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TMI Blog2024 (6) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... Basic Customs Duty and Special Additional Duty available under Notification No. 46/2012- Customs applicable under DFRC licenses in their possession which is only applicable to 100% Processed Cotton fabrics and not applicable for 65% poly and 35% Cotton fabric. The Appellant had declared the entire consignment as 100% Processed Cotton fabrics and failed to declare and assess 65% poly and 35% Cotton fabric. Therefore, there is no denying the fact that the Appellant fabricated the invoice and Bill of Lading, only with an intent to evade payment of applicable duties of Customs. There are no hesitation to hold that the appellant had manipulated the invoice and Bill of Lading in order to evade applicable customs duty by utilizing ineligible DFRC licenses which would not cover the import of 65% Polyester and 35% Cotton Fabrics. As such invocation of extended period is legal and justified in this appeal for aforesaid reasons. Whether the Show Cause Notice dated 21.02.2013 issued is barred by limitation of time or not in terms of relevant provisions of Section 28 of the Customs Act, 1962? - HELD THAT:- The relevant date that is applicable to the facts of this appeal is the date of payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Customs Act, 1962 (ACT) and holding the imported goods liable for confiscation under Section 111(m) / Section 119 of the ACT ibid and imposing penalties of Rs.16,44,929/- and Rs.5,00,000/- on the Appellant under Section 114AA of the said Act and Penalties of Rs.75,000/- and Rs.30,000/- on the authorised signatory and CHA respectively under Section 112 (a) of the Act ibid. 2.1 The facts emerging from the appeal are that investigation was conducted by the department in respect of goods imported by the Appellant covered under Bill of Entry number 659465 dated 31. 01. 2008 declared as 100% Cotton Woven fabrics. The documentary evidences like original invoice and Bill of Lading obtained during the investigation by department revealed that only part of the goods declared were 100% cotton Processed fabrics while the other part was actually 65% poly and 35% Cotton fabric pattern which were not declared , as tabulated below : - Relating to Declared in the Bill of Entry Declared Quantity (Metres) Actual commodity as per Investigation Actual Quantity (Metres) Unit Price declared (USD) Declared Value (USD) Actual Value as per Original Invoice Description Quantity 100% Cotton Processed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000/- on the Appellant under Section 114 A and 114 AA of the Act ibid and imposed a penalty of Rs.30,000/- and Rs.75,000/- on the CHA and its authorised signatory respectively under Section 112(a) of the Customs Act, 1962. 2.5 Aggrieved, the Appellant came on appeal before this forum. 3. The main grounds of appeal submitted by the Appellant are:- i. that the demand is time barred and hence not maintainable in as much as the Show cause notice was issued on 21.02.2013 whereas the duty payment under Section 28(3) of the Customs Act,1962 was paid by the Appellant on 11.02.2008. ii. that the impugned order mis-interpreted Section 28(3)(a) of the Customs Act, 1962 by holding that duty collected for the subject imports was not Customs duty but only Special Additional duty (SAD) in terms of Section 5A of the Central Excise Tariff Act as the Appellant claimed exemption of BCD/CVD under Notification No. 46/2002 and hence the relevant date would be the date on which the goods were given out of charge. iii. it was submitted that SAD was collected as Customs duty in terms of Section 3(5) of the Customs Tariff Act, 1975 and hence the relevant date under Section 28 of Customs Act, 1962 would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty under Section 114(A) of Customs Act was not sustainable as the department has not established without any ambiguity that the goods imported comprised of both 100% Cotton Woven fabrics and 65% Polyester and 35% Cotton fabric. It was also averred that the order for confiscation under Section 119 will not sustain as the subject goods were not available and the department had not conclusively established the identity of the goods and the Appellant had not used any particular item to smuggle the goods. It was submitted that the appellant never tried to conceal the goods imported by them and never mis-declared the total quantity of goods and hence Confiscation will not sustain. vi. It was averred that the department had no material evidence to re- classify the goods under CTH 5515.31 and hence it was maintained that they have only imported 100% Cotton Woven fabrics and hence duty debit under DFRC licence was in order and hence imposition of penalty does not arise. 4. The Ld. Advocate for the Appellant, Shri Ajay Kumar Gupta reiterating the grounds of appeal, prayed for setting aside the impugned order. 