2019 (1) TMI 451 - HC - Customs

Advance Licence - assessee s case is that notification No. 43/2002 Cus dated 19.04.2002 speaks of exemption to import against advance licence issued under duty exemption/remission scheme - whether the appellant/assessee is entitled for exemption from the whole of the duty of customs additional duty safeguard duty and anti-dumping duty. Held that - It is not in dispute that pursuant to the said communication dated 02.09.2008 the Ministry of Finance has not amended the Notification No.56/2007 and the same stands as such. In the light of the said position if the imports have been made against the advance licence for annual requirement in terms of paragraph 4.1.7A of the Export and Import Policy the importer is exempt from the whole of the duty of Customs leviable thereon as specified in the First Schedule to the Customs Tariff Act and from the whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act only and the said notification does not exempt the importer from the levy of anti-dumping duty. Further more Notification No. 56/2003 was issued on 04.01.2003 and it is not an amendment to Notification No. 43/2002 which deals with a separate category of imports namely against advance licence issued in terms of subparas (a) and (b) of paragraph 4.1.1 of the Export and Import Policy. Tribunal was fully justified in stating that the object of both notifications is different and as long as there is no amendment to the notification No. 56/2003 dated 01.04.2003 the assessee is not eligible for exemption from the levy of anti-dumping duty. There is no error in the order passed by the Tribunal and the manner in which they have interpreted both the notifications - we cannot substitute words in an exemption notification more particularly when the exemption notification No.56/2003 specifically states that it pertains to advance licence for annual requirement with actual user addition issued in terms of paragraph 4.1.7A of the Export and Import Policy. Appeal dismissed - decided against assessee.

Summary

Issues:
1. Interpretation of notifications No. 43/2002-Cus and No. 56/2003-Cus regarding exemption from duty.
2. Entitlement of the appellant/assessee for exemption from various customs duties.
3. Application of Foreign Trade Policy provisions to advance licenses.

Analysis:
1. The appeal raised substantial questions of law regarding the interpretation of notifications No. 43/2002-Cus and No. 56/2003-Cus. The Tribunal had to determine if the appellant was entitled to the benefits under these notifications and if they were exempt from anti-dumping duty.

2. The primary issue was whether the appellant was entitled to exemption from the whole of the duty of customs, additional duty, safeguard duty, and anti-dumping duty. The appellant claimed entitlement based on the notifications and the specific licenses issued under the Export and Import Policy.

3. The facts revealed that the appellant availed benefits under the Export Import Policy 1997-2002 and applied for an Advance License for Annual Requirements under paragraph 4.1.7A. The dispute arose from the interpretation of notifications No. 43/2002-Cus and No. 56/2003-Cus, which provided exemptions subject to specific conditions.

4. The Tribunal analyzed the notifications and the communication from the Deputy Director General of Foreign Trade, emphasizing the need for strict interpretation of exemption notifications in favor of revenue. The Tribunal concluded that the appellant was not eligible for exemption from anti-dumping duty based on the existing notifications and the absence of any amendment.

5. The judgment highlighted that the notifications had distinct objectives and that the appellant's argument, based on the interpretation by the Deputy Director General of Foreign Trade, could not override the clear language of the exemption notifications. The Tribunal upheld the strict interpretation principle and dismissed the appeal, ruling against the appellant.

6. Ultimately, the Tribunal found no grounds for interference, and the appeal was dismissed with costs against the appellant. The judgment reaffirmed the importance of adhering to the specific terms of exemption notifications and the need for clarity in interpreting legal provisions related to duty exemptions.

By analyzing the issues raised in the appeal and the Tribunal's detailed reasoning, the judgment clarified the application of exemption notifications and upheld the strict interpretation principle in tax matters.