TaxTMI 
TaxTMI 
2026 (6) TMI 1248
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....,07,092/- in respect of Ascorbic Acid IP for the period from July 2000 to November 2001 and Rs. 1,35,09,568/- in respect of 3, 4, 5 TMBA for the period from February 2000 to September 2000, along with the penalty imposed for non-payment of duty. 2. Pursuant to the show-cause notice an adjudication order dated 18.02.2005 was passed by the Commissioner, Central Excise and Customs by confirming the demand of customs duty to the tune of Rs. 8,84,16,660/- under the provision of Section 28 of the Customs Act, 1962 and also imposing penalty of equal amount of Rs. 8,84,16,600/- under Section 114A of the Customs Act, 1962. The Customs Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai (in short referred to as the 'CESTAT') by a majority order dated 01.11.2006 under Section 35(1) of the Central Excise Act, 1944, Section 129B of the Customs Act, 1962 and the Finance Act, 1994 affirmed the demand of anti-dumping duty for the period prior to 11.05.2001 whereas the demand subsequent thereto, has been set aside. The penalty both under the Customs Act and Central Excise Rules was reduced to 10% of the duty amount confirmed. 3. A rectification application dated 04.12.2006 w....
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....the consent of the learned counsels for the parties, both the Tax Appeals as well as the writ petition have been heard together and are being decided by this common judgment. For the sake of convenience, herein after the 'Company' and the 'Customs department' (rival appellants) are being referred as the 'appellant' and 'the revenue' throughout in this judgment. II Narration of Brief Facts:- 9. Before adverting to the questions of law fell for determination before us, the brief facts of the case are relevant to be noted hereinunder :- (a) M/s Tonira Pharma Ltd. (appellant), a 100% Export Oriented Unit (EOU) and private bonded warehouse licensee, imported 29,000 kgs. of 3, 4, 5 TMBA (between Feb to Sept 2000) and 1,48,000 kgs. of Ascorbic Acid (from July 2000 to Nov 2001) duty-free under the Notification no. 53/97-Cus dated 03.06.1997. (b) The show-cause notice dated 26.08.2003 was issued to appellant M/s. Tonira Pharma Ltd. pursuant to the visit of the Central Excise Officers to the unit of the appellant on 04 & 05.01.2001. The show-cause notice was issued demanding various duties on the ground that imported goods were cleared to Domestic Tariff Area(DTA) wit....
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....e appellant did not undertake manufacturing on imported goods as per Chapter 9 of the EXIM Policy and after fabricating the production records, had diverted the goods to DTA. The appellant, therefore, cannot be treated as EOU (Export Oriented Unit) entitled to the benefits of Section 9A(2A) of the Customs Tariff Act, 1975 (in short as the 'Tariff Act') and the Notification dated 03.06.1997. It was held that the appellant being guilty of defaulting the EOU that violates provisions of the Customs Act, Central Excise Act and the EXIM Policy, is liable for recovery of all customs duties under the relevant provisions of the said Acts. 12. The Tribunal in the majority order dated 01.11.2006, though affirmed the order of the Commissioner, Central Excise, on the demand of anti-dumping prior to 11.05.2001 on the ground that the demand or the liability arose upon the import, in light of Section 28 of the Customs Act read with Section 9A(1) and (5) of the Tariff Act, could not become unenforceable merely upon discontinuance on the Notification dated 03.06.1997, with effect from 15.04.2003. 13. It was held that the goods were imported in 25 kg packs and sold in 25 kg packs, showing no re....
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....nd of the notification dated 21.07.2000 for imposition of anti-dumping duty by efflux of time, there was no question of levy of anti-dumping duty. 17. It was argued before us that initially, the notification dated 24.07.1998 was issued by the Central Government under Section 9A(1) of the Customs Tariff Act, 1975 to impose provision of anti-dumping duties on imports of Vitamin C originating in or exported from China. The said notification was rescinded on 21.07.2000. Vide another notification dated 21.07.2000, anti-dumping duty was imposed on imports of Vitamin C originating in or exported from China, which was effective till 15.04.2003. 18. The submission is that under Section 9A(5), the anti-dumping duty imposed under Section 9A shall cease to have effect on the expiry of five years from the date of such imposition. Resultantly, the notification dated 21.07.2000 levying anti-dumping duty expired on its own on 15.04.2003. 19. By placing reliance to 'page 351' of Craies on Statute Law (Seventh Edition), it was argued that the effect of repeal without any express savings would obliterate the statute completely from the records of the statute book and it shall be informed as ....
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....ngs applicable. The result is that the initiation of the proceedings for levy of anti-dumping duty after expiry of the tenure of the notification, on its own, is wholly without jurisdiction. The demand for anti-dumping duty as a whole is, thus, liable to be set aside. 25. Elaborating this submission, reliance is placed on the decision of the Apex Court in S. Krishnan v. State of Madras [1951 SCC 499] to submit that the said decision is with regard to a temporary statute wherein the Apex Court has held that although the Act does not expressly provide for period for which any person thereunder may be detained, but the detention under the temporary statue after its expiry, is illegal. The extension of duration of preventive detention under a temporary statute in absence of any specific provision to the contrary will ipso facto terminate as soon as the statute expires. 26. The submission is that the Apex Court decision in S. Krishnan (supra) has been noted with approval by the Constitution Bench in Kolhapur Canesugar Works Ltd. (supra). 27. The learned counsel for the appellant further relies upon the decision of the Apex Court in District Mining Officer v. Tata Iron and Steel....