5. The Ld. Authorised Representative Shri N. Satyanarayanan representing the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blic interest so to do, hereby exempts materials when imported in to India, from the whole of the duty of customs leviable thereon, under the First Schedule to the Customs Tariff Act, 1975 (51 of1975), and from the whole of the Special Additional Duty leviable thereon under section 3A, of the said Customs Tariff Act, subject to the following conditions, namely: - (i) that the importer has been granted duty free replenishment certificate licence by the Licensing Authority for import of the said materials in terms of paragraph 4.2 of the Export and Import Policy (hereinafter referred to as the said licence) and the said licence is produced at the time of clearance for debit by the proper officer of the customs; (ii) the said licence contains the endorsements specifying, inter alia;(a)the Standard Input Output Norm (SION)number, description and value of the resultant product exported on the reverse;(b)the shipping bill number(s) and date(s) and FOB value in Indian Rupees of the resultant product, on the reverse; and(c)the description, value and quantity of the materials which are allowed to be imported: Provided that in respect of materials* specified in the Sensitive List contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and Countervailing duty. Further, the fact that the Appellant indulged in fabrication of documents was evidenced by documentary evidence obtained during investigation and moreover the Appellant admitted that they had resorted to the mis-declaration to utilise the exemption for Basic Customs Duty and Special Additional Duty available under Notification No. 46/2012- Customs applicable under DFRC licenses in their possession which is only applicable to 100% Processed Cotton fabrics and not applicable for 65% poly and 35% Cotton fabric. The Appellant had declared the entire consignment as 100% Processed Cotton fabrics and failed to declare and assess 65% poly and 35% Cotton fabric. Therefore, there is no denying the fact that the Appellant fabricated the invoice and Bill of Lading, only with an intent to evade payment of applicable duties of Customs. The appellant importer had also admitted filing the impugned Bill of Entry No. 659465 dated 31.01.2008 with fabricated documents in his statement given under Section 108 and also in the reply given to the Show Cause Notice. Thus, there was wilful misdeclaration as to the description of the goods. So, we have no hesitation to hold that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He has further held that the second item which was not declared has escaped the assessment under Section 17 and consequently no duty was levied and paid. 14. In this appeal, it is not disputed that the imported goods declared as 100% Cotton Fabrics have been cleared availing the exemption from payment of Basic Customs Duty and Special Additional Duty by way of debit for quantity and value in the concerned DFRC Licences. It has to be noted that in respect of the Bill of Entry dated 31.01.2008 covering the imported fabric whether of 100% Cotton Fabric or 65% Poly+35% Cotton Fabric, there was levy and assessment but payment of duty was exempted on production of relevant DFRC Licences. As such, we have to conclude that the Bill of Entry dated 31.01.2008 was assessed but duty payment was exempted by way of debit in the DFRC Licenses. The Ld. Advocate has referred to the decision in the case of Collector of Central Excise, Calcutta Vs. National Tobacco Co. of India Ltd. [1978 (2) ELT (J416) (SC)] wherein the terms of Levy and assessment and imposition were explained. In respect of the present import, the goods imported were assessed and duty was levied but same was paid by way of debit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the Cotton Fabrics imported and not that portion of Poly+Cotton Fabrics. As such, we have to conclude that at the best there can be short levy but not non levy . Further, it is noted that vide Clause 120(h) of the Finance Act, 1994, Section 28 of the Customs Act, 1962 has been amended as follows:- (a) In Explanation, in cause (1)(a), for the words not levied , the words not levied or not paid or short levied or short paid shall be substituted. Thus, the explanation covers both non levy and short levy subsequent to the amendment w.e.f. 2016. The period involved in this case is before 2016 and so short levy cases would not be covered by explanation 1(a) to Section 28 of the Customs Act, 1962. At the relevant time, the date of order of Out of Charge of Customs would cover only non-levy cases. 17. We also find that CESTAT New Delhi in the case of M/s. Desein Private Limited Vs. Commissioner of Service Tax [2024 (1) TMI 400-CESTAT NEW DELHI] has held that the Show cause Notice issued beyond 5 years is time barred and neither the demand maintainable nor interest and penalty leviable. The relevant portion of the order is extracted below:- 7. We find that the demand has been confirmed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Returns in following words:- 7. Returns (1) Every assessee shall submit a half-yearly return in Form ST-3, or ST-3A 5[or ST-3C), as the case may be, along with a copy of the Form TR-6, in triplicate for the months covered in the half-yearly return (2) Every assessee shall submit the half-yearly return by the 25th of the month following the particular half-year, 10. From the provisions of Clause 6 of section 73, the period of five years shall be computed firstly from the date of filing the return. Secondly, where no return is filed the last date on which such return is to be filed. Lastly, the date on which the service tax is to be paid. As per rule 6, the liability to pay the service tax accrues by the 6th day of the following month and as per Rule 7 the assessee is required to submit the half yearly return by the 25th of the following month. In the present case for the period 1.04.2008 to 30.09.2008 the return was required to be submitted by 25th of October, 2008, which would be the relevant date for computing the period of five years. Therefore, the show cause notice issued on 21.04.2014 for the period in question is beyond the period of five years. It is a settled position t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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