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2015 (8) TMI 243 - SUPREME COURT

2015 (8) TMI 243 - SUPREME COURT - 2015 (322) E.L.T. 561 (SC) - Levy of Anti-dumping Duty - failure to fulfill its export obligation – goods were imported against advance licenses without payment - Appellant duly paid entire duty payable towards BCD, SAD and SCD after considering partial exports already made however did not make any payment towards ADD – Appellant disputed that Anti-dumping duty was exempt under Notification No.69 of 2000 and no interest was chargeable on any of four duties inas .....

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l assessment in 2004, as both dates being prior to 2006 no interest was chargeable.

Whether Anti-dumping duty can be included in calculating special customs duty and special additional duty. - Held that:- It was clear that no exception was carved out before 19.5.2000 in favour of Blast Furnace Manufacturers either when provisional Anti-dumping duty was first imposed or when final Notification was issued – Therefore Notification of 2000 creating exception in favour of persons like appe .....

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not include Anti-dumping duty– Impugned judgment of CESTAT set aside – Appeal allowed – Decided in favour of assessee.

Levy of penalty - Held that:- the appellant has not diverted goods meant for export to the domestic tariff area. We are satisfied that market considerations made it difficult, if not impossible, for the appellant to fulfill its export obligations and are, therefore, of the view that the penalty imposed in the present case ought to be set aside. - Decided in favor of a .....

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oms duty (BCD) levied under Section 12 of the Customs Act, 1962, special customs duty (SCD) levied under Section 68 of the Finance Act, 1996, special additional duty (SAD) levied under Section 3A of Customs Tariff Act, 1975 and Anti-dumping duty (ADD) levied under Section 9A of the Customs Tariff Act, 1975 during the period June 1998 to August 1998, which were exempt from duty vide (i) Notifications No. 30/97 Cus dated 1.4.1997, (ii) Sr. No.4 of Notification No.12/97 Cus dated 1.3.97, (iii) Sr. .....

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instead been used by the appellant in its factory for the manufacture of pig iron. 4. Demand of duty of ₹ 7.21 crores was sought to be raised. The break up of demand of ₹ 7.21 crores is as under: 1. Basic Customs Duty Rs.1.01 crores 2. Antidumping Duty Rs.5.00 crores 3. Special Customs Duty Rs.0.50 crore 4. Special Additional Duty Rs.0.66 crore 5. Cess Rs.0.02 crore Total Rs.7.21 crores. 5. Pending final adjudication of the show cause notice by the Commissioner, the appellant duly pa .....

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,510/-. Further, interest on the said amount at 24% was also held to be payable. 7. The appellant appealed to CESTAT. Vide the impugned judgment dated 18.8.2005, CESTAT partly allowed the appeal by remanding the matter to the original authority to calculate duty, interest, and penalty in accordance with the findings contained in its judgment. The basic difference between CESTAT s judgment and that of the Commissioner is that interest was reduced from 24% to 15%, but the Anti-dumping duty was inc .....

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able at all stating that the appellant was exempt under Notification No.69 of 2000. He further argued that no interest is chargeable on any of the four duties inasmuch as the bond that was furnished under Notification No.30 of 1997 did not stipulate that in the event of default, interest would become payable. Further, according to him, it is clear that the assessment in the present case is only provisional and that being the case, even if the provisions of the Customs Act are made applicable ins .....

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export obligation could not be fulfilled only because of bonafide commercial impossibility. It is contended that nothing has been diverted to the domestic tariff area and sold in that area, and the entire imports made have been used by the appellant captively in its factory for the manufacture of pig iron. He further argued that he could not be worse off in an appeal filed only by the appellant herein to CESTAT and that on the assumption that the appellant was liable to pay Anti-dumping duty, th .....

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case was payable as Notification No.30 of 1997 independently levied a charge of interest. Further, he also supported the Commissioner s order and the Tribunal so far as the various other aspects of this appeal are concerned. 10. We have heard learned counsel for the parties. In order to appreciate the first submission of Shri Lakshmikumaran, namely, that Anti-dumping duty in the present case ought to be nil, we set out the relevant Notifications - Notification: 22/98-Cus. Dated 06-May-1998 Meta .....

