2023 (6) TMI 1257 - AT - Customs

Doctrine of Merger - Appeal dismissed on being time barred - Project Import - Exemption from duty of customs - failure on the part of the importer to meet the Project Import regulations - HELD THAT - In the first round of litigation before this forum, an appeal was filed by the importer and this Bench, after hearing both sides and after waiving the pre-deposit in V. Mohan 2010 (6) TMI 334 - CESTAT, CHENNAI chose to set aside the impugned order by observing that the appellant had no knowledge of the adjudication against M/s. Powmex Steels Ltd. at any date prior to 28.07.2007. Further, the above order of this Bench has been accepted by both the parties and thus, has attained finality - By the time the above order of this Bench was passed, the second Show Cause Notice dated 27.07.2004 was already on board and we do not see any whisper about the same anywhere in the order of this Bench and in particular, any issue being made as to the Show Cause Notice being issued much after the period of limitation. Hence, we can only say that the contention of the appellant cannot be accepted as, apparently, it has missed the bus. Further, when the order of this Bench which was passed against the Order-in-Appeal wherein the Order-in-Original was challenged, which was passed on the second Show Cause Notice, has become final now, we have to only hold that by virtue of the doctrine of merger, the orders of the lower authorities have merged with the order of this Bench and it is only consequent to the directions of this Bench that the de novo Order-in-Original dated 26.07.2012 was passed. The appellant registered its Project Contract for import of capital goods, but it has not disputed the missing of two items which therefore resulted in denying the concurrent benefit of exemption. For this, differential duty was demanded, which is as per law - Appeal dismissed.

Summary

Issues involved: Interpretation of Project Import regulations, validity of Show Cause Notice, merger doctrine application, sustainability of Order-in-Appeal.

Issue 1 - Project Import regulations interpretation:
The appellant registered a Project Contract for importing capital goods, but two items were found missing. The Revenue contended that once goods are registered under Project Import, they cannot be de-registered for claiming other exemptions. A Demand Notice was issued for the differential duty on the missing items. The appellant's appeal was dismissed by the first appellate authority as barred by limitation, leading to an appeal before the forum. A previous order remanded the matter for de novo adjudication due to no delay in receipt. This order was not challenged further, thus becoming final.

Issue 2 - Validity of Show Cause Notice:
The appellant raised objections regarding the Show Cause Notice being hit by limitation as it was issued after the Order-in-Original and against a non-existent entity due to a merger. The adjudicating authority upheld the demand of differential duty due to non-compliance with Project Import regulations. The first appellate authority rejected the appeal, leading to the current appeal before the forum.

Issue 3 - Merger doctrine application:
The forum noted that a previous order by the Bench had set aside the impugned order due to lack of knowledge by the appellant regarding the adjudication against the previous entity. The second Show Cause Notice issued during this period was not challenged, and the doctrine of merger was applied, leading to the de novo Order-in-Original.

Issue 4 - Sustainability of Order-in-Appeal:
After considering the contentions of both sides and reviewing the lower authorities' orders, the forum focused on the sustainability of the Order-in-Appeal. The forum found that the differential duty was rightfully demanded due to the missing items, and the appellant failed to make a case for intervention. Consequently, the appeal was dismissed.

This judgment addresses the interpretation of Project Import regulations, the validity of the Show Cause Notice, the application of the merger doctrine, and the sustainability of the Order-in-Appeal. The forum upheld the demand for differential duty due to missing items under the Project Contract, finding no grounds for intervention.