Case Law Details
Commissioner of Customs Vs Hyderabad Chemicals Ltd (CESTAT Chennai)
Introduction: The CESTAT Chennai recently delivered a ruling concerning the Anti Dumping Duty (ADD) imposed on the import of Diethyl Thio Phosphoryl Chloride (DETPC) from China. The central issue revolved around the amendment in Section 9A(8) of the Customs Tariff Act and its implications on the case.
Analysis: Hyderabad Chemicals Ltd. imported DETPC from China, for which a bill of entry was filed in 2008. At the time, there was no ADD on the product. However, a subsequent notification in 2009 imposed ADD on goods from China, leading the department to demand ADD on the previously imported goods. This demand was initially confirmed by the original authority but was later set aside by the Commissioner (Appeals). The primary point of contention here is the interpretation of Section 9A(8) of the Customs Tariff Act, which underwent an amendment in 2009. The Tribunal analyzed prior judgments and the implications of the amendment to conclude on the matter.
Conclusion: CESTAT Chennai held that Hyderabad Chemicals Ltd. is not liable to pay the ADD, as the Notification No.73/2009 was not in force during the time of import. This decision aligns with prior judgments and interpretations of the Customs Tariff Act. Consequently, the department’s appeal against the quashing of ADD was dismissed, reaffirming the importance of temporal applicability in the imposition of duties.
FULL TEXT OF THE CESTAT CHENNAI ORDER
1. Brief facts are that the respondent imported goods from China and filed bill of entry dated 15.07.2008 for warehousing the goods. The goods were warehoused and thereafter the respondent filed ex-bond bill of entry dated 29.06.2009 for clearance of the warehoused goods for home consumption. At the time of import of the goods there was no levy of Anti Dumping Duty (ADD) on the goods Diethyl Thio Phosphoryl Chloride (DETPC) imported from China. Later Notification no. 73/2009 dated 22.06.2009 was issued whereby ADD was imposed on the goods imported from China. The department was of the view that, respondent is liable to pay the ADD on the goods imported. Demand notice dated 17.09.2009 was issued for payment of ADD amounting to Rs.11,76,768 along with interest. The appellant contested the demand and after personal hearing, the original authority vide order dated 05.03.2012 confirmed the demand of ADD along with interest. On appeal, the Commissioner (Appeals) set aside the said order. Aggrieved, the department is now before the Tribunal.
2. The Ld. AR Shri Rajaraman reiterated the grounds of appeal. The decision in the case of M/s. LSML Pvt. Ltd. Vs Principal Commissioner of Custom, Chennai 2023 (383) ELT 75 (Tribunal -Chennai) was relied. It is submitted that the Commissioner (Appeals) has erroneously relied on the decision of the Apex Court in the case of Sneh Enterprises Vs Commissioner 2006 (202) ELT 7 (S.C). The Tribunal in the case of M/s. LSML Pvt. Ltd. (supra) has referred to this decision also and held that the said decision of Apex Court would not be applicable after the amendment of Section 9 A of Customs Tariff Act, 1975. The Ld. AR prayed that the appeal may be allowed.
3. The Ld. Counsel Shri P.V.B. Chary appeared and argued for the Respondent. The amendment brought forth to subsection (8) of Section 9A of the Tariff Act was adverted to by the Ld. Counsel. It is submitted that subsection (8) was amended so as to include the provisions of section 15 of Customs Act, 1962 (Date of determination of rate of duty) only with effect from 19.08.2009 and therefore the import being prior to this date, the appellant is not liable to pay ADD on the imported goods. The decision of the Apex Court in the case of Sneh Enterprises (supra) was relied. The Ld. Counsel prayed that the appeal may be dismissed.
4. Heard both sides.
5. The issue that arises for consideration is whether the appellant is liable to pay ADD on the goods imported. The sub section (8) to 9 A of Customs Tariff Act, 1975 adopts the provisions of Customs Act for implementation of Anti-Dumping Duty Notifications. Prior to 19.08.2009, sub section (8) of Section 9 did not adopt provision of section 15 of Customs Act which relates to determination of the date on which the rate of duty applies. After amendment w.e.f. 19.08.2009, this provision is also included. The said subsection (8) before amendment reads as under:
“The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made there under, relating to non-levy, short-levy, refunds, appeals, offences and penalties shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act”.
After amendment, subsection (8) to 9 A reads as under:
[(8) The provisions of Customs Act, 1962 (52 of 1962) and the rules and regulations made there under, including those relating to the date of determination of rate of duty, assessment, non-levy, short levy, refunds, interest, appeals, offences and penalties shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under than Act].
