9911796707
TMI Blog2016 (9) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... l duty in respect of lining and interlining materials imported by them claiming full exemption under serial No.168 of the table annexed in the Customs Notification No.21 of 2002. The allegation in the show causes was that an indenting agent (co-applicant in all applications before the Settlement Commission) for various textile materials from abroad collected AEPC certificate and other import documents for the import of polyester lining fabrics from the various petitioners/importers at Tiruppur and cleared the imported goods by availing concessional rate of duty under Customs Notification No.21 of 2002, dated 01.03.2002, took delivery on behalf of the importers and diverted the imported material to the local market. 2. The allegation in the show cause is that the goods imported, availing concessional rate of duty under Customs Notification No.21 of 2002, were not used in the manufacture of textile garments but diverted to domestic market in contravention of the said notification with an intention to evade payment of customs duty, the goods are liable for confiscation under Section 111(O) of the Customs Act, 1962, (Act) and the importers are also liable to penalty under Section 114A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Commission taking note of the fact that the petitioners admitted the allegations contained in the show cause notice and the resultant inability for total exemption, the Settlement Commission did not go into the merits of the matter. Thus, the only issue was the quantum of duty that could be demanded. The contention was that Special Additional Duty is not leviable on the subject goods on account of Section 3A(5) of the Customs Tariff Act, 1975, as according to the said provision, Special Additional Duty is not applicable on goods on which Additional Duty of Excise is leviable. The Settlement Commission pointed out that Additional Duty namely, CVD is leviable in terms of Section 3(1) of the Customs Tariff Act and in terms of Section 3(5), the duty payable under sub-section (1), i.e., CVD is in addition to other duty leviable on the said imported goods in terms of Customs Tariff Act or any other Act and Additional Duty of Excise Act is one such other Act. Therefore, the Settlement Commission held that the imported goods ought to have been charged, Additional Duty of Excise also, which the subject show cause notice has omitted to take into account and in view of the leviability of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount calculated at the rate specified in the corresponding entry in column (4) of the said Table; (b) from so much of the additional duty leviable thereon under sub-section (1) of section 3 of the said Customs Tariff Act, as is in excess of the rate specified in the corresponding entry in column (5) of the said Table. 7. Reference was also made to Section 3 of the Customs Tariff Act and also Section 3 of the Additional Duties of Excise (Goods of Special Importance), Act, 1957, which reads as follows:- 3. Levy and Collection of Additional Duties:- (1) There shall be levied and collected [in respect of the goods described in column (3) of the First Schedule] produced or manufactured in India and on all such goods lying in stock within the precincts of any factory, warehouse or other premises where the said goods were manufactured, stored or produced, or in any premises appurtenant thereto duties of excise at the rate or rates [specified in column (4) of the said Schedule]. (2) The duties of excise referred to in sub-section (1) in respect of the goods specified therein shall be in addition to the duties of excise chargeable on such goods under the [Central Excise Act, 1944] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, dated 01.03.2002, exempts all goods from additional duty leviable under Section 3(1) of the Customs Tariff, as in excess of the rates specified in column 5 of the table annexed to the notification and in the cases on hand, the specified rate is 16% and the said notification does not provide exemption to the duties that may be levied as per Section 3(5) of the Customs Tariff Act and as ADE imposed at 8% is under Section 3(5) of the Customs Tariff Act, the levy imposed is correct and in accordance with law. In support of his contention, learned counsel placed reliance on the decision of the Hon'ble Supreme Court in the case of State of Kerala vs. Attesee reported in 1989 (72) STC 1. 10. Heard Mr.S.Murugappan, learned counsel for the petitioner and Mr.V.Sundareswaran, learned Standing counsel for the respondent Department and perused the materials placed on record. 11. On a perusal of the impugned order passed by the Settlement Commission, it is evident that the petitioners conceded to the fact that 8% ADE is leviable along with the Basic Customs Duty CVD at 16% and Cess at 0.05%. When the petitioner had accepted to the said fact and allowed the case to be settled on those te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime being leviable on a like article on its sale, purchase or transportation in India, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty at a rate not exceeding four percent of the value of the imported article as specified in that notification. Explanation:- In this sub-section, the expression sales tax, value added tax, local tax or any other charges for the time being leviable on a like sale, purchase or transportation in India means the sales tax, value added tax, local tax or other charges for the time being in force, which would be leviable on a like article if sold, purchased or transported in India or, if a like article 25 is not so sold, purchased or transported, which would be leviable on the class or description of articles to which the imported article belongs, and where such taxes, or, as the case may be, such charges are leviable at different rates, the highest such tax or, as the case may be, such charge. 13. The above provision has been made with an object of counter balancing, the sales tax value of the article, when the same is removed to the domestic area. Therefore, when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese restrictions resultant in loss of revenue to the State, it was considered expedient to compensate the State for the loss of Sales Tax incurred by them and thus, the object of amendment to Section 15 of Act 31 of 1958, was explained. At this juncture, it would be beneficial to take note of the observations made in paragraph 6 of the judgment:- These restrictions clearly entailed loss of revenue to the States and it was considered expedient and desirable to compensate the States for the proportionate loss of sales tax incurred by them. Thus, even before Section 15 was brought into force, the Central Government decided to pass an Act to provide for the levy and collection of additional duties of excise on certain goods and for the distribution of a part of the net proceeds thereof among the States in pursuance of the principles of distribution recommended by the Second Finance Commission in its report dated September 30, 1957. This proposal to levy additional duties of excise on certain special goods was a part and parcel of an integrated scheme under which sales tax levied at different rates by the States on certain goods was ultimately substituted by the levy of additional dut ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
