2021 (12) TMI 855 - AT - Customs

Levy of Anti-dumping duty - import of pre-sensitized positive offset aluminium plates (for offset printing machine) - discarding of certificate of origin , and thereby denying eligibility for exemption and laying the ground for re-determination of origin of the goods, without following the process of verification prescribed in circular no. 31/2016-Cus dated 12th September 2016 - HELD THAT - Anti-dumping duty is leviable on digital offset printing plates within which are three sub-categories, viz., violet, thermal and CtCP. Even if the outcome of the test evidences the impugned goods to be CtCP , the origin of the goods both in manufacture and of export must be from Peoples Republic of China for the levy to be valid in law. It has not been controverted that the goods were not procured from the exporter in Malaysia - the certificate of origin must be discarded and not by reliance on any circumstantial evidence. Without determination of the authenticity and correctness of the contents of certificate of origin , the testing of the product is a half measure that may not conclude the proceedings except in circumstances that confirm the declaration of the importer. This should have found a place in the impugned order. The question that follows is whether the first appellate authority, and arising from inability to proceed with determination on merits, is within its competence to direct fresh evidence to be incorporated in the proceedings - proviso to section 128A(3) of Customs Act, 1962 empowers Commissioner of Customs (Appeals) to issue show cause notice subject to conditions prescribed therein and, though rarely resorted to, impliedly authorizes directions, such as re-test of the goods once again for issue of addendum to show cause notice, without compromising principles of natural justice. In the absence of a finding on the nature of the goods, the dispute remains undetermined. The rival claims of feasibility of testing and the futility of the exercise do not suffice for determination and testing appears to be the only option. Learned Consultant has also not placed any alternative for determination of the nature of the goods - However, mere re-testing may not culminate in conclusion of proceedings even if the test report is conclusive enough for determination of the nature of the goods. No less critical to the eligibility is the certificate of origin which has also been doubted by the original authority. The first appellate authority has not returned a finding on that aspect which is not dependent on the outcome of the re-test. That lack must be made good. Matter remanded back to the first appellate authority without disturbing the directions in the order impugned - appeal allowed by way of remand.

Summary

Issues Involved:
1. Improper procedure for testing of goods and inconclusive test report.
2. Rejection of the certificate of origin and the eligibility for exemption from basic customs duty.
3. Levy of anti-dumping duty on the imported goods.
4. Confiscation of goods and imposition of penalties.

Issue-wise Detailed Analysis:

1. Improper Procedure for Testing of Goods and Inconclusive Test Report:
The appellate tribunal addressed the primary issue concerning the improper procedure for testing the imported goods and the inconclusive nature of the test report. The first appellate authority had remanded the matter for fresh adjudication, directing the Original Authority (OA) to allow a re-test of the goods and provide the appellant an opportunity for a personal hearing. The OA had initially relied on the test report from IIGT School of Printing and Packaging, which contradicted the appellant's declaration. The tribunal emphasized the necessity of a re-test to ascertain the nature of the goods accurately, as the previous test process was deemed deficient.

2. Rejection of the Certificate of Origin and Eligibility for Exemption from Basic Customs Duty:
The tribunal examined the rejection of the certificate of origin, which affected the appellant's claim for exemption from basic customs duty under the ASEAN-India Free Trade Area Preferential Tariff. The OA had discarded the certificate of origin without following the verification process prescribed in circular no. 31/2016-Cus dated 12th September 2016. The tribunal highlighted the need for a proper determination of the authenticity and correctness of the certificate of origin, as it is critical for establishing the eligibility for the claimed exemption.

3. Levy of Anti-dumping Duty on the Imported Goods:
The tribunal considered the levy of anti-dumping duty on the imported goods, which were identified as 'digital offset printing plates' subject to anti-dumping duty under notification no. 51/2012-Cus (ADD) dated 3rd December 2012. The OA had concluded that the goods were liable to anti-dumping duty based on their origin in the People's Republic of China, as evidenced by 'whatsapp' messages and statements from Mr. Sushil Nalage. The tribunal noted that the determination of the nature of the goods through re-testing is essential for confirming the applicability of the anti-dumping duty.

4. Confiscation of Goods and Imposition of Penalties:
The OA had ordered the confiscation of the goods valued at ?48,26,024/- under section 111(m) of the Customs Act, 1962, with an option to redeem on payment of a fine of ?5,00,000/-, and imposed penalties on the appellant and the proprietor. The tribunal did not delve deeply into the merits of the confiscation and penalties, as the primary issue of the nature of the goods and the certificate of origin needed resolution first. The tribunal remanded the matter back to the first appellate authority for additional findings on the certificate of origin and upheld the direction for re-testing the goods.

Conclusion:
The tribunal concluded that the re-testing of the goods is necessary to determine their nature accurately. Additionally, the authenticity of the certificate of origin must be verified to resolve the dispute comprehensively. The matter was remanded back to the first appellate authority for further examination, without disturbing the directions for re-testing the goods. The appeal was disposed of accordingly.