TaxTMI 
TaxTMI 
2026 (3) TMI 45
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Rs. 2,03,887/- under Section 28(4) of the Customs Act, 1962 along with interest under Section 28AA and imposed penalty equal to duty under Section 114A of the Act. 1.2 The appellant, S. Sutharson, Tuticorin, a Government contractor, imported Ordinary Portland Cement 43 Grade from Pakistan during March 2009 to September 2011 through Tuticorin Port under thirteen Bills of Entry. In ten Bills of Entry, concessional CVD under Clause 1C of Notification No. 04/2006-CE dated 01.03.2006 (as amended) was claimed; in two Bills of Entry, concession under Clause 1A(ii) was claimed; and in one Bill of Entry, tariff rate was paid. The Show Cause Notice dated 14.03.2014 was issued alleging misdeclaration of Retail Sale Price (RSP) at Rs. 190/- per ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the procurement should, in substance, be treated as direct purchase from the manufacturer. It was further submitted that the cement was used exclusively for Government construction contracts and not for retail sale, and therefore the appellant qualifies as an "institutional consumer" under Rule 2A(b). Reliance was placed on Heidelberg Cement (India) Ltd. v. CCE, 2015 (315) ELT 53 (Tri.-Mumbai) and Ultratech Cement Ltd. v. CCE, 2015 (317) ELT 505 (Tri.-Del.). 3.2 The appellant also relied on Jayanti Food Processing (P) Ltd. v. CCE, 2007 (215) ELT 327 (SC) to contend that in the absence of retail sale, declaration of RSP is not attracted, and on Northern Plastics Ltd. v. Collector, 1998 (101) ELT 549 (SC) to submit that a mere incorrect cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rchase from the manufacturer. 9. The appellant adverted to the fact that the cement was shipped directly by the foreign manufacturer and that the High Sea Sale transaction merely involved transfer of title before clearance. It was contended that High Sea Sale is a recognised commercial practice and does not break the physical supply chain from manufacturer to importer. 10. The respondent controverted the above submission and relied upon the judgment of the Hon'ble Madras High Court in A1 Hollow Bricks and Construction v. Commissioner of Customs, Tuticorin - 2025 (392) ELT 698 (Mad.). We note that the said judgment examined the precise requirement of "direct purchase from manufacturer" and held that the statutory condition must be stri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dition of direct procurement from manufacturer, which has been specifically interpreted by the Hon'ble Madras High Court in A1 Hollow Bricks (supra). To that extent, SSN Trading is distinguishable both on facts and on the precise legal issue involved. 14. We nevertheless observe that the appellant is a Government contractor engaged in execution of Government construction works. It has been consistently contended that the cement was consumed in project execution and not sold in retail market. We note that no material has been brought on record by the Department to establish diversion of cement to retail market or resale in retail trade. 15. We find that while the appellant may have used the cement for project execution and not for reta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore observe that though the appellant is not eligible under Clause 1C on account of failure to satisfy the condition of direct purchase from manufacturer, there is no evidence forthcoming to sustain the charges of undervaluation or diversion to retail market so as to sustain the allegation of misdeclaration of RSP. 20. In view of the foregoing discussion, and in the light of the binding ratio of the Hon'ble Madras High Court in A1 Hollow Bricks (supra), we hold that the appellant does not satisfy the statutory requirement of direct purchase from manufacturer and is therefore not eligible for the concessional rate of duty under Clause 1C of Notification No. 04/2006-CE. Issue No. (i) is accordingly decided against the appellant. ISSUE....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cation No. 04/2006-CE and the scope of the statutory definition of institutional consumer. The Hon'ble Supreme Court in Pushpam Pharmaceuticals Co. v. CCE - 1995 (78) ELT 401 (SC) and Northern Plastics Ltd. v. Collector - 1998 (101) ELT 549 (SC) has held that suppression must be wilful and that a mere claim of exemption based on interpretation does not amount to misdeclaration. In the present case, where exemption was claimed openly and assessments were completed after scrutiny, a subsequent change of legal opinion cannot justify invocation of extended period. We therefore hold that the essential ingredients for invoking Section 28(4) are not satisfied and consequently the demand is barred by limitation. ISSUE NO. (iii): Penalty under Se....