2014 (1) TMI 368 - AT - Customs

Exemption from basic customs duty - Customs Notification No.51/2000-Cus - Duty Exemption Entitlement Certificate - Surcharge of 10% of the Basic Customs Duty - Held that - levy may include both imposition of a tax as well as assessment. Section 28 of the Customs Act envisages issue of demand by proper officer for duty not levied or short levied. Surely a customs Officer cannot make demand duty over and above what is levied by the Parliament - for the purpose of levying such additional duty of customs under section 3 (1) of Customs Tariff Act, it is not the excise duty as per the Central Excise Tariff which is being taken into account. Where there are exemptions from excise duty granted unconditionally, the rates resulting after giving effect to such exemption is considered as excise duty for the time being leviable on like articles. In fact, there are many cases, where even in the case of conditional exemptions, the court have held that rates as applicable after giving effect to such notifications has to be considered as duty leviable on like goods in India. Government has already issued notification 51/2000-Cus dated 27-04-2000 exempting anti-dumping duty for imports against Advance Licenses - when it was decided that the importer was not eligible for exemption under notification 64/88-Cus the appellants were given opportunity to claim alternative notification 65/88-Cus wherever such plea was taken - it is proper to remand the matter to the adjudicating authority to examine the eligibility to notification 51/2000-Cus dated 27-04-2000. The impugned orders of lower authorities are set aside and the matter is remanded to the adjudicating authority to decide on the benefit of notification 51/2000-Cus dated 27-04-2000 - Decided in favour of Revenue.

Summary

Issues Involved:
1. Calculation of "landed value" for anti-dumping duty.
2. Interpretation of the term "levied" in the context of customs duty.
3. Eligibility for exemption under Customs Notification 51/2000-Cus.

Detailed Analysis:

1. Calculation of "landed value" for anti-dumping duty:
The core dispute revolves around the method of calculating the "landed value" for imposing anti-dumping duty under Notification 16/99-Cus dated 9.2.99. The department contends that the landed value should exclude the Basic Customs Duty (BCD) for which exemption was claimed under Notification 31/97-Cus, whereas the respondent argues that the BCD as per the tariff (without considering the exemption) should be included. The adjudicating authority initially decided in favor of excluding the BCD and surcharge, but the Commissioner (Appeals) reversed this decision, stating that the BCD as per the tariff should be included in the landed value calculation. The Tribunal ultimately sided with the department, emphasizing that the term "levied" should be interpreted to mean the effective rate after considering exemptions.

2. Interpretation of the term "levied" in the context of customs duty:
The Tribunal examined the interpretation of the term "levied" in the Explanation to Notification 16/99-Cus. The respondent argued that "levied" refers to the duty prescribed under the tariff by Parliament, without considering exemptions. However, the Tribunal noted that the term "levied" has been interpreted by courts to include both imposition and assessment of duty, and current practice considers the effective rates after exemptions. The Tribunal cited several cases, including UOI Vs. Rakesh Enterprises and Lohia Sheet Products Vs. CC, to support the view that "levied" includes the effective duty rate post-exemptions. Therefore, the Tribunal concluded that the term "levied" in the notification should be interpreted to mean the duty as reduced by any exemption notification.

3. Eligibility for exemption under Customs Notification 51/2000-Cus:
The respondent argued that they could claim exemption from anti-dumping duty under Notification 51/2000-Cus dated 27.4.2000, which was issued before their first import. Although this exemption was not claimed at the time of assessment, the Tribunal acknowledged that such exemptions could be claimed later, as seen in previous cases like Sonic Band International Vs. CCE Vadodara. The Tribunal decided to remand the matter to the adjudicating authority to examine the respondent's eligibility for the exemption under Notification 51/2000-Cus. This decision aligns with the Tribunal's approach in similar cases, ensuring that the respondent is given an opportunity to claim the exemption.

Conclusion:
The Tribunal set aside the orders of the lower authorities and remanded the matter to the adjudicating authority to decide on the benefit of Notification 51/2000-Cus dated 27-04-2000, ensuring that the respondent's eligibility for the exemption is thoroughly examined. The judgment emphasized the importance of considering effective duty rates post-exemptions in calculating landed value and interpreting the term "levied" in the context of customs duty.