2025 (4) TMI 117 - AT - Customs

Appellant loses challenge over anti-dumping duty on recovered acetone solvent under Section 9A(2A) Customs Tariff Act

Dishman Carbogen Amcis Limited Versus Commissioner of CGST & Central Excise, Ahmedabad-ii

CESTAT Ahmedabad dismissed the appeal regarding non-payment of anti-dumping duty on DTA clearances. The appellant imported acetone and cleared recovered ... Non-payment of anti-dumping duty, while making DTA clearances - time limitation - contravention of the provisions of N/N. 60/2008-Cus dated 05.05.2008 as well as sub-Section 2A of Section 9A of Customs Tariff Act, 1975 - levy of ADD on the recovered solvent cleared in the Domestic Tariff Area (DTA) as a by-product of the imported Acetone. Demand of ADD is hit by limitation or not - bill of entry for import of goods was filed on 18th September, 2013 and show cause notice was issued after a lapse of 29 months - Section 28 of the Customs Act, 1962 - HELD THAT:- Sub-section (4) of Section 28 provides that where any duty has not been levied or not paid on account of collusion, any willful mis- statement or suppression of facts by the importer or exporter or agent or employee of the importer or exporter, the competent officer may act within five years from the relevant date and serve notice on the person chargeable with duty or interest which has not been paid. Therefore, the provisions of sub-section (4) contemplates extended period of limitation for taking duty proceeding for non-payment or short levy of Customs duty - The appellant had clearly failed to follow laid down procedures before making the impugned clearances in the DTA. Therefore, the invoking of extended period of limitation is just and proper in the present case. Absence of a report from the Norms Committee as required under Notification No. 60/2008-CUS - HELD THAT:- The ad hoc norms would continue till such time the final norms were fixed by the Norms Committee. In the instant case, the appellant has given no indication that it had fixed any ad hoc norms that was submitted to the jurisdictional development Commissioner for confirmation or alteration as required, eventually paving way for the Norms Committee to finalize the norms. Further, the appellant has also not claimed that it had filed any undertaking as required in N/N. 60/2008-CUS dated 05.05.2008 to adjust the ad hoc norms, in accordance with the norms finalized by the Norms Committee. Therefore, it is also clear that the D.T.A. clearances impugned in the instant case, without payment of anti-dumping duty was in contravention of the provisions of the said Notification as well as sub-section 2A of Section 9A of the Customs Tariff Act, 1975. Therefore, there is no merit in the argument of the appellant that the demand should not have been confirmed without the adjudicating authority producing a norms committee report. ADD on recovered solvent - HELD THAT:- In the present case, the appellant failed to pay the anti-dumping duty on ACETONE which was cleared in DTA as “recovered solvent” which is a by product produced from ACETONE imported without payment of Customs duty including anti- dumping duty. Therefore, the product which was cleared in DTA was in fact ACETONE by product of which was produced from ACETONE imported without payment of Customs Duty and it was cleared in DTA as “recovered solvent”. Therefore, the provisions of anti-dumping N/N. 75/2008-CUS with effect from 10.06.2008 read with section 9A (2A) of the Customs Tariff Act, 1975 are attracted and applicable in the present case. Conclusion - i) The appellant had clearly failed to follow laid down procedures before making the impugned clearances in the DTA. Therefore, the invoking of extended period of limitation is just and proper in the present case. ii) There is no merit in the argument of the appellant that the demand should not have been confirmed without the adjudicating authority producing a norms committee report. iii) The provisions of anti-dumping N/N. 75/2008-CUS with effect from 10.06.2008 read with section 9A (2A) of the Customs Tariff Act, 1975 are attracted and applicable in the present case, imposition of duty on the recovered solvent upheld. Appeal dismissed. