2009 (9) TMI 425 - AT - Customs

Exemption- This appeal was filed by the department against an order passed by the Commissioner (Appeals), whereby the respondent got the benefit of exemption from payment of CVD on goods imported under DFIA No. 0310386574 dated 23-6-2006 issued from the office of the Directorate-General of Foreign Trade (DGFT). The main contention raised by the department (appellant) is that the above endorsement is not a decision or order appealable under Section 128 of the Customs Act. held that- endorsement taken as not binding and customs to independently assess the goods. Commissioner (Appeals) ought to have not entertained appeal based on intradepartmental proceedings. Impugned order set aside.

Summary

Issues:
1. Appeal filed against an order granting exemption from payment of CVD on imported goods.
2. Contention regarding the appealability of an endorsement on DFIA.
3. Communication of conditions by the DGFT regarding payment of applicable duty.
4. Entertaining an appeal against an endorsement made on DFIA.
5. Jurisdiction of the assessing authority and the Commissioner (Appeals) in intradepartmental proceedings.

Analysis:
1. The appeal in question was filed by the department against an order granting the respondent exemption from payment of Countervailing Duty (CVD) on goods imported under a specific DFIA. The appellate Commissioner had granted this benefit subject to the production of an indemnity bond by the party. The department contended that the endorsement on the DFIA, requiring payment of CVD, was not a decision or order appealable under the Customs Act. The respondent argued that the endorsement could adversely affect them during imports, justifying their appeal. The Tribunal found that the endorsement did not cause any injustice to the respondent and should not have been entertained by the Commissioner (Appeals).

2. The communication from the DGFT regarding the conditions for imports under the DFIA was crucial in this case. Initially, a letter from the Foreign Trade Development Officer stated the requirement of paying CVD. However, a subsequent letter informed the party that this condition was deleted as per the Foreign Trade Policy. This communication clarified that the respondent had no liability to pay CVD on imports under the DFIA after a certain date, resolving any ambiguity regarding duty payment.

3. The Tribunal highlighted that the endorsement on the DFIA, which was not communicated to the respondent by the department, did not result in any actual adverse impact on the party. The assessing authority was expected to independently assess duty during import, and any unfavorable assessment could be appealed by the importer. The Tribunal emphasized that intradepartmental proceedings should not be the subject of appeals, and the Commissioner (Appeals) erred in entertaining the appeal against the endorsement. The decision allowed the appeal by setting aside the Commissioner's order while affirming the assessing authority's independent quasi-judicial function in duty assessment during import processes.