The Kolkata bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that no power was given to the customs authorities to challenge the power of licensing authorities to amend the license.
Tata Steel Ltd, the appellant assessee engaged in the manufacture of iron and steel having its largest production facility in Jamshedpur, wherein the assessee had commissioned seven blast furnaces referred to as “A” to “G” having aggregate capacity of 5 million Million Tonnes Per Year (MPTA) and sought to enhance the capacity of its blast furnace upto 10 million MPTA and thus conceived the plan to install “H” blast furnace and “I” blast furnace of 2.5 million capacity each.
The assessee appealed against the order passed by the adjudicating authority for confirming the Customs duty demand of Rs. 32,76,67,821/- on the revised assessable value of the goods imported during the period 22.11.2006 to 22.11.2007, determined under Section 28(8) of the Customs Act, 1962.
Gajendra Jain, Narendra Dave, Rahul Tangri, Udita Saraf, P. R. Renganath, and M. Kannan, the counsels for the assessee contended that in the case of Bhilwara Spinners Ltd. Vs. Union of India, the court held that it was not the case of the customs authorities that the decision of the licensing authorities to convert the ‘zero duty Export Promotion Capital Goods (EPCG) license’ into ‘10% duty EPCG license’ was not a bona fide decision or the decision was vitiated by mala fides.
Mihir Ranjan, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee had deliberately and intentionally underdeclared the value of goods imported with the sole intention of evading payment of duties and due to arbitrarily splitting the lumpsum offer amount suppression of relevant facts, and willful misdeclaration, the assessee had evaded payment of customs duty.
The Bench observed that in the case of Bhilwara Spinners Ltd. Vs. Union of India, the division bench of CESTAT held that the licensing authorities do not have the power to amend the license with retrospective effect from the date of granting the license.
The two-member bench comprising Muralidhar (Judicial) and Rajeev Tandon (Technical) held that the demands raised by the department against the assessee were legally not sustainable as per the law.
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