2017 (3) TMI 449 - AT - Customs

ADD - Scope of levy of anti-dumping duty on clearances from a special economic zone - jurisdiction to levy during the inter regnum between the expiry of a provisional levy and imposition of final levy - natural justice - Held that - the authorized officer and the first appellate authority have not examined the records to ascertain if the goods cleared to the appellant did match the description in the anti-dumping notification with the SEZ as a mere staging place for removal into DTA. The bill of entry filed for claiming exemption u/s 26 of SEZ Act, 2005 would evidence that ADD had been foregone at that stage. Should it be so evinced as having been foregone and the same goods have been cleared as such against a bill of entry into the DTA the levy of ADD would be correct in law. As this exercise was not undertaken at the lower stages, the impugned order, bereft of this consideration, lacks sanctity. Reliance was placed in the case of Commissioner of Customs, Bangalore v. G M Exports 2015 (9) TMI 1162 - SUPREME COURT , where it was held that the relevant provisions of Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 renders it against authority of law to collect ADD for the time that a notification provisional or final-did not exist. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Recovery of anti-dumping duty on procurement of 'synchronous digital hierarchy (SDH)' equipment.
2. Retrospective applicability of final anti-dumping duty notification.
3. Jurisdiction and authority of the authorized officer in the Special Economic Zone (SEZ).
4. Definition and applicability of 'import' under Customs Act, 1962 and Customs Tariff Act, 1975.
5. Compliance with procedural requirements, including issuance of show cause notice.
6. Applicability of anti-dumping duty on goods manufactured in SEZ and cleared into Domestic Tariff Area (DTA).
7. Legal interpretation of the gap period between provisional and final anti-dumping duty notifications.

Detailed Analysis:

1. Recovery of Anti-Dumping Duty:
The appellant faced recovery of anti-dumping duty on 'synchronous digital hierarchy (SDH)' equipment procured from a supplier in a Special Economic Zone (SEZ). The duty was initially imposed provisionally and later finalized, with retrospective applicability from the date of the provisional imposition.

2. Retrospective Applicability:
The provisional anti-dumping duty imposed on 8th December 2009 expired on 7th September 2010. The final duty, effective from 16th December 2010, was made retrospectively applicable. The dispute centered on whether the duty could be levied for the period between the expiry of the provisional duty and the imposition of the final duty.

3. Jurisdiction and Authority:
The authorized officer in the SEZ demanded the anti-dumping duty for clearances made between 22nd September 2010 and 16th December 2010. The appellant argued that the authorized officer lacked jurisdiction to demand duty post-clearance without specific empowerment and that such action was unsustainable.

4. Definition and Applicability of 'Import':
The appellant contended that their procurements did not conform to the definition of 'imports' under the Customs Act, 1962, as the goods were manufactured in India by a unit in the SEZ. The tribunal agreed that the Customs Act and Customs Tariff Act could not be invoked for goods cleared into the DTA from an SEZ.

5. Compliance with Procedural Requirements:
The appellant argued that the proceedings lacked the issuance of a show cause notice and an opportunity to be heard, which was acknowledged by the first appellate authority. This procedural lapse compounded the appellant's case against the demand for duty.

6. Applicability of Anti-Dumping Duty on SEZ Goods:
The tribunal examined whether goods manufactured in the SEZ and cleared into the DTA were subject to anti-dumping duty. Section 30 of the SEZ Act, 2005, which includes anti-dumping duty as chargeable on such clearances, was scrutinized. The tribunal emphasized that the duty applies if the goods match the description in the anti-dumping notification.

7. Legal Interpretation of Gap Period:
Relying on the Supreme Court's decision in Commissioner of Customs, Bangalore v. G M Exports, the tribunal held that collecting anti-dumping duty during the gap period between the provisional and final notifications was incorrect. The Supreme Court had ruled that no duty could be levied during this interregnum period, making the action by the authorized officer unsustainable.

Conclusion:
The tribunal allowed the appeal, emphasizing that the authorized officer's demand for anti-dumping duty during the gap period was not legally sustainable. The tribunal also highlighted procedural lapses and jurisdictional issues, providing consequential relief to the appellant. The judgment underscored the importance of adhering to legal provisions and procedural requirements in the imposition and recovery of duties.

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