The Chennai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) in a recent judgement has set aside the higher duty confirmed by the adjudicating authority since the authority cannot go beyond the scope of the Show Cause Notice.
M/s. Suraj Electronics P. Ltd, the appellants, imported ‘Glass Neck Tubes’ vide Bill of Entry dated 02.03.1995 and claimed the benefit of Notification No.88/94-Cus. dated 01.03.1994. Later, Customs Receipt Audit pointed out that the exemption was only for duty that is more than 30% and not 20% as assessed in terms of the notification.
A demand notice for Rs. 49,062/- being the differential amount between 30% and 20% was despatched to the appellant as well as to their CHA on 28.08.1995. The adjudicating authority confirmed the demand of Rs. 2,20,777/- because the appellants have not produced an end-user certificate from the jurisdictional Central Excise authorities.
The appellant contended that they came to know about the demand notice and the order confirming the duty only when the Revenue Recovery Unit initiated steps for recovery of the amount. The appellant then obtained a copy of the order passed by the original authority and filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) disposed of the appeal by holding that the order of confirmation is set aside, however, the demand notice was upheld.
It was submitted that the appellant had claimed the benefit of Notification No.89/94-Cus. dated 01.03.1994 as per Sl. No.39 of List-C. The subject goods were assessed under CTH 8540.91 and accordingly, duty @ 20% was collected from the appellant and the goods were released to him.
The appellant filed a copy of the SSI registration granted to them by the General Manager, District Industrial Centre, Ghaziabad along with a letter dated 23.02.1995 requesting for grant of the exemption as per the above notification to the goods imported by them.
After a lapse of 8 years, the appellant received a recovery notice for an amount of Rs.2,20,777/- which is said to have been confirmed by an order dated 03.11.9999 passed by the Assistant Commissioner of Customs.
The appellant had pleaded that the demand notice as well as notice had not been served upon the appellant. It is submitted that after a delay of 14 long years, a copy of the order dated 03.11.1999 was served on their employee through Delhi Customs on 12.11.2009. However, the copy of the SCN was never served on them.
It was indicated that the SCN was issued on 28.08.1995 for the differential duty demand of Rs.49,062/- being the difference in the rate of Basic Customs Duty which was applied to be 20% instead of 30%.
The adjudicating authority has gone beyond the scope of the show cause notice and confirmed a higher duty of Rs.2,20,777/- alleging that the appellant has not produced the certificate from the Assistant Commissioner of Central Excise, in whose jurisdiction their factory manufacturing the said goods is situated, to the effect that the said goods have been used in the manufacture of finished goods.
The two-member Coram comprising of Ms Sulekha Beevi C.S., Member (Judicial) and Shri M. Ajit Kumar, Member (Technical) viewed that a notice was issued under sub-section (1) of Section 28 of the Customs Act, 1962 demanding duty to the tune of Rs.49,062/- since the exemption is only for duty that is over 30% and not 20%. The amount of Rs.2,20,777/- has been confirmed by the original authority on the ground that the appellant has not produced an end-user certificate.
On perusal of Notification No.89/1994, the CESTAT found that there is no such condition attached to the goods imported under List-C. There was no evidence available from the impugned order or from the records that SCN and the OIO have been served on the appellant. Considering this fact, the Tribunal set aside the impugned order and allowed the appeal.
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