Custom, Excise & Service Tax Tribunal
M/S. Jupiter Wagons Ltd vs Commissioner Of Customs (Port), ... on 23 August, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.C/76276/14
(Arising out of Order-in-Original No.KOL/CUS/PORT/40/2014 dated 27.05.2014 passed by the Commissioner of Customs (Port), Kolkata)
FOR APPROVAL AND SIGNATURE
Honble Shri H.K.Thakur, Member (Technical)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s. Jupiter Wagons Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Customs (Port), Kolkata
Respondent (s)
Appearance:
Sri Prosenjit Das, Advocate for the Appellant (s) Sri K.C.Jena, ADC(AR) for the Respondent (s) CORAM:
Honble Shri H.K.Thakur, Member (Technical) Date of Hearing:-23.08.2016 Date of Pronouncement :- 26.08.2016 ORDER NO.FO/A/75894/2016 Per Shri H.K.Thakur
1. The present appeal has been filed by the appellant against Order-in-Original No. KOL/CUS/PORT/40/2014 dated 27.05.2014 passed by the Commissioner of Customs (Port), Strand Road, Kolkata as Adjudicating Authority. Under the four paged OIO dated 27.05.2014 Adjudicating Authority has confirmed a demand of Rs.1,47,30,478/- under Section 28 of the Customs Act, 1962 and also confirmed interest on the demand confirmed as per the provisions contained in Section 28 AA of the Customs Act, 1962. Appellant has no objection in payment of Rs.1,47,30,478/- differential duty demanded, which stands paid and appropriated in the OIO dated 27.05.2014. Appellant has filed this appeal only on the ground the interest demanded is not payable.
2. Sri Prosenjit Das (Advocate) appearing on behalf of the appellant submitted that appellant is a Private Ltd. Company engaged in the manufacture of Railway Wagons and Parts thereof. That appellant imported certain goods falling under CTH 8607 of the Customs Tariff from USA, during the period March, 2012 to December, 2012 and paid appropriate duty as per challan generated by EDI system of Kolkata Customs. That as per the EDI prescribed procedures appellant is required to fill up IEC Number, Import Invoice Number and date, description of goods including Customs Tariff Heading (CTH), quality of goods, value of goods and relevant notification number, if claimed. That these details are given as per the answers to Frequently Asked Questions published by department and printed in R.K.Jains Customs Law Manual 2013-14. That as per these questions/answers EDI system indicates the applicable rate of duty which is checked by Appraising Officers of Customs and confirmed by the Assistant/Deputy Commissioner of Customs. That only on 17.04.2013 DRI, Patna raised the issue that rate of CVD shown in Customs EDI, system @ 6% was wrong and actual CVD payable was @12%. That appellant paid differential duty on 17.05.2013 where as the show cause notice was issued on 23.05.2013. That interest, if any, can be payable w.e.f. 17.04.2013, till the date of payment, which is the date when DRI pointed about the applicable rate of duty. It is the case of the appellant that interest cannot be demanded under Section 28AA of the Customs Act, 1962 as no CVD @12% advalorem was assessed by the EDI system of the department.
3. Sri K.C.Jena, ADC(AR) appearing on behalf of the Revenue argued that once differential duty is paid by the appellant then interest under Section 11AA of the Customs Act, 1962 is automatic. Learned AR thus strongly defended the order passed by the Adjudicating Authority.
4. Heard both sides and perused the case records. The issue involved in this appeal is whether interest under Section 28AA of the Customs Act 1962 is payable by the appellant. Section 28AA (1) & (2) of the Customs Act, 1962, substituted with effect from 08.04.2011 under which interest is demanded by the Adjudicating Authority, is reproduced below:
28AA. Interest on delayed payment of duty.(1) Notwithstanding anything contained in any judgement, decree, order or direction of any court, Appellate Tribunal or any authority or in any other provision of this Act or the rules made thereunder, the person, who is liable to pay duty in accordance with the provisions of section28, shall, in addition to such duty, be liable to pay interest, if any, at the rate fixed under sub-section (2), whether such payment is made voluntarily or after determination of duty under that section.
