2024 (3) TMI 994 - AT - Customs

Levy / Demand of Countervailing Duty (CVD). - whether the appellant can be considered as an importer when the software has been imported by SAP India Pvt. Ltd. (subsidiary company) was contentious and reached before the Tribunal? - Validity of show cause notice - limitation - Interest - penalty - intent to evade customs duty or not - HELD THAT - If the appellant pays CVD on the goods (software imported by them) they would be able to avail credit of such CVD paid by them. The entire situation is revenue neutral and there cannot be any intent to evade payment of duty. Further, the appellant was under bona fide belief that they have not imported the goods as they have only entered into an agreement with SAP India Pvt. Ltd. for purchase of the software. The issue as to whether they can be considered as the importer was contentious and had travelled upto to the Tribunal. Taking these aspects into consideration, the issue is also interpretational in nature. We find that by the Department has not established any positive act on the part of the appellant in regard to suppression of facts with intent to evade Customs duty. Thus, we find that there are no grounds for invocation of extended period. The demand of CVD along with the interest and the imposition of penalties cannot sustain. The issue on limitation is answered in favour of the appellant. The impugned order is set aside on the ground of limitation. The appeal is allowed with consequential relief, if any, as per law.

Summary

Issues involved:
1. Liability to pay Countervailing Duty (CVD) on imported software
2. Invocation of extended period for demanding duty
3. Applicability of interest on CVD

Liability to pay Countervailing Duty (CVD) on imported software:
The appellant had placed a purchase order for SAP Standard Software with SAP India Pvt. Ltd. and received the software via courier import. The Department contended that the appellant, as the importer, was liable to pay CVD on the imported goods. The Tribunal, in a similar case involving SAP India Pvt. Ltd., held that the appellant should be considered as an importer of the software. The appellant's argument that they are not the importer was deemed untenable. The issue on merits was decided in favor of the Revenue and against the appellant.

Invocation of extended period for demanding duty:
The appellant argued that there was no basis for invoking the extended period as the demand could not be sustained on the ground of limitation. They contended that if they paid the CVD, they would be eligible for CENVAT credit, making the situation revenue neutral. The appellant also raised the interpretational nature of the issue regarding their status as an importer, which had been contentious and reached the Tribunal. The Tribunal found that there was no positive act on the part of the appellant to evade Customs duty, leading to the conclusion that there were no grounds for invoking the extended period. The demand of CVD, interest, and penalties was set aside on the ground of limitation, and the appeal was allowed in favor of the appellant.

Applicability of interest on CVD:
The appellant argued that interest on CVD could not be demanded based on a decision of the Hon'ble Apex Court, which was confirmed and upheld by the Supreme Court. However, the Tribunal's decision focused on the grounds of limitation and the appellant's status as an importer, ultimately leading to the setting aside of the impugned order based on limitation.