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....onsolidated into a new enactment called as the Interpretation Act, 1978. The equivalent provision of the erstwhile Section 38 is Section 16 of the Interpretation Act, 1978. Section 16(2) of the Interpretation Act, 1978 makes Section 16 applicable to expiry of temporary enactment as if it was repealed by an Act. 31. The relevant portion of the White Paper on the draft Bill preceding the Interpretation Act, 1978 at pages '88-95' of the Volume-I of the compilation supplied by the learned counsel for the appellant explains the reason for extending savings to temporary enactments. It was argued that Section 38(2) of the Interpretation Act, 1978 contains a number of important saving provisions which are implied (subject to the contrary intention) where an Act repeals any other enactment. Under the said provision, the benefits of savings was not confined to express repeals, but extends to any enactment which abrogates or limits the effect of the previous enactment. However, such kind of provision is not incorporated either in the General Clause Act, 1897 or Section 159A of the Customs Act, 1962. 32. The submission is that Section 159A of the Customs Act would apply only to rule, reg....
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....-Cus dated 03.06.1997, which relates solely to the EOU. It was argued that the EOUs are governed by the provisions of the EXIM Policy and the term "manufacture" in relation to EOU has to be construed as defined under the EXIM Policy and not as per the Central Excise Act, 1944. 36. The contention is that the Notification no. 53/97-Cus dated 03.06.1997 allowed EOUs to import goods required for production of goods by the unit, subject to the conditions of the EXIM Policy - 01.04.1997 to 31.03.2002 notified by the Government of India under the Ministry of Commerce Notification No. 1/97 dated 31.03.1997. 37. A perusal of the Notification dated 03.06.1997 indicates that the same has been issued by the Central Government in exercise of powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962, to exempt goods specified in the table therein when imported into India for the purpose of manufacture of articles for export out of India, or for being used in connection with the production or packaging or job work for export of goods or services out of India by 100% export Oriented Unit (EOU), approved by the Board of Approvals for 100% Export Oriented Units appointed by th....
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....the Notification No. 1/95-C.E. will be applicable to 100% EOU engaged in 'manufacturing process' defined under the EXIM Policy, which included galvanising of Black MS Pipes, as per the said Circular issued with the approval of the Central Board of Direct Taxes (CIDT). 41. Further referring to the decision of the Madras High Court in Xomox Sanmar Ltd. v. Director General of Foreign Trade [2023 SCC OnLine Mad 8440], it was argued that question in the said case was as to whether the demand of customs duty was justified on the premise that no manufacturing activity was involved that brought into existence a new product with a distinctive identity and name justifying the benefit under advance authorisation, permitting import without customs duty, inasmuch as, the import was subject to specific condition that the petitioner therein must use the inputs for manufacture. Based on the discussion in the said judgment, it was argued that the Madras High Court has considered the definition of "manufacture" in clause 9.6 of the EXIM Policy being wide and inclusive and held that the deeming fiction by inclusion of various activities in the definition of 'manufacture' would cslearly expand the ....
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....bunal has erred in holding that the appellant have merely done relabelling, which does not amount to "manufacture" under the Exise law and in absence of repacking, such relabelling cannot be considered to meet the criteria under the EXIM Policy, inasmuch as, the appellant has not undertaken the multi-stage manufacturing process. The submission is that the Tribunal while holding so has completely ignored the expansive definition of "manufacture" as contained in the EXIM Policy 1992-2002 extracted hereinabove. 46. Reliance is further placed on the decision of the CESTAT in Oracle Infotech (P) Ltd. vs. Commissioner of C.Ex., New Delhi [2003 (151) E.L.T. 656 (Tri. - Del.] to submit that liberal interpretation is to be given to the expression "manufacture" keeping in mind the definition thereof in the EXIM Policy and the said expression is not to be given the same meaning in the case of EOU as under the Central Excise Act. 47. Placing reliance upon the CBDT Circular No. 576/13/2001, it was submitted that labelling or re-labelling of the containers would amount to manufacture in view of Note 5, Chapter 30 of the Central Excise Tariff Act, 1985. 48. Further relying upon the decis....
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..... Deshmukh [1981 Mh.L.J. 936], Kerala High Court in Kurian Chacho vs. Varkey Ouseph [1968 SCC Online Ker]. 52. On the question of imposition of penalty invoking Section 114A of the Customs Act, 1962, it was argued that Section 114A is pari materia to Section 28 of the Customs Act, 1962. The appellant being a 100% EOU and is undertaking manufacturing operations under Warehousing Regulations under Section 65 of the Customs Act. The factory premises of the appellant was licensed as Private Bonded Warehouse in 1999. The permission for manufacturing and warehouse was also granted simultaneously in 1999. The entire activity of procurement, manufacturing and dispatches is under the direct permission of the department. The permission to manufacture Ascorbic Acid was also granted by the jurisdictional office of the department. At the time of import, the appellant obtained procurement certificates from the jurisdictional Deputy Commissioner and only on the strength of such certificate, goods are allowed to be cleared without payment of duty. 53. The appellant is regularly maintaining records and documents as required under the Customs Act and the Central Excise Act and is filing monthl....
