Demanding Differential Duty without Challenging Original Assessment of the Bills of Entry not Sustainable: CESTAT quashes Differential Duty Demand on PPC Cement [Read Order]

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed differential duty demand on PPC Cement thereby noting that demanding the differential duty without challenging original assessment of bills of entry is not sustainable.

The appellant, Shri Rajib Saha, is engaged in import and export business through land borders in the state of Tripura. He imported OPC/PPC Cement in 50 Kg. PP woven bags, through Srimantpur L.C.S. from Bangladesh, during the period 17.03.2012 to 31.10.2014. As the product was subject to levy of Additional duty of Customs (CVD) on MRP basis, the appellant asked the exporter from Bangladesh to print the MRP on the bags.

The appellant was issued Show Cause Notice alleging that he has evaded Additional duty of customs amounting to Rs.65,741/- by way of undervaluation in as much as cement from the same manufacturer in Bangladesh imported through Agartala L.C.S. was having a higher MRP of Rs. 305/- per bag of 50 Kg.

The issue involved in the present appeals are undervaluation of cement imported from Bangladesh. The department alleged that the declared MRP of the cement imported by the Appellant was much less as compared to the MRP declared on the cement imported from the same manufacturer through other ports.

The appellant stated that different lots of the impugned goods were imported by different importers through different land ports though the goods were manufactured by the same manufacturer in Bangladesh. The MRP printed on the goods imported through other ports can be different, as the Place of importation itself was different and hence difference in MRP is quite natural.

The appellant contended that the impugned Bills of Entry duly self-assessed were not challenged by the department and hence became final. As held by the Supreme Court in the case of ITC Ltd, unless the original Assessment by the assessing officer is challenged, the department cannot demand differential duty subsequently by issuing a demand Notice.

A Two-Member Bench comprising R Muralidhar, Judicial Member and Rajeev Tandon, Technical Member observed that “We observe that MRP on the same item is decided in consideration of a number of factors besides landing cost and duty element. In the instant case the goods were imported through different ports. That itself is a valid reason for the difference in price. There is no evidence to suggest that the goods so imported through different ports under different MRP were being sold at same price. Hence, the price difference cannot be attributed to suppression of the value by the Appellant. Accordingly, we hold that the demand is not sustainable.”

“We find that the impugned order passed demanding differential duty without challenging the original assessment of the Bills of entry is not sustainable. Hence, the demand is not sustainable on this count also” the Bench concluded.

To Read the full text of the Order CLICK HERE

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