Madras High Court
M/S Trading Partners International vs The Customs on 6 November, 2014
Author: R.Sudhakar
Bench: R.Sudhakar, R.Karuppiah
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 06.11.2014
CORAM
THE HONOURABLE MR.JUSTICE R.SUDHAKAR
AND
THE HONOURABLE MR.JUSTICE R.KARUPPIAH
C.M.A.Nos.2256 & 384 of 2014
M/s Trading Partners International
101, Kanchan House, Karampura
New Delhi 110 015
by its Proprietor Mr.Dev Raj Mahajan
No.178, Raja Garden
New Delhi 110 015 .. Appellant in both the appeals
-vs-
1. The Customs, Excise and Service Tax
Appellate Tribunal
Haddows Road,
Shastri Bhavan Annexe 1st Floor
Chennai 600 006
by its Assistant Registrar
2. The Commissioner of Customs
(Seaport-Imports)
Customs House
No.60, Rajaji Salai
Chennai 600 001 .. Respondents in both the appeals
Memorandum of Grounds of Civil Miscellaneous Appeal No.2256 of 2014 is filed under Section 130(1) of the Customs Act, 1962 against the Final Order No.40189 of 2014 dated 21.03.2014 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai.
Memorandum of Grounds of Civil Miscellaneous Appeal No.384 of 2014 is filed under Section 130(1) of the Customs Act, 1962 against the Miscellaneous Order No.42803 of 2013 dated 04.12.2013 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai.
For Appellant :: Mr.N.Viswanathan
For Respondents :: Mr.T.Chandrasekaran for R2
in C.M.A.No.2256 of 2014
Mr.K.Mohanamurali for R2
in C.M.A.No.384 of 2014
R1-Tribunal
JUDGMENT
(Judgment of the Court was delivered by R.SUDHAKAR, J.) The appellant filed three bills of entries for import of goods falling under Chapter 8539 of the heading Electric filament or discharge lamps, including sealed beam lamp units and ultra-violet or infra-red lamps; arc lamps and its sub headings before the Customs authority and the nature of goods claimed under the respective sub-headings pertaining to the three bills of entries falling under the above chapter are as follows:-
Sl.No. Bill of Entry No. & Date Description of goods Goods falling under sub heading(s) 1 434121 dated 21.10.2002 Night Lamp CFL 3W 853921 - 853910 2 436430 dated 29.10.2002 Energy Saving Lamp (CFL) 7W 853931 - 853990 3 438303 dated 07.11.2002 Single U tube CFL 9W 853939 - 853990
2. Pursuant to the Notification No.128/2001-Customs dated 21.12.2001, the imported goods were assessed and the appellant was allowed to clear the goods provisionally after execution of Provisional Duty Bonds dated 13.11.2002, 5.11.2002 and 21.11.2002 under Section 18(1) of the Customs Act, 1962. After investigation and conclusion of the enquiry, the Government of India issued the Notification No.138/2002-Customs dated 10.12.2002 based on the final findings dated 14.11.2002 of the designated authority. Under the Customs Notification No.138/2002 dated 10.12.2002, the imported Compact Fluorescent Lamps (CFL) with/without choke originating in or exported from People's Republic of China and Hong Kong are liable to payment of anti-dumping duty. It is to be mentioned herein that the Notification No.138/2002 dated 10.12.2002 relates to the goods falling under sub-heading 8539.31 of the First Schedule to the Customs Tariff Act, 1975, which is in continuation of the Notification No.128/2001-Customs dated 21.12.2001. The relevant portion of the Notification No.138/2002 reads as follows:-
''Whereas in the matter of import of Compact Fluorescent Lamps (hereinafter referred to as CFL), falling under sub-heading 8339.31 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), originating in, or exported from People's Republic of China and Hong Kong, and imported into India, the designated authority vide its preliminary findings, published in the Gazette of India, Extraordinary, Part-I, Section 1, dated the 2nd November, 2001, had come to the conclusion that -
(a) the imports of CFL into India from People's Republic of China and Hong Kong have increased quite significantly both in absolute terms and relative to consumption in India;
(b) the sale of domestic industry has declined significantly;
(c) the domestic sale prices are suffering from both price suppression and price depression due to dumped imported from People's Republic of China and Hong Kong;
(d) the production has remained more or less static during period of investigation;
(e) closing stocks have gone up by around 145% during period of investigation over previous year;
(f) the capacity utilisation during the period of investigation was as low as 20% (after taking into account the increased capacity);
(g) the domestic industry has suffered losses during the period of investigation, and had considered it necessary to impose anti-dumping duty, provisionally, pending final determination, on all imports of CFL, originating in or exported from People's Republic of China and Hong Kong;
AND WHEREAS on the basis of the aforesaid findings of the Designated Authority, the Central Government had imposed provisionally an anti-dumping duty vide Notification No.128/2001-Customs dated the 21st December, 2001, published in Part II, Section 3, Sub-section (i) of the Gazette of India, Extraordinary, dated the 21st December, 2001 vide No.G.S.R.916(E), dated the 21st December, 2001;
