2016 (12) TMI 316 - AT - Customs

Tribunal Upholds Duty Exemption for Phosphoric Acid Import: Evidence Supports Decision

Commissioner of Customs, Goa Versus M/s Deepak Fertilizers & Petrochemicals Co. Ltd.

Commissioner of Customs, Goa Versus M/s Deepak Fertilizers & Petrochemicals Co. Ltd. - TMI Issues:1. Consideration of dropping proceedings against the appellant for recovery of customs duty on imported goods.2. Interpretation of Customs Notifications regarding concessional rate of duty on imported goods for manufacturing fertilizers.3. Assessment of shortage of imported goods and applicability of customs duty exemption.4. Application of judicial precedents in determining customs duty liability.Analysis:1. The appeal was filed by the Revenue challenging the dropping of proceedings against the appellant for recovery of customs duty on imported goods, specifically Phosphoric Acid imported during 1991-1995. The issue was whether the adjudicating authority was correct in dropping the proceedings initiated.2. The respondent imported Phosphoric Acid for manufacturing fertilizers under various Customs Notifications. The Revenue alleged that a portion of the imported quantity was not used for manufacturing fertilizers, thus not eligible for duty exemption. The adjudicating authority, after considering evidence and notifications, concluded that the shortage was due to transfer processes and exempted the goods from duty.3. The Revenue argued that the appellant failed to receive a specific quantity of Phosphoric Acid, making them liable for customs duty and penalties. They claimed that the adjudicating authority erred in dropping the proceedings without considering the notification correctly. However, the appellant contended that the quantity discrepancy was due to transfer processes and relied on Circulars and judicial decisions supporting their position.4. The Tribunal analyzed the evidence and notifications, finding that the shortage of Phosphoric Acid was established. As the imported goods were for manufacturing fertilizers, they were exempt from customs duty. The Tribunal upheld the lower authority's decision, citing judicial precedents and Circulars supporting the exemption and assessment based on shore tank receipts.In conclusion, the Tribunal rejected the Revenue's appeal, affirming the correctness of the lower authority's decision to drop the proceedings against the appellant for customs duty recovery on imported Phosphoric Acid used for manufacturing fertilizers. The judgment was based on a thorough analysis of evidence, Customs Notifications, Circulars, and relevant judicial precedents.