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2019 (12) TMI 652 - AT - CustomsBenefit of CVD exemption - Sr. No.88 and Sr. No. 8C(ii) of notification No. 6/2006-CE dated 01.03.2006 (as amended) - import of Filmtech Membrane (water filter parts) - classified under CTH 84212190 or not? - demand of differential duty alongwith interest and penalty - extended period of limitation. HELD THAT - The issue on merits as submitted by the learned Authorized Representative is no longer res integra and covered by the decision in case of PURE CURE TECHNOLOGY VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , NHAVA SHEVA 2018 (12) TMI 617 - CESTAT MUMBAI where it was held that the appellant themselves had admitted that exemption notification to the said product was inserted w.e.f.1.3.2007 mentioning through new Sr. No. 8B where the classification of sub-heading was shown as 842121. Interest and penalty - HELD THAT - Once the appellants have paid duty and interest and have admitted their liability they are barred in subsequent proceedings, to claim the benefit of limitation in respect of the amounts so paid - in view of the statement made by the Appellant admitting the differential duty liability in respect of each of 13 Bill of Entries, after making the payment, the appellants are barred from taking any stand contrary to what has admitted by them. The fact that statement has been recorded nearly two months after the act of actual deposit the statement is voluntary, in absence of any retraction of the same - there are no merits in submission made by the Appellant in respect of the differential duty confirmed along with interest. Abatement of duty - Section 28 (2) of the Customs Act, 1962 - HELD THAT - In terms of this sub section, when the son has admitted duty liability and had paid the same along with the interest due, the proceedings should have been abated against that person. In our view it is not the case of willful misstatement, suppression or mis-declaration, but a case of bonafide error in claiming the benefit of exemption which was not due to them, we do not find any merits in the penal proceedings undertaken against them - Since appellants have clearly and correctly described the imported goods as part of water filter, the error in claiming the benefit of wrong exemption notification cannot be act of deliberate misdeclaration - there are no merits in the order of Commissioner imposing penalty on the appellants under Section 114A. Appeal allowed in part.
Issues Involved:
1. Denial of CVD exemption under Notification No. 6/2006-CE. 2. Liability of goods for confiscation under Section 111(d) and (m) of the Customs Act, 1962. 3. Confirmation of differential duty demand under Section 28(1) of the Customs Act, 1962. 4. Confirmation of interest demand under Section 28AB of the Customs Act, 1962. 5. Imposition of penalties under Sections 114A and 114AA of the Customs Act, 1962. 6. Appropriation and adjustment of amounts paid voluntarily by the appellant. 7. Final assessment of provisionally assessed Bills of Entry. Detailed Analysis: 1. Denial of CVD Exemption: The Commissioner denied the benefit of CVD exemption claimed under Sr. No.88 and Sr. No. 8C(ii) of Notification No. 6/2006-CE, as the imported goods were parts of water purification equipment and not the equipment itself. The Tribunal upheld this decision, referencing the case of Pure & Cure Technology, which established that membranes, though crucial, do not independently purify water and thus do not qualify for the exemption. 2. Liability for Confiscation: The goods with an assessable value of ?9,36,63,021/- were held liable for confiscation under Section 111(d) and (m) of the Customs Act, 1962. However, since the goods were not available for confiscation, the order focused on the penalties and duties instead. 3. Confirmation of Differential Duty Demand: The Commissioner confirmed a demand of ?71,38,777/- as differential duty under Section 28(1) of the Customs Act, 1962. The Tribunal noted that the appellants had admitted their liability and paid the differential duty voluntarily, thus upholding the demand. 4. Confirmation of Interest Demand: An interest demand of ?6,74,584/- was confirmed under Section 28AB of the Customs Act, 1962. The Tribunal supported this demand, noting that the appellants had also voluntarily paid the interest. 5. Imposition of Penalties: The Commissioner imposed penalties totaling ?78,13,361/- under Section 114A and ?5,00,000/- under Section 114AA of the Customs Act, 1962. The Tribunal, however, found that since the appellants had clearly described the goods and there was no deliberate misdeclaration, the penalties under Sections 114A and 114AA were not justified. The Tribunal set aside these penalties, citing the principle of estoppel, as the appellants had admitted their liability and paid the duty and interest. 6. Appropriation and Adjustment of Amounts Paid: The Commissioner ordered the appropriation and adjustment of ?83,64,390/- paid voluntarily by the appellants against the differential duty, interest, and/or penalty payable. The Tribunal upheld this appropriation. 7. Final Assessment of Provisionally Assessed Bills of Entry: The Commissioner ordered the final assessment of provisionally assessed Bills of Entry No. 792603 dated 31.03.11 and 3303205 dated 25.04.11, denying the benefit of Notification No. 6/2006-CE. The Tribunal upheld this order. Conclusion: The Tribunal partly allowed the appeal by setting aside the penalties imposed under Sections 114A and 114AA of the Customs Act, 1962, while upholding the rest of the impugned order, including the denial of CVD exemption, confirmation of differential duty and interest demands, and the final assessment of provisionally assessed Bills of Entry. The principle of estoppel was applied to prevent the appellants from contesting the admitted liability.
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