Case Law Details
M.S. Clothing Company Vs Commissioner of Customs (CESTAT Bangalore)
CESTAT Bangalore held that benefit of notification no. 20/2006 dated 01.03.2006 and notification no. 21/2012-Cus. dated 17.03.2012 not available in case of import of garment accessories. Accordingly, 4% SAD leviable.
Facts- The appellant had imported garment accessories vide various Bills of Entry and warehoused the goods and thereafter Ex-bond Bills of Entry were filed for debonding the goods by claiming the benefit of Notification No.20/2006 dated 01.03.2006 (Sl.No.50) and Notification No.21/2012-Cus. (Sl. No. 12) dated 17.03.2012. However, later it was noticed that the said goods were omitted from the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 with effect from 08.04.2011 and hence they were liable to pay additional duty of customs (SAD).
Accordingly, show-cause notice was issued and impugned order confirmed duty on the said goods for the period April 2011 to October 2012. The authorities also invoked suppression on the ground that the Bills of Entry were cleared under self-assessment and the appellant had claimed the exemption of the notifications; which they were not eligible; thus, there was misdeclaration and hence extended period of limitation was invoked.
Conclusion- Held that the appellant is liable to pay 4% SAD, thus the impugned order is upheld on merit. However, with regard to suppression I find that the Original Authority has confirmed the demand for the extended period on the ground that the bills of entry were under self-assessment procedure and the fact that the appellant has claimed the benefit of the notification, should be taken as wilful mis-statement. The Commissioner Appeals in the impugned order held that ‘declaring and claiming any exemption on the Ex-Bond Bills of Entry which is otherwise not admissible is a clear manifestation of intent which is not bona fide’. Other than the above observations, there is no indication or anything to show on record that the appellant had wilfully mis-declared or claimed the benefit of the notification. On the other hand, the Ex-Bond Bills of Entry filed by the appellant are clearly endorsed by the officers as proof of assessment. Since, the description, specific chapter heading and respective duties liable to be paid are clearly mentioned and assessed to duty by the officers, the question of reopening the assessments for the past period does not arise. There are no material facts that have been mis-declared or misrepresented except to state that in self-assessment, the appellant should have been vigilant and claimed only those benefits that were available to them. In view of the above, I do not find any reason to uphold the demand beyond the normal period.
FULL TEXT OF THE CESTAT BANGALORE ORDER
This appeal is filed against Order-in-Appeal No.95/2017 dated 31/03/2017 passed by the Commissioner of Customs (Appeals), Bangalore.
2. Briefly, facts of the case are that the appellant had imported garment accessories vide various Bills of Entry and warehoused the goods and thereafter Ex-bond Bills of Entry were filed for debonding the goods by claiming the benefit of Notification No.20/2006 dated 01.03.2006 (Sl.No.50) and Notification No.21/2012-Cus. (Sl. No. 12) dated 17.03.2012. However, later it was noticed that the said goods were omitted from the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 with effect from 08.04.2011 and hence they were liable to pay additional duty of customs (SAD). Accordingly, show-cause notice was issued and impugned order confirmed duty on the said goods for the period April 2011 to October 2012. The authorities also invoked suppression on the ground that the Bills of Entry were cleared under self-assessment and the appellant had claimed the exemption of the notifications; which they were not eligible; thus, there was misdeclaration and hence extended period of limitation was invoked.
3. The learned advocate for the appellant fairly admits that they are liable to pay SAD of 4% in view of the amendment dated 08.04.2011 brought in the First Schedule to Additional Duties of Excise (Goods of Special Importance) Act, 1957; hence were liable to pay 4% SAD from 08.04.2011. However, they dispute the fact that there was misdeclaration, in view of the fact that the Bills of Entry were filed clearly mentioning the relevant exemption notifications, which were assessed by the officers concerned and endorsed by them on the Bills of Entry. He also relies on the recent decision of this Tribunal in the case of Sewing Systems Pvt. Ltd. Vs CC, Bangalore [Final order No.20628/2024 dated 12.08.2024] wherein in similar circumstances, this Bench had confirmed the demand of duty only for the normal period, thus setting aside the demand for extended period of limitation..
4. Learned AR on behalf of the Revenue does not dispute the fact that the issue has been settled by the above decision of this Tribunal in the case of Sewing Systems Pvt. Ltd. (supra).
