2025 (11) TMI 312 - AT - Customs

Revenue's appeal dismissed; anti-dumping duty set aside and lapsed under s.9A(5), so duty not levied on June 13, 2017 imports

CESTAT ALLAHABAD dismissed the revenue's appeal challenging non-payment of anti-dumping duty, holding the Notification imposing duty was set aside by the ... Recovery of Anti-Dumping duty with interest and penalty - Revenue was of the view that new/n used pneumatic Radial tyres (Including Tubeless) with or without tubes and/or flap of rubber, having nominal rim dia code above 16” used in buses and lorries/trucks, when imported into India, attract Antidumping duty in terms of Notification No.12/2010-ADD dated 19.10.2010 - HELD THAT:- Since the Notification under which this demand has been made is itself set aside by the order of this Tribunal and it is also noticed that the appeal filed by the revenue against the said order of the Tribunal has been admitted but no stay has been granted. Even if the submissions made in the appeal filed by the revenue are accepted, then also by virtue of the Section 9 A (5) of Customs Tariff Act, 1975, the anti-dumping duty that has been imposed by N/N. 12/2010- Customs dated 19.02.2010 will cease to have effect after expiry of five years from the date of imposition i.e. 19.02.2010, until further extended. No subsequent notification to Notification No. 12/2010Customs dated 19.10.2010, extending period of imposition of anti-dumping duty after 19.02.2015 has been placed on records either in the appeal filed by the revenue or during the course of argument. In the present case the order in original records that the importer had made imports for which the Bill of Entry No 2065593 dated 13.06.2017 was filed. Thus in absence of any subsequent notification extending the imposition of anti-dumping duty imposed by notification dated 19.02.2010, the anti-dumping as per this notification could not have been levied, on the imports made against Bill of Entry dated 13.06.2017. There are no merits in the appeal filed by the revenue - appeal dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether Anti-dumping Duty (ADD) under Notification No.12/2010-ADD dated 19.02.2010 was leviable on the imported new radial truck tyres & flaps (CTH 40112010) imported on 13.06.2017. 2. Whether demand of ADD under Section 28(4) of the Customs Act, 1962, interest under Section 28AA and penalty under Section 114A can be sustained where the underlying ADD Notification has been set aside by the Tribunal and no stay has been granted by the Supreme Court. 3. Whether, in the absence of any subsequent notification extending the period of imposition under Section 9A(5) of the Customs Tariff Act, 1975, the ADD imposed by Notification No.12/2010 ceased to have effect after five years and thus could not be levied on imports made after expiry of that period. 4. Whether the importer's filing of self-assessed Bill of Entry without mentioning the relevant ADD notification and without payment of ADD constitutes suppression with intent to evade duty, justifying recovery under Section 28(4) and penal action under Section 114A. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Leviability of ADD under Notification No.12/2010 for imports on 13.06.2017 Legal framework: ADD is imposed by Central Government notification under Section 9A of the Customs Tariff Act, 1975. Section 9A(5) provides that ADD shall cease after five years from date of imposition unless extended by subsequent notification or continued pending review as provided. Precedent treatment: The Commissioner (Appeals) relied on the Tribunal's Final Order in Bridgestone Tyre Manufacturing (Tri-Del.) which set aside the Designated Authority's Final Findings dated 01.01.2010 and Customs Notification No.12/2010 dated 19.02.2010. The Tribunal's order is treated as binding on adjudicating/appellate authorities unless stayed by a competent court. Interpretation and reasoning: The Tribunal's decision establishing that the Final Findings and Notification were set aside removes the legal basis for ADD under that Notification. Further, Section 9A(5) dictates automatic cessation after five years unless extended; no evidence of extension beyond 19.02.2015 was placed on record. The Bill of Entry for the subject consignments was dated 13.06.2017 - well after both the Tribunal's setting aside and the five-year expiry absent extension. Even if the Tribunal's order had been subject to appeal to the Supreme Court, there was no stay of its operation. Principles of judicial discipline require following the Tribunal's order unless and until suspended. Ratio vs. Obiter: Ratio - where a Notification imposing ADD has been set aside by the Tribunal and no stay granted, and in absence of any statutory extension under Section 9A(5), that Notification cannot serve as a legal basis to levy ADD on later imports. Obiter - incidental remarks on the nature of the D.A.'s injury analysis (taken from the Tribunal decision) are explanatory but not pivotal beyond the holding that the Final Findings were flawed. Conclusion: ADD under Notification No.12/2010 could not be levied on imports made on 13.06.2017 because the Notification's legal basis was set aside by the Tribunal and, independently, no extension under Section 9A(5) was shown to be in force after 19.02.2015. Issue 2 - Sustainment of demand, interest and penalty where the Notification was set aside and no stay obtained