JSW Vallabh Tinplate Pvt. Ltd. Vs Commissioner of Customs (CESTAT Chandigarh)
In a significant ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Chandigarh has quashed a customs duty demand of over Rs. 1.88 crore, along with equivalent penalties and an additional penalty of Rs. 25 lakh, imposed on JSW Vallabh Tinplate Pvt. Ltd. The Tribunal, in its order dated July 10, 2024, found a clear violation of the principles of natural justice, specifically the non-supply of crucial documents relied upon by the customs authorities during the investigation and adjudication process. The case has been remanded back to the Commissioner of Customs, Ludhiana, for a fresh adjudication within three months.
The dispute originated from an investigation initiated by the Directorate of Revenue Intelligence (DRI) into JSW Vallabh Tinplate’s imports of Tin Ingots from Malaysia. The company had been availing concessional customs duty benefits under Notification No. 46/2011-Customs, dated June 1, 2011, which applies to goods originating from ASEAN countries, including Malaysia, provided they meet specific Rules of Origin (ROO) criteria. These rules, laid down in Notification No. 189/2009 dated December 31, 2009, require that for products not wholly produced in the exporting party, the ASEAN-INDIA FREE TRADE AREA (AIFTA) content must be at least 35% of the Free On Board (FOB) value, and non-originating materials must have undergone a change in the six-digit Harmonized System (HS) Tariff (CTSH) level, with the final manufacturing process performed in the exporting country.