6. It can be seen that prior to 19.08.2009, subsection (8) did not specify that the provisions contained in Section 15 of Customs Act would be applicable to determine the date on which the rate of duty / ADD is payable. The Hon’ble Apex Court in the case of Sneh Enterprises was dealing with the situation prior to amendment to subsection (8) of 9 A and held that ADD would be payable at the time of import of the goods. Taking note of the amendment, the Commissioner (Appeals) has held that appellant is not liable to pay ADD. The decision in the case of M/s. LSML Pvt. Ltd. (supra) relied by the Ld. AR is not applicable to the facts of the case before us as the decision related to imports made after amendment to subsection (8) of 9 A. The date of bill of entry in the present case is prior to 19.08.2009. Therefore, the decision of the Apex Court in the case of Sneh Enterprises (supra) would be squarely applicable.
“20. Anti-dumping duty would be payable in respect of the goods which have already entered Indian Territory and are warehoused.
21. In this case, goods were cleared by the Customs Authorities without imposing any anti-dumping duty. It was at a later date the duties were sought to be imposed, where for a show cause notice was issued.
22. A Judgment, as is well known, is the authority for the proposition which it decides and not what can logically be deduced from Kiran Spinning Mills (supra) does not militate against a contention of the appellant. It, in fact, supports its contention. The question as to when import of goods is complete would depend upon contract between the parties and/or statute governing the field. It is not a part of common law that the import of the goods would be deemed to have been completed only when it passes the customs barrier. Such a provision had been made for achieving definite purposes, i.e., for the purpose of calculating customs duty.
23. In absence of a statute, the contract between the parties would not be superceded. Sub-Section 6 of Section 3 or Sub-Section 8 of Section 9A of Customs Tariff Act was enacted to achieve a specific purpose. Its operation is limited from the date it came into force. It cannot be applied with retrospective effect. Unless there exists a statutory interdict, common law principle would apply which would mean that import would be complete when the goods enter the territories of the country. Taxable event in terms of the notification issued under Section 9A of the Act is on importation of the good and not when the same passes the customs barrier. The goods in question landed at Mumbai. They were trans-shipped to Delhi. They were, however, cleared at Delhi. The goods might have passed the customs barrier on the day on which the Bill of Entry was filed by the appellant for the purpose of Customs Act. But such importation of goods, in terms of the provisions of the Customs Act, was meant only for computation of duty thereunder and not for any other purpose. In other words, a situation contemplated under one statute cannot, in absence of any express or clear intendment, be made to apply or be given effect to while applying the provisions of another statute.
24. It is a trite law that while interpreting the statute, the courts not only may take into consideration the purpose for which the same had been enacted, but also the mischief it seeks to suppress. Evidently, with a view to suppress the mischief, if any, Section 26 of the Finance Act, 2004, was brought into the statute book. It cannot, therefore, by no stretch of imagination be held that the Parliament intended to apply the provisions of Section 15 of the Customs Act in Section 9A of the Customs Tariff Act, prior to 2004.
25. While dealing with a taxing provision, the principle of ‘Strict Interpretation’ should be applied. The Court shall not interpret the statutory provision in such a manner which would create an additional fiscal burden on a person. It would never be done by invoking the provisions of another Act, which are not attracted. It is also trite that while two interpretations are possible, the Court ordinarily would interpret the provisions in favour of a tax-payer and against the Revenue.
26. The notification dated 22-5-2002, on its face value, is prospective in operation and not retrospective. It, in no uncertain terms, states that Central Government thereby may impose duty only, inter alia, on lead acid batteries originated from the countries specified therein and imported into India. The proviso appended to the notification provides for a clue in the sense that by reason thereof no duty was to be imposed on industrial lead acid batteries manufactured by the manufacturers named therein. The anti-dumping duty imposed thereby was to remain effective only for a limited period, i.e., upto 21st November, 2002.
27. For the aforementioned reasons, the impugned judgment cannot be sustained, which is accordingly set aside. The appeal is allowed. No costs.”
6.1. We hold that the appellant is not liable to pay the Anti-Dumping Duty as the Notification no. 73/2009 dated 22.06.2009 was not in existence at the time of import of goods. The impugned order does not call for any interference. The same is sustained.
7. In the result, the appeal filed by department is dismissed.
(Pronounced in court on 16.08.2023)