AND WHEREAS the Designated Authority, vide its final findings, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 14th November, 2002 has come to the conclusion that-
(a) CFL originating in or exported from People's Republic of China and Hong Kong have been exported to India below normal value, resulting in dumping;
(b) the Indian industry has suffered material injury from exports of subject goods from People's Republic of China and Hong Kong;
(c) the injury has been caused cumulatively by the dumped imports from People's Republic of China and Hong Kong;
(d) in case of exports of CFL with choke by M/s Philips & Yaming, People's Republic of China, casual link could not be established, as the landed value of such exports was more than the non-injurious price, and has proposed to impose anti-dumping duty, on all imports of CFL, except the exports of CFL, both with and without choke, by M/s Philips & Yaming, People's Republic of China, originating in, or exported from, People's Republic of China and Hong Kong:
Now, therefore, in exercise of the powers conferred by sub-section (1) and (5) of Section 9A of the said Customs Tariff Act, read with rule 18 and rule 20 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, on the basis of the above findings of the designated authority, hereby imposes on Compact Fluorescent Lamps falling under Chapter 85 of the First Schedule to the said Customs Tariff Act, originating in or exported from the country specified in column (2) of the Table annexed hereto, when exported by exporter mentioned against the corresponding entry in column (3) of the said Table, and imported into India, an anti-dumping duty at the rate which is equivalent to the difference between the amount mentioned in corresponding entries in column (4) or column (5) of the said Table, and the landed value of the imports per unit in US$.
.........
2. The anti-dumping duty imposed under this notification shall be levied with effect from the date of imposition of the anti-dumping duty, i.e., the 21st December, 2001 and shall be payable in Indian currency;
Provided that in the case of export of CFL with choke, originating in, or exported from Hong Kong, the anti-dumping duty imposed under this notification shall be effective from the date of issue of this notification in the Official Gazette.
........''
3. Based on the aforesaid Notification, the department proceeded to demand anti-dumping duty in respect of the goods imported and provisionally cleared by the appellant, in the following manner:-
WORKING SHEET Sl.No. B/E dated Rate per unit (USD) (A) Total quantity under import (B) Antidumping chargeable under C.NotificationNo.138/02 (C) = (A) & (B) 1 USD in IR (D) Antidumping chargeable under C.Notification.138/02 (E) = (C) & (D) (in NR) Assessable Value (F) Basic Customs Duty (G) Landed value (H) = (F) & (G) Antidumping duty (E)-(H) 1 434121 dt. 21.10.02 3.125 93200 291250.00 48.6 14154750.00 323840 97152 420992 13733758 2 436430 dt. 29.10.02 3.125 152000 475000.00 48.6 23085000.00 1433552 430066 1863618 21221382 3 438303 dt. 07.11.02 3.125 350000 1093750.00 48.55 53101562.50 1735550 520665 2256215 50845348 Total (Rs.) 85800488 Though the appeal preferred before the Commissioner of Customs (Appeals) came to be dismissed for non-compliance of the pre-deposit duty by the appellant at the first instance, by the order of the Tribunal, the matter was remanded to the Commissioner of Customs (Appeals) who, on remand, decided the matter on merits and upheld the order of the lower authority in demanding the anti-dumping duty for the imported goods. Aggrieved by the order of the Commissioner of Customs (Appeals), the appellant preferred an appeal to the Tribunal along with an miscellaneous application for waiver of the pre-deposit duty. The said miscellaneous application was considered by the Tribunal and in its Miscellaneous Order No.42008 of 2013 dated 24.7.2013 held as follows:-
''3. On the other hand, the Ld. AR submits that similar goods imported during the relevant period by other importers, wherein the Tribunal directed to predeposit the entire amount of duty in the case of Picasso Overseas v. CC Chennai 2009 (243) ELT 359 (Tri.Chen.). He further submits that the Hon'ble Madras High Court modified the Tribunal's Stay Order in so far as it directed the applicant to predeposit about 30% as reported in Picasso Overseas v. CESTAT, Chennai 2012 (275) ELT 185 (Mad.). He also relies upon the decision of the Kerala High Court in the case of CC v. Akash Trading Co.-2010 (253) ELT 734 (Ker.). It is submitted that the applicant themselves sought provisional assessment by executing a bond under Section 18 of the Act. It is also contended that the goods as mentioned in the case of Picasso Overseas (supra), are similar in the present case. It is further submitted that the sub-section 8 of Section 9A of the Customs Tariff Act, 1975, provides the provisional assessment of the goods.