Legal framework: Recovery of unpaid customs duties is governed by Section 28(4) of the Customs Act, 1962; interest for delayed payment is under Section 28AA; penalty for contravention of customs provisions is under Section 114A. Adjudicatory authorities are bound by superior tribunal orders unless stayed. Precedent treatment: The Commissioner (Appeals) applied the Tribunal's Bridgestone decision to hold that the Notification had been set aside and that, absent a stay by the Supreme Court, the Tribunal's order must be followed. Interpretation and reasoning: Because the Notification lacked legal effect for the relevant import date (see Issue 1), there was no legally enforceable duty to be recovered; consequently, interest and penalty predicated solely on non-payment of that ADD cannot stand. The absence of a stay of the Tribunal's order means departmental reliance on the Notification was untenable for the period in question. Ratio vs. Obiter: Ratio - demands, interest and penalties based solely on an ADD Notification that has been set aside and not stayed cannot be sustained for imports after the Notification's effective cessation. Obiter - discussion on the self-assessment regime and importers' obligations is explanatory to culpability analysis where the underlying duty exists. Conclusion: The demand of ADD, interest and penalty could not be sustained for the June 2017 import because the Notification no longer provided a legal basis; hence the adjudication confirming such recovery was erroneous. Issue 3 - Effect of Section 9A(5) (five-year cessation/extension) on the continuity of ADD Legal framework: Section 9A(5) provides that ADD shall cease after five years from imposition unless the Central Government extends the period by notification or a review initiated prior to expiry permits continuation pending outcome for up to one year. Precedent treatment: The impugned orders considered both the Tribunal's setting aside and the statutory five-year limitation. The appeals record did not place any subsequent extension notification on record. Interpretation and reasoning: Even accepting that a Notification could be susceptible to challenge, the statutory five-year rule independently requires an express extension to keep ADD in force beyond that period. Absence of any record of such extension for Notification No.12/2010 means that as of 13.06.2017 the duty - on statutory grounds alone - had ceased to have effect. Ratio vs. Obiter: Ratio - statutory cessation under Section 9A(5) extinguishes ADD after five years unless a valid extension or continuation pending review exists; absence of such extension precludes levy. Obiter - commentary on the interaction between judicial annulment and statutory expiry is ancillary. Conclusion: The ADD imposed by Notification No.12/2010 had, by operation of Section 9A(5), ceased to have effect after 19.02.2015 in absence of any extension; therefore ADD could not be levied on the 2017 import. Issue 4 - Importer's self-assessment error/omission and allegation of suppression with intent to evade ADD Legal framework: Section 46 (filing and contents of Bill of Entry) and Section 17 (self-assessment provisions) require truthfulness in the Bill of Entry; failure to declare applicable notifications/duties can attract recovery under Section 28 and penalty under Section 114A if suppression/intent established. Precedent treatment: Revenue argued willful contravention and suppression due to non-mention of the notification and non-payment of ADD; Commissioner (Appeals) examined this contention in light of the Notification's legal status and Tribunal precedent. Interpretation and reasoning: The Commissioner (Appeals) found that the fundamental legal basis for ADD was removed by the Tribunal's decision and that, independent of any alleged omission in the Bill of Entry, there existed no enforceable ADD liability for the import date. Where the duty itself could not be lawfully levied, the contention of suppression with intent to evade that non-existent duty could not sustain consequences under Sections 28(4) and 114A. Moreover, principles of judicial discipline require adherence to the Tribunal's order unless stayed; thus the importer could not be penalized for not declaring an obligation that the Tribunal had nullified and which lacked statutory extension thereafter. Ratio vs. Obiter: Ratio - omission to declare an ADD notification does not attract recovery/penalty when the notification is set aside and no extension exists; proof of willful suppression presupposes existence of a valid underlying duty. Obiter - observations on the role of post-clearance audit and self-assessment responsibilities where duties are valid in law. Conclusion: The importer's failure to mention the Notification on the Bill of Entry and non-payment of ADD could not be equated with suppression justifying recovery and penalty because the ADD Notification had been set aside and had ceased to be in force for the relevant import. Overall Disposition The appeal by the revenue was dismissed: demands for ADD, interest and penalty founded on Notification No.12/2010 could not be sustained for the June 2017 import because (i) the Tribunal had set aside the Final Findings and Notification and no stay was in place, and (ii) Section 9A(5) effected cessation of the ADD after five years absent any recorded extension; accordingly recovery and penalties were not maintainable.