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....able on goods imported by 100% EOU with effect from 11.05.2001. 59. Pressing the writ petition, viz. Special Civil Application No. 1908 of 2009, it was argued that the failure to adjust the excise duty paid on the goods removed in DTA has resulted in filing of the writ petition, inasmuch as, such adjustment has been allowed by the Tribunal in other cases. 60. The submission is that it is not a case of non-payment by concealment or material suppression of facts. The fact that the excise duty was paid by the appellant itself is sufficient to draw inference that there was not even a semblance of intention of the appellant to avoid duty or to suppress the correct facts. IV Arguments on behalf of the Revenue / Department:- 61. On behalf of the Revenue, it was argued that the appellant failed to prove that the goods imported by it underwent manufacturing process, even if the wider definition of the expression "manufacture" under the EXIM Policy is given consideration. The present is a case where 25 kg containers of Ascorbic Acid IP were imported and sold in the domestic market by mere change of the label for the dishonest act of the appellant, which is 100% EOU in seeking exe....
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....04.2003 in the instant case till the validity of the Notification No. 105/2000 dated 21.07.2000. The submission is that sub-section (2A) of Section 9A though provides that notification imposing anti-dumping duty in sub-section (2) of Section 9A shall not apply to articles imported by a 100% EOU, or in a free trade zone or in a SEZ, however, the appellant had imported goods under the Notification dated 03.06.1997 under which raw material could be imported duty free by an EOU for manufacture of goods, subject to fulfillment of certain conditions as stipulated therein. 66. The facts of the case reveal that the appellant had not fulfilled the conditions stipulated in the notification and consequently, no such benefit was available to them. It was argued that since the appellant had not fulfilled the condition of manufacture and had diverted the imported goods in the Domestic Tariff Area (DTA) without undertaking any process, the disposal of goods cannot be treated as export for the purpose of availing benefit of sub-section (2A) of Section 9A of the Customs Tariff Act. One of the most important condition of availing the benefit under sub-section (2A) of Section 9A of the unit being ....
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....on the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. Explanation. For the purposes of this section,- (a) "margin of dumping", in relation to an article, means the difference between its export price and its normal value; (b) "export price", in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6); (c) "normal value", in relation to an article, means- (i) the comparable price, in the ordinary course of trade, for the....
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....by the anti-dumping duty so imposed is rendered ineffective, it may modify such duty to counter the effect of such absorption, from such date, not earlier than the date of intitiation of the inquiry, as the Central Government may, by notification in the Official Gazette, specify. Explanation. For the purposes of this sub-section, "obsorption of anti-sumping duty" is said to have taken place,- (a) if there is a decrease in the export price of an article without any commensurate change in the cost of production of such article or export price of such article to countries other than India or resale price in India of such article imported from the exporting country or territory; or (b) under such other circumstances as may be provided by rules.] (2) The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such anti-dumping duty exceeds the margin as so determi....
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.... under that sub-section, and notwithstanding anything contained in any law for the time being in force, such duty shall be payable at such rate and from such date as may be specified in the notification. (4) The anti-dumping duty chargeable under this section shall be in addition to any other duty imposed under this Act or any other law for the time being in force. (5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition: Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period [up to five years] and such further period shall commence from the date of order of such extension: Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not e....
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...., when it excludes levy or imposition of anti-dumping duty notwithstanding there being notification issued under sub-section(1) of Section 9A of the articles imported by 100% EOU undertaking or of unit in Free Trade Zone or in a Special Economic Zone, unless the condition in clauses (i) and (ii) therein are fulfilled. 74. Sub-section(4) of Section 9A provides that the anti-dumping duty chargeable under the said section shall be in addition to any other duty imposed under the Customs Tariff Act or any other law for the time being in force. Sub-section (5) provides for the tenure of the life of the notification issued by the Central Government, which says that the anti-dumping duty proposed under Section 9A shall cease to have effect on the expiry of the period of 5 years from the date of such imposition. However, two provisos to sub-section (5) confer power upon the Central Government to extend the period of imposition in a review where Central Government is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury. 75. By virtue of sub-section (8) of Section 9A of the Customs Tariff Act, the provisions of the Customs ....
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.... of such duty or interest: [Provided that where notice under clause (a) of sub-section (1) has been served and the proper officer is of the opinion that the amount of duty along with interest payable thereon under section 28AA or the amount of interest, as the case may be, as specified in the notice, has been paid in full within thirty days from the date of receipt of the notice, no penalty shall be levied and the proceedings against such person or other persons to whom the said notice is served under clause (a) of sub-section (1) shall be deemed to be concluded.] (3) Where the proper officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then, he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of ²[two years] shall be computed from the date of receipt of information under sub-section (2). (4) Where any duty has not been ³[levied or not paid or has been short-levied or short-paid] or erroneously refunded,....
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....the amount actually payable in the manner specified under that sub-section and the period of '[two years] shall be computed from the date of receipt of information under sub-section (5). (7) In computing the period of '[two years] referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4), the period during which there was any stay by an order of a court or tribunal in respect of payment of such duty or interest shall be excluded. [(7A) Save as otherwise provided in clause (a) of sub-section (1) or in sub-section (4), the proper officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed, and the provisions of this section shall apply to such supplementary notice as if it was issued under the said sub-section (1) or sub-section (4).] (8) The proper officer shall, after allowing the concerned person an opportunity of being heard and after considering the representation, if any, made by such person, determine the amount of duty or interest due from such person not being in excess of the amount specified in the notice. (9) The proper officer shall determine the amount of du....