4. After hearing both sides, we find force in the submissions of the Ld.AR. It is seen that in the case of Picasso Overseas (supra), the goods mentioned as CFL 2U-7W, PL Tube 9W & 11W, CFL2U-7W, which are similar in the present case. We also find that the applicant has furnished the bond for a provisional assessment for release of the goods in respect of demand of anti-dumping duty vide Notification No.128/2001 dt.21.12.01, and on that basis proper officer has allowed to clear the goods. At any event, we find this issue has already been discussed by the Tribunal in the earlier stay order in detail, which was modified by the Hon'ble Madras High Court by directing the applicant to deposit 30% of the demand of duty. We do not find any force in the submission of the Ld.Advocate in respect of financial hardship as it is without any supporting material. Accordingly, we direct the applicant to deposit a sum of Rs.2,50,000/- (Rupees two crores and fifty lakhs only) within 8 weeks. Upon deposit of the said amount, pre-deposit of balance dues would be waived till the disposal of appeal and recovery stayed thereof. Compliance to be reported on 04.10.2013.''
4. Thereafter, the appellant moved an application for modification on the plea that the Tribunal did not consider the merits of the decision of its coordinate Bench in the case of Dyna Enterprises v. Commissioner of Customs, Cochin reported in 2009 (246) ELT 417 (Tri.Bang.) and the decision of the Delhi High Court in the case of Plaza Lamps and Tubes Ltd., v. Commissioner of Customs reported in 2007 (209) ELT 182 (Del.). The Tribunal in its Miscellaneous Order No.42803 of 2013 dated 4.12.2013, taking cue of the order passed by this Court in the case of Picasso Overseas v. CESTAT, Chennai 2012 (275) ELT 185 (Mad.), while confirming its earlier order, held as follows:-
''4.1. It is seen that in the present case applicant imported CFL under the description of ''Single U Tube CFL 9W'' and ''Energy Saving Lamps CFL 7W''. In the case of Picasso Overseas (supra), the goods imported are similar in nature and therefore the Tribunal proceeded on the basis of stay order passed in Picasso Overseas. The finding of the adjudicating authority is that applicant executed provisional bond and had not submitted catalogue/specifications and, in this context, the item was treated as CFL without choke. We find from final Notification No.138/2002-Cus (supra), the table appended to the notification indicates two types of rates of duty on CFL with choke and without choke.
5. On a plain reading of the notification, it appears that anti-dumping duty could be imposed on CFL without choke and with choke. The Board's clarification in respect of items duty would be levied on two types of CFL such as complete, ready to use wherein the choke is integrated within the lamp and choke is external. It would be decided after examining the entire catalogue and other facts at the time of appeal hearing. Considering the overall facts and circumstances of the case, and the decision of Picasso Overseas, the Tribunal directed them to make a predeposit of Rs.2.50 crores. The issue of classification is a factual aspect which cannot be decided at the stage of hearing of application for modification of stay order. In view of that, we do not find any merit in the application. Accordingly, application is rejected. However, we find that it is appropriate that applicant should be granted extension of time for compliance. Accordingly, the period of compliance of stay order is extended for a further period of 6 weeks. Compliance is to be reported on 23.1.2014. MISC application is disposed of in the above terms.'' Aggrieved by the miscellaneous order, the appellant has preferred the C.M.A.No.384 of 2014. In the meanwhile, since the appellant failed to comply with the stay order, the main appeal itself was dismissed by the Tribunal vide the order dated 21.3.2014. Aggrieved by the final order, the appellant has preferred the C.M.A.No.2256 of 2014.
5. Mr.N.Viswanathan, learned counsel for the appellant was at pains to argue that when the imported goods are falling under the sub-headings 853910, 853921, 853931, 853939 and 853990 in respect of the three bills of entries presented by the appellant, the anti-dumping duty is proposed to be levied in respect of all the goods, despite the fact that the Notification No.138/2002 is specific only with regard to the goods falling under the sub-heading 853931.
