TaxTMI 
TaxTMI 
2026 (9) TMI 1389
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....s "the appellant"), engaged in the manufacture and supply of Wind Operated Electricity Generators (WOEGs), imported various parts of WOEGs, classifiable under CTH 85030090, from China through several Bills of Entry. The Department formed a view that the imported goods constituted "castings for wind operated electricity generators" falling within the scope of Notification No. 01/2016-Customs (Countervailing Duty) dated 19.01.2016 and Notification No. 42/2017-Customs (Anti-Dumping Duty) dated 30.08.2017. Accordingly, Show Cause Notice was issued proposing recovery of differential duty under Section 28 of the Customs Act, 1962.The appellants contested the proceedings, inter alia, contending that a substantial number of the imported goods comprised forged components, machined assemblies, fabricated structures, electrical systems and other non-casting products, which fell outside the scope of the Product Under Consideration (PUC). It was further contended that the imports were effected under valid Advance Authorisations; that the export obligations prescribed thereunder had been duly fulfilled; that Export Obligation Discharge Certificates (EODCs), Redemption Certificates, Chartered Acc....
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....ional grounds, and the findings recorded in this Final Order are confined to those issues alone. 4. The Ld. Counsel Shri T. Viswanathan appearing for the appellant, submitted that the imports effected under valid Advance Authorizations are specifically exempt from the levy of duties under Section 9 and Section 9A of the Customs Tariff Act, 1975, by virtue of Notification No. 18/2015-Customs dated 01.04.2015 read with the relevant provisions of the Foreign Trade Policy, 2015-2020. 4.1 The Ld. Counsel submitted that the appellant had duly fulfilled the export obligations prescribed under the Advance Authorisations and that the DGFT had issued Export Obligation Discharge Certificates (EODCs) certifying such fulfilment. It was contended that, once the competent licensing authority has issued the EODCs, the Customs authorities cannot disregard or reopen the issue on the basis of mere assumptions regarding non-fulfilment of the export obligations. 4.2 It was further submitted that the jurisdictional Customs authorities themselves had discharged and cancelled the bonds executed by the appellant after due verification and upon being satisfied regarding fulfilment of the export obl....
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....ated Electricity Generators (WOEGs); that the extended period of limitation is not invocable since the dispute pertains to the interpretation of the applicable notifications, an earlier Show Cause Notice covering substantially similar goods had already been issued, and there was neither wilful suppression nor misstatement of facts; and that appellant had correctly declared the correct description and all relevant particulars of the imported goods before the Customs authorities. 5. Per contra, the Ld. Authorized Representative Shri Anoop Singh, appearing for the Revenue, reiterated the findings recorded in the impugned Order-in-Original and submitted that the imported goods squarely fall within the description of "Castings for Wind Operated Electricity Generators" covered by Notification No. 01/2016-Customs (Countervailing Duty) dated 19.01.2016 and Notification No. 42/2017-Customs (Anti-Dumping Duty) dated 30.08.2017. It was submitted that exemption notifications are required to be construed strictly and that the burden of establishing eligibility to exemption rests entirely upon the importer. According to the learned Authorised Representative, the appellant failed to establish ....
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....94; Kolhapur Canesugar Works Ltd. v. Union of India, 2000 (119) E.L.T. 257 (S.C.); and Union of India v. Kumho Petrochemicals Co. Ltd., 2017 (351) E.L.T. 65 (S.C.), on the ground that those decisions were rendered in different statutory contexts and did not govern demand proceedings initiated under Section 28 of the Customs Act, 1962 or recovery proceedings under Section 142 of the Customs Act,1962, in respect of imports effected during the currency of valid levy notifications. 5.2 The Ld. Authorized Representative accordingly prayed that the appeal be dismissed and the impugned Order-in-Original be upheld. It was submitted that the imported goods are correctly classifiable as "Castings for Wind Operated Electricity Generators" covered by Notification Nos. 01/2016-Customs and 42/2017-Customs and are, therefore, liable to Countervailing Duty and Anti-Dumping Duty. It was further submitted that the appellant had failed to establish its entitlement to exemption under Notification No. 18/2015-Customs or compliance with the conditions governing the Advance Authorisations and, therefore, the confirmation of duty demand, interest, confiscation, redemption fine and penalties is fully ju....
