Custom, Excise & Service Tax Tribunal
M/S Aveco Technologies Pvt. Ltd vs Commissioner Of Customs, Hyderabad ... on 31 January, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. C/31037/2017 (Arising out of Order-in-Original No. HYD-CUS-06-COM-16-17 dated 28.03.2017 passed by Principal Commissioner of Customs, Hyderabad) M/s Aveco Technologies Pvt. Ltd., ..Appellant(s) Vs. Commissioner of Customs, Hyderabad Customs ..Respondent(s)
Appearance Shri Vipin Kumar Jain, Advocate for the appellant.
Shri Narsimha Sharma, M. Chandra Bose (ARs) for the Respondent.
Coram:
Honble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Honble Mr. MADHU MOHAN DAMODHAR, MEMBER (TECHNICAL) Date of Hearing: 16/11/2017 Date of Decision: 31/01/2018 FINAL ORDER No. A/30108/2018 [Order per: M.V. Ravindran] This appeal is directed against Order-in-Original No. HYD-CUS-06-COM-16-17 dated 28.03.2017.
2. The relevant facts that arises for consideration are the appellants have been importing projectors of a kind which are principally used in an Automatic Data Processing System and have been classifying the same under Chapter sub-heading 85286100 of the Customs Tariff and claiming exemption from payment of Basic Customs Duty under Notification No. 24/2005-Cus dated 01.03.2005. The Departmental Authorities disputed the claim of the appellant for classifying the projectors under Chapter sub-heading No. 85286100 and commenced investigations, under an impression that the projectors were not meant to be solely or principally with Automatic Data Processing System/computers and were equally usable with other devices like USB, VCR, DVD players etc, show cause notice dated 08.11.2016 was issued by DRI for the duty demand of Rs. 4,17,75,982/- for the imports during the period November, 2011 to September, 2016, stating classification of the imports were wrong and the correct classification should have been 85286900, wherein benefit of exemption under Notification No. 24/2005-Cus was not available. The appellant contested the show cause notice on merits as well as on limitation. The Adjudicating Authority after following due process of law, confirmed the demands raised for the normal period and dropped the proceedings for the demand of extended period. The Adjudicating Authority effectively confirmed the demand of Rs. 1,58,43,056/- along with interest and did not impose any penalties. Aggrieved by such an order, an appeal is preferred before the Tribunal by the importer. Revenue is not in appeal against the order that dropped the demand for extended period.
3. Learned Counsel Shri V.K. Jain appearing on behalf of the appellant takes the bench through the entire records and proceedings. It is his submission that the classification of the projectors imported by the appellant and they are eligibility to claim exemption under Notification No. 24/2005-Cus dated 01.03.2005, is no longer res integra and same is decided by this Tribunal in their own case as reported at [2011 (263) ELT 420 (Tri-Bang.)]. It is his submission that for the earlier imports of projectors in 2007, which also had multiple input ports, the classification was disputed, the same classification as has been arrived by the Adjudicating Authority in this case i.e. 85286900 denying the benefit of exemption notification, was the issue in those proceedings, the Adjudicating Authority accepted contentions of the appellant and dropped the proceedings. Revenue was aggrieved by such an order and preferred an appeal before the First Appellate Authority who also held in the favour of the appellant herein and an appeal preferred to CESTAT by the Revenue was rejected by the Tribunal by an order dated 01.09.2010. It is his submission that this order dated 01.09.2010 as reported in [2011 (263) ELT 420] is accepted by Central Board of Excise and Customs on merits, as no further appeal was filed. It is his submission that having once accepted the order on merits the classification of the similar/identical goods, Revenue should not have reopened the case, and seek classification under the heading which is rejected, as not correct by the Tribunal. It is his further submission that the projectors which are imported in these proceedings are having enhanced and additional features, with the advancement in technology, continue to be of a kind principally used with an Automatic Data Processing System and therefore continue to merit classification under Chapter sub-heading 85286100 and are eligible for exemption under Notification No. 24/2005-Cus dated 01.03.2005. It is his submission that the findings of the Adjudicating Authority that the projectors were equally used with other devices because there are multiple input ports, is wrongly conclusion as it is already decided by the Tribunal in the appellants own case and this fact cannot lead to a different conclusion that the projectors imported by appellants are of a kind not principally used with a Automatic Data Processing System. It is his submission that paragraph No. 26.1 to 26.5 of the impugned order, wherein table is given correlating to the technical differences between projectors of the kind imported by them and the projectors which are used along with Home Theatres have not been properly appreciated or dealt with by the respondent; due to technological advancement, the Contrast Ratio in both the categories of projectors viz. business and education on the one hand and Home Theatre and Entertainment on the other, had gone up considerably in the past 10 years, which fact has not been considered by the Adjudicating Authority hence the conclusion therein is incorrect. It is his further submission that the Revenue had not led any credible evidence in support of the classification sought to be adopted by them, it would be required for departing from the earlier view held by this Tribunal and accepted by the Revenue. It is the submission that evidence in the form of statements of representatives of other importers of projectors is totally irrelevant as the practice followed by other importers is of no consequence and reliance placed on the statement of the representative of Hitachi is concerned, most of the Models of the Projectors are different from those imported by the appellant. Further the statement of representative of Panasonic Corporation is concerned, the said representative could not satisfactorily explain as to why the Projectors were being classified under sub-heading 85286900, when the invoices issued by foreign supplier i.e. Panasonic Corporation, Japan showed classification of the projectors under Heading 852861. It is his final submission that in any case wrong classification adopted by other importers cannot invalidate the classification claimed by the appellant.
