2025 (2) TMI 751 - AT - Customs

Appeal allowed for Anti-Dumping Duty on PVC Flex Banner imports citing Section 138B witness testimony requirements

M/s. Sibco Overseas Private Limited, M/s. Bersons Electronics Private Limited and Shri Sunil Kumar Agarwal, Director Versus Commissioner of Customs (Port), Kolkata

M/s. Sibco Overseas Private Limited, M/s. Bersons Electronics Private Limited and Shri Sunil Kumar Agarwal, Director Versus Commissioner of Customs ... 1. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment include:Whether the imported consignments of PVC Flex Banner were of Malaysian origin or Chinese origin, impacting the applicability of Anti-Dumping Duty.The admissibility and reliability of statements and documents provided by witnesses, especially in the absence of cross-examination.The legality of the demands for Anti-Dumping Duty, Customs Duty, interest, and penalties imposed on the appellants based on the alleged mis-declaration of the country of origin.The appellants' eligibility for concessional duty rates under specific Customs Notifications.2. ISSUE-WISE DETAILED ANALYSISIssue 1: Origin of GoodsLegal Framework and Precedents: Customs Notification No. 82/2011-Cus. mandates Anti-Dumping Duty on imports from China, while Notifications Nos. 46/2011-Cus. and 053/2011-Cus. provide exemptions for goods of Malaysian origin.Court's Interpretation and Reasoning: The Tribunal found that the investigation did not adequately prove that the goods were of Chinese origin. The appellants produced AIFTA Certificates of Origin from Malaysia, which were not proven to be fraudulent.Key Evidence and Findings: The Tribunal noted the lack of independent evidence to support the claim that the goods were Chinese. Payment records showed transactions to Malaysian accounts, supporting the appellants' claim of Malaysian origin.Application of Law to Facts: The Tribunal applied the legal principle that the burden of proof lies with the party making the claim. In this case, the Department failed to provide sufficient evidence to counter the appellants' documentation.Treatment of Competing Arguments: The Department's reliance on statements and documents from witnesses who were not cross-examined was deemed insufficient.Conclusions: The Tribunal concluded that the goods were of Malaysian origin, exempting them from Anti-Dumping Duty.Issue 2: Admissibility of EvidenceLegal Framework and Precedents: Section 138B of the Customs Act requires cross-examination for the admissibility of statements in adjudication proceedings.Court's Interpretation and Reasoning: The Tribunal emphasized the importance of cross-examination to uphold principles of natural justice, citing the Calcutta High Court's decision in Ajay Saraogi Vs. Union of India.Key Evidence and Findings: Only one witness was cross-examined, and his testimony was found to be vague and unreliable. The other witnesses' statements were inadmissible due to the lack of cross-examination.Application of Law to Facts: The Tribunal determined that the lack of cross-examination rendered the evidence from three witnesses inadmissible.Treatment of Competing Arguments: The Tribunal rejected the Department's argument that the statements and documents were sufficient without cross-examination.Conclusions: The Tribunal excluded the unexamined witnesses' statements from consideration, undermining the Department's case.Issue 3: Legality of Duty and PenaltiesLegal Framework and Precedents: The Customs Act provisions for duty demands and penalties require a valid basis for claims of mis-declaration.Court's Interpretation and Reasoning: The Tribunal found that the demands and penalties were based on insufficient evidence and thus legally unsustainable.Key Evidence and Findings: The Tribunal noted the absence of credible evidence proving mis-declaration of the country of origin.Application of Law to Facts: The Tribunal applied the principle that penalties cannot be imposed without a proven violation of law.Treatment of Competing Arguments: The Tribunal dismissed the Department's claims due to the lack of admissible evidence.Conclusions: The Tribunal annulled the duty demands and penalties, ruling them as baseless.3. SIGNIFICANT HOLDINGSVerbatim Quotes: 'The statements recorded and documents submitted by all persons, other than Shri Arup Bandhu Guha, are not admissible as evidence in the adjudication proceedings as they have not fulfilled the tests prescribed in Section 138B of the Customs Act, 1962.'Core Principles Established: The necessity of cross-examination for the admissibility of evidence in customs adjudication; the burden of proof lies with the party alleging mis-declaration.Final Determinations: The Tribunal set aside the demands for Anti-Dumping Duty, Customs Duty, interest, and penalties, affirming the appellants' eligibility for duty exemptions based on the Malaysian origin of goods.