2004 (2) TMI 208 - AT - Central Excise

Summary

Issues:
Classification of imported goods, valuation of goods, additional duty of customs (CVD) without show cause notice.

Classification of Imported Goods:
The case involved the classification of Textile Grade Polyester chips imported by the appellants for manufacturing Polyester Filament Yarn. The dispute arose when the proper officer changed the classification from Heading 38.01/19(1) to Heading 39.01/06 and included landing charges in the assessable value. The High Court passed an interim order allowing clearance under the original classification pending appeal. Subsequently, the original authority was directed to re-adjudicate the classification dispute following a Supreme Court judgment in another case. The Assistant Commissioner raised an issue regarding the payment of Additional Duty of Customs (CVD) under Section 3 of the Customs Tariff Act during de novo adjudication.

Valuation of Goods:
Apart from the classification issue, the Asstt. Commissioner also raised concerns about the valuation of the imported goods. The party challenged the demand of CVD without a show cause notice, arguing that it was an illegal demand due to the lack of prior notice in any earlier proceedings.

Additional Duty of Customs (CVD) without Show Cause Notice:
The main ground of challenge in the appeal to the Tribunal was the demand of CVD without issuing a show cause notice under Section 28 of the Customs Act. The Commissioner (Appeals) deemed the assessment of the Bill of Entry as provisional and upheld the demand. However, the Tribunal found that the assessment was not provisional as per the Supreme Court's ruling and that a show cause notice was mandatory for demanding duty. Consequently, the demand of CVD without a show cause notice was deemed illegal, and the appeal was allowed.

In conclusion, the Tribunal set aside the order of the Commissioner (Appeals) and allowed the appeal, ruling that the demand of CVD without a show cause notice was illegal as per the Supreme Court's decision, emphasizing the mandatory requirement of a prescribed format notice for demanding duty.