4. Learned Counsel Shri M. Narasimha Sharma with Addl. Commissioner (AR) Shri Chandra Bose appearing on behalf of the Revenue would support the order of the Adjudicating Authority. It is the submission after taking the bench through the case records and more specifically the notification which granted exemption of basic customs duty, that the said notification grants exemption only to the goods falling under Chapter 85286100 which indicates projectors of king solely or principally used in an Automatic Data Processing System of heading No. 8471. It is his submission that this notification has to be interpreted strictly in as much the words of the notification indicates that the projectors should be solely and principally used in an Automatic Data Processing System. It is his submission that the goods which were imported does not satisfy the tariff entry as the technical literature and the findings recorded by the Adjudicating Authority indicate that these projectors were of a king which would be used for multiple purpose and does not satisfy that they were solely or principally used with Automatic Data Processing System. It is his further submission that after bill of entries were collected documents were called from the manufacturers and perusal of the said documents from Hitachi itself indicated that these goods were classifiable under 85286900 and no exemption was claimed by Hitachi India. He would submits that the statements Managing Director of appellant admitted the projectors which were imported can be used in multiple applications as they have multiple inputs ports. He would rely upon the various evidences which have been collected by the Revenue and annexed to the show cause notice. He would rely upon the following decisions in support of various submissions:
Aphali Pharmaceuticals Ltd., Vs. State of Maharashtra [1989 (44) ELT 613 (SC)] Chief Information Commissioner Vs. State of Manipur [2012 (286) ELT 485 (SC)] Real Optical Co. Vs. Appellate Collector of Customs [2001 (129) ELT 7 (SC)] Collector of Central Excise Vs. Fusebase Eltoto Ltd., [1993 (67) ELT 30 (SC)] Plasmac Machine Mfg. Co. Pvt. Ltd., Vs. Collector of Central Excise [1991 (51) ELT 161 (SC)] Pioneer Embroideries Ltd., Vs. Commissioner of Customs [2015 (322) ELT 602 (S.C.)] Dunlop India Ltd., & MRF Ltd., Vs. Union of India & others [1983 (13) ELT 1566 (SC.)] Commissioner of C.Ex., Hyderabad-III Vs. Sanghi Polyesters Ltd., [2003 (155) ELT 381 (Tri.-Bang.)] ESPI Industries and Chemicals Pvt. Ltd., Vs. Collector of C.Ex., Hyderabad [1996 (82) ELT 444 (SC)] Peshawar Soap & Chem. Works Vs. Commissioner of C. Ex., Chandigarh [2001 9138) ELT 855 (Tri.-Del.)] Commissioner of Central Excise, Calcutta-I Vs. ASCU Ltd., [2006 (203) ELT 39 (Tri.-Kolkata)] Collector of C.Ex., Calcutta Vs. Alnoori Tobacco Products [2004 (170) ELT 135 (SC)]
5. We considered the submissions made by both sides and perused the records.
6. The short issue to be decided is whether the projectors imported by the appellant during the period November 2014 November 2016 were entitled for the benefit of Notification No.4/2005-Cus dated1.3.2005 (at Sr. No.17) which grants full exemption from payment of Basic Customs Duty to all goods falling under heading 85286100 of the Customs Tariff. Heading 85286100 to which the exemption applies covers projectors of a kind solely or principally used in an Automatic Data Processing System of Heading 8471. While the appellant claims that the projectors imported by it were principally used in an Automatic Data Processing System (ADPS for short, which usually refers to computers) and are thus entitled for exemption, the Revenues case is that the projectors are equally usable in ADP systems as well as with Non-ADP equipments such as DVD Players, Set Top Boxes etc. and thus fall under the residuary heading 85296900 to which the exemption does not apply.
