2007 (11) TMI 167 - AT - Customs

Anti-dumping duty on Theophylline Anhydrous imported from China as imposed u/not. 3/01 - In our opinion Theophylline Anhydrous BP which was imported having been subjected to pulverization, repacking and labelling by SEZ unit and thus converted as Theophylline Anhydrous IP and cleared from SEZ cannot be treated as imported from China - clearances from SEZ unit is of a product different from what was imported from China anti-dumping duty not imposable

Summary

Issues:
- Appeal against the order of the Commissioner (Appeals) regarding anti-dumping duty on imported goods cleared by a Special Export Zone (SEZ) unit.

Analysis:
The case involved an appeal by the department against the order of the Commissioner (Appeals) regarding the imposition of anti-dumping duty on imported goods cleared by a SEZ unit. The respondent had imported Theophylline Anhydrous BP2000 from China, which was later converted into Theophylline Anhydrous IP grade and cleared to the Domestic Tariff Area (DTA) by the SEZ unit. The Original Authority held that anti-dumping duty was payable on the goods sold in the DTA. However, the Commissioner (Appeals) considered the conversion of the goods by the SEZ unit as manufacturing and ruled that the clearance of Theophylline Anhydrous IP grade did not attract anti-dumping duty.

The department argued that the anti-dumping duty exemption under Notification No. 3/2001 applied to imports by SEZ units, not clearances by the SEZ units. They contended that as the finished product, Theophylline Anhydrous IP, was cleared from the SEZ unit, excise duty including anti-dumping duty was applicable under Section 8(1) of the Central Excise Act. However, the Tribunal analyzed the case and determined that the anti-dumping duty was not charged at the time of import by the SEZ unit as it was not specified in Notification No. 3/2001 for such imports by SEZ units. The Tribunal further emphasized that the product cleared by the SEZ unit, Theophylline Anhydrous IP, was different from the imported goods from China due to the processing it underwent, and therefore, it could not be considered as imported from China, making it exempt from anti-dumping duty.

Ultimately, the Tribunal rejected the department's appeal, stating that the clearance of Theophylline Anhydrous IP from the SEZ unit did not constitute an import of goods from China subject to anti-dumping duty. The decision highlighted the distinction between imported goods and processed goods cleared by SEZ units, leading to the dismissal of the department's appeal.