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....refunded under said sub-section, the excess amount so refunded shall be recovered along with interest thereon at the rate fixed by the Central Government under section 28AA, from the date of refund up to the date of recovery, as a sum due to the Government. (10B) A notice issued under sub-section (4) shall be deemed to have been issued under sub-section (1), if such notice demanding duty is held not sustainable in any proceeding under this Act, including at any stage of appeal, for the reason that the charges of collusion or any wilful misstatement or suppression of facts to evade duty has not been established against the person to whom such notice was issued and the amount of duty and the interest thereon shall be computed accordingly.] [(11) Notwithstanding anything to the contrary contained in any judgment, decree or order of any court of law, tribunal or other authority, all persons appointed as officers of Customs under sub-section (1) of section 4 before the 6th day of July, 2011 shall be deemed to have and always had the power of assessment under section 17 and shall be deemed to have been and always had been the proper officers for the purposes of this sec....
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.... the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty or interest as reduced or increased, as the case may be, shall be taken into account: Provided also that in a case where the duty or interest determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available if the amount of the duty or the interest so increased, along with the interest payable thereon under section [28AA], and twenty-five per cent. of the consequential increase in penalty have also been paid within thirty days of the communication of the order by which such increase in the duty or interest takes effect: Provided also that where any penalty has been levied under this section, no penalty shall be levied under section 112 or section 114.] Explanation. For the removal of doubts, it is hereby declared that- (i) the provisions of this section shall also apply to cases in which the order determining the duty or interest under [sub-section (8) of section 28] relates to notices issued prior to....
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.... and inclusive of 15.04.2003, providing that unless the time limit is extended or the notification is revoked before such time by a the notification published in the official gazettee. 78. Indisputably, the Notification dated 21.07.2000 remained effective uptil 15.04.2003 creating liability in respect of the imports made during the period of its operation. There cannot be a dispute that imports made by the appellant were covered under the period of subsistence of the notification dated 21.07.2000 for levy of Anti-dumping duty. 79. As noted hereinabove, by virtue of Section 9A of the Customs Tariff Act, the Anti-dumping duty is a duty which becomes payable on the import of the articles covered by the notification imposing such duty as per Section 9A of the Customs Act, 1975 and that it is in addition to any other duty imposed under the Customs Tariff Act or any other law for the time being in force. 80. From the above conspectus of the legal provisions relating to imposition of the anti-dumping duty, it can be seen that the uninterrupted period of imposition of anti-dumping duty upon the articles covered by the notification issued under Section 9A(1), is 5 years. It is reco....
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....eal, supersession or recession shall also not affect any penalty, forfeiture or punishment incurred in respect of any offence committed or in violation of any rule, regulation, etc. so amended repealed, superseded or rescinded. 85. It was noted that Section 159A has been inserted by the Finance Act, 2001 with effect from 11.05. 2001. It was also held that by Section 114 of the Finance Act, 2001, it was also inter alia provided that any action or omission in any notification, etc. shall be deemed to be and to have been for all purposes as validly and effectively taken or done as if the amendment by Section 113 of the Finance Act, 2001 have been enforced at all material time and that recovery shall be made of all such amounts of duty or interest or penalty or fine or other charges which have not been collected, as if the amendment made by Section 113 of the Finance Act had been in force at all material time. It was, thus, held that any obligation or liability that was incurred under the notification imposing anti-dumping duty prior to the expiry of the notification dated 21.07.2000, uptil 15.04.2003, shall continue to remain in force and, as such, enforceable against the appellant....
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.... who did not pay the anti-dumping duty was clearly a case of non-levy and therefore, recovery could be affected under the provisions of Section 28 of the Customs Act read with Section 9(A)(5)(8) of the Custom Tariff Act in respect of the liability to pay anti dumping duty that had arisen upon importation of the articles on which the duty was imposed and had remained operative till 15.4.2003. Since the liability arising under the provisions of the statute which continued to remain operative could be enforced under Section 28 of the Customs Act read with Section 9A(1) (5) of the Customs Tariff Act, it would not be open for the appellant to argue that the liability incurred, which was enforceable till 15.4.2003 suddenly become unenforceable on dis-continuance of the duty from that date. It is thus clear that the recovery proceedings were correctly initiated in made during the period of currency of the said notification till 15.4.2003 and the order recovering anti dumping duty upon the imports made during the period of currency of the said notification till 15.4.2003 and the order recovering anti dumping duty cannot be challenged on the ground that the notification expired from 15.4.20....
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....in the said First Schedule to the Customs Tariff Act 1975 (51 of 1975) by virtue of any notification of the Government of India in the Department of Revenue and Banking or in the Ministry of Finance (Department of Revenue) from the whole of the additional duty leviable thereon under Section 9A of the said Customs Tariff Act." 11.2 It is therefore clear that the demand of anti dumping duty for the period prior to 11.5.2001 is required to be sustained and the demand subsequent to 11.5.2001 is required to be sustained and the demand subsequent to 11.5.2001 is required to be set aside. 12. For the foregoing reasons, the opinion on the points referred by Hon'ble the Vice President and Hon'ble the Member (Technical) for decision of third Member is recorded as under: (1) The demand of anti dumping duty for the period prior to 11.5.2001 is required to be sustained and the demand of anti dumping for the period subsequent to 11.5.2001 is required to be set aside. (2) The anti dumping duty does not form part of the assessable value of the goods for the purpose of levy of CVD and SAD." 91. Coming to the order passed by the Commissioner, Central Excise and....
