By TIOL News Service

MUMBAI, MAY 30, 2018: THIS is a Revenue appeal filed against the order of Commissioner (Appeals) permitting re-assessment of Bills of Entry.

The facts are that the respondents had filed Bills of Entry for clearance of goods under EPCG authorization scheme at concessional rate of duty. The said Bills of Entry filed on 7.5.2008 were assessed as per Notification No. 97/04-Cus and duty @ 5% was collected and the consignment was cleared.

The respondents challenged the said assessment claiming that under Notification No. 1(RE-2008)/2004-09 dated 11.4.2008, the Foreign Trade Policy amendment w.e.f. 1.4.2008 had reduced the prevailing customs duty rate in respect of EPCG scheme from 5% to 3%.

The Commissioner (Appeals) had accordingly allowed re-assessment of the said Bills of Entry.

In the Revenue appeal, it is submitted that the prevailing customs notification on the date of filing the Bills of Entry was 97/04-Cus dated 17.9.2004 and the same prescribed 5% as the rate of duty;that the said rate was revised to 3% by Notification No. 64/08-Cus, which came into force on 9.5.2008. And, therefore, since the Bills of Entry was assessed on 7.5.2008, the benefit of Notification No. 64/08-Cus has wrongly been allowed by the Commissioner.

The respondent relied on the apex court decisions in MRF Ltd. - 2006-TIOL-124-SC-CT, Nestle India Ltd. - 2004-TIOL-55-SC-CT and Kamani Oil - 1986 (SVPP) SCC 728 and submitted that one branch of the Government i.e. Ministry of Commerce, O/o the DGFT had issued the necessary notification reducing the duty rate in respect of EPCG scheme from 5% to 3% on 11.4.2008 [and made effective from 1.4.2008] and in these circumstances, the delay in issuing the corresponding customs notification revising the duty from 5% to 3% should not be a reason for imposing the duty liability on the respondents. Inasmuch as it is argued that the Customs authority cannot review or question or reject the benefit granted by the Government of India in the Import Policy through DGFT.

The Bench considered the rival submissions and observed -

++ The EPCG authorization was issued in respect of the said import on 30.4.2008 prescribing 3% as customs rate of duty. Ideally there should not be any discord between the EPCG and the Customs authorities and the notification in respect of said scheme should be issued simultaneously by both the authorities.

++ In the instant case, while policy was amended w.e.f. 1.4.2008, the notification of customs implementing the said change was issued on 9.5.2008 also 39 days after the issue of DGFT notification.

++ In the instant case, it is apparent that when the EXIM Policy was amended and notified, the Government has taken the decision of revising customs duty under the EPCG from 5% to 3%. To enforce this decision, the Ministry of Finance, Department of Revenue was required to act in tandem with the DGFT and Ministry of Commerce. In the instant case, the appellants were also issued a license as well as authorization prescribing 3% rate of duty.

Concluding that the failure of customs authorities to issue notification on time cannot be held against the respondent, the Revenue appeal was dismissed.

(See 2018-TIOL-1652-CESTAT-MUM)