Concessional customs exemption and receipt shortage: earlier final order sustained assessee's claim against differential duty demand

Differential duty on imported crude palm oil and crude palm kernel oil was disputed on the ground that concessional exemption under Notification No. 21/2002-Cus. was unavailable because shortage was recorded on receipt, allegedly showing non-use for the intended purpose. The Tribunal noted that the same issue in respect of the same assessee had already been decided in its favour by an earlier final order, and that view had attained finality. On that basis, the demand for duty, interest and penalties was not sustainable and the impugned order was set aside.

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Issues: Whether differential duty could be demanded on imported crude palm oil and crude palm kernel oil on the ground that the goods, though cleared at concessional rate under exemption Notification No. 21/2002-Cus., were not used for the intended purpose because of shortage recorded on receipt.

Analysis: The disputed imports were made during June 2006 to March 2007 claiming exemption under Notification No. 21/2002-Cus. The authorities proceeded on the basis that shortage in the goods recorded at receipt amounted to non-use of the materials for the intended purpose and, on that footing, confirmed duty, interest and penalties. The Tribunal noted that an identical issue involving the same assessee had already been decided in its favour by an earlier final order. Since that view had attained finality, no reason was found to depart from it.

Conclusion: The demand of differential duty could not be sustained and the impugned order was set aside in favour of the assessee.

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