5. Heard both sides and perused records.
6. On perusal of the records, it is seen that the issue in this case is whether appellant is eligible for the benefit of Notification No.20/2006 dated 01.03.2006 (Sl.No.50) and Notification No.21/2012-Cus. (Sl. No. 12) dated 17.03.2012. In similar set of facts and circumstances, this Bench in the case of Sewing Systems Pvt. Ltd. (supra), held as under:-
5.2 In view of the above, the question of extending the benefit of Notification to the goods that were omitted does not arise. Therefore, the appellant’s claim that the amendment to the First Schedule has no implication on the exemption Notification is absolutely of no legal basis in as much as the exemption Notification read with the amendment made to the First Schedule makes them ineligible for the benefit of the above Notification. There is no dispute that the Bills of Entry filed by the appellant was for clearance of textile materials classifiable under Chapter Headings 5407, 5516 and 5903 which specifically stand omitted by the above amendment. Hence, the Commissioner (Appeals) had rightly denied the benefit of the Notification. As rightly submitted by the Revenue, in view of the numerous decisions of the Hon’ble Supreme Court, any exemption Notification has to be strictly interpreted. Therefore, as discussed above, the appellant is not eligible for the benefit of the Notification during the disputed period.
6. The second issue is whether there was any misstatement or misdeclaration of facts so as to invoke extended period of limitation. The period of dispute is April 2011 to March 2013 wherein the appellant had filed Ex-bond Bills of Entry during the relevant period clearly showing the description of goods, the Chapter Heading and had paid BCD along with CVD and claimed the benefit of Notification No.20/2006-Cus. dated 01.03.2006 or Notification No. 21/2012 dated 17.03.2012 on SAD as the case may be. These Ex-Bond Bills of Entry placed on record have been clearly endorsed by the offices of the Customs as proof of assessment and allowed the goods to be cleared. Since, the description, specific chapter heading and respective duties liable to be paid are clearly mentioned and assessed to duty by the officers, the question of reopening the assessments for the extended period does not arise. There are no material facts that have been mis-declared or misrepresented except to state that in self-assessment, the appellant should have been vigilant and claimed only those benefits that were available to them. The Hon’ble Supreme Court in the case of Uniworth Textiles Ltd. (supra) observed as follows:
“19. Thus, Section 28 of the Act clearly contemplates two situations, viz. inadvertent non-payment and deliberate default. The former is canvassed in the main body of Section 28 of the Act and is met with a limitation period of six months, whereas the latter, finds abode in the proviso to the section and faces a limitation period of five years. For the operation of the proviso, the intention to deliberately default is a mandatory prerequisite.
20-24…….
25. Moreover, this Court, through a catena of decisions, has held that the proviso to Section 28 of the Act finds application only when specific enumerated in the proviso to the said subsection are more than one and if the Excise Department places reliance on the proviso it must be specifically stated in the show-cause notice which is the allegation against the assessee falling within the four corners of the said proviso….”
(Emphasis supplied)
26. Hence, on account of the fact that the burden of proof of proving mala fide conduct under the proviso to Section 28 of the Act lies with the Revenue; that in furtherance of the same, no specific averments find a mention in the show cause notice which is a mandatory requirement for commencement of action under the said proviso; and that nothing on record displays a willful default on the part of the appellant, we hold that the extended period of limitation under the said provision could not be invoked against the appellant”.
(Emphasis supplied)
7. In view of the above, the appellant is liable to pay 4% SAD, thus the impugned order is upheld on merit. However, with regard to suppression I find that the Original Authority has confirmed the demand for the extended period on the ground that the bills of entry were under self-assessment procedure and the fact that the appellant has claimed the benefit of the notification, should be taken as wilful mis-statement. The Commissioner Appeals in the impugned order held that ‘declaring and claiming any exemption on the Ex-Bond Bills of Entry which is otherwise not admissible is a clear manifestation of intent which is not bona fide’. Other than the above observations, there is no indication or anything to show on record that the appellant had wilfully mis-declared or claimed the benefit of the notification. On the other hand, the Ex-Bond Bills of Entry filed by the appellant are clearly endorsed by the officers as proof of assessment. Since, the description, specific chapter heading and respective duties liable to be paid are clearly mentioned and assessed to duty by the officers, the question of reopening the assessments for the past period does not arise. There are no material facts that have been mis-declared or misrepresented except to state that in self-assessment, the appellant should have been vigilant and claimed only those benefits that were available to them. In view of the above, I do not find any reason to uphold the demand beyond the normal period.
8. It is also noticed from the records that that the appellant has paid the entire duty amount of Rs.3,95,676/- [ 4% SAD i.e. Rs.2,39,727/- + 18% of interest i.e. Rs.1,55,949/-) for the normal period from February 2012 to October 2012.
9. Consequently, by following the decision of this Bench in the case of Sewing Systems Pvt. Ltd. (supra), the demand along with interest is confirmed for the normal period. Confiscation of the goods under Section 111(m) along with penalty imposed under Section 114A of the Customs Act, 1962 is set aside for the reasons discussed above.
10. In the result, the impugned order is modified to the extent mentioned above and appeal is partially allowed.
(Order dictated in open court)
Author Bio
