2024 (11) TMI 530 - AT - Customs

Demand for non-payment of cess along with interest - appellant/exporter had exported Fabricated Mica - period of Limitation period for issuing Show Cause Notice - HELD THAT - In this case it is an admitted fact that at the time of export of goods the appellant was liable to pay cess which appellant failed to pay, therefore, a Show Cause Notice under Section 28 was issue within time to the appellant for the export made during the period 05.05.2014 and 14.08.2014 on 13th May, 2016. As with effect from 2.4.2011 under Section 28 Show Cause Notice could have been issued within one year. Therefore, the contention of the appellant that Show Cause Notice is barred by limitation is not sustainable. Accordingly, we hold that demands confirmed against the appellant are within time. The appellant has taken the argument that the orders u/s 17(5) of the Customs Act, 62 is not passed therefore, the proceedings are not sustainable. We find that in this case there is no question of enhancement of payment of duty by the Adjudicating Authority by reassessing the goods under Section 17(4) of the Customs Act, 1962. Infact provision of Section 17(4) of the Customs Act are not involved in this case. Therefore, question of passing order under Section 17(5) of Customs Act does not arise. Accordingly, the said argument fails. In terms of Section 129 D(2) of the Customs Act, the proceedings against the appellant are not sustainable - We find that in this case the Show Cause Notice has been issued to the appellant under Section 28 of the Customs Act, 1962 for short payment or non payment of cess by the appellant. Therefore, the said argument also fails. Show Cause Notice does not demand interest from the appellant - We find that in this case, the Show Cause Notice is not proposing recovery of interest from the appellant and the case was relied upon by the Ld. Authorized Representative in support of demand of interest, and all those cases that Show Cause Notice has demanded the interest and therefore, it was held that the appellant is liable to pay interest. As there is no proposal of demand of interest in the Show Cause Notice, the demand of interest is set aside. We confirm the demand of cess payable by the appellant and no interest is payable by the appellant.

Summary

Issues:
Appeal against demand for non-payment of cess along with interest; Validity of Show Cause Notice; Applicability of Section 17(5) of the Customs Act; Limitation period for issuing Show Cause Notice; Liability to pay interest even if duty not paid.

Analysis:
The appellant appealed against an order demanding a sum for non-payment of cess along with interest. The appellant, a registered exporter of Fabricated Mica products, exported goods without paying the applicable cess. A Demand Cum Show Cause Notice was issued under section 28(1) of the Customs Act, 1962, directing the appellant to show cause for non-payment of cess. The lower authority confirmed the demand, leading to the appeal. The appellant argued that the demand notice was not sustainable as no order under Section 17(5) of the Customs Act was passed. The appellant also contended that the Show Cause Notice was issued beyond the limitation period. However, the Ld. Authorized Representative opposed these arguments, stating that the Show Cause Notice was issued correctly within the time limit. The Tribunal held that the demands confirmed against the appellant were within time, rejecting the appellant's contention on limitation.

The appellant further argued that the proceedings were not sustainable as orders under Section 17(5) of the Customs Act were not passed. The Tribunal found that there was no question of enhancement of duty under Section 17(4) in this case, making the argument invalid. The appellant's argument under Section 129 D(2) of the Customs Act was also dismissed as the Show Cause Notice was issued under Section 28 for non-payment of cess. Regarding interest, the appellant contended that since the Show Cause Notice did not demand interest, it should not be payable. The Tribunal agreed, setting aside the demand for interest as it was not proposed in the Show Cause Notice.

In conclusion, the Tribunal confirmed the demand for cess payable by the appellant but ruled that no interest was payable. The appeal was disposed of accordingly.