Commissioner of Customs, Pune Vs Ballarpur Industries Ltd. (Supreme Court of India)
None of the above findings have been displaced in the order of the Tribunal. The Tribunal has not looked into the merits of the appeals at all on the facetious ground that the show cause notice did not contain any basis to doubt the classification of the goods and that while issuing the notice, the adjudicating authority had not examined the classification based on the report of the laboratory. The findings of the Tribunal are contrary to the record and cannot therefore be sustained.
At the same time, since the Tribunal has not considered the case of the respondent in appeal on merits, we are of the considered view that it would be appropriate to restore the proceedings back to the Tribunal for the purpose. In order to facilitate a fresh decision on remand, we have recorded the broad submissions of the contesting parties on the merits as well but leave open the matter for evaluation by the Tribunal on remand. We accordingly allow the appeals and set aside the judgment of the Tribunal dated 27 September 2017. Appeal Nos. C/70 & 71/07 arising out of the orders in Original No. II/Cus/2006 and 12/Cus/2006 both dated 17 October 2006 of the Commissioner of Customs, Pune are restored to the file of the Tribunal for determination afresh.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Admit.
2. These appeals by the Commissioner of Customs, Pune arises from a judgment of the Customs, Excise & Service Tax Appellate Tribunal (“CESAT” or the “Tribunal”) dated 27 September 2017. The question of law which has been formulated in the appeals is whether the Tribunal erred in setting aside the demand of anti – dumping duty on the product ‘Styrene Butadiene Rubber’ (“SBR”) classified under the heading 4002 of the First Schedule of the Customs Tariff Act, 1975 and imported from Korea.
3. A show cause notice1 dated 23 May 2006 was issued to the respondent covering five Bills of Entry under which the product ‘Lutex -701’ was imported namely:
“(1) Bill of Entry No. 500271 dated 18.03.05;
(2) BilI of Entry No. 500044 dated 03.05.05;
(3) Bill of Entry No. 500110 dated 13.06.05;
(4) Bill of Entry No. 500161 dated 1 7.08.05; and
(5) Bill of entry No. 500162 dated 17.08.05.”
Another show cause notice2 dated 30 June 2006, covering six Bills of Entry’ was issued to the respondent under which the product ‘Lutex – 780’ was imported. The details of the Bills of Entry are:
“(1) Bill of Entry No. 500183 dated 26.08.05;
(2) Bill of Entry No. 500034 dated 27.04.05;
(3) Bill of Entry No. 500073 dated 24.05.05;
(4) Bill of Entry No. 500109 dated 13.06.05;
(5) Bill of Entry No. 500148 ·dated 28.07.05; and
(6) Bill of Entry No. 500128 dated 29.06.05.”
4. The allegation in the Show Cause Notice dated 23 May 2006 is that the respondent mis-declared its goods as ‘Lutex – 701’ which on tests were found to be SBR of 1900 series on which anti-dumping duty was leviable. The notice proposed to confiscate the goods imported, collectively valued at Rs.1,19,16,267/- under Section 111(m) of the Customs Act 1962; to demand anti-dumping duty of Rs.10,14,101/-; besides the levy of interest and penalty. The Show Cause Notice dated 30 June 2006 alleged a similar mis-declaration of the goods declared as ‘Lutex 780’. Confiscation of the goods collectively valued at Rs.2,10,57,783/- was proposed besides the demand of anti-dumping duty of Rs.16,88,618/-, the levy of interest and penalty.
5. The Commissioner of Customs, Pune by orders dated 17 October 2006, held that:
(i) The goods were leviable to confiscation in terms of Section 111(m) of the Customs Act 1962;
(ii) The goods were chargeable to anti-dumping duty; and
(iii) The respondent was liable to pay interest under Section 28AB and penalty under Section 112(a) read with Section 118(a) of the Customs Act 1962.
6. Appeals were filed before the CESAT by the respondent against the decision of the Commissioner. The CESAT allowed the appeals by its order dated 27 September 2017 and came to the conclusion that the Show Cause Notices could not be sustained.
7. The Tribunal has allowed the appeals on the basis of two findings. The first finding is as follows:
“There is no whisper of any reason in the show-cause notice to disturb the classification claimed by the appellant. Therefore, the classification of the imported declared by the appellant under CTH 40021100 remained untouched by this order. Anti- dumping notification indicates that the goods falling under customs heading Nos.3903 and 4002 of the first schedule to the Customs Tariff Act, 1975 were subject to levy of anti-dumping duty. Accordingly, levy was confined to the goods of heading 4002.19 since anti-dumping investigation was confined to the goods covered by heading 4002.19.
Therefore there cannot be any misconception about the product under consideration. Notification no. 2004-Cus dated 26.09.2004 was issued pursuant to sunset Review arising out of the final findings of the designated authority made on 02.06.1999. That Authority confined his scope of investigation into the goods covered by above tariff heading in the Sunset Review which was subject matter of levy of definitive duty. Therefore pleading of the appellant that its goods having fallen under CTH 40021100 does not come under CTH 40021900 for levy of anti dumping duty for the reason that goods of CTH 4002 1100 were not subject matter of antidumping investigation at any stage.”
The second finding is as follows:
“It may be stated that while issuing show-cause notice, learned adjudicating authority had not examined the classification based on the report of the Laboratory. The show-cause notice issued in 2006 was to finalise the assessment only, without any proposal to levy anti-dumping duty. There was no reference to the character and nature of the imported product also therein. The Notification No. 100/2004-Cus dated 26.09.2004 does not intend to levy anti-dumping duty on the product imported by the appellant. Accordingly, the show cause notice having no basis, both the appeals are allowed.”
8. The Commissioner of Customs, Pune is in appeal.
9. Before we deal with the submissions which have been urged on behalf of the contesting parties, it is necessary to preface this judgment with a reference to Notification 100/2004-Cus dated 28 September 2004. The Notification sets out that on 30 July 2003 the Designated Authority had initiated a sunset review in the matter of continuing anti-dumping duty on imports of SBR 1900 series falling under heading 3903 or 4002 of the First Schedule to the Customs Tariff Act 1975 (referred to as the “subject goods”) originating in or exported from Japan, Korea R.P. and the United States of America. The anti-dumping duty had been imposed by the Government of India in the Ministry of Finance (Department of Revenue), by Notification No. 73/2000-Customs dated 22 May 2000. By a communication dated 29 April 2004, the continuation of the anti-dumping duty for an additional period for six months was requested pending the completion of the review. The Central Government had extended the anti- dumping duty on the subject goods originating in or exported from the above countries by a Notification dated 26 July 2004, for an additional period of six months up to and inclusive of 25 October 2004. On a sunset review, the Designated Authority had rendered its findings on 27 July 2004 coming to the conclusion that:
“(i) subject goods, originating in or exported from subject countries has been exported to India below normal value, resulting in dumping;
(ii) the domestic industry is suffering material injury;
(iii) dumping of subject goods is continuing from the subject countries; and
(iv) the material injury to the domestic industry may continue and intensify if anti-dumping duty is removed.”
Hence, in exercise of the powers conferred by sub-sections (1) and (5) of Section 9A of the Customs Tariff Act 1975 read with Rule 23 of Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995, the Central government imposed an antidumping duty as specified in the following table:
