TaxTMI 
TaxTMI 
2024 (11) TMI 417
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....SEZ unit') imported the goods, described by the petitioner as stand-alone parts/components, into India from Huawei, China. After the PCBAs were populated using Surface Mounting Technology (STM) at the abovementioned SEZ unit, they were procured in a domestic tariff area (DTA)by the petitioner. Since the goods were moved from a SEZ to a DTA, bills of entry were filed and the goods were cleared after paying customs duty. The PCBAs were then used for further assembly of telecommunication equipment in the petitioner's DTA unit and sold to the petitioner's customers in India. Notification 125/2010: 3. After receiving an application from the domestic industry represented by a manufacturer, Tejas Network Ltd. (Tejas), alleging that the Synchronous Digital Hierarchy Transmission equipment (SDH equipment), originating in or exported from the People's Republic of China and Israel were being dumped in the Indian market causing them material injury, the Directorate General of Antidumping and Allied Duties (DGAD) conducted Anti-Dumping investigations concerning the import of these SDH equipment. Pursuant to its investigations, the DGAD, in its preliminary findings, recommended the....
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....No.1/2015 - Cus. (ADD) dated 05.01.2015 (Second ADD Notification) was issued to amend the original ADD Notification to extend the latter's operation till 7.12.2015; and Notification No. 15/2016- Cus. dated 26.04.2016 (Third ADD Notification) which was issued post sunset review to levy ADD for a period of 5 years, i.e., from 26.4.2016 to 25.4.2021. The following table sets out the details of these SCNs, the challenges thereto and the outcome thereof: SCN Period of demand of ADD Particulars of WP and outcome thereof SCN dated 1.12.2014 (SCN-I) July, 2011 to August, 2014 SCN-I was challenged in WP 33904/2014; WP 27873/2014 was filed to restrain the Development Commissioner and Authorized Officer of the Flextronic SEZ Unit (respondents therein) from levying ADD on PCBA clearance from SEZ into DTA under section 30, Special Economic Zones Act, 2005 (the SEZ Act) read with the ADD Notification and Section 9, Customs Tariff Act, 1975. Common order dated 2.12.2016 of the Hon'ble High Court in WP 33904 and WP 27873/2014: While declining to determine whether the Development Commissioner has jurisdiction to act as the adjudicating authority, the Court transferred the file to t....
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....rds the common order dated 06.10.2017 in W.P.Nos.22770 and 22771 of 2017 insofar as it pertains to the imposition of ADD for the period running from 08.12.2014 to 31.08.2015. He submitted that the above order was placed before the Principal Commissioner of Customs and was referred to at paragraph 33 of the impugned order. He also pointed out that the writ appeal against the order was dismissed subsequently by order dated 17.02.2022. Consequently, learned senior counsel contended that the impugned order cannot be sustained and is liable to be set aside. Even with regard to the imposition of ADD for the period running from 14.11.2014 to 07.12.2014, he contended that the impugned order cannot be sustained on other grounds common to W.P.No.769 of 2017. On Jurisdiction 8. His second contention was that the Development Commissioner of the SEZ did not have the jurisdiction to issue the show cause notices because Rule 47(5) of the Special Economic Zones Rules, 2006 (the SEZ Rules) was only notified on 05.08.2016, thereby conferring jurisdiction on customs officers. Likewise, he contended that offences under inter alia sections 28, 28A and 28AAA of the Customs Act, 1962 (the Customs Act) ....
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....me components were considered as stand-alone in the case of Tejas. In a separate note filed by the petitioner on the issue of 'standalone parts/components', the petitioner referred to the DGAD's Final Findings that formed the basis for the ADD Notification. By referring to paragraphs 51-55 of the DGAD's Final Findings, it was submitted that the ADD Notification excludes the import of stand-alone parts from ADD levy even if they are imported from China as they do not form part of the PUC. 12. By referring to and comparing the impugned orders with the written submissions of the respondents, he further contended that these orders are a reproduction of the written submissions. He also pointed out, in this regard, that the petitioner's written submissions were provided to the respondents, but the respondents' written submissions were not provided to the petitioner until after the impugned orders were issued. Learned senior counsel contended that this was in breach of principles of natural justice. 13. His last contention was that the respondents have proceeded on the implied basis that the petitioner had circumvented ADD by entering into purchase transactions through F....
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....i, 2011 (265) ELT 17 (SC) ('Sayed Ali'). viii) According to Essar Steel Ltd. v UOI 2010 (249) ELT 3 (Guj) , SEZ is a territory wholly within India. ix) Flextronics Technologies (India) Pvt. Ltd. v The State of Tamil Nadu ('Flextronics'), 2016-VIL-230-MAD, holds that a) the leviability of ADD should be determined when the goods are imported for the first time into the SEZ from outside India, and not when goods are cleared from the SEZ into the DTA; b) the fundamental pre-condition for ADD levy is not satisfied as clearance from SEZ to DTA cannot be regarded as an export of a product from outside India into India; and therefore, the PCBA which originates wholly for the first time only within the Flextronics SEZ which is a part of the Indian territory cannot be regarded as a product exported into India from China or Israel or any other foreign country. Respondents' contentions: 15. Oral arguments were advanced by Mr. ARL. Sundaresan, learned Additional Solicitor General (ASG), assisted by learned senior standing counsel, A.P. Srinivas, for the first respondent. Mr. Rabu Manohar appeared for the second respondent. 16. As regards the impugned OIO in W.P.No.768 of 2018, lear....
