M/S Timken INDIA LTD. vs. Union Of INDIA And Ors

Facts

The petitioner, M/s Timken India Ltd., filed a writ petition challenging a notice dated July 8, 2009, issued by the Deputy Commissioner, Central Excise, Customs and Service Tax, Jamshedpur. This notice demanded payment of customs duty amounting to Rs. 53,42,875/- for alleged non-compliance with conditions under Notification No. 32/97-Cus dated April 1, 1997, concerning goods imported between May 2007 and December 2007. The petitioner questioned the jurisdiction of the issuing authority, arguing the goods were diverted for other uses after availing concessions. A previous demand notice for Rs. 25,68,998/- for the period April 2006-April 2007 was challenged in WPT No. 6284/2007, which was disposed of by the High Court on December 13, 2007. The present petition was filed in 2009, with a stay granted on August 5, 2009. The matter had proceeded through various appellate stages, including the Commissioner (Appeals) and CESTAT, Kolkata.

Held

The High Court disposed of the writ petition on similar lines as WPT No. 6284/2007. The Court noted that the petitioner had prayed for the instant petition to be disposed of in a similar manner, wherein the demand notice was to be treated as a show-cause notice and adjudicated. The Revenue did not object to this approach. The Court explicitly stated that it had not expressed any opinion with regard to the merits of the case of the parties. The operative direction was to dispose of the writ petition on similar lines as the order dated December 13, 2007, in WPT No. 6284/2007, which had treated the demand notice as a show-cause notice and directed the petitioner to file an explanation, followed by a reasoned order from the Deputy Commissioner. I.A. No. 3791/2020 was also disposed of accordingly. No specific issue was left undecided, as the petition was disposed of procedurally.

Key Issues

1. Whether the Deputy Commissioner, Central Excise, Customs and Service Tax, Jamshedpur, had the jurisdiction to raise the demand regarding short levy of customs duty on imported goods, particularly when the goods were allegedly diverted for other uses after availing concessions, under Section 8 of the Customs (Imports of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods), 1996? Petitioner's contention: The petitioner questioned the jurisdiction of the Deputy Commissioner to raise the demand. They relied on the previous order of this Court in WPT No. 6284/2007, arguing that the demand notice should be treated as a show-cause notice and adjudicated, as prayed in I.A. No. 3791/2020. Revenue's contention: The Revenue acknowledged the procedural history, including the matter reaching the adjudicatory authority in terms of the Commissioner (Appeals)'s order dated February 7, 2020, and did not object to the writ petition being disposed of on similar lines as WPT No. 6284/2007.