The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the burden of proof lies on the Customs Department to establish allegations of the country of origin for imposing anti-dumping duty ( ADD ). The tribunal upheld the rejection of ADD demands on unmarked pallets of stainless-steel sheets.
Vinayak Steel Impex, the respondent, imported stainless-steel melting scrap from an overseas supplier in the UAE. The shipment included 25 pallets, some of which were found to contain stainless-steel sheets instead of the declared scrap. Upon examination, three pallets were marked “Made in Taiwan,” three were marked “Made in Japan,” and 19 pallets bore no markings of origin.
The Customs Department issued a show cause notice demanding ADD of Rs. 63,99,733 on 46.646 MT of stainless steel sheets stating that the unmarked pallets should also be treated as Taiwanese origin. ADD was dropped for pallets marked “Made in Japan,” as Japan was not subject to ADD under Notification No. 14/2010-Cus.
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The Commissioner of Customs confirmed ADD on three pallets marked “Made in Taiwan” but dropped the demand for 19 unmarked pallets citing a lack of evidence that these were of Taiwanese origin.
The Commissioner observed that similarity in grade and thickness alone did not justify assuming Taiwanese origin as similar grades of sheets are manufactured in various countries, including those not subject to ADD.
The Customs Department appealed before the CESTAT arguing that the respondent’s misdeclaration placed the burden on the importer to prove the non-Taiwanese origin of the unmarked pallets. The department also claimed that the importer must rebut allegations made in the show cause notice.
The respondent’s counsel argued that the goods were mistakenly shipped as sheets instead of the ordered scrap and that no markings or evidence indicated Taiwanese origin. The counsel argued that assumptions based on grade and thickness were unjustified and highlighted the presence of sheets of Japanese origin in the same consignment.
The Tribunal comprising Somesh Arora (Judicial Member) and C.L. Mahar ( Technical Member ), dismissed the department’s appeal, holding that the Customs Department as an alleging party, bore the burden of proving the origin of the unmarked pallets.
The tribunal observed that statutory consequences of misdeclaration such as extended limitation and revaluation had already been imposed and no legal or factual basis existed to presume Taiwanese origin for the unmarked pallets when other pallets in the consignment were marked with different origins.
The tribunal also clarified that the principle of “the one who asserts must prove” applied in such cases and the department could not sustain ADD on the unmarked pallets without concrete evidence. The tribunal upheld the Commissioner’s order and the department’s appeal was dismissed as devoid of merit.
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