issued by the Board being Circular no.44/2013 Customs. Accordingly, the adjudicating authority confirmed the proposal in the show cause notice and denied the benefit of the notification. The decision of the Hon ble Supreme Court in the Commissioner of Customs, Bangalore-1 vs- Motorola India Limited 2019 (9) TMI 229 - SUPREME COURT . It was pointed out that when the question involved is whether an assessee is covered by an exemption notification or not is a question relatable to the rate of duty. If that be the legal position, then this Court cannot entertain this appeal. Thus, the preliminary objection raised by Mr. Ghosh is sustained and appeal is held to be not maintainable before this Court. The appeal is dismissed as not maintainable. The Registry is directed to return the original certified copy of the order passed by the Tribunal to the learned advocate for the appellant after retaining a photostat copy.

Summary

Issues:
1. Interpretation of exemption Notification No. 45/2005 Cus(Tariff) dated 16th May, 2005.
2. Scope of Circular No. 44/2013-Customs dated 30th December, 2013.
3. Applicability of the extended period of limitation in customs cases.
4. Maintainability of the appeal under Section 130 of the Customs Act, 2016.

Interpretation of Exemption Notification:
The appellant questioned whether goods cleared from SEZ to DTA via stock transfer were exempted under Notification No. 45/2005 Cus(Tariff) without evidence of paying State Sales Tax/VAT. The Tribunal's interpretation of Circular No. 44/2013-Customs and the original exemption was challenged, arguing that the circular was merely explanatory and did not introduce new conditions. The Tribunal's refusal to invoke the extended period of limitation due to goods clearance from SEZ without verifying future tax payments was also contested.

Scope of Circular No. 44/2013-Customs:
The Tribunal's interpretation of Circular No. 44/2013-Customs was questioned, arguing that it did not restrict the original exemption under Notification No. 45/2005 Cus(Tariff). The appellant contended that the circular provided clarification and did not impose additional conditions, challenging the Tribunal's understanding of the circular's impact on the exemption.

Applicability of Extended Period of Limitation:
The Tribunal's decision on invoking the extended period of limitation was disputed, emphasizing that customs officials rely on Bill of Entries for clearance and cannot foresee future actions like tax payments in DTA units. The appellant argued that the Tribunal erred in not considering the possibility of tax payments at subsequent stages and the limitations faced by customs officials during goods clearance.

Maintainability of Appeal under Section 130:
The respondent raised a preliminary objection on the appeal's maintainability under Section 130 of the Customs Act, citing the question of rate of duty concerning the applicability of Notification No. 45/2005-Customs. Referring to the Supreme Court's decision in Commissioner of Customs, Bangalore vs. Motorola India Limited, the Court held that questions related to exemption notifications fall under the rate of duty, making the appeal not maintainable. Consequently, the appeal was dismissed, and the original order copy was directed to be returned to the appellant's advocate.

Conclusion:
The High Court dismissed the appeal as not maintainable under Section 130 of the Customs Act, 2016, based on the question of exemption notification's applicability falling within the rate of duty domain. The Court upheld the preliminary objection raised by the respondent's counsel, citing relevant legal precedents. As a result, the substantial questions of law raised by the revenue were not addressed, and the original order copy was to be returned to the appellant's advocate.