2009 (8) TMI 999 - Commissioner - Customs

Appeal Rejected on Export Duty for Non-Beige Leather Upheld

The appeal was rejected as non-maintainable, upholding the decision to drop the demand for export duty on leather of colors other than beige. The test ... - Issues Involved:1. Mis-declaration of exported goods.2. Applicability of export duty based on product classification.3. Validity of the show cause notice and time-barred claims.4. Representativeness of samples for testing.5. Legal and procedural aspects of the appeal.Detailed Analysis:1. Mis-declaration of Exported Goods:The primary issue was whether the goods declared as 'finished leather from hides of buffalo' were indeed finished leather. The CLRI test report dated 15-10-07 stated that the sample was 'not a finished leather as per the norm' contained in Public Notice No. 3 ETC(PN) 92-97. This indicated that the exporter had mis-declared the leather, leading to the evasion of export duty amounting to Rs. 43,51,083/-.2. Applicability of Export Duty Based on Product Classification:According to Sl. No. 14 of the IInd Schedule of the Customs Tariff 1975, hides, skin, and leather tanned or un-tanned but not including manufactures of leather are subject to export duty at 60% ad valorem. The adjudicating authority confirmed the demand for export duty on the beige-colored leather but dropped the demand for other colors, reasoning that the test report for beige leather could not be applied to other colors.3. Validity of the Show Cause Notice and Time-barred Claims:The respondent argued that the show cause notice was time-barred as it was issued more than six months after the date of export. The relevant date was considered to be 13-4-2007, and the show cause notice was served on 31-3-2008. The adjudicating authority did not invoke the provisions of the extended period, making the notice time-barred.4. Representativeness of Samples for Testing:The appellant contended that the sample drawn from the beige leather represented the entire consignment, including other colors. However, the adjudicating authority and the respondent argued that the consignment was differentiated by color, and a single sample could not represent the entire consignment. The adjudicating authority's decision to drop the demand for other colors was based on this differentiation.5. Legal and Procedural Aspects of the Appeal:The respondent claimed that the appeal was not maintainable due to being time-barred and lacking proper authorization. However, the appeal was found to be filed within the prescribed period under Section 129D(4) of the Customs Act, 1962, and with proper authorization. The appeal was taken up on merits.The adjudicating authority's order was divided into two parts: confirming the demand for beige-colored leather and setting aside the demand for other colors. The appeal against the demand for beige-colored leather had already been decided in favor of the respondent, setting aside the duty demand both on merits and on the issue of time-bar. Consequently, the present appeal regarding the other colors was also not maintainable under the Doctrine of merger.Conclusion:The appeal was rejected as non-maintainable, upholding the adjudicating authority's decision to drop the demand for export duty on leather of colors other than beige. The test report for beige leather could not be applied to the entire consignment, and the show cause notice was deemed time-barred.