2014 (5) TMI 945 - AT - Customs

Supreme Court upholds data tape valuation, remands exemption claim for further review under Notification No. 20/99.

The Supreme Court affirmed the Tribunal's decision regarding the valuation of imported data tapes and remanded the claim for exemption under Notification ... Eligibility for exemption - Serial No. 184 of Notification No. 20/99 - Essentiality Certificate - Import of seismic data tapes etc. - Valuation of the data tapes and demand notice dated 1-11-1999 – Whether certificate or letter issued by Dr. Chandrasekhar can be considered as the certificate issued by a duly authorized officer of the DGH as the essentiality certificate - Held that:- Assessees themselves have addressed their application to Shri Chug who was the authorized officer at the relevant time - It is inconceivable to believe assesse`s contention that according to them, Dr. Chandrasekhar is the duly authorized officer - In any case assessee had cross-examined Dr. Chandrasekhar during the adjudication proceedings wherein he has clarified the position - At this stage, it cannot be disputed that assessee have not been able to obtain essentiality certificate from the duly authorized officer of DGH - Even the impugned order was passed in 2006 and even at the time of hearing before this Tribunal in 2013, they have not been able to obtain the certificate - In the result, the benefit of Notification 20/99-Cus. cannot be extended to in the absence of the said certificate - Demand of duty is therefore upheld - Penalty u/s 112(a) is set aside – Decided partly in favour of assessee. Issues:1. Valuation and exemption claim of imported data tapes under Notification No. 20/99-Cus.2. Eligibility for benefit under Serial No. 184 of Notification No. 20/99.Issue 1: The appellant imported seismic data tapes at a declared value of Rs. 2389. A dispute arose regarding the valuation, leading to a demand notice of Rs. 3,08,77,440. The appellant claimed exemption under Notification No. 20/99 at Serial No. 184 and Serial No. 231. The Tribunal upheld the valuation but remanded the claim under Serial No. 184 for further examination by the Commissioner. The Supreme Court affirmed the Tribunal's decision. The Commissioner re-adjudicated the matter, leading to further scrutiny of certificates required for exemption.Issue 2: The core issue revolved around the appellant's eligibility for the benefit of Notification No. 20/99 at Serial No. 184. The notification exempted goods required for petroleum operations under specified contracts. The appellant was required to produce certificates from the Directorate General of Hydrocarbons (DGH) to prove eligibility. The appellant claimed a letter from Dr. C. Chandrasekhar of DGH served as the required certificate. However, the Revenue contended that Dr. Chandrasekhar was not the authorized officer to issue the essential certificate as per the notification.The Tribunal analyzed the submissions and found that the appellant failed to obtain the essentiality certificate from the duly authorized officer of DGH as required by the notification. Despite the appellant's argument, the Tribunal held that the letter from Dr. Chandrasekhar did not fulfill the criteria of being issued by a duly authorized officer. As a result, the benefit of Notification 20/99-Cus. could not be extended due to the absence of the requisite certificate. The Tribunal rejected the plea to summon DGH as it was the appellant's responsibility to procure the necessary certificate. The demand of duty was upheld, but the penalty under Section 112(a) of the Customs Act was set aside based on the circumstances of the case.In conclusion, the Tribunal upheld the demand of duty due to the appellant's failure to obtain the essential certificate from the authorized officer of DGH as mandated by the notification. The penalty under Section 112(a) was set aside, and the appeal was disposed of accordingly.