Case Law Details
Brief of the Case
In the case of M/S. Jaswal Neco Ltd. Vs. Commissioner Of Customs , it was held by Supreme Court that anti-dumping duty could not be added for computing customs duty, Special Customs Duty and Special Additional Duty by referring to the judgment in the case of Commissioner of Customs (Preventive) v. Goyal Traders, (2014) 302 ELT 529 and J.K. Synthetics Ltd. v. Commercial Taxes Officer, (1994) 4 SCC 276.
Brief facts
The appellant is engaged in the manufacture of pig iron. The appellant imported Low Ash Metallurgical (LAM) Coke under seven Bills of Entry, against four advance licenses without payment of basic customs duty (BCD) levied under Section 12 of the Customs Act, 1962, special customs duty (SCD) levied under Section 68 of the Finance Act, 1996, special additional duty (SAD) levied under Section 3A of Customs Tariff Act, 1975 and Anti-dumping duty (ADD) levied under Section 9A of the Customs Tariff Act, 1975 during the period June 1998 to August 1998, which were exempt from duty vide (i) Notifications No. 30/97 Cus dated 1.4.1997, (ii) Sr. No.4 of Notification No.12/97 Cus dated 1.3.97, (iii) Sr. No.3 of the Notification No.34/98-Cus dated 13.6.1998, and (IV) Notification No.41/97-Cus dated 30.4.97 respectively.
At the time of import, the appellant furnished a bond containing an undertaking to pay duty on imported goods cleared under Notification No.30/97 and 41/97 in the event of failure to fulfil its export obligation.
It is an admitted position that the appellant failed to fulfil its export obligation in the terms of the exemption notifications. The entire LAM so imported has instead been used by the appellant in its factory for the manufacture of pig iron.
Pending final adjudication of the show cause notice by the Commissioner, the appellant duly paid the entire duty payable towards BCD, SAD and SCD after considering partial exports already made. The appellant did not make any payment towards ADD.
The Commissioner of Customs confirmed the duty demand. The appellant appealed to CESTAT. Vide the impugned judgment dated 18.8.2005, CESTAT partly allowed the appeal by remanding the matter to the original authority to calculate duty, interest, and penalty in accordance with the findings contained in its judgment.
The basic difference between CESTAT’s judgment and that of the Commissioner is that interest was reduced from 24% to 15%, but the Anti-dumping duty was increased by applying the higher rates specified by the final Notification No.69 of 2000.
Contentions of the Assessee
The assessee contended that Anti-dumping duty was not payable at all stating that the appellant was exempt under Notification No.69 of 2000. The assessee further contended that no interest is chargeable on any of the four duties inasmuch as the bond that was furnished under Notification No.30 of 1997 did not stipulate that in the event of default, interest would become payable. Further, it is clear that the assessment in the present case is only provisional and that being the case, even if the provisions of the Customs Act are made applicable insofar as Anti-dumping duty is concerned, under the Customs Act itself there was no provision for collection of interest for the period in dispute as Section 18 was amended to include such a provision only prospectively with effect from 2006. Anti-dumping duty could not be added for purposes of computing customs duty, special customs duty and special additional duty. Also no penalty is imposable inasmuch as nothing contumacious was done by the appellant and the export obligation could not be fulfilled only because of bonafide commercial impossibility.
Contentions of the Revenue
The Revenue contended that the exemption contained in the Anti-dumping duty Notification 69 of 2000 was only prospective and, hence Anti-dumping duty had to be paid for the relevant period. The Revenue further submitted that interest in any case was payable as Notification No.30 of 1997 independently levied a charge of interest.
Held by Hon’ble Supreme Court of India
The Hon’ble Supreme Court stated that it is clear that under Rule 20(2)(a) of the Customs Tariff (Identification, Assessment And Collection of Antidumping Duty on Dumped Articles and For Determination of Injury) Rules, 1995, where a provisional duty has been levied and where the designated authority has recorded a final finding of injury or threat of injury and the further finding that the effect of imports in the absence of provisional duty would have led to injury, the Anti-dumping duty may be levied from the date of imposition of provisional duty. In the present case, therefore, it will be noticed that the final Notification dated 27.10.1998 is said to come into force from the date of the first Notification dated 6.5.1998 imposing provisional duty in the present case. It is clear that as the final Notification dated 27.10.1998 has been superseded by the Notification dated 19.5.2000, the appellant would have had to pay Anti-dumping duty at the rate of US$ 24.95 per metric tonne as indisputably it falls within Item No.7 of the said Notification.
The Hon’ble court referred to the judgment in the case of Commissioner of Customs (Preventive) v. Goyal Traders, (2014) 302 ELT 529, the Gujarat High Court has held as under:-
“17. In the present case, we find that prior to introduction of sub-section (3) of Section 18 of the Act in the present form, there was no liability to pay interest on difference between finally assessed duty and provisionally assessed duty upon payment of which the assessee may have cleared the goods. It was only with effect from 13.7.2006 that such charging provision was introduced in the statute. Upon introduction therefore such provision created interest liability for the first time w.e.f. 13.7.2006. In absence of any indication in the statute itself either specifically or by necessary implication giving retrospective effect to such a statutory provision, we are of the opinion that the same cannot be applied to cases of provisional assessment which took place prior to the said date. Any such application would in our view amount to retrospective operation of the law.”
In addition, it is clear that this Court has held that the levying of interest can only be by a substantive provision (See: J.K. Synthetics Ltd. v. Commercial Taxes Officer, (1994) 4 SCC 276 at paragraph 16), thereby making it clear that such levy can only be prospective.
Given the aforesaid, it is clear that no interest is chargeable on any of the customs duties that are payable on the facts of the present case.
It will be noticed that the very words “as an addition to, and in the same manner as” used in Section 3(2) and 3A(2) of the Customs Tariff Act have been used in Section 23 of the Finance Act of 1963 when what was sought to be levied was only a surcharge. By way of contrast, Section 24(3) when it levies a different duty – a regulatory duty of customs – uses the expression “in addition”. It is clear, therefore, that what is referred to in Section 3(2) and 3A (2) is only a surcharge or an additional duty of customs. The words “in the same manner” also point to the same conclusion. It is clear on a reading of the Customs Tariff (Identification, Assessment And Collection of Antidumping Duty on Dumped Articles and For Determination of Injury) Rules, 1995, that Anti-dumping duty apart from being a separate levy from a levy of customs duty is also levied in a completely different manner from that of customs duty.
Though it is stated that the object of the amendment is to clarify and set at rest doubts, it is not necessary to decide whether this amendment is clarificatory and, therefore, retrospective in view of what has already been held as above.
In view of the above, the appeal is allowed.