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y, Part I, Section 1, dated the 20th March, 1998 that there is dumping in respect of the Metallurgical coke falling under Heading No. 27.04 of the First Schedule to the said Act, and originating in or exported from China PR, hereby imposes on the said Metallurgical coke originating in or exported from China PR, and imported into India, an anti-dumping duty at the rate of one thousand eight hundred rupees per metric tonne. This notification shall have effect upto and inclusive of the 5th day of N .....

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ds the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 22/98-Customs, dated the 6th May, 1998, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide G.S.R. 243 (E), dated the 6th May, 1998. Notification: 81/98-Cus. Dated 27-Oct-1998 Metallurgical coke (Metcoke) originating in, or exported from, China PR - Anti-dumping duty Now, therefore, in exercise of the powers conferred by sub-section (1) of section 9A of th .....

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culated at a rate as equivalent to the difference between ₹ 4673 and the landed value of Metcoke, per metric tonne; 2. The anti-dumping duty imposed under this notification shall be levied with effect from the date of imposition of provisional duty i.e. 6th of May, 1998. 11. The final Notification dated 27.10.1998 was challenged by the Pig Iron Manufacturers Association. By its judgment reported in Pig Iron Manufacturers Association v. Designated Authority, Ministry of Commerce, 2000 (116) .....

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port Corporation. 24.51US$ 3. Shanxi Coal Import Export Group : Corporation. (Minmetal Group). 19.22US$ 4. Ningxia Xiacheng Import & Export : Corporation. 24.95 US$ 5. China North Industries Corporation. : 22.69 US$ 6. Shanghai Pacific Chemicals (Group) : Corporation Ltd. 19.22 US$ 7. All other exporters. : 24.95 US$ 2. Subject to these modifications, the final findings dated 27th August, 1998 of the D.A. are confirmed. The Corrigendum dated 2nd September, 1998 is set aside. 12. Pursuant to .....

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R. 644 (E), dated the 27th October, 1998], except as respects things done or omitted to be done before such supersession, the Central Government hereby imposes on Metcoke falling under heading No. 27.04 of the First Schedule to the said Customs Tariff Act, originating in, or exported from, China PR and imported into India, by the exporters mentioned in column (2) of the Table hereto annexed, an anti-dumping duty of an amount equivalent to the rate indicated in column (3) of the said Table, conve .....

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Export Corporation US$ 24.95 5. China North Industries Corporation US$ 22.69 6. Shanghai Pacific Chemicals (Group) Corporation Ltd. US$ 19.22 7. All other exporters. US$ 24.95 Nothing contained in this notification shall apply to imports of Metcoke by a manufacturer of pig iron or steel using a blast furnace if he follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. 13. The bone of contention in the present ap .....

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ing duty may be levied from the date of imposition of provisional duty. In the present case, therefore, it will be noticed that the final Notification dated 27.10.1998 is said to come into force from the date of the first Notification dated 6.5.1998 imposing provisional duty in the present case. It is clear that as the final Notification dated 27.10.1998 has been superseded by the Notification dated 19.5.2000, the appellant would have had to pay Anti-dumping duty at the rate of US$ 24.95 per met .....

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M/s. BLA Industries and Industries and Commerce Association in the anti dumping duty petition against import of metcoke of Chinese origin. They explained that while anti dumping duty was essential for the survival of the domestic coke producers, the blast furnaces have never been their principal customers and it was not their intention to harm the blast furnaces industry. 5. After detailed deliberations it was agreed between Indian Metallurgical Coke Manufacturers Association (IMCOM) and Associ .....

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tc. In view of this it was suggested by the AIM that the blast furnace units could be exempted from paying ADD on import of metallurgical coke of Chinese origin, provided this import is for actual use by the blast furnace units. The list of blast furnace units which will be covered by this exemption is also enclosed. 7. Considering the financial difficulty of the members of AIM, IMCOM agreed that they have no objection if the government exempts the blast furnace industry from the purview of the .....

