TaxTMI 
TaxTMI 
2026 (1) TMI 534
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....otification No. 96/2009-Cus dated 11.09.2009, against Advance Authorisations issued by the Director General of Foreign Trade. The said notification permitted duty-free import subject to fulfilment of post-import export obligation, failing which the importer was required to pay the applicable customs duty along with interest in terms of the bond executed at the time of import. 2.2 Due to adverse overseas market conditions, the Appellant could not fulfil the export obligation within the stipulated period. The Appellant voluntarily informed the Department vide letter dated 04.01.2013 of its inability to discharge the export obligation and requested acceptance of duty and interest payable under the bonds and re-credit of the Advance Authorizations. 2.3 Thereafter, the Appellant voluntarily discharged customs duty and interest aggregating to approximately Rs.1.75 crores, prior to issuance of the Show Cause Notice. The payments were duly acknowledged by the Department and are also reflected in the Show Cause Notice itself. 2.4 Notwithstanding the above voluntary compliance, the DRI issued the impugned Show Cause Notice alleging misuse of the Advance Authorization scheme and dive....
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.... Notice. 4.5 It was argued that once duty and interest were paid prior to SCN, Section 28(2) stood attracted and proceedings were required to be concluded and invocation of Section 28(4) is legally impermissible. 4.6 On CVD, it was submitted that Additional Duty was exempt under Notification No. 30/2004-CE dated 09.07.2004, as excise duty on silk fabric was nil. Reliance was placed on: - i. SRF Ltd. v. CC - 2015 (318) ELT 607 (SC) ii. CC Chennai Vs Enterprise International Ltd Vs Sunstar International and others 2015(8) TMI 191-CESTAT Chennai and the 2017(4) TMI 80 -SC Order wherein the Civil Appeal filed by the Department was dismissed. 5.1 Per Contra, the Ld. Authorized Representative supported the findings in the impugned order and further submitted that: - i. Advance Authorizations were procured by misdeclaration of job workers; ii. Imported goods were diverted to the local market; iii. Statements under Section 108 establish wilful contravention. 5.2 It was argued that voluntary payment after detection does not bar proceedings under Section 28(4). The payment was made after detection by the DRI and was therefore not volun....
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....n of CVD. 8.4 Subsequent amendments to excise notifications in 2015 cannot be applied retrospectively to imports made during 2012-2013. The adjudicating authority has failed to follow the binding precedent of the Hon'ble Supreme Court in SRF Ltd. Accordingly, the demand of countervailing duty confirmed in the impugned order is set aside in toto, and the surviving demand, if any, is confined only to Basic Customs Duty along with applicable interest in terms of Notification No. 96/2009-Cus and the bonds executed by the Appellant. 8.5 We further note that the legal position laid down by the Hon'ble Supreme Court in SRF Ltd. v. Commissioner of Customs, 2015 (318) E.L.T. 607 (S.C.) has attained finality. The Review Petitions filed by the Department against the said judgment were dismissed by the Hon'ble Supreme Court vide order reported at Commissioner of Customs v. SRF Ltd. - 2016 (340) E.L.T. A202 (S.C.), wherein the Court categorically observed as under: "We find no error, much less apparent error, in the order impugned. The review petitions are, accordingly, dismissed." The dismissal of the review petitions removes any residual doubt as to the correctness or bindin....
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.... the Hon'ble Supreme Court in SRF Ltd. v. Commissioner of Customs, holding that the levy of countervailing duty is only to counterbalance excise duty actually leviable on like goods manufactured in India, and where such excise duty is nil, the corresponding additional duty must also be nil. 8.10 We further note that the Civil Appeals filed by the Department against the said decision of the Chennai Bench were dismissed by the Hon'ble Supreme Court vide order reported at 2017 (4) TMI 80 (SC). Though the dismissal was by a non-speaking order, it nonetheless affirms the correctness of the legal position adopted by the Tribunal and lends finality to the ratio that countervailing duty is not leviable on silk yarn and silk fabrics during the period when excise duty was exempt under Notification No. 30/2004-CE. 8.11 Significantly, the period involved in Enterprise International Ltd. and connected cases overlaps with the period under consideration in the present appeal, namely 2012-2013. The statutory framework, the excise notification governing silk fabrics, and the levy provision under Section 3 of the Customs Tariff Act are identical. The said decision therefore squarely applies to....
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.... of the extended period under Section 28(4).It was further submitted that mere payment of duty does not bar proceedings when suppression and intent to evade duty are established. 9.3 We have carefully considered the rival submissions on this issue. It is undisputed that the imports were made against valid Advance Authorisations, exemption was granted by the proper officer at the time of import, and Notification No. 96/2009-Cus itself envisages payment of duty and interest upon failure to fulfil export obligation. The failure to fulfil export obligation is admittedly a post-import event and, by itself, does not constitute suppression or wilful misstatement at the time of import. Section 28(2) of the Customs Act, 1962, being a beneficial provision intended to encourage voluntary compliance, mandates statutory conclusion of proceedings once duty and interest are paid prior to issuance of show cause notice. In the present case, there is no evidence of suppression or misdeclaration at the time of import, and invocation of the extended period under Section 28(4) is therefore legally impermissible. 9.4 We further note that the Appellant, by its letter dated 04.01.2013, had voluntari....
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....3 None of the above decisions relied upon by the Revenue involve imports during the period 2012-2013; a case of voluntary payment of duty and interest prior to issuance of show cause notice; application and effect of Section 28(2) of the Customs Act, 1962. 10.4 Further, none of the cited judgments overrule, dilute or depart from the law laid down by the Hon'ble Supreme Court in SRF Ltd. nor do they detract from the statutory mandate of Section 28(2). The said decisions are therefore clearly distinguishable on facts, period and statutory context, and do not advance the case of the Revenue. 10.5 On the contrary, the binding decision in the case of Enterprise International Ltd. (CESTAT, Chennai) and affirmed by the Hon'ble Supreme Court has not been displaced by any subsequent judgment relied upon by the Revenue. 10.6 Further None of the decisions relied upon by the Revenue dilute the finality attained by the judgment of the Hon'ble Supreme Court in SRF Ltd., as reaffirmed upon dismissal of the review petitions. ISSUE No. (iv): Whether confiscation and penalties under Sections 111, 112, 114A and 114AA of the Customs Act, 1962 are sustainable 11.1 In the present case, we....