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....DTA route, necessary steps were taken as noted therein. It was the case of the appellant that out of the total quantity, the appellant has used 113 MTS imported material, i.e. Ascorbic Acid FCC IV for manufacture of Ascorbic Acid IP grade by this route. 95. It was submitted that the entire quantity of Ascorbic Acid FCC IV was imported in fiber drums in the packaging of 25 kg each except once consignment in which the goods were received in corrugated box packing. However, the entire quantity of Ascorbic Acid IP grade was sold by the appellant in the fiber drum packing with transparent/black polythene bag only with an intention to prevent it from the exposure of light and moisture. It was the case of the appellant that all the above materials imported by it was duly processed for manufacturing of the Ascorbic Acid IP Grade and the entire goods were sold in the standard packing of 25 kg. in each fiber drum container with inside transparent polythene bag and black colour outer bag to avoid decomposition from sunlight. The contention was that all these drums/packing materials were duly purchased from the market and the details of the purchase of the raw materials, consumables and pac....
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....ctually exported from the duty demand has to be considered or not and whether the benefit based on origin of raw material as contended by them is extendable or not? (ix) Whether the show cause notice is the time barred as contended by them? (x) Whether consequently penalty on Tonira, recovery of interest on the duty demand and penalty on Managing Director of Tonira are sustainable or not? 99. It is noteworthy from the order passed by the Commissioner, having noticed the contentions of the appellant agitated in the written statement filed by it before the Commissioner that apart from the issue that the show-cause notice was time barred, no issue with regard to the levy of anti-dumping duty after expiry of the notification dated 21.07.2000 was raised before the Commissioner at the first instance. 100. As regards the issue with regard to the show-cause notice being time barred, it is categorically recorded by the Commissioner that the appellant had furnished common submissions to all three categories of demands, viz. other two demands including anti-dumping duty on ascorbic acid. The case of the appellant was that all the activities right from setting up, procu....
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....the subsistence of the notification dated 21.07.2000, the submissions based on Section 6 of the General Clauses Act are misconceived arguments. 105. By virtue of Section 159A of the Customs Act, 1962, which has been imported under sub-section (8) of Section 9 of the Customs Tariff Act, 1975, even the amendment, repeal, supersession or recession of any notification will not affect its previous operation. Moreover, in the instant case, the notification dated 21.07.2000 issued by the Central Government in exercise of the power conferred under sub-section (1) of Section 9A has not been amended, repealed, superseded or rescinded, rather it has expired after a period of 5 years from the date of its issuance. The initial notifications being of the year 1998 and 2000, the notification being mid-term extension of the 1998 notification, the tenure of the notification admittedly came to an end after 15.04.2003. 106. The levy, in the instant case, is with regard to the goods imported by the appellant during the subsistence of the notification under Section 9A(1), i.e. prior to 15.04.2003. The appellant, as such, cannot be permitted to argue that even for the period during which the notif....
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....nufacture" under the EXIM Policy pressed into service before us. 112. On the factual aspect, being the Court of second appeal, we may remind ourselves that no re-appreciation of evidence is permissible. Thus, we are only required to answer as to whether the process undertaken by the appellant can be said to be the process of manufacture of Ascorbic Acid IP from the imported goods, so as to be covered within the definition of the word "manufacture" under the EXIM Policy. 113. Having carefully read the meaning assigned to the word "manufacture" under clause 3.31 of the EXIM Policy, we find that the definition is in three parts. In the first substantive part of the definition the word "manufacture" has been defined to mean, to make, produce, fabricate, assemble, process or bring into existence by hand or by machine, a new product, having a distinctive name, character or use. This meaning has been expanded in the second part with the categories included in the definition clause with the words "and shall include processes" "such as" refrigeration, repacking, polishing, labelling and segregation. The third category included in the definition of the word "manufacture" for the purpos....
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....ember of the naval, military or air force of the Union of India. 116. It was observed therein that it is well settled that classification for the purpose of legislation cannot be done with mathematical precision. The legislature enjoys considerable latitude while exercising its wisdom taking into consideration myriad circumstances, enriched by its experience and strengthened by people's will. The provision should be so interpreted as to advance the purpose sought to be achieved by enacting the provision. When the language is plain and explicit and does not admit of any doubtful interpretation, by reference to an assumed legislative intent, the meaning of the expression employed by the legislature cannot be expanded to include such category of persons as the legislature has not chosen to do. 117. The Bombay High Court in Tata Consultancy Services Ltd. v. Regional Provident Fund Commissioner [2006 SCC OnLine Bom 939], while considering the expression "such as" as interpreted by the Constitution Bench in Central Bank of India (Supra), in the context of Section 34 of the Code of Civil Procedure, noticing the observations in paragraph '43' in Central Bank of India (Supra), (noted ....
