2024 (1) TMI 1023 - AT - Customs

Remission of Customs Duty - Demand of customs duty on goods that were imported but remained undelivered, by rejecting the request of the appellant for remission of the duty - Extended Period of limitation - suppression of facts - goods were not delivered due to reasons other than pilferage - HELD THAT - There have been exchange of letters right from 20.02.2009 between the appellant and the Superintendent of Central Excise, Theni Range, and further, the Revenue vide letter dated 31.03.2009 through the Superintendent, sought for explanation from the appellant insofar as the shortage was concerned, to which the appellant had duly replied vide its letter dated 06.04.2009. We also find that the other communications exchanged between the appellant and the Superintendent, like the letter dated 27.08.2010 from the Superintendent of Customs, Custom House, Tuticorin to the Superintendent of Central Excise, Dindigul, letter dated 01.09.2010 from the appellant to the Superintendent of Central Excise, Theni Range, letter dated 11.10.2010 regarding issuance of Rewarehousing Certificate by the Superintendent of Central Excise-Service Tax, Theni Range addressed to the Deputy/Assistant Commissioner of Customs, Custom House, Tuticorin, and the Survey Reports dated 27.02.2009 and 01.09.2010 by the authorized surveyor, to name a few of the documents, are also forming part of the records of the Revenue. Thus, nothing was hidden nor is there any attempt to play fraud or suppression of any facts on the part of the appellant insofar as the shortage in supply was concerned, which fact was very much within the knowledge of the Revenue. Thus, there was absolutely no scope for the Revenue to assume jurisdiction by invoking the extended period of limitation since any allegation as to fraud or suppression would only be a whim and arbitrary. The Show Cause Notice No. 1/2012 dated 02.01.2012 and the Show Cause Notice No. 05/2012(CE) dated 02.02.2012 have been issued in a haste by invoking the larger period, for which no fresh material or facts were unearthed by the Revenue. Thus, the appellant should succeed on the limitation itself since we are satisfied that jurisdiction has been assumed without any basis, to deny the exemption and thereafter demand the Customs duty. The impugned order which has upheld the demand raised for the period for which the extended period of limitation has been invoked in the Order - in - Original deserves to be set aside - Appeal allowed.

Summary

Issues:
The judgment involves the issue of demanding customs duty on undelivered imported goods and the request for remission of duty by the appellant.

Issue 1: Demanding customs duty on undelivered goods:
The appellant imported coffee beans from Uganda and Vietnam under Customs Notification No. 52/2003-Cus. The first consignment had a shortage of 150 bags of coffee beans upon arrival at the factory premises. The importer filed for remission of customs duty on the short quantity, but received a Show Cause Notice proposing rejection of the claim. The Assistant Commissioner rejected the request for remission, leading to an appeal before the first appellate authority. The authority remanded the case for fresh adjudication. However, the Revenue issued additional Show Cause Notices proposing demands for customs duty, confiscation, and penalties. The importer argued that the shortage may have occurred during transit and highlighted acknowledgments from the supplier regarding the non-importation of goods. The appellant also raised a limitation defense, stating that the Show Cause Notices issued in 2012 were beyond the limitation period.

Issue 2: Request for remission of duty:
The appellant sought remission of customs duty on the undelivered goods under Section 23 of the Customs Act, which allows remission for lost goods not due to pilferage. The appellant engaged in communications with the Revenue and provided explanations regarding the shortage. The documents exchanged between the parties indicated transparency and cooperation from the appellant's side. The Tribunal found that the Show Cause Notices were hastily issued without new evidence, invoking an extended period of limitation without basis. Consequently, the Tribunal held that the demands made during the extended limitation period were unjustified and set aside the impugned order upholding the duty demands.

Conclusion:
The Tribunal allowed the appeal concerning the extended period of limitation, ruling in favor of the appellant. The judgment emphasized the importance of transparency and cooperation in customs matters and highlighted the need for authorities to base their actions on valid grounds rather than assumptions or haste.