7. Though a similar dispute arose in the appellants own case in regard to an importion 2007 of Projectors of NEC make, which was finally decided in appellants favour by an order dated 01-09-2010, as reported in 2011 (263) ELT 420, the counsel for the appellant submitted at the outset that even though the above referred order of the Tribunal in its own case fully covered the issue, he was not relying upon that order in view of the observations made by the Honble High Court of Andhra Pradesh in its Judgment and Order dated 24-08-2017 passed in Writ Petition No. filed by the appellant against the order of the Commissioner, now impugned before us. The counsel for the appellant submitted that the impugned order of the Commissioner was totally unsustainable even if one applied the observations made by the Honble High Court as guiding principles for deciding the dispute in hand. He pointed out that the Honble High Court had, in its Judgement and Order dated 24-08-2017, observed that having regard to the nature of the Tariff Entry, the burden of proving that the projectors imported were projectors of the kind solely or principally used in an ADPS rested upon the importer and not on the Revenue. It was submitted that in the present case, the appellant had adequately discharged such burden by producing evidence in the form of brochures published by various manufacturers of projectors which highlight the technical differences in the projectors of the kind imported by the appellant and other projectors of a kind used in the home theatre / entertainment applications. It was submitted that the technical features and differences that exist between the two kinds of projectors were first explained by the appellants Managing Director, Shri Sandip Jain, in his statement recorded in the course of investigations. Our attention was invited to the answers given by Shri Sandip Jain in response to question No.6 to 10 which are to the effect that the projectors imported by the appellant were meant and intended to be used principally in ADPS and not for other applications such as for home theatres or for entertainment applications. Shri Sandip Jain categorically asserted that the projectors in question were not equally usable with ADPS or Non ADPS applications. The presence of multiple ports in these projectors for enabling their connection with Non-ADPS equipments were explained by pointing out that though these ports enabled the projectors to be used with non ADPS equipments, the principal usage of the projectors continued to be that with ADPS equipments. Some brochures were also referred to in the said statement to support the claim that the projectors imported were data projectors meant for use in classrooms, meeting rooms and seminar halls for displaying images and data such as in a power point presentation. It was further pointed out that these data projectors are not designed for use in home theatres for displaying video images as the video images that could be projected through these projectors were very inferior compared to the videos displayed by projectors which are meant for use for entertainment purposes such as in a home theatre. The assertions made in the statement were reiterated in the replies to the Notice and were then further elaborated and supported by evidence in the form of brochures of third party manufacturers in the course of personal hearing before the Commissioner on 01-03-2017. The record of personal hearing as set out in paras 26.2 to 26.5 of the order are of particular relevance. These are extracted below:
26.2 Shri Jain explained that projectors are of two kinds (a) projectors meant for ADPS [Automatic Data Processing System, commonly known as computers] these are the goods which they have imported. Brochures for these have already been filed. (b) the other kind of projectors are meant for Home Theatres. Shri Jain filed a compilation of 99 pages containing photographs of various documents and brochures in relation to the projectors claimed to be of the second kind i.e. for Home Theatres. Explaining his point with reference to page no.42 of the compilation he mentioned that if a projector is meant for Home Theatre, then it is clearly so mentioned, as on this particular page (relates to EPSON). With reference to page no.44 he mentioned that in the Home Theatre projectors the contrast ratio goes upto 1,000,000 : 1. On the other hand the projectors meant for ADPS do not have such a high contrast ratio because their emphasis is on data visibility quality and not video quality. He also referred to other specific features of Home Theatre projectors such as 3D capabilities, 2D-3D Conversion, 4K Enhancement, MHL connectivity and claimed that these features are not generally present in the ADPS projectors. With reference to page 46, he referred to further features of Home Theatre projectors such as upto 3X Wider Colour Gamut, upto 3X Brighter Colours and No Rainbow Effect which he said are not there in the ADPS projectors. [On a query about the original of the leaflets referred above, Shri Jain mentioned that he took the print out from the EPSON website Epson.com, and this fact was confirmed on the internet available in this office].
