Supreme Court - Daily Orders
The Commissioner Of Customs, Cochin vs M/S Gtn Textiles on 12 August, 2022
Bench: M.R. Shah, B.V. Nagarathna
1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5260 OF 2022
(Arising out of SLP (C) No. 36346 of 2016)
Commissioner of Customs, Cochin ..Appellant(S)
VERSUS
M/s GTN Textiles ..Respondent(S)
With
CIVIL APPEAL NO. 1011 OF 2017
ORDER
1. Leave granted in SLP (C) No. 36346 of 2016.
2. Feeling aggrieved and dissatisfied with the impugned final judgment and order No. 842/2009 dated 19.03.2009 passed by the learned Customs, Excise and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench at Bangalore in Appeal No.E/353/2007, by which, the learned CESTAT has Signature Not Verified Digitally signed by R Natarajan Date: 2022.08.23 17:10:58 IST Reason: allowed the said appeal preferred by the respondent herein – Assessee and has set aside the demand of customs duty and 2 imposition of penalty and interest, the Revenue has preferred Civil Appeal No. 1011/2017. As such the Revenue preferred the customs appeal before the High Court against the impugned judgment and order passed by the learned CESTAT which is the subject matter of Civil Appeal No. 1011/2017. However, the Division Bench of the High Court dismissed the said appeal as not maintainable as the dispute is with respect to rate of duty on customs. The order passed by the Division Bench of the High Court dismissing the said appeal as not maintainable, the Revenue has preferred Civil Appeal No. 5260/2022 arising out of SLP (C) No. 36346/2016. Therefore, Civil Appeal No. 1011/2017 can be said to be the main appeal challenging the order passed by CESTAT.
3. We have heard Shri N. Venkataraman, learned ASG, appearing on behalf of the Revenue and Ms. Charanya Lakshmikumaran, learned counsel appearing on behalf of the respondent – Assessee.
4. The main issue on merits was whether imported paraffin/wax used by the Assessee used in the process of manufacturing of 3 cotton yarn can be said to be a raw material and therefore, the Assessee was entitled to the benefit of notification No. 08/97 CE dated 01.03.1997. Another issue was/is whether the Department was justified in invoking extended period of limitation.
5. Now so far as the first issue whether the Assessee was entitled to benefit of notification No. 08/97 CE dated 01.03.1997 is concerned, the same is squarely covered against the Assessee in view of the decision of this Court in the case of Meridian Industries Limited Vs. Commissioner of Central Excide, (2015) 15 SCC 469. In the case of Meridian Industries Limited (supra), this Court considered the very exemption notification and the use of wax in manufacturing of cotton yarn. After detailed analysis of the submissions made on behalf of the Revenue and Assessee and after considering the process of manufacturing cotton yarn and definition of “raw material”, ultimately it is observed and held that the wax used in manufacturing of cotton yarn is a raw material/input and therefore, the Assessee is not entitled to the benefit of notification dated 01.03.1997. Therefore, on 4 merits the learned CESTAT is not right in holding that the Assessee was entitled to benefit of notification No. 8/97 for concessional rate of duty.
6. However, at the same time, it was/is the case on behalf of the Assessee that the notice/demand was beyond the period of limitation and that the Department wrongly invoked the extended period of limitation. It is not in dispute that in the present case, the Department invoked the extended period of limitation. As this Court laid down the law and clarified the law only in the year 2015 and till then, the issue was at large and therefore, on facts it cannot be said that there was any suppression on the part of the Assessee in disclosing the true and correct facts. Therefore, in the facts and circumstances of the case, we are of the opinion that the Department was not justified in invoking the extended period of limitation. However, at the same time, it is to be noted that the demand for some period can be said to be within the period of limitation. Therefore, to the extent, the Department invoked the extended period of limitation, the demand must fail, as the Department was not justified in invoking the extended 5 period of limitation. Therefore, we see no reason to interfere with the impugned judgment and order passed by the learned CESTAT/Tribunal in so far as setting aside the demand of duty on the ground that the demand was wrongly made by invoking extended period of limitation, however, to the extent the demand was found to be beyond the prescribed period of limitation and was made by invoking the extended period of limitation. To the extent of the demand of duty/differential duty for the period which is found to be within limitation, the same has to be confirmed and is hereby confirmed.
7. Now the Department to recalculate the duty/differential duty to the extent the demand/show cause notice was found to be within the period of limitation/time. At the cost of repetition, it is observed that the demand of duty/differential duty found to be beyond the period of limitation by invoking the extended period of limitation is held to be unsustainable and bad in law.
Civil Appeal No. 1011/2017 is hereby partly allowed to the aforesaid extent. In view of the order passed in Civil Appeal No. 1011/2017, no further order is required to be 6 passed in Civil Appeal No. 5260/2022 and the said civil appeal stands disposed of. No costs.
…………………………………J. (M. R. SHAH) …………………………………J. (B. V. NAGARATHNA) New Delhi, August 12, 2022.
7
ITEM NO.27 COURT NO.9 SECTION XI-A
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 36346/2016
(Arising out of impugned final judgment and order dated 17-06-2016 in CA No. 2/2010 passed by the High Court Of Kerala At Ernakulam) THE COMMISSIONER OF CUSTOMS, COCHIN Petitioner(s) VERSUS M/S GTN TEXTILES Respondent(s) WITH C.A. No. 1011/2017 (IV-A) IA No. 3/2017 - PERMISSION TO FILE ANNEXURES & IA No. 2/2017 - STAY APPLICATION Date : 12-08-2022 These petitions were called on for hearing today. CORAM : HON'BLE MR. JUSTICE M.R. SHAH HON'BLE MRS. JUSTICE B.V. NAGARATHNA For Petitioner(s) Mr. N. Venkataraman, ASG Mr. M.K.Maroria, AOR Mr. Shashank Bajpai, Adv.
Mr. V. Chandra Shekara Bharathi, Adv.
Ms. Neela Kedar Gohale, Adv.
Mr. B. Krishna Prasad, AOR For Respondent(s) Ms. Charanya Lakshmikumaran, Adv.
Ms. Mounica Kasturi, Adv.
Mr. Aditya Bhattacharya, Adv.
Ms. Apeksha Mehta, Adv.
Mr. Punit Dutt Tyagi, AOR Mr. Vikas Singh Jangra, AOR UPON hearing the counsel the Court made the following O R D E R Leave granted in SLP (C) No. 36346 of 2016. Civil Appeal No. 1011/2017 is hereby partly allowed to the extent as indicated in the signed order. In view of the order passed in Civil Appeal No. 1011/2017, no further order is required to be passed in Civil Appeal No. 5260/2022 and the said civil appeal stands disposed of. No costs.
(R. NATARAJAN) (NISHA TRIPATHI)
ASTT. REGISTRAR-cum-PS ASSISTANT REGISTRAR
(Signed order is placed on the file)