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an adverse impact upon the industry and that the intention of levying an Anti-dumping duty was not to harm their interests. Paragraphs 6 and 7 of the said minutes in particular seem to suggest that the exemption that was contemplated by the minutes of such Blast Furnace units was something that could take place only in the future. 17. Quite apart from this, it is clear that no exception was carved out before 19.5.2000 in favour of Blast Furnace Manufacturers either when the provisional Anti-dum .....

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e procedure set out in the Customs import of goods at concessional rate of duty for manufacture of excisable goods Rules, 1996 . The language of the aforesaid clause applies only in futuro and we are afraid that Shri Lakshmikumaran s first argument must, therefore, fail. 18. However, Shri Lakshmikumaran is on firmer ground when he submitted before us that the Commissioner has held that the appellant is liable to pay Anti-dumping duty only under the Notification dated 27.10.1998. The rate prescri .....

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to pay Anti-dumping duty calculated at the rates specified only in Notification No. 81/98 dated 27.10.1998. 19. It was argued by Shri Lakshmikumaran that the appellant was not liable to pay interest on any of the customs duties for which it was held liable by the Commissioner s order. He referred us to Notification No.30 of 1997, the relevant part of which reads as follows: In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) the Central Gov .....

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t Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of the additional duty leviable thereon under Section 3 of the said Customs Tariff Act, subject to the following conditions namely:- (i) xxx xxx (ii) That the importer at the time of clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Assistant Commissioner of Customs binding himself to pay on demand an amount equal to the duty levia .....

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d to be payable. We have been shown the bond executed in the present case. It says nothing about any interest that is payable in case the conditions of the Notification No.30 of 1997 are not met. On this short ground alone, it is clear that no interest is payable on any of the customs duties that are due from the appellant. 21. It was also argued by Shri Lakshmikumaran that Section 101 of the Finance Act, 2009 has been given a retrospective application with effect from 1.1.1995. Section 9A sub-s .....

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cessarily become attracted to Section 9A of the Customs Tariff Act insofar as Anti-dumping duty is concerned, learned counsel further submitted that the Customs Act itself contained no provision for levy of interest until 13.7.2006. Section 18(3) was added only with effect from 13.7.2006 and reads as follows:- (3) The importer or exporter shall be liable to pay interest, on any amount payable to the Central Government, consequent to the final assessment order under sub-section (2), at the rate f .....

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Commissioner of Customs (Preventive) v. Goyal Traders, (2014) 302 ELT 529, the Gujarat High Court has held as under:- 17. In the present case, we find that prior to introduction of sub-section (3) of Section 18 of the Act in the present form, there was no liability to pay interest on difference between finally assessed duty and provisionally assessed duty upon payment of which the assessee may have cleared the goods. It was only with effect from 13.7.2006 that such charging provision was introd .....

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We respectfully agree with the aforesaid view. In addition, it is clear that this Court has held that the levying of interest can only be by a substantive provision (See: J.K. Synthetics Ltd. v. Commercial Taxes Officer, (1994) 4 SCC 276 at paragraph 16), thereby making it clear that such levy can only be prospective. 25. Further, in India Carbon Ltd. v. State of Assam, (1997) 6 SCC 479, this Court held:- 11. Section 9(2-A) makes applicable to the assessment, re-assessment, collection and enforc .....

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ing or payment of interest" in Section 9(2) occur in what may be called the latter part thereof. Section 9(2) authorises the sales tax authorities of a State to assess, reassess, collect and enforce payment of the Central sales tax payable by a dealer as if it was payable under the State Act; this is the first part of Section 9(2). By the second part thereof, these authorities are empowered to exercise the powers they have under the State Act and the provisions of the State Act, including p .....

