2022 (11) TMI 1159 - AT - Customs

Finalization of provisional assessment - Re-export of goods - non-declaration of packing materials for components/ parts of wind mill/ SOC containers with a view to evade customs duty - Denial of benefit of Exemption Notification No. 104/94-Cus. dated 16.03.1994 - HELD THAT - It is seen from the language of the Notification that it pertains to exemption to durable containers from payment of customs duty when imported into India if importer execute a bond and re-export of containers is done within the prescribed period or extended period - once the imported goods have been allowed export by the department, demand of custom duty denying benefit of notification No. 104/94 on export goods is not correct in spite of the fact that they have re-exported after the stipulated period of 6 months. Therefore where the goods are already re-exported benefits of said Notification should be granted. However, the facts of export of the very same goods, which were imported by the appellant have to be established and identity of the imported and re-exported goods is required to be examined by the lower authorities, therefore matter needs to be reconsidered, we set aside the impugned order and remand the matter to the assessing authority for examining the appellant s claim in this regards. The assessments are provisional and the same have to be finalized in accordance with the provisions of the Customs Act and there can be no demand of duty without finalization of the assessments as held in Hon ble Gujarat High Court s judgment in the case of ESSAR STEEL LTD. VERSUS UNION OF INDIA 2001 (2) TMI 149 - HIGH COURT OF GUJARAT AT AHMEDABAD . Where there is incompatibility between departmental proceedings to enforce contract and parallel proceedings for finalization of provisional assessment under Section 18 of the Customs Act, the statutory action must prevail. This is to say that the proceedings for finalization of provisional assessment must go ahead. The assessee s duty liability will depend upon the result of these proceedings. This appeal is allowed by way of remand directing the assessing authority to finalize the provisional assessment of the relevant Bills of Entry and then proceed to recover the duty of customs, if found due.

Summary

Issues:
Appeal against Order-in-Original for confiscation of goods, customs duty demand, interest, and penalties. Denial of benefit under Notification No. 104/94-Cus for imported goods. Provisional assessment and demand under Section 28 of the Customs Act. Finalization of assessment and duty determination.

Detailed Analysis:

Issue 1: Appeal against Order-in-Original
The appeal challenged the Order-in-Original dated 30.06.2015 by the Commissioner of Customs, Kandla, which ordered confiscation of goods, confirmed customs duty demand with interest, and imposed penalties on the appellant. The appellant, M/s Vestas Wind Technology India Pvt. Ltd., was accused of deliberately not declaring packing materials for components of Wind Operated Energy Generator (WOEG) to evade customs duty. The total value of undeclared goods was Rs. 10,98,12,887. The appellant had made a voluntary payment of Rs. 2,89,57,316 during the investigation.

Issue 2: Denial of benefit under Notification No. 104/94-Cus
The appellant claimed the benefit of Notification No. 104/94-Cus for specialized equipment and packing materials imported, valued at Rs. 23,71,41,010. However, it was found that the goods did not qualify for the exemption claimed under the notification as they were not re-exported within the prescribed time limit. The show cause notice proposed the denial of duty exemption and demanded customs duty of Rs. 8,49,40,801 along with interest. The adjudicating authority confirmed the duty demand, interest, and penalties, and denied the benefit of the notification.

Issue 3: Provisional Assessment and Demand under Section 28
The appellant argued that the demand raised under Section 28 of the Customs Act was premature as the assessments mentioned in the show cause notice were provisional and had not been finalized. They cited various judgments to support their contention that no demand can be raised under Section 28 before finalization of provisional assessments.

Issue 4: Finalization of Assessment and Duty Determination
The Tribunal observed that the Revenue had denied the duty exemption under Notification No. 104/94-Cus for the imported goods. It was noted that some of the goods imported by the appellant had already been re-exported, and once goods were allowed for export, the demand of customs duty denying the benefit of the notification on exported goods was not correct. The matter was remanded to the assessing authority to examine the appellant's claim regarding re-exported goods.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter for re-examination. It was emphasized that the provisional assessments had to be finalized before any duty determination. The appeal was allowed by way of remand to the Adjudicating/Assessing Authority for further proceedings in accordance with the Customs Act and principles of natural justice.