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2024 (2) TMI 511 - AT - CustomsDFIA scheme - exemption from basic customs duty and additional customs duty - introduction of new condition by way of amendment - department was of the view that the appellants have mis-declared as they failed to fulfill the condition and are therefore liable to pay duty and penalty - Show Cause Notice is issued beyond the period of six months as envisaged under Section 28 of Customs Act 1962 - Time limitation - suppression of facts or not - HELD THAT - The plastic granules of various grades were imported by the appellant under duty free import authorization scheme read with Customs Notification no.40/2006-Cus dated 1/5/2006. In appeal no.C/41597/2014, the goods were cleared prior to 19.02.2009. The Notification no.17/2009-Cus dated 19.02.2009 had brought in condition no.(iii) (a) by which the transferee importer has to execute a bond that the goods will be used within six months in manufacture of dutiable products. It is noted that the amendment was challenged by many importers before the Hon ble High Court of Madras and the Hon. ble High Court vide judgement reported in the case of TARAJYOT POLYMERS LTD. VERSUS UNION OF INDIA, THE COMMISSIONER OF CUSTOMS (APPEALS) , THE DEPUTY COMMISSIONER OF CUSTOMS, DFIA 2017 (11) TMI 494 - MADRAS HIGH COURT held that the amendment cannot be applied retrospectively. The Tribunal in similar matters vide Final Order No.4481/4486/2019 dated 11.3.2019 2019 (3) TMI 715 - CESTAT CHENNAI had set aside the demand interest and penalties for the clearances which were partly prior to 19/2/2009 and after 19/2/2009. The Tribunal had considered the issue of the amendment to the notification no.40/2006 and held that the allegation of misdeclaration and intention to evade customs duty cannot be saddled on the importer as the period is the transition period of the introduction of the amendment. In the present case, as there is no evidence to establish fraud, misrepresentation or suppression of facts with intend to evade payment of duty. The Show Cause Notice issued on 3.12.2010 and 21.5.2010 invoking the extended period cannot sustain. The demand, interest and penalties imposed in appeals C/41601 C/41602/2015 therefore requires to be set aside. Appeal allowed.
Issues involved:
The case involves the interpretation of a customs notification regarding the exemption from duty on imported goods under the DFIA scheme, specifically focusing on the retrospective application of an amendment introducing a new condition for exemption. Summary: 1. The appellant imported plastic granules under the DFIA scheme and cleared them under a customs notification allowing for duty exemption. A subsequent amendment introduced a condition requiring the execution of a bond for the goods to be used in manufacturing dutiable products within six months. The department alleged misdeclaration by the appellant for failing to fulfill this condition, leading to a demand for duty, interest, and penalties. The appellant challenged this based on a High Court judgment stating that the amendment cannot be applied retrospectively. The Tribunal found in favor of the appellant for the period prior to the amendment, setting aside the demand and penalties. 2. For clearances made partly before and after the amendment, the Tribunal considered the transitional nature of the period and the lack of intent to evade duty. Relying on a previous decision, the Tribunal held that the extended period for issuing the Show Cause Notice was time-barred. As there was no evidence of fraud or misrepresentation, the demand, interest, and penalties for these clearances were also set aside. 3. In conclusion, the Tribunal set aside the impugned orders, allowing the appeals with consequential reliefs if any. The decisions were based on the retrospective application of the amendment, lack of evidence for misdeclaration, and the transitional nature of the period in question.
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