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tral Act makes a substantive provision for the levy and charge of interest on Central sales tax and only to that extent. There being no substantive provision in the Central Act requiring the payment of interest on Central sales tax the States' sales tax authorities cannot, for the purpose of collecting and enforcing payment of Central sales tax, charge interest thereon. 14. The requirement of the 1st respondent's sales tax authorities that the appellants should pay interest at the rate o .....

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e Act No.2 of 1996, which reads as follows:- 68. Special duties of customs. - (1) In the case of goods mentioned in the First Schedule to the Customs Tariff Act, or in that Schedule, as amended from time to time, there shall be levied and collected as a special duty of customs, an amount equal to two per cent of the value of the goods as determined in accordance with the provisions of section 14 of the Customs Act. (2) Sub-section (1) shall cease to have effect after the 31st day of March, 1999, .....

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ll, as far as may be, apply in relation to the levy and collection of the special duties of customs leviable under this section in respect of any gods as they apply in relation to the levy and collection of the duties of customs on such goods under that Act or those rules and regulations, as the case may be. 29. Similarly, special additional duty is levied under Section 3A of the Customs Tariff Act inserted by the Finance Act of 1998. Section 3A reads as under:- Special additional duty.- (1) Any .....

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dditional duty shall be levied and collected at the rate of eight per cent of the value of the article imported into India. Explanation.- In this sub-section, the expression maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India means the maximum sales-tax, local tax, other charges for the time being in force, which shall be leviable on a like article, if sold or purchased in India, or if a like article is not so sold or p .....

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962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; (ii) any duty of customs chargeable on that article under section 12 of the Customs Act, 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but not including the special additional duty referred to in sub-section (1); and (iii) the additional duty of customs chargeable on that article under .....

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ntained in this section shall apply to any article, which is chargeable to additional duties levied under sub-section (1) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957). 30. Section 3(2) of the Customs Tariff Act as it stood at the relevant time reads as under: (2) For the purpose of calculating under this section, the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the importe .....

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eing in force as an addition to, and in the same manner as, a duty of customs 31. Similarly, Section 3A(2) dealing with special additional duty as it stood at the relevant time reads as under:- (2) For the purpose of calculating under this section the special additional duty on any imported article, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962 or section 3 of this Act, be the aggregate of - (i) The value of the imported articl .....

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t article under section 3 of this Act. 32. It will be noticed that additional duty and special additional duty would include any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs . What has been contended before us is that these words would refer only to a surcharge provision and not to a provision which levies an independent duty, as the relevant words are an addition and not in addition . This argument has c .....

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r the time being in force, there shall be levied and collected as an addition to, and in the same manner as, the total amount so chargeable, a sum equal to 10 per cent of such amount: Provided that in computing the total amount so chargeable, any duty chargeable under Section 2A of the Tariff Act or Section 24 of this Act shall not be included. (2) Sub-section(1) shall cease to have effect after the 31st day of March, 1964 except as respects things done or omitted to be done before such cesser; .....

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ich shall be - (a) twenty-five per cent of the rate, if any, specified in the said First Schedule read with any notification issued under Section 3A or sub-section (1) of Section 4 of the Tariff Act; or (b) ten per cent of the value of the goods as determined in accordance with the provisions of Section 14 of the Customs Act, 1962 whichever is higher: Provided that different dates may be specified by the Central Government for different kinds of goods. (2) Sub-section (1) shall cease to have eff .....

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Act, 1962 and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties, shall, as far as may be, apply in relation to the levy and collection of the regulatory duty of customs leviable under this section in respect of any goods as they apply in relation to the levy and collection of the duties of customs on such goods under that Act or those rules and regulations. (5) Every notification issued under sub-section (1) shall, as soon as may be after i .....

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ction 3(2) and 3A(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 Antidumping 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 .....

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mported article determined under sub-section (1) of the said Section 14 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and (ii) any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include - (a) the special additional duty referred to in .....

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ion 3 of this Act, be the aggregate of - (i) The value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; (ii) Any duty of customs chargeable on that article under section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, .....

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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 the CVD. In this regard, it is clarified that for computing the 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 du .....

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