2021 (9) TMI 1012 - SC - Customs

Supreme Court Overturns Tribunal Ruling on Anti-Dumping Duty

The Supreme Court allowed the appeals, set aside the Customs, Excise & Service Tax Appellate Tribunal's judgment, and remanded the case for a fresh ... Levy of anti – dumping duty - Styrene Butadiene Rubber imported from Korea - classified under the heading 4002 of the First Schedule of the Customs Tariff Act, 1975 or otherwise? - HELD THAT:- In the present proceedings, there is no dispute about the position that the product under consideration of the Designated Authority was SBR of 1500, 1700 and 1900 series falling under CTH 4002.19 of the Customs Tariff Act 1975 but not goods covered by the CTH 40021100 - while SBR of the 1900 series is a dry polymer, the goods imported by the respondent were in a liquid form and hence, according to the respondent, fall for classification under CTH 40021100 as Latex. In this context, reliance was sought to be placed on the Vanderbiit Rubber Handbook and an opinion obtained from the University of Mumbai. On the above premises, it was submitted that the goods which were imported fall under CTH 40021100. It was urged that the literature indicates that goods imported in a liquid form would fall for classification as Latex and the opinions of experts demonstrate that the Styrene content is not decisive on whether or not the goods would fall for classification as Latex. The Tribunal has not looked into the merits of the appeals at all on the facetious ground that the show cause notice did not contain any basis to doubt the classification of the goods and that while issuing the notice, the adjudicating authority had not examined the classification based on the report of the laboratory. The findings of the Tribunal are contrary to the record and cannot therefore be sustained. Since the Tribunal has not considered the case of the respondent in appeal on merits, it would be appropriate to restore the proceedings back to the Tribunal for the purpose - Appeal allowed by way of remand. Issues Involved:1. Validity of the demand for anti-dumping duty on 'Styrene Butadiene Rubber' (SBR) imported from Korea.2. Alleged mis-declaration of imported goods as 'Lutex-701' and 'Lutex-780'.3. Classification of the imported goods under the Customs Tariff Act, 1975.4. Evaluation of test reports and their implications on the classification and duty.5. Procedural propriety of the Show Cause Notices issued by the Customs authorities.Detailed Analysis:1. Validity of the demand for anti-dumping duty on 'Styrene Butadiene Rubber' (SBR) imported from Korea:The primary issue revolves around whether the Customs, Excise & Service Tax Appellate Tribunal (CESAT) erred in setting aside the demand for anti-dumping duty on SBR classified under heading 4002 of the First Schedule of the Customs Tariff Act, 1975. The Tribunal concluded that the Show Cause Notices did not provide sufficient grounds to disturb the classification claimed by the importer, which was under CTH 40021100. The Tribunal noted that the anti-dumping notification applied to goods under heading 4002.19 and not 4002.11, which was the classification claimed by the importer.2. Alleged mis-declaration of imported goods as 'Lutex-701' and 'Lutex-780':The Show Cause Notices issued on 23 May 2006 and 30 June 2006 alleged that the importer mis-declared its goods as 'Lutex-701' and 'Lutex-780', respectively. The notices proposed confiscation of the goods under Section 111(m) of the Customs Act, 1962, and demanded anti-dumping duty, interest, and penalties. The Commissioner of Customs upheld these allegations, finding that the goods were indeed SBR of the 1900 series, which was subject to anti-dumping duty.3. Classification of the imported goods under the Customs Tariff Act, 1975:The Tribunal's decision was based on the finding that the Show Cause Notices did not provide reasons to disturb the classification claimed by the importer under CTH 40021100. The Tribunal noted that the anti-dumping investigation and subsequent notification applied to goods under heading 4002.19, not 4002.11. The Tribunal concluded that the goods classified under CTH 40021100 were not subject to anti-dumping duty as per the relevant notifications.4. Evaluation of test reports and their implications on the classification and duty:The Commissioner of Customs relied on test reports from the Indian Rubber Manufacturers' Research Association (IRMRA), which indicated that the imported goods were SBR of the 1900 series. The Tribunal, however, found that the Show Cause Notices did not reference these test reports adequately to justify a change in classification. The Tribunal's decision was criticized for being superficial and not addressing the merits of the test reports, which were central to the classification dispute.5. Procedural propriety of the Show Cause Notices issued by the Customs authorities:The Tribunal found that the Show Cause Notices did not provide a basis to disturb the classification claimed by the importer and did not examine the classification based on the laboratory reports. The Supreme Court criticized this finding, noting that the Show Cause Notices did contain references to the IRMRA test reports, which indicated that the goods were SBR of the 1900 series. The Supreme Court found that the Tribunal's findings were contrary to the record and could not be sustained.Conclusion:The Supreme Court allowed the appeals, set aside the Tribunal's judgment, and remanded the case back to the Tribunal for a fresh determination on the merits. The Tribunal was directed to consider the case afresh, taking into account the submissions and evidence presented by both parties. The appeals were disposed of with no order as to costs.