2022 (9) TMI 399 - HC - Customs

High Court dismisses revenue appeal, no substantial question of law. Tribunal rules in favor of assessee on Anti Dumping Duty.

Commissioner Of Central Excise, Kolkata IV, Commissionerate Versus M/s. Royal Touch Fablon Pvt. Ltd.

The High Court dismissed the revenue's appeal, stating that no substantial question of law arose for consideration. The Tribunal's decision favored the ... Levy of Anti Dumping Duty - assessee himself opted for the condition Sl. No.2 of the Notification No.23/2003-CE dated 31.03.2003 - benefit of exemption notification to the assessee even in absence of any conclusive proof/evidence as to the goods for sale in DTA were manufactured wholly out of indigenous raw material - total DTA sales were undertaken by the Respondent on the raw materials by not paying anti dumping duty - Respondent’s claim of maintenance of separate account of imported and indigenous material was an afterthought? HELD THAT:- The tribunal took into consideration the factual position and noted that the respondent had maintained separate register. Further, the tribunal on examining the facts, found that the difference cited between the table (as mentioned in the order-in-original)and the issue register for ADD material submitted by the respondent with respect to “Issues to Production” and “closing stock” was only on account of difference in methodology adopted for reflection of closing stock in the table vis-à-vis the register and the same was duly reconciled and certified in terms of the chartered accountants certificate which was furnished before the tribunal. Further, the tribunal pointed that macro-comparison of the available stock of polypropylene from known ADD jurisdiction vis-à-vis DTA clearance during 2009-10 and 2010-11 by the adjudicating authority also suffers from infirmities and had agreed with the respondent that DTA clearance of finished goods prior to 30th July, 2009, the date of imposition of anti dumping duty could not have been considered and the stock of polypropylene as on the date of introduction of anti dumping duty could not have been ignored in such macro comparison. As in the case of COMMR. OF C. EX., LUDHIANA VERSUS MALWA COTTON SPINNING MILLS LTD. [2010 (2) TMI 260 - PUNJAB & HARYANA HIGH COURT], the respondent had maintained separate accounts for the goods which was examined by the tribunal and relief has been granted. Thus, there is no question of law much less substantial question of law arising for consideration in this appeal. Appeal dismissed - decided against Revenue. Issues:1. Interpretation of Anti Dumping Duty provisions under Customs Act, 1962.2. Burden of proof regarding the utilization of imported materials in manufacturing.3. Examination of separate records maintained by the assessee.4. Comparison of stock and clearance data for imported materials.5. Application of precedent cases in determining liability for Anti Dumping Duty.Analysis:1. The primary issue in this case revolved around the interpretation of Anti Dumping Duty provisions under the Customs Act, 1962. The revenue challenged the Tribunal's decision regarding the liability of the assessee to pay Anti Dumping Duty despite opting for a specific condition under Notification No.23/2003-CE dated 31.03.2003. The Tribunal's conclusion was that the assessee was not liable to pay the duty, leading to the revenue raising substantial questions of law for consideration.2. The burden of proof regarding the utilization of imported materials in manufacturing was a crucial aspect of the case. The Tribunal considered whether the revenue had established that the imported polypropylene granules were used in the manufacture of goods cleared to the Domestic Tariff Area (DTA). The assessee argued that the onus was on the revenue to prove this linkage, which led to a detailed examination of the records and evidence presented by both parties.3. Another significant issue was the examination of the separate records maintained by the assessee. The Tribunal noted that the respondent had maintained a separate register, which played a key role in determining the utilization of imported materials in manufacturing. The reconciliation of data discrepancies and the certification provided by chartered accountants were crucial in establishing the credibility of the records maintained by the assessee.4. The comparison of stock and clearance data for imported materials was also a point of contention. The Tribunal scrutinized the macro-comparison of stock from known Anti Dumping Duty (ADD) jurisdictions with DTA clearance data. It was observed that the stock of polypropylene as on the date of the imposition of Anti Dumping Duty was essential in such comparisons. The Tribunal found infirmities in the adjudicating authority's approach and agreed with the respondent's arguments regarding the timing and relevance of stock data in relation to duty imposition.5. Lastly, the application of precedent cases in determining liability for Anti Dumping Duty was discussed. The Tribunal referred to the case of Commissioner of Central Excise, Ludhiana vs. Malwa Cotton Spinning Mills Ltd. and emphasized the importance of maintaining separate accounts for imported goods. The Tribunal's decision aligned with the principles established in the Malwa Cotton case, where relief was granted based on the maintenance of separate records. This alignment with precedent cases played a significant role in the Tribunal's decision-making process.In conclusion, the High Court dismissed the revenue's appeal, emphasizing that no substantial question of law arose for consideration. The detailed analysis of the issues surrounding Anti Dumping Duty provisions, burden of proof, record-keeping, data comparison, and precedent application provided a comprehensive understanding of the case's complexities and the Tribunal's rationale in granting relief to the assessee.