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TMI Blog2017 (3) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... ls agree, that by itself, will not impact the tenability of the appeal, in view of the fact that, if, we were to deal with the main judgment, it would necessarily impact the order passed in the review petition. 4. In order to adjudicate upon the appeal, the following facts need to be noticed : 4.1.The appellant claims to be a manufacturer and exporter of textile garments. During 2001-2002, the appellant claims that it had exported goods worth Rs. 10,17,08,547/-. Consequently, the appellant was issued an export performance certificate by the Apparel Export Promotion Council (in short, AEPC). 4.2. Based on the exports made and the export performance certificate issued by AEPC, the appellant sought to take benefit of Notification No.21/2002, Customs, dated 01.03.2002, which, inter alia entitled import of lining and interlining material equivalent to 2% of the total FOB value of the exports made, during the previous financial year, by claiming full exemption under Entry 168 of the Table appended to the said notification. 4.3. As is indicated above, the value of the imports, which could be made, was correlatable to the Export Certificate, issued by the AEPC. 5. It is the appellant& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vident from the extract of the order dated 31.12.2003, the appellant was required to pay the balance duty amount of Rs. 4,88,768/-, within a period of 30 days from the date of receipt of the said order. Since, compliance of the said direction was required to be reported, the appellant vide communication dated 13.02.2004, filed a letter with the office of the Settlement Commission, recording therein, that the said sum had been deposited with the concerned Treasury. 11. It is, in this background, that the Settlement Commission proceeded to the next step, which is to pass a final order with regard to the application preferred by the appellant under Section 127B of the Act. 11.1. During the course of the proceeding, the appellant was required to file a work sheet with regard to, what according to it, would be the duty payable in the matter. 11.2.This aspect of the matter is important, as while the appellant did not dispute the fact that there had been infraction of the import conditions, what it did dispute, is the quantification and the levy of the duty under different heads. 11.3. In particular, the appellant disputed the levy of Special Additional Duty (in short SAD ), as indica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SAD, pegged at 4%, as was indicated in SCN. 18.1. It is pertinent to note, though, that before the Settlement Commission the stand taken was SAD could not be levied. It is because the Settlement Commission, via, its final order levied ADE, at the rate of 8%, even while deleting SAD, that the appellant approached the Court by way of a writ petition. Clearly, there is a change in position by the appellant in so far as SAD is concerned, to which, the appellant says that it cannot be held to its earlier position, as the concession given was contrary to law. As to why the stand vis-a-vis SAD was taken in the first, is explained, hereafter. 19. It is also the submission of the learned counsel, both before us and, as it appears, before the Settlement Commission, that though, the Notification No.21/2002, dated 01.03.2002, was an exemption notification, in so far as importers were concerned, conditions contained therein would apply only to the extent they could not be satisfied. 19.1. This submission is sought to be supported by the learned counsel based on a recent judgment of the Supreme Court in the matter of : SRF Ltd. Vs. Commissioner of Customs, Chennai, 2015 (318) E.L.T. 607 (S.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even the case of the respondents that both ADE and SAD could be imposed on the appellant. 22.1. Mr.Sundareswaran, based on the provisions of Section 3(5) of the CTA, fairly stated that is is quite obvious upon a bare perusal of the said provision that only one of the two duties, i.e., SAD or ADE, could be imposed on the appellant. 23. We have heard the learned counsels for the parties and perused the record. 24. According to us, the controversy lies in a narrow compass. The only aspect which is agitated before us, by the appellant is that the Settlement Commission could not have imposed ADE upon it. The submission in this behalf, as noticed above, is based on the reading of the Notification No.21/2002, dated 01.03.2002. 25. It is not in dispute before us, that imposition of ADE is based on the provisions of Section 3 of the Additional Duties Of Excise (Goods of Special Importance) Act, 1957 (in short, 1957 Act). 25.1.A perusal of the 1957 Act, would show that the duty imposed under the 1957 Act is in the nature of excise duty. This is evident even upon a bare perusal of the statement of object and reasons of the 1957 Act. 25.2. For the sake of convenience, the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of the article imported into India. (2) ..... (3) ..... (4) ..... (5) Nothing contained 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)." 29. Therefore, as indicated by the learned counsel for the appellant, levy of SAD would be in order. This apart, there is another dimension to the matter, which is, that, under sub-section (1) of Section 3 A of the CTA, SAD can be levied at the rate specified by the Central Government, by way of a Notification published in the Official Gazette, having regard to the maximum sales tax, local tax or other charges for the time being leviable on a like article on its sale or purchase in India. Sub-Section (1) of Section 3A of the CTA is followed by a proviso, which, provides that until such rate is specified by the Central Government, SAD would be levied and collected at the rate of 8% of the value of the article imported in India. 30. An attempt was made in the course of the argument by Mr.Sundareswaran to trace ADE to this provision, at which stage, we asked the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer could not have gone beyond the SCN, we have grave doubts as to whether the Settlement Commission, in exercise of powers under Section 127C of the Act, could have included ADE in the final order passed by it, and that too, at a rate, which adversely, impacted the appellant's financial burden, in the given facts and circumstances. 35.3. A perusal of the final order of the Settlement Commission would show that it was not the case of the Revenue that the appellant had not disclosed the entire duty liability, or, that the reports were generated under Section 127C(3) of the Act, or sub section 127C(4) of the Act, which were suggestive of the fact that the appellant, had not made a full and complete disclosure of its duty liability, in its application for settlement filed under Section 127B. While one can, perhaps, envisage a situation where an applicant approaches the Settlement Commission and discloses an income, and thus, resultant duty liability, which is, more than what is adverted to in the SCN, it cannot be that without any case being made out of non-disclosure, the Settlement Commission, on its own, albeit, on an erroneous application of the law, enhances the duty liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles imported into India and is traceable to Section 3(1) of CTA, and not, to Section 3(5) of CTA. 36.6. Furthermore, a plain reading of Section 3(5) of CTA would show that additional duty on the imported articles, is levied to counter-balance Sales Tax, Value Added Tax, Local Tax, or other charges for the time being levied on a like article upon on its sale, purchase, or transportation in India which cannot be imposed at the rate exceeding 4%. Clearly, therefore, the justification provided for levy of ADE at the rate of 8% under Section 3(5) of CTA, cannot be sustained. 36.7. Thus, in our opinion, the view of the learned Single Judge, for the reasons given above, cannot be accepted. 37. For the foregoing reasons, the appeal is allowed. The order of the learned Single Judge, dated 12.09.2016, is set aside. Consequently, the order passed in the review application will be rendered inefficacious. 37.1. Mr.Murugappan, at this stage says, that the balance amount, along with interest, calculated in terms of the order passed by us, today, will be paid, within a period of four weeks from the date of receipt of a copy of the order. 38. Consequently, connected miscellaneous petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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