2017 (11) TMI 53 - SC - Customs

Supreme Court affirms Tribunal's decision on time-barred Show Cause Notices and goods classification

The Supreme Court upheld the Customs, Excise and Service Tax Appellate Tribunal's decision regarding time-barred Show Cause Notices issued in 2003, ... Release of seized goods - imported goods, copper concentrate - hazardous waste or not - Held that: - the order of the Adjudicating Authority that the samples from the consignments dated 24.12.2001 and 24.01.2002 are hazardous waste and not Copper Concentrate is open to serious doubt, the benefit of which must go in favour of the importer in the light of the totality of the materials on record - appeal of Revenue dismissed. The subject goods have been released subject to furnishing of Bank Guarantee of ₹ 10 lakhs on account of demurrage charges - as the respondent-importer had cleared/obtained release of the goods on furnishing of the Bank Guarantee of ₹ 10 lakhs in favour of the Central Warehousing Corporation in terms of the interim order of this Court dated 25.11.2016, we are of the view that the Corporation should be allowed to invoke the Bank Guarantee of ₹ 10 lakhs. Any further claim of the Corporation or any denial of any liability by the importer or the Customs Department, if raised, will be liable to be adjudicated in accordance with law. Petition dismissed - decided against Revenue. Issues:1. Appeal against the Order dated 04.04.2005 passed by the Customs, Excise and Service Tax Appellate Tribunal2. Classification of imported goods as hazardous waste or copper concentrate3. Time-barred Show Cause Notices issued under Section 28 of the Customs Act4. Consideration of reports by EPTRI and NMDC5. Dismissal of appeal by Revenue and confirmation of Tribunal's order6. Release of goods subject to Bank Guarantee of Rs. 10 lakhs7. Disposal of Contempt Petition (Civil) No. 456 of 2014Analysis:1. The appeal challenged the Order dated 04.04.2005 passed by the Customs, Excise and Service Tax Appellate Tribunal, involving nine appeals filed by the respondents. The Tribunal allowed some appeals on the grounds of time-barred Show Cause Notices under Section 28 of the Customs Act, while others were allowed on merits, disputing the classification of imported goods as hazardous waste instead of copper concentrate, leading to confiscation and penalties.2. The case involved the importation of Copper Concentrate by the respondent, which was certified as such by the Chemical Examiner. Subsequent reports by EPTRI and NMDC conflicted with the importer's claims, resulting in Show Cause Notices for confiscation and penalties. The Tribunal's consideration of these reports and the classification of goods were pivotal in the appeal.3. The Supreme Court upheld the Tribunal's decision on the time-barred Show Cause Notices issued in 2003, emphasizing the importance of the normal limitation period unless there is suppression of facts. The Court found no error in the Tribunal's conclusion that the extended period of limitation was not warranted due to lack of evidence of suppression by the Revenue.4. The Court scrutinized the reports by EPTRI and NMDC, noting discrepancies and inconclusive findings. EPTRI's report highlighted insufficient sample quantity, while NMDC's report lacked conclusive evidence against the goods' origin. The importer's claims of sending samples for analysis were supported by the lack of contradictory evidence from the Revenue, leading to doubts about the hazardous waste classification.5. Ultimately, the Court dismissed the Revenue's appeal and affirmed the Tribunal's decision regarding the classification of goods as Copper Concentrate instead of hazardous waste. The Court's reasoning differed from the Tribunal's but aligned with the outcome in favor of the importer based on the totality of evidence presented.6. The Court addressed the release of goods subject to a Bank Guarantee of Rs. 10 lakhs for demurrage charges. While the liability for these charges was not directly relevant to the appeal, the Court allowed the Central Warehousing Corporation to invoke the Bank Guarantee as per the interim order, leaving any further disputes for legal adjudication.7. The Contempt Petition (Civil) No. 456 of 2014 was disposed of in view of the judgment on Civil Appeal No. 5720 of 2008, concluding the legal proceedings related to the case.