2023 (4) TMI 784 - AT - Customs

Demand of Customs Duty on value by applying exchange rate of the date on which ex-bond bill of entry was filed - exchange rate applicable on the date of warehousing has to be applied for the purpose of valuation or not - benefit of limitation by treating the normal period of limitation as 1 Year - period 2007-08 to 2009-10 - HELD THAT - The sole issue is if currency exchange rate applicable to imports will be the rate prevalent at the time bill of entry is filed or the rate prevalent when Ex-bond bill of entry is filed. The impugned order relies on para 12 and 13 of the order in original to hold that the demand is sustainable. A perusal of para 13 of the O-I-O reveals that the said order relies on the decision of Tribunal in the case of SRI MAHARAJA INDUSTRIES VERSUS COMMISSIONER OF CUSTOMS, CHENNAI 2006 (8) TMI 407 - CESTAT, CHENNAI where it was held that the Commissioner of Customs is not competent to issue any public notice contrary to the provisions of the Act. The appellants themselves accepted that they were aware of the duty due and payable, but the system thwarted their efforts to file correct ex-bond Bs/E. The decision relied in the Order In Original does not support the case of the Revenue and is totally contrary to what Revenue has alleged. The aforesaid decision of Tribunal clearly holds that the exchange rate applicable will be the rate on the date the warehousing bill of entry was filed for putting goods in bond. The demand cannot be sustained. The appeal is consequently allowed.

Summary

Issues involved:
The appeal filed against the demand of customs duty based on the exchange rate applicable at the time of filing ex-bond bill of entry.

Details of the Judgment:

Issue 1: Exchange Rate for Valuation
The appellant warehoused goods under Section 46 of Customs Act and cleared them for domestic consumption on payment of duty under Section 68. The Department sought to demand duty based on the exchange rate at the time of filing ex-bond bill of entry. The appellant argued that the exchange rate applicable at the time of warehousing should be used for valuation. The Commissioner (Appeals) allowed the benefit of limitation by considering the normal period as 1 year. The appellant contended that since the imports were made before the Finance Act, 2011, the extended period of limitation should be granted as per the statute at the time of import. The Tribunal analyzed the case of Shri Maharaja Industries and concluded that the exchange rate applicable should be the one at the time of filing the warehousing bill of entry. As the decision relied on by the Order In Original did not support the Revenue's case, the demand was deemed unsustainable, and the appeal was allowed.

Conclusion
The Tribunal held that the exchange rate for valuation of imports should be the rate prevailing at the time the warehousing bill of entry was filed. Therefore, the demand for customs duty based on the exchange rate at the time of filing ex-bond bill of entry was not sustainable, and the appeal was allowed.