(2) Interest at such rate not below ten per cent. and not exceeding thirty-six per cent. per annum, as the Central Government may, by notification in the Official Gazette, fix, shall be paid by the person liable to pay duty in terms of section 28 and such interest shall be calculated from the first day of the month succeeding the month in which the duty ought to have been paid or form the date of such erroneous refund, as the case may be, up to the date of payment of such duty. 4.1. As per the provisions of Section 28AA (2) interest payment liability on duty will start from the first day of the month succeeding the month in which the duty ought to have been paid by the importer. It is also relevant to observe that in the present proceedings rate of duty is applied by the EDI system maintained by the department. The bill of entry generated by the EDI system indicating the duty payable is controlled by the appraising staff as per Frequently Asked Questions on Customs published by the department. Following questions and answers regarding procedure of assessment of bill of entry, relied upon by the appellant, are reproduced below:-
Q. Once a person has an IEC Number, what are the formalities in respect of Customs for the import of Customs for the import of goods?
Ans : Any person importing goods has to file a Bill of Entry for the clearance of goods. The Bill of Entry can be filed online using the ICEGATE at the ICEGATE portal namely xvxvxv.icegate.gov.in. The Bill of Entry can also be filed at the EDI a Centre functioning in different Customs Houses wherein particulars are fed and a check list is generated. The importer can also fill in details in their respective business premises and bring in material in a floppy and hand over the same to the Service Centre.
Q. What are the details that one has to furnish while filing a Bill of Entry?
Ans : The details to be furnished while filing a Bill of Entry include the IEC Number, Import Invoice Number and date, Description of goods including Customs Tariff heading, Quantity of goods, Value of goods, relevant Notification No. and date if concessional rate of duty is claimed.
Q. Who calculate the duty?
Ans : After the particulars of the Bill of Entry are filed by the Importer or his agent, the EDI system of the /customs calculates the applicable duty on its own which is checked by the Appraising Officers of the Customs posted for this purpose and confirmed by the Assistant /Deputy Commissioner of Customs.
Q. Whether there is any time limit to pay duty once a Bill of Entry has been assessed?
Ans : Duty has to be paid within five days from the date on which the Bill of Entry is returned after assessment to the Importer/Agent for payment of duty. If the duty is not paid within the stipulated time, simple interest (@15% per annum presently) on amount of duty is also payable (Section 47 of the Customs Act 1962) 4.2. From the above prescribed procedure the crucial point required to be answered is whether the rate of duty approved by the EDI system of the department will be said to have been made by the appraising officer or will continue to be a case of self-assessment made by the importer. It may be factually correct in the present proceedings that the rate of CVD duty, during relevant period when goods were imported, was 12% as per Notification No.18/2012-C.E dated 17.03.2012 with respect to goods imported under Customs Tariff Heading 86.07, 86.08 and 86.09. However, the EDI system calculated the duty at a lower rate, which was paid by the appellant. Section 28AA (2) of the Customs Act, 1962 mandates that interest payment will start from the first day of the month succeeding the month in which the duty ought to have been paid. A procedural machinery in the form of EDI system not updated by the department cannot absolve the respondent from payment of interest provided by the statutory provisions of Section 28AA (2) of the Customs Act, 1962. The word ought has not been defined in the Customs Act, 1962 but dictionary expressions of this word means to have a duty or be obliged or to be expected etc. Appellant was well aware of the fact at the time of import that applicable rate of duty was 12% under Notification No.18/2012-C.E. dated 17.03.2012. This fact is evident from page-2 of the statement dated 25.04.2013 of Sri Debdulal Goswami who was working in the capacity of Manager Accounts with the appellant. Thereafter a question was also asked to Sri Debdulal Goswami as to why penal action should not be taken against the appellant for deliberately non-payment of legitimate duty as per the last question/answer to this statement dt. 25.04.2013.
5. In view of the above observations it is held that Section 28AA (2) of the Customs Act, 1962 mandates the appellant to pay interest from the first date of the month succeeding the month in which duty was expected to be paid by the appellant. Argument of the appellant that interest, if any, can be payable w.e.f. 17.04.2013 till the date of payment, which is the date when DRI pointed out the applicable rate of interest, is not an acceptable proposal in view of the statutory mandate provided under Section 28 AA (2) of the Customs Act, 1962, substituted w.e.f. 18.04.2011 under Section 43 of the Finance Act, 2011. Accordingly, appeal filed by the appellant is rejected.
(Pronounced in the open court on 26.08.2016) S/d.
(H.K.Thakur) MEMBER IAL) MEMBER(TECHNICAL)
SS
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Appeal No.C/76276/14