Confiscation of imported goods and imposition of penalty under the Provisions of Customs Act for evasion of anti-dumping duty is legally not sustainable after a recent CESTAT ruling that provisions relating to confiscation and penalties contained in Customs Act are not applicable to anti-dumping duty.

The anti-dumping duty is imposed under the provisions of Section 9A of the Customs Act. It has been held by the Larger Bench of the Tribunal in the case of Caprihans India Ltd. vs. Commissioner of Customs, Bombay, 2002-Taxindiaonline-89-CESTAT-Del-LB, that 'anti-dumping duty levied under Section 9 A of the Customs Tariff Act cannot be considered as duty realised under Customs Act, 1962. special provisions have been made under Section 9A for the imposition of duty known as anti-dumping duty.'

The Larger Bench came to the conclusion in that case that the provisions of Section 27 of the Customs Act do not apply to refund of anti-dumping duty. Sub-Section (8) of Section 9 A of Customs Tariff Act reads as under:

"(8) The Provisions of the Customs Act, 1962 (52 of 1962) and the Rules and Regulations made thereunder, relating to non-levy, short levy, refunds and appeals shall, as far as may be, apply to the duty chargeable under this Section as they apply in relation to duties leviable under that Act."

The Delhi High Court in Pioneer Silk Mills case, 2003-Taxindiaonline-45-HC-Del-CX, observed that Chapter II of the Central Excise Act dealing with levy of duty contains provisions of offences and penalty and all the sections can hardly be said to be related to levy and collection of duty of Excise and as such would not be entirely applicable in respect of Additional Duties of Excise (Goods of Special Importance) Act, 1957.

Following the said decision, it was held by the tribunal that provisions relating to confiscation and penalties contained in Customs Act are not applicable in respect of anti-dumping duty.

The levy of anti-dumping duty is governed by Section 9A of the Customs Tariff Act that sub section (8) was inserted in Section 9 A by the Finance Act, 2000 with effect from 12.5.2000. Prior to this amendment, there was no provision under section 9A for even recovery of anti-dumping duty leave alone there being a provision for collection of anti-dumping duty that has not been levied/short levied; that thus there was no machinery provision for the assessment and collection of anti-dumping duty; that further Section 9 A (8) of the Customs Tariff Act does not borrow provisions relating to confiscation and penalty as it only provides that the provisions relating to non-levy, short-levy, refunds and appeal shall apply to anti-dumping duty as they apply to duties leviable under the Customs Act .

Therefore provisions under Section 111 (m) for confiscation and penalty under Section 112/114 A are not applicable to anti-dumping duty matters.

The appellants filed these Appeals against Order-in-Original No. 160/2002 dated 19.8.2002 by which the Commissioner of Customs confirmed the Anti-dumping duty in terms of Notification No.81/97-Cus dated 24.10.97; confiscated the goods with consequential redemption fine and imposed penalties under Section 114 A and 112(a) of the Customs Act.

The importer, a joint sector company with Punjab State Industrial Development Corporation (PSIDC), imported acrylic fibre from M/s. Flotec Co. Ltd., Taiwan and filed two Bills of Entry both dated 24.12.98 for manufacturing acrylic and synthetic yarn; that they declared the Country of Origin as Taiwan in accordance with the Certificate of Origin that accompanied the consignment and which was issued by the General Chamber of Commerce of Taiwan; that, however, investigation conducted by the Revenue concluded that the impugned goods were of Thailand origin and the original Bills of lading was exchanged with 6 switch bills of lading issued by N.Y.K. Taiwan, the shipper, showing the port of loading as keeling, Taiwan, whereas the original Bills of lading clearly showed the place of loading as Bangkok.

A show cause notice dated 5.11.99 was issued, covering not only the said two consignments, but also four other Bills of Entry dated between 17.7.98 and 14.12.98; which culminated in the impugned order.

The tribunal observed that Section 9A of the Customs Tariff Act empowers the Central Government to impose an anti-dumping duty not exceeding the margin of dumping if any article is exported from any country or territory to India at less than its normal value.

Rule 18 and 20 of Rules, 1995 also empowers the central government to impose by Notification anti-dumping duty. Notification No. 61/97-Cus., imposes an anti-dumping duty on acrylic fibre originated from Thailand.

As it is not in dispute that the impugned acrylic fibre, imported by the Appellants, has originated from Thailand, the anti-dumping duty @ specified in the Notification is payable by the Appellants. The Appellants had deposited the duty during the course of investigation itself. Once the duty legally payable by them has been paid, the question as to whether there was any provision in the Act at the relevant time for demanding the duty or not is irrelevant.

As the duty, which is legally payable by them, stood paid by the importer, the Tribunal did not go into the question as to whether the show cause notice could have been issued by the Revenue in 1999 for demanding the anti-dumping duty.

See full text of Judgement in 2004-taxindiaonline-199-CESTAT-del in Legal Corner

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