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TMI Blog2011 (4) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... demand needs to be re-quantified - matter remanded to the Commissioner of Customs for the limited purpose of quantification of demand i.e. excluding the demand in respect of period beyond five years and also for computing the duty demand on the correct value, i.e. excluding the Basic Customs Duty and Special Duty of customs since those levies were exempted during the relevant period - CDM-72/06 - - - Dated:- 26-4-2011 - SHRI S.S. KANG, P.R. CHANDRASEKHARAN, JJ. Appearance: Dr. Samir Chakraborty, Advocate for the Appellant (s) Shri B.B. Agarwal, Authorised Representative(Jt.CDR) for the Respondent (s) Per Shri P.R.Chandrasekharan. 1. Heard both sides. 2. The issue for consideration in this Appeal is whether the exemption from Special Additional Duty of Customs (SAD in short) leviable under Section 3A of the Customs Act, 1975 provided in Notification No.34/98 dated 13.06.1998 its succssor Notifications would be available, when the goods are sold in an area where no sales tax or purchase tax is chargeable. 3. Briefly stated the facts of the case are as under:- 3.1 M/s.Indian Oil Corporation (I.O.C. in short) imported kerosene during the per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The plea of the Appellant is that in the Notification expression used is chargeable . During relevant time in the state of Orissa sales tax was chargeable on kerosene but it was exempted and therefore they are rightly entitled to the benefit of exemption Notification and they relied on the judgement of this Tribunal in the case of Seiko Brushware (India) vs. CC, Mumbai 2005 (192) ELT 603 (Tri.-Del.) in support of their above contention. They further submit that the demand is time barred as there has been no suppression of facts or willful misstatement of the facts to evade customs duty on their part and therefore the extended period of time could not have been invoked in the instant case. They further submit that duty has been demanded in the instant case even beyond the period of five years as duty demand is for the period June 1998 onwards and the Show Cause Notice has been issued in November 2003, after a period of about five years. They further point out that there are errors in the duty calculation inasmuch as while computing the duty demand, the learned adjudicating authority has not taken into account the exemption that was available on kerosene from basic customs duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le and payability would depend upon the exemption Notification also. In other wards, if no sales tax is payable on account of exemption, no sales tax is chargeable either, therefore in the instant case in since the State of Orissa there is an exemption from sales tax no sales tax is chargeale and hence they have violated the provisions and conditions of Notification No.34/98 and subsequent Notifications in terms of the undertakings given by them. He relies on the judgements of this Tribunal in the case of Tarsem Singh Multani Sons vs. Commissioner of Cus., Amritsar 2001 (134) ELT 753 (Tri.-Del.) referred (supra), Commissioner of Customs, Mangalore vs. Hindusthan Petroleum Corpn. Ltd. 2006 (202) ELT 335 (Tri.-Bang) and Vajirom Chem. Pvt.Ltd. vs. Commr. of Cus., Bangalore 2006 (199) ELT 751 (Tri.-Ban.) in support of his above contention. A perusal of the above judgement would reveal if no sales tax is payable in an area, the importer would not be eligible for Special Additional Duty of customs under Notification No.34/98 or the subsequent Notifications. He further submits that Department has appealed against the order of this Tribunal in the case of Seiko Brushware (India) referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the importer. M/s.I.O.C. is the canalising agency for import of kerosene and they are regular importers and they should know the provisions of Customs law very well and they cannot plead any ignorance or bona fide belief. He further submits that it is a clear case of willful mis-declaration and therefore the penalty has been rightly imposed on the importer in terms of the provisions of Section 114A of the Customs Act, 1962. Regarding the quantification of the duty demanded, the learned Jt.CDR fairly concedes that Commissioner has not given any finding on this matter in his order. He would submit that even though the demand has been confirmed under Section 28 of the Customs Act which provides for a time limit of five years in the case of suppression of facts, fraud, collusion etc., in the case of violation of the terms and conditions of the Notification, as has been held by Apex Court as in the case of Mediwell Hospital and Health Care Pvt.Ltd. vs. UOI 1997 (89) ELT 425 (SC) there is an obligation to discharge duty liability in case of wrong availment on a continuing basis. He also relies on the judgement of the Hon ble Apex Court in the case of N.B.Sanjana, Assistant Collecto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification and also in terms of the undertaking given by them under the said Notification. The Appellant has relied upon the decision of this Tribunal in the case of Seiko Brushware (India) case (referred supra) wherein it was held that exemption notification did not render the goods non-chargeable to tax altogether but only allowed concession in the tax by way of exemption. However the said judgement overlooks the decision of this Tribunal in the case of Tarsem Singh Multani Sons wherein it was held that exemption from SAD under Notification 56/98-CUS not available when imported goods were sold in an area where no sales tax is paid on them. Further in the case of Vijirom Chem Pvt.Ltd. and Hindusthan Petroleum Corporation, this Tribunal had held that the only relevant criteria for levy of SAD is whether the imported goods are being sold and whether sales tax is paid or not. Thus in these decisions this Tribunal had interpreted the term chargeable to sales tax as equivalent to payability of sales tax . Thus in the light of these judgements also, it would appear that if any sales tax exemption is available, then exemption from SAD will not be available. Therefore we have to hold t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a period of five years and there is no time limit specified under the Notification. Though this argument would, on the face of it, be appealing, in the Show Cause Notice wherein, the demand has been made under the provisions of Section 28 and the Commissioner has also confirmed the duty demand invoking powers under Section 28 of the Customs Act and has also determined the duty liability in terms of the provisions of the said Section. Therefore the demand is bound by the time limit prescribed by the said provisions and cannot go beyond period of five years. Learned Jt.CDR has argued for extended time period beyond five years and relied upon certain judgements in that regard but those judgements mainly relate to defects in the Show Cause Notice or in the examination order. In the instant case the Commissioner has passed a final assessment order and he cannot afford to commit errors while quoting the provisions of law. Further the appellant has not been put on notice with regard to demand of duty beyond the period of 5 years. In view of this position we are of the view that duty demand cannot go beyond a period of five years from the relevant date in the instant case. 7.4 Coming ..... X X X X Extracts X X X X X X X X Extracts X X X X
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