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....ory and legal framework governing the controversy. 9. The exemption claimed by the appellants is founded upon Notification No. 18/2015-Customs dated 01.04.2015, issued under Section 25 of the Customs Act, 1962. The levy of Countervailing Duty arises under Notification No. 01/2016-Customs (CVD) dated 19.01.2016, whereas the levy of Anti-Dumping Duty arises under Notification No. 42/2017-Customs (ADD) dated 30.08.2017, both issued under the Customs Tariff Act, 1975. The scope of the Product Under Consideration (PUC) is delineated in the Final Findings of the Designated Authority, which constitute the very foundation for the imposition of the aforesaid trade remedial duties. Since the rights and liabilities of the parties are governed by the interplay of these statutory provisions, notifications and the Final Findings, they are required to be read harmoniously. 10. The portion of Notification No. 18/2015-Cus. dated 01.04.2015 reproduced in the order reads as follows: - G.S.R. 254(E).- In exercise of the powers conferred by subsection (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public intere....
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....e initiation notification as follows: "5. The product under consideration in the present investigation is "Castings for Wind Operated Electricity Generators, whether or not machined, in raw, finished or sub-assembled form, or as a part of a sub-assembly, or as a part of an equipment/component meant for windoperated electricity generators". A Windmill requires a number of casting parts, including the Hub, Rotohub, Rotor Nabe, Main Frame, Base Frame, Main Foundation, Nacelle, Nacelle Frame, Nacelle Foundation, Bearing Housing, Bearing Support, Hollow Shaft, Main Axle, Rotor Shaft, Rotor Coupling, Axle Pin, Main Shaft, Lateral Suspender, Pitch Stop, Stator, Generator castings, Part of Generators, Rotor, Torque Arm support, etc. The basic function of a casting is in a wind turbine, to be used in a wind mill along with some other non-casting parts and components like blades, etc. which leads to the generation of electricity. ***" 11. Following are the observations made by the Authority in regard to the product under consideration: ****** x. In view of the above, the Authority holds that the scope of the product under consideration defined in the notic....
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....ly, or as a part of an equipment/component meant for wind-operated electricity generators" 13. On a perusal of the Final Findings issued vide Notification No. 14/28/2013-DGAD dated 28.07.2017, it is evident that the Product Under Consideration (PUC) for the purpose of levy of Anti-Dumping Duty under Notification No. 42/2017-Customs (ADD) dated 30.08.2017 is identical to the Product Under Consideration specified in the Final Findings issued vide Notification No. 17/6/2013-DGAD dated 27.01.2015, which formed the basis for the levy of Countervailing Duty under Notification No. 01/2016-Customs (CVD) dated 19.01.2016.In other words, the goods falling within the scope of the Product Under Consideration and attracting Countervailing Duty under Notification No. 01/2016-Customs (CVD) are also liable to Anti-Dumping Duty under Notification No. 42/2017-Customs (ADD). An examination of the Customs Act, the Customs Tariff Act, the aforesaid notifications and the Final Findings of the Designated Authority shows that while the expression "Product Under Consideration" has been specifically defined, the expressions "casting", "forging", "sub-assembly", "equipment" and "component" have not been s....
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....ated Electricity Generator is, therefore, insufficient to attract the levy unless the product itself possesses the essential character of a casting. 16. It is equally well settled that the burden lies upon the Department to establish that the imported goods satisfy the statutory description attracting the levy. This burden assumes greater significance where the imports comprise technically distinct products manufactured through different processes such as casting, forging, machining and fabrication. A general or sweeping conclusion that all the imported goods are "castings" is legally impermissible. The Department is required to establish, on the basis of cogent evidence, component-wise and Bill of Entry-wise, that each imported article answers the description of the Product Under Consideration as defined in the relevant notifications and the Final Findings of the Designated Authority. In the absence of such evidence, no duty liability can be fastened merely on the basis of the end use of the goods or broad assumptions regarding their nature. 17. Having examined the statutory framework governing the controversy, the relevant notifications, the Final Findings of the Designated....
