2014 (9) TMI 400 - HC - Customs

Levy of Anti-dumping duties on import of Mulberries Silk Grade IV A - extended period of limitation - demand notice was issued beyond six months from the dated of payment of duty - CESTAT decided in favor of assessee - Held that - Tribunal has over-looked the facts which has been recorded by the Original Authority as well as the First Appellate Authority. At this stage, it is to be pointed out that the importer/respondent did not dispute the test report of the Central Authority, which held that the product is of 2A grade. Furthermore, in the statement recorded under Section 108 of the Act, the partner of the respondent had accepted that he was aware of the Notification No. 106/2003-Customs, dated 10-7-2003 that the import of Mulberry Silk of 2A grade attracts anti-dumping duty. The Tribunal rendered a finding that it cannot be taken as a intentional mis-declaration since the certificate was given by the supplier that the product is of 4A grade and the same quality of the product was mentioned in all the import documents. Reasons assigned by the Tribunal not acceptable - In fact, the First Appellate Authority pointed out that the information furnished in the certificate given by the supplier itself was found to be false and investigation was initiated. Moreover, when the respondent themselves requested the assessment to be done at the enhance value, even before test report, it clearly shows that the assessee was aware of the aware of the quality/grade of the imported goods and trying to escape the rigour of anti-dumping duty. Extended period of limitation - Held that - In the case on hand, Section 9A of the Customs Tariff Act, 1975 was not invoked at all and the goods were given an order of clearance after assessment of the goods. Therefore, it is a clear case, where Section 28(3)(a) of the Customs Act, 1962 is invokable and the relevant date for determination of limitation would be the date of clearance of the goods and therefore, the demand is not hit by limitation. In the absence of specific challenge to the certificate issued by the Central Silk Board or to the findings of the Tribunal, on this aspect of the bonafideness of the assessee/importer, the reasoning of the Tribunal is perverse, hence, the order of the Tribunal is liable to be interfered. - Decided in favor of revenue.

Summary

Issues:
1. Interpretation of substantial question of law regarding misdeclaration of imported goods.
2. Assessment of misdeclaration of goods and imposition of duty, penalty, and interest.
3. Consideration of limitation period for demand of duty.
4. Evaluation of misdeclaration and classification of imported goods.
5. Determination of applicability of anti-dumping duty and relevant provisions under the Customs Act.

Issue 1: Interpretation of substantial question of law regarding misdeclaration of imported goods

The case involved a dispute over the misdeclaration of imported goods as Mulberry Raw Silk of a lower grade to evade anti-dumping duty. The Tribunal concluded that the importer did not intentionally misdeclare the goods based on the certificate provided by the supplier. However, the High Court disagreed, noting that the importer had prior knowledge of the actual grade of the goods and attempted to avoid anti-dumping duty. The Court highlighted discrepancies in the certificates provided and the importer's actions, leading to a finding of intentional misdeclaration to evade duty.

Issue 2: Assessment of misdeclaration of goods and imposition of duty, penalty, and interest

The Adjudicating Authority confirmed the demand of duty, while the First Appellate Authority upheld the decision, stating that the demand was not barred by limitation. The Tribunal, however, found the demand notice issued beyond the prescribed period and ruled it as barred by limitation. The Court analyzed the provisions of the Customs Act regarding levy, assessment, and collection of duty, emphasizing that the Department was justified in invoking the larger period of limitation due to misdeclaration for anti-dumping duty purposes.

Issue 3: Consideration of limitation period for demand of duty

The Court examined Section 28(3)(a) of the Act, which covers situations where levy and assessment have taken place. It differentiated between clauses (a) and (d) of Section 28(3), emphasizing that in cases of misdeclaration leading to anti-dumping duty, the relevant date for limitation is the clearance of goods. Therefore, the demand was not considered barred by limitation as the duty was imposed after obtaining the test report confirming the misdeclaration.

Issue 4: Evaluation of misdeclaration and classification of imported goods

The Court addressed the discrepancies in certificates provided by the supplier and the Central Silk Board, highlighting the rejection of the supplier's certificate due to misdeclaration. The Court emphasized that the importer did not challenge the test report or the classification of goods as per the Central Silk Board's certificate, indicating awareness of the misdeclaration to evade anti-dumping duty.

Issue 5: Determination of applicability of anti-dumping duty and relevant provisions under the Customs Act

The Court concluded that the misdeclaration of goods to evade anti-dumping duty was intentional, leading to the imposition of duty. It emphasized the importance of accurate classification and assessment of imported goods to prevent duty evasion. The Court set aside the Tribunal's order, reinstating the decision of the Commissioner (Appeals) regarding the demand of duty, penalty, and interest.