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....claimed by the appellants has held that the words "such as stainless steel, nickel monel, incoloy, hastelloy" in sub-section (2) are only illustrative of the various metals from which valves can be made but the said description is not exhaustive of the metals. If the material from which the valves are made is a corrosion-resisting material then the valves would fall under sub-heading (2) of Heading 84.61 of the customs tariff. 121. Before the Bombay High Court in Commissioner of Central Excise v. Ultratech Cement Ltd., [2010 SCC OnLine Bom 2212], the question was to interpret the meaning of the word "input service" in Cenvat Credit Rules, 2004, for credit of service tax on goods and services. Taking note of three categories of services included therein, it was held that the definition of "input service" is very wide and covers not only services, which are directly or indirectly used in or in relation to the manufacture of final products but also includes various services used in relation to the business of manufacture of final products, be it prior to the manufacture of final products or after the manufacture of final products. However, the expression "activities in relation to ....
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....enovation or repairs of a factory) as well as services rendered after the manufacture of final products (such as advertisement, sales promotion, market research etc.) and, includes services rendered in relation to business such as auditing, financing etc. Thus, the substantive part of the definition of "input service" covers services used directly or indirectly in or in relation to the manufacture of final products, whereas the inclusive part of the definition of "input service" covers various services used in relation to the business of manufacturing the final products. In other words, the definition of "input service" is very wide and covers not only services, which are directly or indirectly used in or in relation to the manufacture Of final products but also includes various services used in relation to the business of manufacture of final products, be it prior to the manufacture of final products or after the manufacture of final products. To put it differently, the definition of input service is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product. ....
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....is added with the words "and such as" in the same sentence. While reading the whole sentence having words and expressions "and shall include processes", "such as", we find that the process included in the second part with the words "and shall include" and further categorised with the words "such as" to include refrigeration, repacking, polishing, labelling and segregation shall have to be read and understood in conjunction with and in the context of the first substantive part of the definition giving meaning to the word "manufacture" which would conclusively mean that the processes categorised in the second part must be such which bring into existence a new product having a distinctive name and character or use. 126. As per our reading and understanding of the definition of the word "manufacture" in clause 3.31 of the EXIM Policy, though the word "manufacture" has been given an expansive meaning to include other processes as well, besides the process of production, fabrication, assembly, etc. but such other processes mentioned in the second part of the definition cannot be considered standalone in disjunction with the first substantive part of the definition, which included the ....
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....its TP and TP 2 plant. The officers in the presence of the panchas drew four representative samples from the stock of Ascorbic Acid FCC grade (stated to be) and Ascorbic Acid IP grade for further investigation in the matter. One sealed sample of each product was also handed over to Shri J.P. Sanyal, the Executive Director of Tonira (appellant). The categorical finding of fact recorded in the order of the Commissioner is that the scrutiny of the records revealed that even though no entries of the charging and the reaction of the Ascorbic Acid and TMBA was recorded in the daily shift register of the appellant, some entries recording the above products were made in the raw material issuing register and Appellant also maintained batch reports of the said product. 131. It was noted that the daily shift register contains the records of all activities of each plant on a day to day basis, on the strength of which batch reports are prepared and thereafter, production is recorded in the production register. On the contention of the appellant that the manufacture/processing was done on Ascorbic Acid, it was noted that the statement of all these officers working with the appellant in relati....
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....oes not confirm IP and the Tests are carried out as per IP" 135. However, the test reports of Ghaziabad Laboratory of the samples drawn and sent by the department was relied and considered as confirming with both the samples of Ascorbic Acid IP. It was concluded that the said report implies that both the goods, i.e. raw material and finished goods are one and the same, which leads to the conclusion that no manufacture/processing has been carried out on the products. Further on consideration of the definition of "manufacture" in the EXIM Policy 1997-02, it was held that:- "M/s. Tonira initially contended that they transformed the imported Inputs i.e. Ascorbic Acid and 3, 4 5 TMBA into a manufactured Products. They did make efforts to prove through laboratory test that the input and the output were different so as to establish a process of manufacture on imported materials. During the course of investigation, they have never stated that so as to bring the they repacked or relabeled the imported material processes under the definition of manufacture. Now, at the stage of adjudication, they have come forward with a plea that which amount to they repacked and relabe....
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....nterfere with the finding of the Commissioner in holding that the said reports cannot be relied upon having been submitted for testing in the year 2004. Moreover, during the course of investigation, the appellant did not state that they repacked or relabelled the imported material so as to bring the process under the definition of "manufacture" and no material evidence was produced to prove that the inputs in question were even subjected to repacking or relabelling. In view of this finding of fact, we do not find any reason to take any exception to the decision of the Commissioner, in holding that no manufacturing process as asserted has been undertaken to convert the raw material to finishing product released in the DTA. 140. Coming to the observations made by the CESTAT, we may note that the appellant had argued before the CESTAT that they have imported Ascorbic Acid Grade IV and converted the same to Ascorbic Acid IP Grade and sold the final product in relabelled containers. It was also argued that no anti-dumping duty was chargeable on the Ascorbic Acid as the relevant notification imposing anti-dumping duty had lapsed and was not in force at the time of issuance of the show....