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....D Notifications were in force and the imported goods were accordingly liable to the levy of such duties. The liability to duty, therefore, stood validly attracted upon importation of the goods. The expiry, omission, repeal or cessation of operation of a procedural provision or notification cannot, by itself, obliterate or defeat the substantive liability, nor can it extinguish the statutory power to recover duties otherwise lawfully recoverable under Section 28 of the Customs Act, 1962. Acceptance of the appellant's contention would amount to holding that the expiry of a procedural mechanism confers immunity from recovery of duties otherwise legally due, a consequence which neither flows from the statutory scheme nor is in accordance with settled principles of law. 18.5 The appellant's contentions are devoid of merit as the notification imposing antidumping duty under Section 9A of the Customs Tariff Act was neither repealed, rescinded, amended, nor superseded, but merely expired upon completion of its prescribed tenure. Consequently, Section 6 of the General Clauses Act has no application to such expiry, and its expiry cannot be construed as obliterating the notificatio....
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....having been omitted." 19.1 The above view also stands fortified by the recent decision of the jurisdictional Hon'ble High Court of Madras in the Sachin Bansal Versus The Directorate of Enforcement and others -2025 (2) TMI 17 - MADRAS HIGH COURT, wherein again the earlier decisions in Rayala Corporation (P) Ltd. versus Director of Enforcement, New Delhi (1969) 2 SCC 412 and Kohlapur Cane Sugar Works Ltd. versus Union of India (2000) 2 SCC 536, relied upon by the appellant, were also placed before and considered by the Hon'ble High Court. The relevant paragraphs of the judgment are extracted below: - "Para 7. ***** In support of the said contention, the learned Senior Counsel appearing for the petitioners relied on the following judgments: (i) Rayala Corporation. (P) Ltd. and another v. Director Enforcement reported in (1969) 2 SCC 412; of (ii) Kolhapur Cane Sugar Works Limited and another Vs Union of India and others reported in (2000) 2 SCС 536. It is further submitted by the learned counsel appearing for the petitioners that since there was no saving clause in Finance Act of 2015 which omitted Section 6(3) of FEMA, the impugned ....
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....auses Act would not then apply to allow the previous operation of the provision so omitted or anything duly done or suffered thereunder. Nor may a legal proceeding in respect of any right or liability be instituted, continued or enforced in respect of rights and liabilities acquired or incurred under the enactment so omitted. In the vast majority of cases, this would cause great public mischief, and the decision of Fibre Board case is therefore clearly delivered by this Court for the public good, being, at the very least a reasonably possible view. Also, no aspect of the question at hand has remained unnoticed. For this reason also we decline to accept Shri Aggarwal's persuasive plea to reconsider the judgment in Fibre Board case. This being the case, it is clear that on point one the present appeal would have to be dismissed as being concluded by the decision in Fibre Board case." 19.2 The above view also stands fortified by the recent decision of the Hon'ble High Court of Gujarat in the Tonira Pharma Ltd. Versus The Union of India & Ors.- 2026 (6) TMI 1248 - GUJARAT HIGH COURT, wherein again the earlier decisions in Rayala Corporation (P) Ltd. versus Director of Enforc....
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....y of the notification by efflux of time, it must be considered as if it was never enacted except for the transaction closed or completed during the subsistence of the notification. There being no saving clause or analogous provision as contemplated under Section 6 of the General Clauses Act, the show-cause notice having been issued after expiry of the tenure of the notification, is liable to be quashed outrightly. Section 9A of the Tariff Act cannot be invoked to exercise the enabling power of the Government to levy antidumping duty, inasmuch as, such power is subject to issuance of a notification under the said provision. In absence of the notification, there cannot be any levy of anti-dumping duty. IV Arguments on behalf of the Revenue / Department:- ***** 62. It was urged that the contention of the appellant that on expiration of the notification, the show-cause notice cannot be issued even when the import was during the subsistence of the notification is wholly misconceived. The arguments made by the learned counsel for the appellant based on the saving clause of the statute and Section 6 of the General Clauses Act, are wholly misconceived. ****....
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....9A of the Customs Tariff Act, extracted hereinabove. 87. The third member of the Tribunal in the judgment impugned, has further observed that the basic customs duties are leviable under Section 12 of the Customs Act at such rates as may be specified in the Customs Tariff Act, 1975. The Central Government has power to grant exemption from duty by issuing notification in the official gazette under Section 25 of the Customs Act. However, in such cases, the question about the liability to pay duty would arise when the exemption notifications are issued and withdrawn. Such liability for non-levy, short levy, etc. could be enforced under Section 159A of the Act, which specifically lays down that the obligation or liability accrued or incorporated inter alia under a notification is not affected after the notification is repealed, superseded or rescinded and that it could be enforced. The position will be the same even prior to 11.05.2001 when Section 159A was inserted because of the provisions of Section 114 of the Finance Act, 2001, which saves recoveries of all amounts under any notification which had been collected, as provided under clause (c) of Section 114. 88. Fur....
