Recovery of short-paid customs duty proceeds without reassessment; anti-dumping duty enters the IGST base, while penalties follow import-date limits.
Recovery of customs duty not levied or short-paid may proceed through a show-cause notice under Section 28 of the Customs Act, 1962 without prior appellate modification of self-assessment; the assessment-modification requirement applies to refund claims, not recovery. Anti-dumping duty imposed under Section 9A of the Customs Tariff Act, 1975 constitutes customs duty and is included in the aggregate value for IGST on imports, so corresponding duty, IGST and interest remain payable. A penalty for contravention must not exceed the statutory maximum in force on the date of import; a later enhanced ceiling cannot apply to earlier imports.
Issues: (i) Whether differential anti-dumping duty and IGST could be demanded under Section 28 of the Customs Act, 1962 without prior appellate modification of the self-assessment; (ii) Whether anti-dumping duty is a duty of customs and IGST is leviable on such duty; (iii) Whether the penalty under Section 117 of the Customs Act, 1962 could exceed the statutory maximum applicable on the dates of import.
Issue (i): Whether differential anti-dumping duty and IGST could be demanded under Section 28 of the Customs Act, 1962 without prior appellate modification of the self-assessment.
Analysis: The requirement of modification of an assessment or self-assessment before grant of refund operates in refund proceedings and does not restrict recovery proceedings for duty not levied or short-paid. Section 28 of the Customs Act, 1962 independently authorises recovery of differential customs duty through a show-cause notice after clearance of imported goods.
Conclusion: The differential-duty demand under Section 28 of the Customs Act, 1962 is sustainable without prior appellate modification of the self-assessment, against the assessee.
Issue (ii): Whether anti-dumping duty is a duty of customs and IGST is leviable on such duty.
Analysis: Anti-dumping duty imposed under Section 9A of the Customs Tariff Act, 1975 is a duty of customs by virtue of Section 12 of the Customs Act, 1962. Under Sections 3(7) and 3(8) of the Customs Tariff Act, 1975, IGST on imported goods is calculated on the aggregate value that includes customs duties chargeable on those goods. The notified anti-dumping duty was consequently includible in the IGST base.
Conclusion: Anti-dumping duty is a duty of customs and IGST is chargeable on it; the related duty, IGST and interest demands are affirmed, against the assessee.
Issue (iii): Whether the penalty under Section 117 of the Customs Act, 1962 could exceed the statutory maximum applicable on the dates of import.
Analysis: The imports occurred before the enhancement of the maximum penalty under Section 117 of the Customs Act, 1962 from Rs. 1 lakh to Rs. 4 lakh. The applicable maximum penalty on the import dates was therefore Rs. 1 lakh.
Conclusion: The penalty is reduced to Rs. 1 lakh, in favour of the assessee.
Final Conclusion: The customs-duty and IGST liabilities, with applicable interest, remain enforceable, while the penalty is confined to the maximum prescribed when the imports occurred.
Ratio Decidendi: Recovery of customs duty not levied or short-paid under Section 28 of the Customs Act, 1962 is not contingent on prior appellate modification of the self-assessment.