Tata Motors Ltd. vs Commissioner of Customs (Import)

After having heard both sides and perusing the copy of the order of the Tribunal [2015 (316) E.L.T. 257 (Tribunal)], we are of the view that this appeal raises the following substantial questions of law :

(1) Whether in the facts and circumstances of the case, the Hon''ble Tribunal was right in holding that extended period of limitation as per the proviso to Section 28(1) is applicable in the present case in demanding duty on imports made vide the 21 bills of entry (covered by Annexure-B to the SCN), imported during the period May, 2008 to July, 2009?

(2) Whether in the facts and circumstances of the case, the Hon''ble Tribunal was right in imposing penalty on the Appellant under Section 114A of the Customs Act, 1962?

(3) Whether in the facts and circumstances of the present case, the Hon''ble Tribunal was right in holding that the goods are liable for confiscation under Section 114A of the Customs Act 1962?".

It is, therefore, admitted on the above questions of law. With the consent of both sides and since a limited point is involved, we have disposed of the appeal by the present order.

The undisputed facts are that for manufacture of motor vehicles, the appellant imported what they call as cold rolled coils of iron and steel (CR Coil) on a regular basis. A purchase order on the foreign suppliers for supply of these coils was placed and according to the appellant this was for non-alloy steel.

The issue of classification of the said imported material need not detain us for the simple reason that Mr. Sridharan, learned senior counsel appearing on behalf of the appellant in support of this appeal fairly conceded that the said issue of classification had been resolved finally by an order passed by the Bench of the Tribunal at Ahmedabad. That is resolved in favour of the Revenue. The only issue that is being agitated before us by Mr. Sridharan is that while the Revenue proceeded to issue the show cause notice and adjudicate the case, it invoked Section 28 of the Customs Act, 1962.

Thus, the Revenue alleged in terms of that provision that the extended period of limitation can be invoked for there is a wilful misstatement or suppression of facts by the assessee.

Mr. Sridharan would submit that the very fact that when the Revenue brought the issue before the Tribunal and agitated it so also when the Tribunal considered the case of the assessee, there was a difference of opinion between the members deciding that appeal. The appeal was referred to a third member on the limited issue of classification and namely the difference of opinion. In the meanwhile, the Ahmedabad Bench of the Tribunal rendered an order on the issue of classification and based on which the Mumbai Bench concluded the matter in favour of the Revenue. The assessee has paid up the amount of duty and is not seeking any relief in relation to the same. That there was a difference of opinion would denote as to how an arguable case was raised and, therefore, the extended period of limitation cannot be invoked.

In the impugned order, barring noting the rival contentions, the Tribunal, according to Mr. Sridharan, has passed a cryptic order without assigning any reasons and considering the materials placed on record. It is, therefore, for this limited issue that the appeal deserves to be allowed and the matter examined again by the Tribunal. Mr. Sridharan, on instructions, states that no other issue would be raised and argued, save and except the plea of time-bar.

Mr. Sonpal, on the other hand, would submit that the issue of limitation is a mixed question of fact and law. Whether it is wilful misstatement or suppression of facts would necessitate an enquiry into factual matters and once the Tribunal has referred to the statement of officials of the assessee, then, there cannot be any reappreciation and reappraisal of the order passed by the Tribunal. It is not vitiated by any error of law apparent on the face of the record or perversity warranting interference in the appellate jurisdiction of this Court.

Having heard the rival contentions, we find that in the initial order passed by the Tribunal where the Member (Judicial) and Member (Technical) differed, namely, that rendered on 17th June, 2013, the issue was squarely raised. In Paragraph 5.1.3 the Tribunal finds that the assessee failed to fulfil the obligation and requirement of declaring complete description and specification whether the goods were alloy steel or non-alloy steel. According to the Tribunal, the correct description of the goods was not declared. The statements of the four officials and recorded under Section 108 of the Customs Act, 1962, according to the Tribunal, contains an admission and that is how the Tribunal terms the act as misdeclaration and suppression on the part of the importer, resulting in a duty evasion. These facts, according to the Tribunal, conclusively establish misdeclaration.

From this discussion, we find that there appears to be a confusion in the mind of the Tribunal as to whether what the appellant-assessee declared was a correct description of the goods or whether it was a misdeclaration and suppression as alleged. The facts, according to the Tribunal, establish misdeclaration, but save and except the statements of the four officials, we do not feel that the Tribunal has adverted to any other material based on which the assessee declared the goods and as claimed throughout (CR coils) under the Tariff Head 72.09 of the Customs Tariff.

Thus, without expressing any opinion on the rival contentions but finding that the Tribunal having not examined the issue of time-bar or extended period of limitation completely that we have no alternative, but to set aside the impugned order of the Tribunal only to this limited extent. The appeal of the assessee before the Tribunal shall stand revived only for this limited purpose and the Tribunal shall now examine as to whether the recovery of duties are levied or not levied or erroneous and on account of the acts attributable to the assessee and within the meaning of sub-section (4) of Section 28 of the Customs Act, 1962. All incidental and ancillary matters to the same shall also be allowed to be raised and examined or scrutinised by the Tribunal. We clarify that we have kept all contentions open and merely because we have admitted this appeal and passed an order of remand or allowed it in the above terms, does not mean that any conclusive opinion is rendered or expressed by this Court.

In the light of the fact that the issue is pretty old and the Revenue has initiated proceedings for recovery, we would request the Tribunal to take this matter early and by giving it some priority. It should endeavour and dispose it off within a period of four months from the date of receipt of a copy of this order.

The appeal is, accordingly, disposed of. In view of the disposal of the appeal, the Notice of Motion does not survive and it is disposed of accordingly.