26.3 With reference to page 48, he pointed out the following 12 features which are not there in the ADPS projectors: Dynamic Mode, Living Mode, Cinema Mode, 3D Cinema, High Refresh Rate, High Contrast Ratio, Wide-range Connectivity, Flexible Conversion from 2D to 3D, PC-free Slideshow, availability of MHL Port, Wireless Transmission and Frame Interpolation (2D/3D). Shri Jain mentioned that while the ADPS projectors may have some of the above features but those would be of a far lower quality/degree/specifications as compared to the Home Theatre projectors.
26.4 With reference to page 52, he referred to a feature called Frame Interpolation wherein two images are shown of a cyclist of which one is blurred and the other is not. It is his claim that the ADPS projectors will have the blurred quality i.e., image of an inferior quality for a moving image. On a query as to whether with reference to the brochures for the ADPS projectors filed by them, he can show as to whether those brochures referred to the deficiency such as blurred image quality, Shri Jain mentioned that as these kind of projectors do not have those features hence the catalogues will not mention them. He contended that no manufacturer will show their deficiencies / shortcomings in their projectors. Referring similarly to the brochure of another manufacturer of Home Theatre projector Optoma (page 74) he referred to the clear mention of Home Theatre on the brochure and pointed out to various similar features mentioned on the backside such as Segment Primary Color Wheel, Real 2D to 3D Technology, Dynamic Black V, Color Management System, Ultra Detail II, Pure Motion and Pure Color. He similarly referred to the leaflets from other manufacturers like Panasonic/BenQ in his compilation and pointed out their features.
26.5 He mentioned that all these Home Theatre projectors also have a VGA port for connecting it to a computer (emphasis mine, for reasons discussed later). However they are principally to be used for Home Theatres due to their various technical specifications. He mentioned that similarly all ADPS projectors will also have a VGA port which with the help of connector can be connected to a video playing device (such as DVD player) and the video can be projected. The difference is in the image quality and the overall resolution. He further mentioned that adapters are freely available in the market with the help of which either kind of connector can be used for either kind of function. He referred to the adapters shown on page 1 of the compilation.
8. It is evident from the above record of personal hearing that specific technical differences between projectors of a kind used with ADPS and those used principally with non-ADPS equipment was explained before the Commissioner and brochures containing technical specifications of projectors of these two different kinds were also placed before him in a 99 page compilation. The additional features which exist in projectors meant for Home Theatres/Entertainment use and which are not present in ADPS projectors have been specifically set out in para 26.3 of the order. Para 26.2 records the submission that the contrast ratio in projectors meant for use in Home Theatre/Entertainment purposes, is very high (1,000,000:1), as against the contrast ratio of about 10,000:1 in case of the imports made by the appellant. In an otherwise well-written order which fairly records the submissions made by the appellant, we find no answer whatsoever to the above submission made by the appellant. Since the appellant had made categorical assertions about the technical differences and had also backed them up by producing brochures of different manufacturers, the Commissioner was to deal with this crucial submission. The initial burden of proof that lay upon the importer was discharged, and the burden then shifted upon the Revenue to disprove or rebutt the assertions and submissions made by the appellant. The order miserably fails to address the specific points made by the appellant with regard to technical differences between projectors of different types, and is thus totally unsustainable.
9. The impugned order records a finding that since the projectors imported by the appellant were equally usable with ADPS equipments and non ADPS equipments, they could not be regarded as projectors of a kind principally used in ADPS of the kind covered under heading 85286100. The finding that the projectors were equally usable with ADPS and non ADPS equipments is based primarily on the statement of Shri Lalit Kumar Singh, Assistant Manager (Services) of Hitachi (India). The Notice also relies upon the statement of one Shri GiriGanesan, Senior Manager (Imports) of Panasonic India. Shri Lalit Kumar Singh, Assistant Manager (Services) of Hitachi has stated that the Indian arm of Hitachi also imports the very same projectors which the appellant has imported but classifies it under the residuary heading 85286100 without claiming the benefit of exemption. Shri GiriGanesan of Panasonic India has also given a similar opinion. The main thrust of the argument of the learned Senior Counsel appearing for the Revenue before us also has been that since Hitachi is the manufacturer of the projector imported by the appellant, the classification determined by Hitachi is of paramount importance as the manufacturer knows best how to classify its products.
