AVN COMMODITIES PVT. LTD. Vs. UNION OF INDIA

JUDGEMENT

(1.) Mr. Paresh Dave, learned advocate for the petitioner invited the attention of the court to the provisions of section 12 of the Customs Act, 1962, to submit that this is the charging section which provides for levy of duties of customs on goods imported into or exported from India. It was submitted that, therefore, the charging event is the import of goods into India. Referring to the provisions of section 3 of the Central Excise Act, 1944, it was submitted that the charging event under that section is production or manufacture of goods. It was pointed out that under clause (b) of sub-section (1) of section 15 of the Customs Act, in the case of goods cleared from a warehouse under section 68 , the rate of duty and tariff valuation applicable to any imported goods shall be the rate and valuation in force on the date on which a bill of entry for home consumption in respect of such goods is presented under that section. It was submitted that vide Customs Notification No.1/2017-Customs (CVD) dated 7th September, 2017, definitive countervailing duty on imports of certain hot rolled and cold rolled stainless steel flat products originating in, or exported, from the Peoples Republic of China came to be imposed. It was submitted that in the facts of the present case, the goods in question came to be imported vide bills of entry dated 7.7.2017, 17.7.2017, 16.8.2017 and 4.9.2017, prior to the coming into force of the said notification. It was submitted that, therefore, since as on the date when the goods came to be imported, there was no levy of definitive countervailing duty on import of the said goods, even under the provisions of clause (b) of sub-section (1) of section 15 , the petitioner would not be liable to pay definitive countervailing duty on the import of such goods. It was submitted that, however, the customs authorities, as is evident from the impugned show cause notice, seek to recover definitive countervailing duty from the petitioner by placing reliance upon the provisions of section 15(1)(b) of the Customs Act. It was pointed out that rule 9A of the Central Excise Rules, 1944 is similar to section 15 of the Customs Act and that the Supreme Court in Collector of Central Excise, Hyderabad v. Vazir Sultan Tobacco Co. Ltd ., 1996 (83) ELT 3 (SC) has held that goods manufactured prior to levy of duty not being excisable goods are not dutiable. The court held that once levy is not there at the time when the goods are manufactured or produced in India, it cannot be levied at the stage of removal of the said goods. It is not as if the levy is at the stage of removal; it is only the collection that is done at the stage of removal. It was submitted that insofar as the Customs Act is concerned, the levy is at the stage of import and not at the stage when the goods are cleared from the warehouse under section 68 of the Customs Act. It was submitted that, therefore, in the light of the above settled legal position, the petitioner is not liable to pay definitive countervailing duty as introduced by the notification dated 7th September, 2017.

(2.) Reliance was also placed upon the decision of the Delhi High Court in the case of H.M.M. Ltd. v. Union of India , 2005 (192) ELT 63 (Del.) laying down the similar proposition of law. Reference was also made to the decision of this court in the case of Anand Regional Coop. Oilseeds Growers Union Ltd. v. Union of India, 2016 (342) ELT 379 (Guj.).

(3.) The attention of the court was invited to a decision of the Madras High Court in the case of Leitwind Shiram Manufacturing Ltd. v. Assistant/Deputy C.C. (GR .4), Chennai, 2018 (361) ELT 398 (Mad.), to submit that the court in the said decision has held that as per section 15(1)(b) of the Customs Act, in the case of goods cleared from a warehouse under section 68 , the rate of duty and tariff valuation, if any applicable to any imported goods, shall be the rate and valuation in force on the date on which a bill of entry for home consumption in respect of such goods is presented under that section. It was submitted that in view of the above decision of the Madras High Court which is the only decision in respect of the provisions of section 15(1)(b) of the Customs Act, the respondent authorities would be bound to follow the said decision, which is contrary to the settled law as laid down by the Supreme Court as well as the other courts in the above referred decision.