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.... notification by virtue of Section 9A (1)(5) of the Customs Tariff Act, which continued to remain in force for the period in question with respect to which the liability to pay anti-dumping duty has been imposed. However, on the factual finding recorded by the technical Member, CESTAT about the test report and that the samples collected during the course of inspection of appellant factory were one and the same, nothing has been discussed in the order of the other member differing with the view and also in the order of the third member. The view taken by the technical member of the tribunal in confirming the finding of the Commissioner that no manufacturing/processing had taken place in the premises of the appellant has remained affirmed with the majority order dated 01.11.2006 giving final opinion on the subject. No interference can be made in the said opinion for the reasons noted hereinabove. 145. On the factual aspect, as such, we do not find any error of law in the findings returned by the Commissioner. We do not find any reason to deliberate much on the issue, inasmuch as it is proved that no manufacturing process had taken place in the appellant's factory and the case of t....
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....of the adjudicatory Commissioner that the appellant is not entitled to the benefit of the notification as it had not subjected the imported goods to manufacture process before passing them in the domestic market (DTA). 149. With the above, we are left with two more questions framed in the appeal filed by the Customs Department, viz. the Revenue as to whether the Tribunal is justified in holding that no anti-dumping duty was leviable for the period subsequent to 11.05.2001, in view of sub-section (2A) of Section 9A of the Customs Tariff Act, 1975 and whether the Tribunal is justified in setting aside the mandatory penalty leviable under Section 114A of the Customs Act, 1962. 150. As regards the first question framed in the appeal of the revenue with regard to setting aside the anti-dumping duty for the period subsequent to 11.05.2001, it was argued by the learned counsel for the Revenue that sub-section (2A) was inserted in Section 9A of the Customs Tariff Act, 1975 by virtue of Section of 118 of the Finance Act, 2001 with effect from 11.05.2001. 151. A reading of sub-section (2A) of Section 9A of the Customs Tariff Act indicates that the said provision carves out the excep....
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....FCC IV into the finished product namely, Ascorbic Act IP. Therefore, sub-section (2A) though applicable for imports of goods by 100% EOU, but is not applicable for removal of prohibited imported goods from 100% EOU to DTA, as it is. The relief in terms of sub-section (2A) of Section 9A of the Customs Tariff Act as such cannot be granted. 154. It will be considered and to be held by us that anti-dumping duty as contemplated under the notification dated 21.07.2000 issued under sub-section (1) of Section 9A, shall be leviable on the article imported by the appellant, viz. Ascorbic Acid IP, inasmuch as, the exemption from the customs duty was subject to fulfilment of conditions of the notification itself. As has been noted hereinbefore as no manufacturing was undertaken by the appellant, as contemplated by Chapter 9 of the EXIM Policy and the conditions of the Notification dated 21.07.2000 had not been fulfilled, the demand of anti-dumping duty as held by the Commissioner, Central Excise and Customs in its order dated 18.02.2005 is liable to be upheld. 155. The majority order of the CESTAT in setting aside the anti-dumping duty after 11.05.2001 by applying sub-section (2A) of Sec....
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....er Section 114A cannot be confused with the penalty imposed under Section 114 of the Customs Act, 1962, which is leviable on the basic customs duty, inasmuch as, Section 114 can be applied in a case where any act or omission of any person in relation to any dutiable goods render such goods liable to confiscation under Section 113 of the Customs Act, 1962 being improperly exported goods. However, the penalty for short-levy or non-levy of duty under Section 114A is leviable in a case where the duty has not been levied or has been short-levied or has been erroneously refunded by raising of collusion or any willful misstatement or suppression of facts on the part of the assessee. In case of existence of any of these conditions, the duty as determined under sub-section (8) of Section 28 for recovery shall be leviable with the penalty equal to the duty so determined, as per Section 114A of the Customs Tariff Act. 158. The first proviso to Section 114A though provides for reduction of penalty to 25% of the duty, but the said indulgence can only be granted where the duty determined under sub-section (8) of Section 28 has been paid within 30 days from the date of communication of the ord....
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....e it is found that the non-payment or short-payment of duty was as a result of misstatement or suppression of facts with the deliberate intent to evade duty, the concerned authority would have no discretion in quantifying the amount and penalty, which must be imposed equal to the duty determined. Considering the language of Section 11AC of the Central Excise Act, 1944, and Section 114A of the Customs Act, 1962, we are of the view that there is no scope or discretion for the competent authority in the matter of imposition of penalty, which is to be levied mandatorily equal to the amount of duty in view of the language employed in Section 114A of the Customs Act, 1962, once willful misstatement or suppression of facts resulting in non-levy or short-levy or erroneous refund of duty, is proved. 163. At the cost of repetition, it is stated herein that the present case is a clear case of willful misstatement or suppression of material fact on the part of the appellant who is liable to pay the duty and hence, anti-dumping duty is found leviable, the penalty equal to the amount of duty is also to be levied, inasmuch as, there is no discretion with the competent authority to reduce the p....
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....rming the demand determined under the order of the Commissioner. 168. The Division Bench of this Court taking note of various decisions of this Court including the Union of India vs. Dharmendra Textile Processors (supra) has noted that the consistent view followed by this Court is that the assessee is required to be given the option by the adjudicating authority where he is asked to pay a duty demand with interest and 25% of penalty within 30 days from the date of adjudication of the order and in such case, he would be liable to pay only 25% of the penalty. However, where such option had not been given, the remand had been made to the concerned authorities and period of 30 days is being considered, if in case option is not given earlier, from the date of availing such option. 169. In the facts of the said case, it was noted that the Tribunal while imposing penalty of the amount equivalent to the demand of duty confirmed by the adjudicating Commissioner, provided an option to the assessee to pay reduced penalty if duty, interest and penalty were paid within 30 days from the receipt of the order of the Tribunal. This very order was subjected to challenge by way of a rectificati....