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment are:1. Whether the demand for anti-dumping duty on the appellant is time-barred under Section 28 of the Customs Act, 1962.2. Whether the demand for anti-dumping duty is sustainable in the absence of a report from the Norms Committee as per Notification No. 60/2008-CUS.3. Whether the anti-dumping duty can be imposed on the 'recovered solvent' cleared in the Domestic Tariff Area (DTA) as a by-product of the imported Acetone.ISSUE-WISE DETAILED ANALYSIS1. Time-barred Demand for Anti-dumping DutyRelevant Legal Framework and Precedents: The appellant argued that the demand for anti-dumping duty is time-barred under Section 28 of the Customs Act, 1962, which prescribes a normal time limit of one year for issuing a demand notice. The appellant contended that since all necessary information was declared to the authorities, the extended period of limitation should not be invoked.Court's Interpretation and Reasoning: The Tribunal disagreed with the appellant's argument, interpreting Section 28(4) of the Customs Act, which allows for an extended period of five years in cases involving collusion, willful misstatement, or suppression of facts. The Tribunal found that the appellant failed to follow laid-down procedures, and the evasion of anti-dumping duty was only discovered during an audit, justifying the invocation of the extended period.Key Evidence and Findings: The Tribunal noted that the appellant did not disclose the necessary information until demanded by the department post-audit, suggesting suppression of facts.Application of Law to Facts: The Tribunal applied Section 28(4) to conclude that the extended period was applicable due to the appellant's failure to disclose pertinent information.Treatment of Competing Arguments: The appellant's argument that the demand was time-barred was rejected based on the Tribunal's interpretation of Section 28(4).Conclusions: The Tribunal upheld the invocation of the extended period of limitation, finding no illegality in the department's actions.2. Absence of Norms Committee ReportRelevant Legal Framework and Precedents: The appellant argued that the demand for anti-dumping duty was unsustainable without a report from the Norms Committee, as required by Notification No. 60/2008-CUS.Court's Interpretation and Reasoning: The Tribunal held that the appellant was responsible for self-declaring ad hoc norms and ensuring their confirmation by the Development Commissioner. The appellant failed to undertake this process, leading to a contravention of the notification's provisions.Key Evidence and Findings: The Tribunal found no evidence that the appellant had declared ad hoc norms or filed the required undertaking.Application of Law to Facts: The Tribunal applied the provisions of Notification No. 60/2008-CUS, determining that the appellant's failure to comply with the notification's requirements justified the demand.Treatment of Competing Arguments: The appellant's argument was rejected based on the Tribunal's interpretation of the notification's requirements.Conclusions: The Tribunal concluded that the demand was sustainable despite the absence of a Norms Committee report.3. Imposition of Anti-dumping Duty on 'Recovered Solvent'Relevant Legal Framework and Precedents: The appellant contended that anti-dumping duty could not be imposed on the 'recovered solvent,' a by-product of imported Acetone, as it was not the imported product itself.Court's Interpretation and Reasoning: The Tribunal held that the 'recovered solvent' was a by-product of Acetone, which was imported without payment of anti-dumping duty, and thus subject to the provisions of Notification No. 75/2008-CUS and Section 9A(2A) of the Customs Tariff Act.Key Evidence and Findings: The Tribunal found that the product cleared in the DTA was indeed Acetone in the form of a by-product, subject to anti-dumping duty.Application of Law to Facts: The Tribunal applied the relevant notification and legal provisions to affirm the imposition of anti-dumping duty on the 'recovered solvent.'Treatment of Competing Arguments: The appellant's argument was rejected based on the Tribunal's interpretation of the notification and the Customs Tariff Act.Conclusions: The Tribunal concluded that the imposition of anti-dumping duty on the 'recovered solvent' was justified and lawful.SIGNIFICANT HOLDINGSPreserve Verbatim Quotes of Crucial Legal Reasoning: 'The provisions of sub-section (4) of Section 28 contemplate an extended period of limitation for taking duty proceedings for non-payment or short levy of Customs duty.'Core Principles Established: The Tribunal established that the extended period of limitation under Section 28(4) is applicable in cases of suppression of facts. It also reaffirmed the necessity for compliance with notification requirements, such as self-declaration of norms, to avoid duty demands.Final Determinations on Each Issue: The Tribunal rejected the appellant's appeal, upholding the demand for anti-dumping duty, the invocation of the extended period of limitation, and the imposition of duty on the 'recovered solvent.'