The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) set aside a Rs. 30 lakh duty demand, issued after 4 years, for importing white poppy seeds using ineligible scrips. The tribunal ruled the demand as time-barred, and the scrips were initially approved by the customs officials.
Empire Exports, the appellant imported white poppy seeds between November 2010 and April 2011. They used scrips under the Focus Product Scheme ( FPS ) and Vishesh Krishi and Gram Udyog Yojana ( VKGUY ) for the payment of customs duty, amounting to Rs. 30,64,968.
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After 4 years, a Show Cause Notice was issued by the department alleging the ineligibility of using these scrips for such imports, leading to the demand for customs duty, along with interest and penalty.
The appellant challenged the customs duty order before the Kolkata Bench of CESTAT arguing that the customs official assessed the Bills of Entry and approved the use of the scrips for duty payment, now asking for duty again amounts to double taxation.
The appellant’s counsel contended that the goods were cleared only after customs authorities verified all relevant documents in 2011, and there was no concealment or misrepresentation on their part.
Further, the counsel highlighted that the demand was time-barred, as the customs officials had all the necessary information, and issuing the notice four years later was beyond the permissible period.
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On the contrary, the department’s counsel argued that the scrips under FPS and VKGUY could not be used to pay duty for the imported goods in question. The department’s counsel argued that there was a suppression of facts that caused the delay.
The two-member bench comprising R. Muralidhar ( Judicial Member ) and Rajeev Tandon ( Technical Member ) observed that the appellant did not have a case on merits, as the goods could not be cleared using the disputed scrips. However, the assessment had already been completed by customs officials after reviewing the relevant documents.
The tribunal found merit in the appellant’s argument that there was no suppression of facts as the documents were assessed and verified by the customs officials. Since the assessment occurred in 2011 and the notice was issued in 2015, the tribunal noted that the demand was time-barred.
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Further, the tribunal noted that there was no case for extending the limitation period based on suppression of facts, as all information was available to the customs authorities at the time of clearance.
Therefore, the tribunal set aside the impugned order and the appellant’s appeal was allowed.
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