2015 Supreme(SC) 769

SUPREME COURT OF INDIA
A.K. Sikri, R.F. Nariman, JJ.
M/S. JASWAL NECO LTD. – APPELLANT
VERSUS
COMMISSIONER OF CUSTOMS, VISAKHAPATNAM – RESPONDENT
CIVIL APPEAL NO.7189 OF 2005
Decided On : 04-08-2015

IMPORTANT POINTS
Notification dated 26.5.2000 is prospective.
In the undertaking given by the appellant there being no mention of interest, he is not liable to pay interest.
Special customs duty and special additional duty are in the nature of surcharge.
Breach of conditions not being willful, penalty cannot be imposed.

Headnote:(a) Customs Tariff Act, 1975 – section 9A(2) r/w rule 13 and 20(2)(a) Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 – Notification dated 26.5.2000 – Appellant liable to pay Anti-dumping duty at the rate of US$ 24.95 per metric tonne. (Para 14)

       2000 (116) ELT 67 (Tribunal) – Referred

       (b) Interpretation of statute – Taxing statute – Notification dated 26.5.2000 – Exception – Expressions “shall apply to imports”, “if he follows” – Provision applies only in future. (Para 17)

       Administration of Justice – Judicial propriety – Anti-Dumping Duty – Commissioner holding appellant liable under Notification dated 27.10.1998 – Revenue not challenging this finding before Tribunal – Tribunal could not have made notification dated 19.5.2000 applicable and enhanced the rate of ADD – Appellant cannot be worse off by reason of filing an appeal. (Para 18)

       (c) Customs Tariff Act, 1975 – Section 9A – Anti dumping duty (ADD) – Notification No.30 of 1997 – Bond – No mention of interest becoming payable on the contingency of conditions of the notification being not met – Held, no interest is payable on any of the customs duties that are due from the appellant. (Para 20)

       (d) Custom Tariff Act, 1975 – Section 9A r/w section 18, Customs Act, 1962 – Section 18 of 1962 Act becoming attracted to section 9A retrospectively by virtue of Section 101 of the Finance Act, 2009 – However sub-section (3) added to section 18 of 1962 Act only in 2006 providing for interest – Such levy of interest can only be prospective – Instantly provisional and final assessment made before or on 4.11.2004 – No interest is payable by the appellant. (Para 23, 24, 26)

       (1994) 4 SCC 276; (1997) 6 SCC 479 – Relied upon

       (2014) 302 ELT 529 – Cited with approval

       (e) Finance Act, 1996 – Section 68 r/w section 3A and 3(2), Custom Tariff Act, 1975 (as inserted by Finance Act, 1998) – Special customs duty and special additional duty – Use of words “an addition” instead of “in addition” and “in the same manner” – Would only be a surcharge or an additional duty of customs – Sections 3(2) and 3A(2), with effect from 1.3.2002, do not include Anti-dumping duty. (Para 33, 34)

       (f) Customs Tariff Act, 1975 – Section 9A – Anti dumping duty (ADD) – Penalty – Appellant not diverting goods meant for export to domestic market – Appellant unable to fulfill his export commitment due to market conditions – Imposition of penalty – Not justified. (Para 37)

       Facts of the case:

       The appellant is engaged in the manufacture of pig iron.

       The appellant imported Low Ash Metallurgical (LAM) Coke under seven Bills of Entry, against four advance licenses without payment of basic customs 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. No.3 of the Notification No.34/98-Cus dated 13.6.1998, and (iv) Notification No.41/97-Cus dated 30.4.97 respectively.

       At the time of import, the appellant furnished a bond containing an undertaking to pay duty on imported goods cleared under Notification No.30/97 and 41/97 in the event of failure to fulfill its export obligation.

       The appellant failed to fulfill its export obligation in the terms of the exemption notifications.

       Pending final adjudication of the show cause notice by the Commissioner, the appellant duly paid the entire duty payable towards BCD, SAD and SCD after considering partial exports already made. However, it did not make any payment towards ADD.

       The Commissioner of Customs confirmed the duty demand of Rs.3.37 crores and imposed a penalty of Rupees Twenty lakhs. Further, interest on the said amount at 24% was also held to be payable.

       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 increased by applying the higher rates specified by the final Notification No.69 of 2000.

       Finding of the Court:

       The appellant will have to pay Anti-dumping duty calculated at the rates specified only in Notification No. 81/98 dated 27.10.1998. He is not liable to pay interest or penalty.

       Result: Appeal allowed.