6. We have also heard the respective learned counsel for the second respondent in both the appeals.
7. Prima facie, we have considered the plea of the learned counsel for the appellant and also the decision of the Delhi High Court on this issue. No doubt, the decision of this Court in Picasso Overseas also dealt with the imported goods falling under the heading 8539. However, in that decision, the details of the goods falling under different headings were not considered in extenso. The Tribunal had taken a rough and ready method for the deposit of 30% of the duty demanded, as per the working sheet extracted supra, in a sum of Rs.2,50,00,000/- by the appellant, following the decision of this Court in Picasso Overseas. However, we find that the goods covered under the Bill of Entry No.436430 dated 29.10.2002 fall under the sub-heading 853931. Even as per the working sheet in respect of the said bill of entry, the demand of anti-dumping duty is Rs.2,12,21,382/-. So far as the other two bills of entries are concerned, there appears to be an arguable issue whether the Notification No.138/2002-Customs dated 10.12.2002 would get attracted or not. That is a debatable and arguable issue, which the Tribunal can go into at the time of hearing the main appeal. For the present, we consider this factor viz., that the bill of entry No.436430 covers the goods in terms of the Customs Notification No.138/2002 dated 10.12.2002 and for that import, anti-dumping duty is leviable. We also take note of the plea of financial hardship, for the reason that the import of the goods in the year 2002 is being adjudicated and further appealed in the year 2014. At this juncture, it is apposite to refer to a decision of the Supreme Court in Benara Valves Ltd. v. CCE, (2006) 13 SCC 347, wherein it has been held as under:
8. It is true that on merely establishing a prima facie case, interim order of protection should not be passed. But if on a cursory glance it appears that the demand raised has no legs to stand on, it would be undesirable to require the assessee to pay full or substantive part of the demand. Petitions for stay should not be disposed of in a routine manner unmindful of the consequences flowing from the order requiring the assessee to deposit full or part of the demand. There can be no rule of universal application in such matters and the order has to be passed keeping in view the factual scenario involved. Merely because this Court has indicated the principles that does not give a licence to the forum/authority to pass an order which cannot be sustained on the touchstone of fairness, legality and public interest. Where denial of interim relief may lead to public mischief, grave irreparable private injury or shake a citizens faith in the impartiality of public administration, interim relief can be given.
9. It has become an unfortunate trend to casually dispose of stay applications by referring to decisions in Siliguri Municipality v. Amalendu Das, (1984) 2 SCC 436 and CCE v. Dunlop India Ltd., (1985) 1 SCC 260 cases without analysing factual scenario involved in a particular case.
10. Section 35-F of the Act reads as follows:
35-F. Deposit, pending appeal, of duty demanded or penalty levied.Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise Authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authority the duty demanded or the penalty levied:
Provided that where in any particular case, the Commissioner (Appeals) or the Appellate Tribunal is of opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal, may dispense with such deposit subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of the Revenue:
Provided further that where an application is filed before the Commissioner (Appeals) for dispensing with the deposit of duty demanded or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing.
11. Two significant expressions used in the provisions are undue hardship to such person and safeguard the interests of the Revenue. Therefore, while dealing with the application twin requirements of considerations i.e. consideration of undue hardship aspect and imposition of conditions to safeguard the interests of the Revenue have to be kept in view.
12. As noted above there are two important expressions in Section 35-F. One is undue hardship. This is a matter within the special knowledge of the applicant for waiver and has to be established by him. A mere assertion about undue hardship would not be sufficient. It was noted by this Court in S. Vasudeva v. State of Karnataka, (1993) 3 SCC 467 that under Indian conditions expression undue hardship is normally related to economic hardship. Undue which means something which is not merited by the conduct of the claimant, or is very much disproportionate to it. Undue hardship is caused when the hardship is not warranted by the circumstances.
13. For a hardship to be undue it must be shown that the particular burden to observe or perform the requirement is out of proportion to the nature of the requirement itself, and the benefit which the applicant would derive from compliance with it.
14. The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant.
15. The other aspect relates to imposition of condition to safeguard the interests of the Revenue. This is an aspect which the Tribunal has to bring into focus. It is for the Tribunal to impose such conditions as are deemed proper to safeguard the interests of the Revenue. Therefore, the Tribunal while dealing with the application has to consider materials to be placed by the assessee relating to undue hardship and also to stipulate conditions as required to safeguard the interests of the Revenue.
8. Accordingly, we modify the orders of the Tribunal as follows:-
''The appellant is directed to deposit a sum of Rs.1,75,00,000/- (Rupees one crore seventy five lakhs only) on or before 4th December, 2014 and on such compliance, the appeal shall stand restored to the file of the Tribunal for disposal on merits and in accordance with law. Till the disposal of the appeal, the pre-deposit of the balance duty shall stand waived.'' With the above direction, both the civil miscellaneous appeals are ordered accordingly. Consequently, M.P.Nos.1 of 2014 are closed. No costs.
Index : no (R.S.,J.) (R.K.,J.)
Internet : yes 06.11.2014
ss
To
1. The Assistant Registrar
Customs, Excise and Service Tax
Appellate Tribunal
Shastri Bhavan Annexe 1st Floor
Haddows Road
Chennai 600 006
2. The Commissioner of Customs
(Seaport-Imports)
Customs House
No.60, Rajaji Salai
Chennai 600 001
R.SUDHAKAR, J.
and
R.KARUPPIAH, J.
ss
C.M.A.Nos.2256 & 384 of 2014
06.11.2014