10. We find that classification under heading 85286900 is the classification claimed determined by the Indian arm of Hitachi, and is not shown to be the classification determined by Hitachi in its country of origin. The classification determined by Hitachi in Japan which also follows the same HSN Code as India has not been brought on record. The classification determined by Panasonic, Japan, who is the other main manufacturer of projectors, is however disclosed as being under heading 85286100, which is the same as the classification that the appellant is claiming. This position emerges from the statement of Shri GiriGanesan, the Senior Manager (Imports) of Panasonic India, the Indian arm of Panasonic, Japan. Despite the fact that Panasonic, Japan classifies the projectors under 85286100, Shri GiriGanesan, Senior Manager (Imports) of the Indian arm of the said company maintains that in his opinion the classification determined by Panasonic India is correct, thus implying that the one followed by the parent company in Japan was incorrect. We find this to be strange and unbelievable. We do not see how the statements of Shri GiriGanesan, Senior Manager (Imports) of Panasonic and of Shri Lalit Kumar Singh, Assistant Manager (Services) of Hitachi India can be cited as authoritative opinions of experts on the issue of classification. We do not find any evidence on record to prove that Hitachi Japan was classifying the projector in question in its country of origin under a classification different from what the appellant had claimed. How the Indian arm has chosen to classify the product in the Bill of Entry filed in Indian cannot be determinative of the true classification of the product. In matters of classification, the stand taken by a particular importer cannot be considered to be the sole basis for determining classification. In cases where the classification claimed by different importers are different, the Customs usually take the opinion of technical expert or an expert body. In the present case, the technical differences that exist between the projectors of the two kinds had been explained in detail not only in the statements recorded under section 108, but also thereafter in the course of personal hearing before the Commissioner, and supporting evidence by way of brochures was also placed on record before the Commissioner. In our view, the appellant had adequately discharged the initial burden of proof which lay upon it. The burden of proof then shifted upon the Revenue to prove that the technical differences cited were either irrelevant or non-existent. No such attempt has been made by the revenue either in the Show Cause Notice or in the impugned order. We therefore hold that the revenue has failed to produce any evidence to rebut the appellants contention or to disprove the evidence produced by the appellant.
11. The only discussion on technical features is found in para 36 of the order wherein the Commissioner has concluded rather abruptly and without basis that the projectors these days are of the kind that are equally usable by ADPS or Non-ADPS. This sweeping finding is surprising as there was no such allegation in the Notice and even otherwise no basis has been shown by the Commissioner to come to such a startling conclusion. It is a matter of common knowledge that projectors that are used for Home Theatres and Entertainment applications are high-end projectors which are designed to show video images of high resolution and clarity. Data projectors, on the other hand, are used in displaying data primarily to show stationary images of a diagram, bar charts, graph or power point presentation. While the projectors for Home Theatres are designed to functioning a dark environment of a cinema hall, auditorium or a room, data projectors meant for schools and corporate offices are intended to function in rooms which are relatively brightly lit. It is for this reason that the features of the two kinds of projectors are very different. In a matter of this kind, where the appellant had cited 12 different technical features which are absent in the projectors imported by the appellant, one would have expected the Revenue to take the views of a technical expert. No such opinion was obtained, and instead reliance has been placed primarily on the statements of representatives of the Indian arm of Hitachi and Panasonic who cannot be considered as experts either on the issue of classification under the Customs Tariff or on the technical features of projectors of different kinds. Even otherwise, we find that the statements of Mr. Singh of Hitachi India as well as that of Shri GiriGanesan of Panasonic India are bereft of any technical details or reasoning, and are therefore mere opinions unsupported by any material or basis.
12. Yet another finding recorded by the Commissioner for rejecting the appellants contentions about the difference in technical features of the two kinds of projectors is that the features relating to contrast, aspect ratio and presence of HDMI port of the projectors imported by the appellant in the year 2014-2016 are the same as those of the Home Entertainment projectors existing in the year 2007 which the appellant itself had cited before the Tribunal in the earlier case. Two tables have been set out in para 36.4 and for ease of reference, we extract the said para 36.4 below:
36.4 Some of their other features are as under:-
Feature DX300ES X3041WNEF(H) X3041WNEF X3030WNEF Contrast 2500 : 1 10000 : 1 10000 : 1 10000 : 1 Aspect Ratio 16 : 9 Compatible 16 : 9/16 : 10 Compatible 16 : 9/16 : 10 Compatible 16 : 9/16 : 10 Compatible HDMI Port Yes Yes Yes Yes From the above, it can be seen that the impugned goods are having high contrast ratio going to the extent of 10000 : 1. They also have 16 : 9 aspect ratio, and have HDMI ports. I find that the relevance of these features arises due to the fact that in the earlier case (on which the noticees have relied) it was their own submission before the adjudicating authority that the goods imported in that case could not fall under 85286900 as those goods did not have some advanced features as under (extract from page 2 of the Order dated 27.11.2007):-
Specification Computer Projectors Multimedia Home Theatre Projectors Contrast 600 : 1 3500 : 1 or more Aspect Ratio 4 : 3 16 : 9 HDMI Port No Yes Thus, I find that now the impugned goods covered by the SCN before me admittedly have the very same features the absence of which was argued by the noticees in that case to be a reason for not putting them under tariff item 85286900. I find this to be a very relevant factor, and obviously this indicates that since then the technology has developed and the projectors these days are of the kind that are equally usable with ADPS or non-ADPS.
