1990 (2) TMI 175 - AT - Customs

Summary

Issues:
1. Whether the drums used as containers for the Palm Oil consignment are subject to duty.
2. Whether the appellants were aware of the separate value of the drums.
3. Whether the provisional assessment covered both the RBD Palm Oil and the drums.
4. Whether the demand notice for duty on the drums was issued within the stipulated time frame.

Analysis:

1. The appellants imported Refined Bleached Deodorised (RBD) Palm Oil in drums from Malaysia. The Customs Authorities provisionally assessed the consignment free of duty but later issued a notice demanding duty on the drums used as containers. The Assistant Collector confirmed the demand, alleging suppression by the importers. However, it was argued that the value of the drums was included in the unit value of the oil per metric ton, and the appellants were not separately invoiced for the drums. The Tribunal found that the drums were not separately declared, and the demand notice was issued after a significant delay, holding it barred by time. Thus, the demand for duty on the drums was deemed invalid.

2. The covering invoice and a letter from the suppliers confirmed that the value of the drums was included in the overall value of the goods, and the appellants were not separately invoiced for the drums. Despite indicating the number of drums in the Bill of Entry, the separate value of the drums was not declared. The Tribunal concluded that this omission did not amount to suppression of material information, as the appellants were not aware of the separate value of the drums due to the inclusive pricing structure.

3. The Collector (Appeals) upheld the demand for duty on the drums, stating that the provisional assessment covered both the RBD Palm Oil and the drums. However, the Tribunal disagreed, noting that while the consignment was provisionally assessed free of duty, there was no evidence of provisional assessment of the drums. The Bill of Entry only reflected the assessment of the oil, and no attempt was made to assess the drums. Therefore, the demand notice for duty on the drums, issued long after the clearance date, was held to be time-barred.

4. The demand notice for duty on the drums was issued on 5-8-1980, well beyond the six-month period from the date of clearance of the goods on 25-11-1978. The Tribunal ruled that the notice was untimely and, consequently, set aside the impugned order, allowing the appeal in favor of the appellants with consequential relief.