2025 (11) TMI 1215 - AT - Customs

Anti-dumping demand on ultra-thin aluminium foil quashed; invoice thickness and customs value upheld, Notification 23/2017 clarified

CESTAT held that the imported product was aluminum foil of 0.0053 mm thickness as shown in the commercial invoice, not 0.053 mm as mentioned in the Bill ... Levy of anti-dumping duty holding thickness of imported aluminum foil as 0.053 mm as mentioned in Bill of Entry instead of 0.0053 mm - demand of customs duty at unit price of USD 3.6/kg in 2nd post clearance audit letter is justified for the same bill of entry dated 14.05.2018, for which the unit price of USD 2.79/kg has been accepted for demand of anti-dumping duty in 1st post clearance audit letter - short paid customs duty. Whether the demand of anti-dumping duty holding thickness of imported aluminum foil as 0.053 mm as mentioned in Bill of Entry instead of 0.0053 mm as mentioned in the invoice has rightly been confirmed? - HELD THAT:- The product was imported by the appellant only and from the same foreign supplier i.e. M/s. Dingsheng Aluminium Industry (Hong Kong) Trading Co. Limited. The commercial invoice for the said Bill of Entry also mentions the thickness of 0.0053 mm. These observations are sufficient for us to hold that the product imported by the appellant was the aluminum foil of 0.0053 mm thickness which does not invite Anti-Dumping Duty in terms of Notification No. 23/2017 dated 16.05.2017. Hence it is held that department has wrongly held the imported product as aluminum foil of 0.053 mm which invites imposition of Anti-Dumping Duty. This issue stands decided in favour of the appellant. Whether the demand of customs duty at unit price of USD 3.6/kg in 2nd post clearance audit letter is justified for the same bill of entry dated 14.05.2018, for which the unit price of USD 2.79/kg has been accepted for demand of anti-dumping duty in 1st post clearance audit letter? - HELD THAT:- The value mentioned in the said invoice is USD 49,370.45 calculated at the rate of USD 2.790/kg. However, it is alleged to be USD 63,703.80 vide the consultative letter dated 05.09.2018/the show cause notice dated 26.09.2019 which is apparently wrong. The bare perusal is sufficient for us to hold that there is no alleged short payment in the Bill of Entry nor there is short payment of customs duty. The facts stands corroborated from the subsequent commercial invoice dated 04.06.2018 wherein also the unit price is mentioned as Rs. 2.88/kg as contrary to the alleged price of Rs. USD 3.6/kg. The department has not produced any evidence to show that the value of the product was at the rate of USD 3.6/kg. With these observations, the issue also stands decided in favour of the appellant. The allegations of short payment of customs duty have wrongly been raised by the appellant - Order demanding the differential customs duty hereby set aside - Appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether the levy of anti-dumping duty was correctly confirmed on the ground that the imported aluminium foil was of thickness 0.053 mm as declared in the Bill of Entry, rather than 0.0053 mm as later asserted by the importer and its foreign supplier. 2. Whether the demand for differential customs duty (basic customs duty, social welfare surcharge and IGST) based on an alleged unit price of USD 3.60/kg was justified where the commercial invoice and Bill of Entry reflected a unit price of USD 2.79/kg (and subsequent invoice USD 2.88/kg). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Correctness of anti-dumping duty levy based on product thickness Legal framework: Determination of liability for anti-dumping duty depends on correct classification/description of imported goods (here, aluminium foil of specific thickness) as attracting the notified anti-dumping measures. Post-clearance audit/consultative letters and show cause proceedings may re-examine declarations in Bill(s) of Entry against supporting commercial documents and additional evidence. Precedent treatment: The judgment does not rely on or distinguish any judicial precedent; the Court resolves the issue on documentary and factual appraisal of the record. Interpretation and reasoning: The Bill of Entry and commercial invoice as filed initially stated thickness 0.053 mm, which, if accepted, would attract anti-dumping duty. The appellant, however, produced contemporaneous communications and a certificate from the foreign supplier acknowledging an inadvertent error and confirming actual thickness as 0.0053 mm; the supplier's e-mail clarification was dated prior to the first consultative letter issued by customs. Further corroboration exists in a subsequent Bill of Entry and commercial invoice for the same importer and same supplier, filed two months later, expressly describing the product as 0.0053 mm. The adjudicating authority and appellate authority were silent as to these documents and did not address this corroborative evidence. The Court treated the supplier's acknowledgment and the subsequent import documentation as material contemporaneous evidence demonstrating that the original invoices/Bill of Entry reflected an inadvertent clerical error, not a misdescription warranting anti-dumping duty. Ratio vs. Obiter: Ratio - The Court's holding that anti-dumping duty cannot be sustained where contemporaneous supplier certification and subsequent identical imports establish that an invoiced thickness was an inadvertent error, and the actual imported product falls outside the notified scope. Obiter - Observations commenting generally on departmental silence in adjudication are ancillary to the primary factual ratio. Conclusions: The levy of anti-dumping duty based on the record designation of thickness 0.053 mm was wrongly sustained. The Court concluded the imported product was 0.0053 mm and therefore did not attract the anti-dumping duty; this issue is decided in favour of the appellant. Issue 2 - Validity of differential customs duty demand based on alleged higher unit price Legal framework: Customs duty liability is determined by declared transaction value as evidenced by commercial invoice(s) and Bill(s) of Entry. Post-clearance reassessment requires evidential basis to alter declared value; mere departmental assertion of a different invoice value must be supported by documentary proof to sustain a demand. Precedent treatment: No precedents were invoked or applied; the Court adjudicated on the documentary record. Interpretation and reasoning: The documented commercial invoice relied upon by the importer explicitly set unit price at USD 2.79/kg yielding total value USD 49,370.45; the Bill of Entry reflected the same. The consultative letter and showcause alleged a value of USD 63,703.80 (unit price claimed USD 3.60/kg), but the department produced no evidence demonstrating that the correct/market value was USD 3.60/kg or that the invoice produced was manipulated. A later commercial invoice also corroborated a unit price in the same range (USD 2.88/kg). In absence of evidence to the contrary, the Court held there was no short payment of customs duty and the departmental valuation allegation was unsustainable. Ratio vs. Obiter: Ratio - A demand for differential customs duty based on an asserted higher unit price is not sustainable without documentary evidence contradicting the declared transaction value; contemporaneous invoices supporting the declared value must be given effect. Obiter - Remarks about the sequence of consultative letters and the timing of supplier clarification are explanatory of the factual matrix. Conclusions: The demand for differential customs duty on the basis of an alleged unit price of USD 3.60/kg is unjustified. The Court set aside the order demanding differential customs duty and held the second issue in favour of the appellant. Cross-references and remedial outcome The findings on Issue 1 and Issue 2 are interrelated: the resolution that the imported product was 0.0053 mm (Issue 1) undercuts the basis for anti-dumping duty, while the documentary appraisal of invoice values (Issue 2) negates any short-payment claim for customs duty. Because both issues were decided for the appellant on documentary and corroborative evidence, the impugned demands (anti-dumping duty and differential customs duty) were set aside and the appeal allowed.