13. Though seemingly attractive and interesting, we find the comparison and analysis made by the Commissioner to be fallacious and incorrect. The Commissioner has himself acknowledged that there have been technical advancements between 2007 (when the previous case originated) and 2014-16 when the present imports have been made. This being the position, it is very much possible that the present day data projectors of heading 85286100 are as advanced as Home Theatre type projectors of the kind existing in 2007. This is akin to a situation where cameras of smart phone now-a-days being more advanced in features than a professional grade camera of 10 years ago. Technological advances in electronic equipments are well known to all. Thus, the mere fact that a data projector being marketed today is more advanced in features than a Home Theatre projector of the year 2007 is no basis for holding that data projection are to be classified as Home Theatre projectors. Even as regards the contrast ratio, the Home Theatre projectors now-a-days have a contrast ratio that can go up to 1,000,000:1 as compared to 10,000:1 or 3,500:1 existing in the year 2007. In other words, the technical features of both kinds of projectors have advanced over the years. Since we are examining the issue of classification during the period 2014-16, we cannot adopt the yardsticks existing in the year 2007. The analysis made by the Commissioner in para 36.4 is therefore totally fallacious and untenable.
14. For the above reason, we hold that the evidence on record establishes that the initial burden which lay upon the importer-appellant for claiming the benefit of an Exemption Notification has been adequately discharged by it. The Revenue has not been able to discharge its burden of disproving or rebutting the evidence placed by the appellant-importer. As such, the findings of the Commissioner in the order on the issue of classification cannot be sustained. We therefore, hold that on merits the demand for duty is not sustainable.
15. We also find that a part of the demand raised in the Notice is barred by limitation. The Commissioner has held in the order that the larger period of limitation available under the proviso to section 28 is not invokable in the present case as there was no deliberate suppression or misstatement. He has therefore confined the demand for a period of the normal period of limitation. He has however applied two years to be the normal period of limitation and, since the Show Cause Notice was issued on 8.11.2014, all imports made after 8.11.2014 have been held to be falling within the normal period of limitation. The appellant has contested this approach by pointing out that demands for the period from 8.11.2014 till 13.5.2016 was time barred and therefore could not have been the subject matter of the recovery proceedings. It was pointed out that the normal period of limitation was enhanced from one year to two years with effect from 14.5.2016. This was done by an amendment made to the Customs Act by Finance Act, 2016. The position thus was that as on 13.5.2016 i.e. prior to the Finance Act, 2016 coming into force, demand for the period prior to 13.5.2015 had already become barred by limitation. This amendment made was not professedly a retrospective one and thus demands which had already become barred by limitation could not get revived by the amendment. Thus, demands for the period 8.11.2014 till 13.5.2015 which had already become time barred could not have been confirmed by the Commissioner by applying the amended period of two years. The fact that the Notice had been issued on 8.11.2016, by which time the limitation period had increased to two years, could not give the Revenue an authority to revive and resurrect demands which had already become dead before the amendment. To do so, would be to give the amended provision a retrospective effect which the legislature did not do while bringing in the amendment. It is a settled law that any statutory amendment is prospective in its operation unless it is specifically declared to have retrospective operation. The Finance Act, 2016 does not contain any provision according to a retrospective operation to the said Act. As such, demands which had already become irrecoverable as on 13.5.2015 could not, by virtue of the amendment with effect from 14.5.2016 get resurrected or revived.
16. In view of the above, we hold that the demand for the period prior to 13.5.2015 was barred by limitation and could not have been confirmed even if a different view is taken on the merits of the matter. Since we are holding in favour of the appellant on merits, the entire demand for duty is ordered to be set aside. Consequential levy for interest, penalties and fine are also set aside. The appeal is thus allowed.
(Order pronounced on 31.01.2018 in open court)
MADHU MOHAN DAMODHAR M.V. RAVINDRAN
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Lakshmi.
Appeal No. C/31037/2017
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