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....ng duty being for the period when the goods were imported during 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,....
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....eneral Clauses Act is inapplicable misconceived and clearly devoid of merit. ii. The notification issued by the Central Government in exercise of the powers conferred under Section 9A(1) of the Customs Tariff Act, 1975 remained valid and operative throughout the period during which the subject goods were imported. The levy of Anti-Dumping Duty is attached to those imports on the respective dates of importation. Merely because the Show Cause Notice came to be issued after the notification had expired does not extinguish the liability, if otherwise lawfully arises, nor does it render the recovery proceedings unsustainable. iii. The submission that expiry of the notification should be treated as equivalent to repeal, omission or rescission, thereby attracting the principles embodied in Section 6 of the General Clauses Act, cannot be accepted. Expiry by efflux of time is conceptually distinct from repeal or rescission. Acceptance of such an argument would amount to treating the notification as though it had never existed, an interpretation which is contrary to settled principles of statutory construction and therefore liable to be rejected. iv. In the present....
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....y short levied or not levied in respect of imports effected during the currency of the notification. Any contrary interpretation would defeat the legislative scheme governing assessment and recovery under the Customs Act. Issue No. (i) is answered accordingly. Issue No. (ii): Whether the subject imports effected under valid Advance Authorisations are entitled to exemption from Countervailing Duty and Anti-Dumping Duty? 23. The second issue which falls for our consideration relates to the availability of exemption under the Advance Authorisation Scheme for subject imported goods. The appellants contend that the imports in question were effected under valid Advance Authorisations issued under the Foreign Trade Policy; that the prescribed export obligations were duly fulfilled; that the competent licensing authority issued Export Obligation Discharge Certificates (EODCs) and Redemption Certificates acknowledging such fulfilment; that Chartered Accountant's Certificates evidencing utilisation of the imported materials for discharge of the export obligations were furnished; and that, upon being satisfied with such compliance, the jurisdictional Customs authorities discharged a....
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....75, subject to fulfilment of the conditions stipulated therein. The legislative intent underlying the notification is, therefore, explicit. Imports effected under a valid Advance Authorisation are entitled not merely to exemption from Basic Customs Duty but also from the whole of the Countervailing Duty and Anti-Dumping Duty, provided the prescribed statutory conditions are satisfied. The controversy in the present appeals is, therefore, not whether Notification No. 18/2015-Customs grants exemption from Countervailing Duty and Anti-Dumping Duty-which it unequivocally does-but whether the appellants have fulfilled the conditions prescribed therein so as to avail and retain the benefit of the exemption. 26. Equally significant is the statutory mechanism incorporated in Notification No. 18/2015-Customs for safeguarding the interests of the Revenue. The exemption granted at the time of import is in the nature of a conditional exemption, whereby the duties otherwise leviable are forgone subject to fulfilment of the prescribed export obligation. Clause (iv) of the notification mandates execution of a statutory bond by the importer, undertaking to pay, on demand, the entire duty forego....
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....oceedings, the appellants have produced the Export Obligation Discharge Certificates (EODCs) issued by the competent Regional Authority of the Directorate General of Foreign Trade (DGFT) in respect of the Advance Authorisations under which the subject imports were effected. These certificates unequivocally record that the export obligations prescribed under the respective Advance Authorisations have been duly fulfilled. The appellants have also placed on record the Redemption Certificates issued by the competent licensing authority, together with Chartered Accountant's Certificates certifying the utilisation of the imported materials in the manufacture of the resultant export products. More significantly, the records further reveal that the jurisdictional Customs authorities, upon being satisfied with the fulfilment of the prescribed conditions under Notification No. 18/2015-Customs, have discharged and cancelled the statutory bonds executed by the appellants. These statutory acts of the competent authorities furnish cogent evidence that the conditions governing the Advance Authorisation Scheme stood duly complied with and substantially displace the very factual premise on whic....