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....addition to, and in the same manner as" used in Sections 3(2) and 3-A(2) of the Customs Tariff Act have been used in Section 23 of the Finance Act, 1963 when what was sought to be levied was only a surcharge. By way of contrast, Section 24(3) when it levies a different duty-a regulatory duty of customs-uses the expression "in addition". It is clear, therefore, that what is referred to in Sections 3(2) and 3-A(2) is only a surcharge or an additional duty of customs. The words "in the same manner" also point to the same conclusion. It is clear on a reading of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, that anti-dumping duty apart from being a separate levy from a levy of customs duty is also levied in a completely different manner from that of customs duty. 34. We may add, that after 2002, Sections 3(2) and 3-A(2) have been amended with effect from 1-3-2002 so as to expressly not include anti-dumping duty. The amended Section 3(2) reads as follows: "3. (2) For the purpose of calculating under [this section], the additional duty on any imported article, where such....
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.... 1. Doubts have been expressed about the method of computing the additional duty of customs (CVD) under Section 3 of the Customs Tariff Act, 1975. The doubt raised is on the point that whether anti-dumping duty, safeguard duty and other duties, etc. should be taken into account while computing CVD. In this regard, it is clarified that for computing CVD, only the value of the imported article as determined under Section 14 of the Customs Act, 1962, including the landing charges, if any and the basic customs duty chargeable at the rates specified in the First Schedule to the said Customs Tariff Act (read with any notification for the time being in force in respect of the basic customs duty) needs to be taken into account. Other duties such as anti-dumping duty, safeguard duty, etc. should not be taken into account." *** "In the explanatory notes for the last year's budget it was clarified that for computing CVD, only the value of imported article as determined under Section 14 of the Customs Act, 1962, including the landing charges, if any and the basic customs duty chargeable at the rates specified in the First Schedule to the Customs Tariff Act (read with....
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....the above, all questions in two connected appeals are answered in the following manner :- a. In the facts and circumstances of the present case, the demand of anti-dumping duty by the adjudicating Commissioner is found to be justified in law. b. The order of the CESTAT in confirming the order of the adjudicating Commissioner to the effect that the appellant Company had not subjected the imported goods to manufacturing process is correct in law, under the facts and circumstances of the present case confirming the demand of anti-dumping duty. c. The CESTAT is held to be not justified in holding that in absence of notification specifically making applicable levy and demand of anti-dumping duty to articles imported by 100% EOU in view of sub-section (2A) of Section 9A of the Customs Tariff Act, 1975, no anti-dumping duty was leviable for the period subsequent to 11.05.2001, in the facts and circumstances of the present case for the reason that the appellant had diverted all goods meant for export to the domestic tariff area clandestinely and has willfully not fulfilled its export obligations. In case of clearance of goods in DTA all the duties are leviable as....
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....ayment, in absence of payment particulars furnished by the applicants. The prayer for remand for re-quantification of duty, subject to verification of payment particulars to be adduced by the applicants is beyond the scope of a ROM application and is therefore rejected ." 179. The grounds agitated by the petitioner-assessee before us are that the petitioner had paid the duty of an amount of Rs. 1,05,97,114/- and Rs. 15,82,968/- (total = Rs. 1,21,80,082/-) under the Notification No. 2/95-CE on Ascorbic Acid and TMBA intermediate when they were cleared in the DTA. The said amount already paid by the petitioner needs to be abated from the total duty demand. The positive evidence adduced by the petitioner for payment of duty at the time of DTA removals, has not been considered by the tribunal while passing the impugned order. 180. The further challenge in the writ petition is also to the final order dated 01.11.2006 passed by the CESTAT and the original order dated 18.02.2005 passed by the Commissioner of Central Excise, Surat-II to the extent that they do not permit for adjustment of the duty paid by the appellant at the time of DTA removals. The application for rectification of....
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....t of duty on: Ascorbic Acid in terms of the Not. No. 2/95-CE dtd. 04.01.95 as amended on Ascorbic Acid cleared in DTA and as such the said amount of duty already paid is to be abated from the total duty demand. It is seen that there is contradiction in their submission about payment of duty on Ascorbic Acid in terms of the Not. No. 2/95-CE-dtd. 04.01.95 as amended. On the one hand it is shown as Rs. 7020226/- and on the other hand as Rs. 1,06,70,714/-. In absence of concrete evidence about the payment of duty in question, their request/submission for abatement of the said duty element can not be entertained/acceded to Moreover, the concessional rate under Not. No. 2/95-CE is available only in respect of manufactured goods, whereas in the instant case Tonira have available only in respect of manufactured goods, whereas in the instant case Tonira have have removed the raw material imported by them as such without carrying out any manufacturing process. Therefore, the allegation made in the SCN regarding none availability of concessional rate under Not. No. 2/95-CE is sustainable. Further, I find that what they are seeking abatement of is the Central Excise duty, whereas in the instan....