2019 (2) TMI 1258 - AT - Customs

Tribunal overturns penalties due to lack of evidence and time-barred claims.

M/s. Antony Metals, M/s. Vincent & Sons, M/s. Kenstar Exims, M/s. Aathees Hard Flooring, M/s. Triumph Enterprises & Investments Madurai (P) Ltd., M/s. P.S.S. Jayam & Co., M/s. PRP Exports, M/s. S. Jawaharlal and Co., M/s. Al Kabir Impex Services and M/s. Madhucon Projects Ltd. Versus C.C., Tuticorin

M/s. Antony Metals, M/s. Vincent & Sons, M/s. Kenstar Exims, M/s. Aathees Hard Flooring, M/s. Triumph Enterprises & Investments Madurai (P) Ltd., M/s. ... Issues Involved:1. Eligibility for concessional rate of countervailing duty (CVD) under Notification No. 04/2006-CE.2. Applicability of extended period of limitation for issuing Show Cause Notices.3. Validity of penalties imposed on importers and Custom House Agents (CHA).Detailed Analysis:1. Eligibility for Concessional Rate of CVD:The appellants imported cement from Pakistan and claimed concessional CVD rates under various clauses of Notification No. 04/2006-CE. The Department later contended that the cement was sold in retail markets, making the concessional rates inapplicable. The appellants argued that they either used the cement themselves or sold it to institutional or industrial consumers, not in retail. They cited judgments like M/s. Thermax Pvt. Ltd. and M/s. Hyderabad Industries to support their claim that importers should be treated on par with manufacturers for CVD purposes. The Tribunal found that the Department did not provide evidence of retail sales and upheld the appellants' claim for concessional rates, referencing the Tribunal’s decision in M/s. Diamond Cement and M/s. Global Star Logistics.2. Applicability of Extended Period of Limitation:The Show Cause Notices were issued more than one or two years after the imports, invoking the extended period of five years under Section 28 of the Customs Act, 1962. However, the Tribunal found no cogent evidence of suppression or mis-statement by the importers. The Department's reliance on sale invoices and importer statements without concrete evidence linking them to the impugned imports was insufficient. Therefore, the Tribunal held that the proceedings were time-barred and could not invoke the extended period of limitation.3. Validity of Penalties Imposed:Penalties were imposed on importers and CHAs for allegedly abetting the wrongful availing of exemption benefits. Since the Tribunal set aside the demands on both limitation and merits, it also held that the penalties could not sustain. The Tribunal emphasized that the assessments were finalized based on the importers' declarations and no contrary evidence of retail sales was presented by the Department.Conclusion:The Tribunal allowed the appeals, setting aside the impugned orders and penalties. It concluded that the demands did not survive due to lack of evidence and were time-barred. The appeals were pronounced in open court on 19.02.2019.