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....ull legal effect. In the absence of any material impeaching their validity, the adjudicating authority could not have disregarded their legal consequences while determining the appellants' entitlement to exemption under Notification No. 18/2015-Customs. 31. The legal position on this issue is well settled. The Customs authorities cannot disregard or act contrary to licences and statutory certificates validly issued by the competent authority administering the Foreign Trade Policy so long as such licences and certificates remain valid and operative. In East India Commercial Co. Ltd. v. Collector of Customs, AIR 1962 SC 1893, the Hon'ble Supreme Court held that the Customs authorities are bound by licences validly issued under the Imports and Exports (Control) Act and cannot ignore or question their validity unless such licences are cancelled or modified in accordance with law by the competent licensing authority. The principle was reiterated by the Hon'ble Supreme Court in Titan Medical Systems Pvt. Ltd. v. Collector of Customs, 2003 (151) E.L.T. 254 (S.C.), wherein it was held that the Customs authorities cannot deny the benefit flowing from a licence validly issued ....
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....rge Certificates (EODCs), Redemption Certificates, Chartered Accountant's Certificates and the bond discharge orders issued by the jurisdictional Customs authorities continue to remain valid and operative and have neither been withdrawn nor questioned by any competent authority. As noticed hereinabove, the preamble to Notification No. 18/2015Customs expressly grants exemption to imports made under a valid Advance Authorisation from, inter alia, Countervailing Duty leviable under Section 9 and Anti-Dumping Duty leviable under Section 9A of the Customs Tariff Act, 1975, subject to fulfilment of the prescribed conditions. Since the appellants have established compliance with those conditions, they are entitled to the benefit of the said exemption notification. 34. Accordingly, Issue No. (ii) is answered in favour of the appellants. We hold that where imports are effected under valid Advance Authorisations and the conditions prescribed under Notification No. 18/2015-Customs stand duly fulfilled, exemption from Countervailing Duty and AntiDumping Duty cannot be denied. Consequently, even if any of the imported goods are ultimately held to fall within the scope of Notification No.....
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.....2017. 36. The controversy centres around the scope and ambit of the Product Under Consideration (PUC) adopted in the aforesaid notifications. The Final Findings of the Designated Authority describe the PUC as "Castings for Wind Operated Electricity Generators, whether or not machined, in raw, finished or sub-assembled form, or as part of a subassembly, or as part of an equipment/component meant for Wind Operated Electricity Generators." 37. The Final Findings further clarify that only wind turbine castings fall within the scope of the Product Under Consideration and that, where a casting is imported as part of a sub-assembly, the levy is confined only to the casting portion thereof. Thus, the threshold enquiry is whether the imported article is a casting within the meaning of the notifications i.e., the product under consideration. 38. The notifications impose a product-specific levy and not an end-use based levy. Consequently, the determinative question is whether the imported article, at the time of importation, satisfies the statutory description contained in the notifications. The mere fact that a product is intended for use in a Wind Operated Electricity Generator do....
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....es between the technical catalogues produced by the appellants and their written submissions, contending that the two were contradictory and, in certain respects, misleading. According to him, the information and technical documents furnished by the appellants before the Department were incomplete, inaccurate and misleading, as specifically recorded by the adjudicating authority in the impugned order at Para 20. He therefore submitted that the adjudicating authority had rightly rejected the appellants' claim that the disputed goods were not castings falling within the scope of the Product Under Consideration. 41. We have carefully examined the rival technical evidence placed on record. We find that the appellants have produced detailed technical material identifying the manufacturing process adopted in respect of several disputed components. Significantly, reliance has also been placed upon the report issued by the CSIR-National Metallurgical Laboratory, which, according to the appellants, concludes that the examined articles are forged components and not castings. No contrary metallurgical opinion, expert report or comparable technical evidence has been placed on record by ....
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....lity survives on the imported goods, in the instant case. Issue No. (iii) is answered in the above terms. Issue No. (iv): Whether the demands are sustainable with reference to the normal period of limitation, the extended period under Section 28(4) of the Customs Act, 1962, and the statutory outer limit of five years, and whether the consequential confiscation, redemption fine, interest and penalties are legally sustainable? 45. The final issue relates to the sustainability of the demand from the standpoint of limitation under Section 28 of the Customs Act, 1962. The appellants contend that the impugned demand comprises imports falling within the normal period of limitation, imports sought to be covered by invoking the extended period under Section 28(4), as well as imports which had already crossed the statutory outer limit of five years on the date of issuance of the Show Cause Notice. 46. It is further contended that an earlier Show Cause Notice dated 29.01.2018 had already been issued in respect of substantially similar imports and that the Department was, therefore, fully aware of the nature of the imported goods, the classification adopted and the exemption claime....