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....ation of common order dated 06.10.2017 in W.P. Nos. 22770 and 22771 of 2017. The admitted position is that the validity period of the ADD Notification was a five year period from 8.12.2009 to 7.12.2014. The Second ADD Notification was admittedly issued on 05.01.2015, after the lapse of the ADD Notification, and purports to extends the validity of the ADD Notification till 7.12.2015. The Supreme Court examined the validity of the Second ADD Notification in Kumho Petrochemicals and held as under: "40. Two things which follow from the reading of the Section 9A(5) of the Act are that not only the continuation of duty is not automatic, such a duty during the period of review has to be imposed before the expiry of the period of five years, which is the life of the Notification imposing antidumping duty. Even otherwise, Notification dated January 23, 2014 amends the earlier Notification dated January 2, 2009, which is clear from its language, and has been reproduced above. However, when Notification dated January 2, 2009 itself had lapsed on the expiry of five years, i.e., on January 1, 2014, and was not in existence on January 23, 2014 question of amending a non- existing Notification ....
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....8 of 2018 is warranted. As regards the prior period (14.11.2014 to 7.12.2014), a conclusion can be drawn only after deciding on the other objections of the petitioner. Jurisdictional objections apropos ADD levy from 14.11.2014 to 7.12.2014 in the OIO c hallenged in W.P.No. 768 of 2018 and for the period July 2011-August 2014 in the OIO challenged in W.P.No. 769 of 2018: 22. The contention that the Development Commissioner did not have jurisdiction to issue SCN I for the period July 2011 to August 2014 or SCN II for the period 14.11.2014 to 31.08.2015 was raised in the earlier round of litigation in W.P. Nos. 27873 and 33904 of 2014. With regard to the transfer of the files to the jurisdictional Commissioner of Customs, the following statements from the petitioner's affidavit were set out in this Court's order: "10. ....The petitioner further submits that if the case is transferred to the jurisdictional Commissioner of Customs, the adjudicating authority should decide the issue independently, after giving due opportunity of personal hearing and file a written submissions to the present petitioner, without being influenced by any of the findings on merits in this Court.......
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....ort levy automatically under the customs Act 1962 even if there is no provision in the SEZ Act. The Development Commissioner being the administrative head of the SEZ can also exercise the powers of the customs officers working under him. Thus the Notice issued by the Development Commissioner is in order." 24. The petitioner contended that the above and other related findings are incorrect on about three grounds. First, it was contended that offences under sections 28, 28A and 28AA of the Customs Act were notified as offences under the SEZ Act only with effect from 05.08.2016 under notification bearing S.O. 2665(E) of the Ministry of Commerce and Industry dated 05.08.2016. Since the show cause notices were issued prior thereto, it was contended that the Development Commissioner had no authority. Secondly, it was contended that Rule 47(5) of the SEZ Rules was incorporated with effect from 05.08.2006 by notification bearing G.S.R. 772(E) of the Ministry of Commerce and Industry. Consequently, only with effect from 05.08.2016, were the jurisdictional customs officers empowered to deal with refund, demand, adjudication, etc. in relation to operations under the SEZ Act. 25. In order to....
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....ation would be undertaken by the appropriate officer from and out of the above list if the adjudication is taking place on or after 05.08.2016. In this case, both the show cause notices were issued prior to 05.08.2016 and the adjudications took place after 05.08.2016. Therefore, the adjudications were in order and, significantly, it cannot be concluded that this amendment had the effect of invalidating the notices issued by the Development Commissioner. 27. The third contention on jurisdiction was that clearance from the SEZ to the DTA does not qualify as an import either under section 2(o) of the SEZ Act or section 2(e) of the FTDRA and, therefore, ADD should not have been imposed on goods cleared from the SEZ into the DTA. The petitioner also relied on the judgment of the Division Bench of this Court in Flextronics to contend that ADD is only applicable when goods are cleared for import into India. As regards section 2(o) of the SEZ Act, the petitioner is correct in contending that the definition of import only covers bringing goods into a SEZ from a place outside India or receiving goods or services from another SEZ unit or another SEZ. This should, however, be considered in th....
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....f such written submissions. As regards the first of these aspects, written submissions are intended to capture the oral arguments in writing so as to facilitate the adjudicator to consider the arguments while issuing the order of adjudication. Since written submissions, unlike pleadings, do not require a response from the counter party, the alleged failure to provide a copy of the written submissions to the petitioner in time for the petitioner to respond thereto is immaterial. On examining the impugned orders closely, I find that the discussion and analysis is elaborate and such orders are not vitiated on the ground of some commonality of language between the written submissions of the respondents and the impugned orders. Applicability of ADD to the subject goods 30. The last aspect to be examined is whether the goods fall within the scope of the ADD Notification. The relevant paragraph 35(g) of the DGAD Final Findings, which can also be found in paragraph 18(vii) in DGAD's further final findings dated 10.12.2012, is as follows: "35. Scope of Product Under Consideration g. Populated Circuit Boards/cards- The cards/PCB's are populated as per the design developed by th....