Customs Duty Demand on Procurement of Capital Goods without Verifying Relevant Provisions Relating to Warehousing under Customs Act: CESTAT Directs Re-adjudication [Read Order]

The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed re-adjudication for the customs duty demand on the procurement of capital goods without verifying the relevant provisions which were related to warehousing under the Customs Act,1962. 

Top Forty Suspension (P) Ltd, the appellant assessee is a 100% Export Oriented Unit (EOU) and had imported certain capital goods availing benefit of Notification No.53/97 and domestically procured capital goods availing Notification No.1/95-Central Excise. 

The assessee appealed against the order passed by the adjudicating authority for confirming the demanding Customs duty of Rs.45,84,960/- and Central Excise duty of Rs.4,79,056/- along with interest and penalty. 

S.C. Jain, the counsel for the assessee contended that the Commissioner was not right in confirming interest from the date of import in terms of Section 15 read with Section 68 of the Customs Act and the duty itself becomes payable on the date of removal of imported goods from the customs bonded warehouse or the expiry of warehousing license as explained in Customs Circular No.31/97. 

Also submitted that it was incorrect on the part of the Adjudicating Authority to impose a penalty under Section 112 of the Customs Act without holding that the goods are liable for confiscation and there was no proposal in the show-cause notice for confiscation of the goods. 

Siddharth Jaiswal and Shivam Syal, the counsels for the department relied on the decisions made by the lower authorities and contended that the assessee was liable for the demand raised by the revenue. 

The Bench observed that a conjoint reading of the relevant provisions relating to warehousing under the Customs Act and the provisions do not seem to give any immunity as regards the payment of interest concerned and the assessee is liable to pay interest on the duty payable on the capital goods as on the date of removal. 

The two-member bench comprising S S Garg (Judicial) and Anjani Kumar (Technical) remanded the matter back to the adjudicating authority to calculate the duty liability of the assessee. 

To Read the full text of the Order CLICK HERE

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