Tata Chemicals Ltd Vs Commissioner of Customs (Import) (CESTAT Mumbai)
The appeal concerns the scope of an exemption notification applicable to goods classifiable under Chapter 31 of the Customs Tariff Act, 1975, as amended with effect from 1 March 2011. The Commissioner (Appeals), Nhava Sheva, upheld the original authority’s decision demanding duty of ₹26,50,377 under section 28 of the Customs Act, along with interest under sections 28AB and 28AA, and ordering confiscation of goods worth ₹21,64,24,656.63 under section 111(o). A penalty of ₹28,65,916 was also imposed.
The appellant had imported various fertiliser-related products through 51 bills of entry between 1 March 2011 and 12 March 2012 without payment of additional duty under section 3(1) of the Customs Tariff Act, claiming exemption under the relevant notification. The goods were traded after import, and the appellant asserted that the bills of entry were endorsed to show that the goods would be used as manure or fertiliser and that an appropriate licence under the Fertiliser (Control) Order, 1985 was held. The lower authorities proceeded on the view that the exemption applied only if the imported goods were used in the manufacture of other fertilisers.
The Tribunal found that the goods were traded, but it could not accept the reasoning of the lower authorities. It held that goods classifiable under Chapter 31 were eligible for a nil rate of duty unless they fell within the narrow exclusion in the amended notification, which applied only to goods “clearly not to be used” in the manufacture of other fertilisers. The Tribunal stated that the burden was on the customs authorities to establish, with clarity, that the goods were not intended for such use, and vague suspicion or probability was insufficient. No such evidence appeared on record.
