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2023 (4) TMI 220 - AT - CustomsLevy of safeguard duty in terms of notification No. 02/2014-Customs dated 13.08.2014 - import of Seamless Steel Tubes - section 8B (1) of the Customs Tariff Act, 1975 (referred to as CTA) read with Rule 12, 14 and 17 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 - first contention of the appellant is to the issuance of the show cause notice on the ground that once the bill of entry is finalized, the proper course was to challenge the assessment by way of an appeal - HELD THAT - Rule 14 of the Safeguard Rules provides that the date of imposition of safeguard duty shall be the date only after publication of the Notification in the official gazette and therefore the safeguard duty shall not be applicable in the case of goods cleared vide Bill of Entry No. 6459749 dated 18.08.2014 as the same is prior to the publication of the Notification. It is a settled principle of law that a notification comes into force from the date of its publication in the official gazette. In view of the reasoning above, we are not inclined to accept the submissions of the revenue that rule 14 being subordinate legislation cannot take precedence over the statutory provisions for the simple reason that the notification being subordinate legislation cannot go contrary either to the Act or the Rules. The reason for implementing the notification immediately on the same day was the underlying object for introducing the safeguard duty and the purpose which it sought to achieve, i.e. to safeguard the interest of the domestic industry. This is evident from the notification when it says that the Director General (Safeguard) in his final findings has come to the conclusion that increase in imports of Seamless Pipes and Tubes into India has caused serious injury to the domestic producers of Seamless Pipes and Tubes necessitating the imposition of safeguard duty on import of these goods into India. It is thus concluded as under (i) The notice under section 28 of the Customs Act, 1962 have been validly issued by the Department for the non-levy of safeguard duty. (ii) That in terms of sub-section 9 of section 8B of CTA, the provisions of Customs Act are applicable to the safeguard duty chargeable under the section, including those relating to the date of determination of rate of duty, assessment, non-levy, short-levy, refunds, interests, appeals, offences and penalties. (iii) Therefore, the rate of duty and tariff valuation of imported goods shall be determined under section 15(1) of the Customs Act, 1962 in the following manner - a. Where goods are cleared for home consumption under section 46, the rate of duty shall be as on the date on which the Bill of Entry is presented. b. Where goods are cleared from the warehouse under section 68, the date the goods are actually removed from the warehouse substituted by the Finance Act, 2003 w.e.f. 14.05.2003 to read as, a bill of entry for home consumption in respect of such goods is presented under that sections . (iv) The relevant date for determining rate of duty is not with reference to the entry of the vessel into the territorial waters in India before the presentation of the Bill of Entry. Therefore, to say that the goods were shipped from the country of origin prior to the issuance of the Notification on 13.08.2014 and, therefore, the safeguard duty is not applicable, is clearly untenable. . (v) The Notification No. 02/2014-Customs dated 13.08.2014 has been validly issued under section 8B of CTA, read with Rule 12, 14 and 17 of the Rules, imposing the safeguard duty on Seamless Steel Tubes. (vi) That Rule 14 of the Rules provides that safeguard duty levied under Rule 10 or 12 shall be effective from the date of publication in the official gazette. (vii) In the present case, the notification in question, though issued on 13.08.2014 was published in the official gazette on 25.08.2014. In terms thereof - a. Bill of Entry No. 6459749 dated 18.08.2014 having been presented for clearance of goods though after the issuance of the Notification in question but before it was published so as to be effective and, therefore, the Notification imposing the safeguard duty shall not be applicable to the said Bill of Entry. b. Bill of Entry No. 6690337 dated 08.09.2014 having been presented after the Notification in question was published on 25.08.2014 and, therefore, the same was effective on that date. The appellant is liable to pay the safeguard duty in respect of the Bill of Entry No. 6690337 dated 08.09.2014.
Issues Involved:
1. Validity of the issuance of Show Cause Notice under Section 28 of the Customs Act. 2. Applicability of Safeguard Duty under Notification No. 02/2014-Customs dated 13.08.2014. 3. Determination of the relevant date for the imposition of safeguard duty. 4. Effective date of the Notification imposing safeguard duty. Summary: 1. Validity of the Issuance of Show Cause Notice: The appellant contested the issuance of the Show Cause Notice on the grounds that once the bill of entry is finalized, the proper course was to challenge the assessment by way of an appeal. The Tribunal held that Section 28 of the Customs Act allows for the recovery of any duty not levied or short-levied by issuing a Show Cause Notice. The Tribunal found no fault in the issuance of the Show Cause Notice under Section 28, citing precedents such as Flock India Pvt. Ltd. and Priya Blue Industries Ltd. 2. Applicability of Safeguard Duty: The appellant argued that the provisions of the Customs Act should not apply to the levy of safeguard duty under Section 8B of the Customs Tariff Act (CTA). The Tribunal rejected this argument, stating that Section 8B(9) of the CTA explicitly makes the provisions of the Customs Act applicable to safeguard duty. The Tribunal cited the decision in Kopran Ltd. to support its conclusion. 3. Determination of the Relevant Date for Imposition of Safeguard Duty: The appellant argued that the goods were shipped before the issuance of the Notification and thus should not be subject to safeguard duty. The Tribunal referred to Section 15 of the Customs Act, which stipulates that the rate of duty applicable is the rate in force on the date the bill of entry is presented. The Tribunal cited multiple precedents, including Dhiraj Lal Vohra and Prakash Cotton Mills, to affirm that the relevant date for determining the rate of duty is the date of presentation of the bill of entry, not the date the goods entered territorial waters. 4. Effective Date of the Notification Imposing Safeguard Duty: The appellant contended that the Notification issued on 13.08.2014 was published in the official gazette only on 25.08.2014, and therefore, the safeguard duty should not apply to goods cleared before this date. The Tribunal agreed, stating that Rule 14 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997, specifies that safeguard duty takes effect from the date of publication in the official gazette. Consequently, the safeguard duty was not applicable to the goods cleared under Bill of Entry No. 6459749 dated 18.08.2014 but was applicable to those cleared under Bill of Entry No. 6690337 dated 08.09.2014. Conclusion: The Tribunal partly allowed the appeal, concluding that: - The Show Cause Notice under Section 28 was validly issued. - The provisions of the Customs Act apply to the safeguard duty under Section 8B of the CTA. - The relevant date for determining the rate of duty is the date of presentation of the bill of entry. - The safeguard duty was not applicable to Bill of Entry No. 6459749 dated 18.08.2014 but was applicable to Bill of Entry No. 6690337 dated 08.09.2014. (Order pronounced on 3rd April, 2023).
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