👍Adjudicating Authority cannot go beyond the Scope of SCN: CESTAT

Clipped from: https://taxguru.in/custom-duty/adjudicating-authority-scope-scn-cestat.html

Suraj Electronics P. Ltd. Vs Commissioner of Customs (Imports) (CESTAT Chennai)

It is noticed by Commissioner (Appeals) that stay was granted waiving the requirement of pre-deposit, observing that the appellant was not served with the show cause notice and the order passed by the original authority. Further, in para-11, the Commissioner (Appeals) has set aside the order of confirmation but has upheld the show cause notice, which we find to be improper. On perusal of the order passed by the original authority, it is seen that a notice was issued under sub-section (1) of Section 28 of the Customs Act, 1962 demanding duty to the tune of Rs.49,062/- for the reason that the exemption is only for duty that is in excess of 30% and not 20%. However, it is seen that amount of Rs.2,20,777/- has been confirmed by the original authority on the ground that the appellant has not produced end-use certificate. Indeed, the said finding is beyond the scope of the SCN. On perusal of Notification No.89/1994, we find that there is no such condition attached to the goods imported under List-C. The argument put forward by the Ld. Counsel alleging that the original authority has confirmed a higher amount on grounds which are not alleged in the SCN and has thus traversed beyond the SCN is not without substance. There is also no evidence available from the impugned order or from the records that SCN and the OIO have been served on the appellant. The said plea has been put forward by the appellant from the very beginning of the litigation. For these reasons, in the facts and circumstances of the case, we find that demand cannot sustain which requires to be set aside which we hereby do.

FULL TEXT OF THE CESTAT CHENNAI ORDER

Brief facts of the case are that the appellants imported ‘Glass Neck Tubes’ vide Bill of Entry dated 02.03.1995 and claimed benefit of Notification No.88/94-Cus. dated 01.03.1994. Later, Customs Receipt Audit pointed out that the exemption was only for duty that is in excess of 30% and not 20% as assessed in terms of the notification. A demand notice for Rs.49,062/- being the differential amount between 30% and 20% was despatched to the appellant as well as to their CHA on 28.08.1995. The adjudicating authority confirmed the demand of Rs.2,20,777/- for the reason that the appellants have not produced end-use certificate from the jurisdictional Central Excise authorities. The said order was also despatched to the appellant as well as their CHA on 03.11.1999. However, the appellant contended that they came know to about the demand notice and the order confirming the duty only when the Revenue Recovery Unit initiated steps for recovery of the amount. The appellant then obtained a copy of the order passed by the original authority and filed an appeal before the Commissioner (Appeals). After hearing the appellant, the Commissioner (Appeals) disposed the appeal by holding that the order of confirmation is set aside, however, the demand notice is upheld. Aggrieved by such order, the appellant is now before the Tribunal.

2. The Ld. Counsel Mr. N. Viswanathan appeared and argued on behalf of the appellant. It is submitted that the appellant had claimed the benefit of Notification No.89/94-Cus. dated 01.03.1994 as per Sl.No.39 of List-C. The subject goods were assessed under CTH 8540.91 and accordingly duty @ 20% was collected from the appellant and the goods were released to him. The appellant filed a copy of SSI registration granted to them by the General Manager, District Industrial Centre, Ghaziabad along with a letter dated 23.02.1995 requesting for grant of the exemption as per the above notification to the goods imported by them. The appellant had utilized the goods only for the intended purpose.

3. After a lapse of 8 years, the appellant received a recovery notice for an amount of Rs.2,20,777/- which is said to have been confirmed by order dated 03.11.9999 passed by the Assistant Commissioner of Customs. The appellant entered into correspondence with the department and sought for service of the copies of the order passed by Assistant Commissioner as well as the demand notice said to have been issued to the appellant. The appellant had pleaded that the demand notice as well as notice had not been served upon the appellant. It is submitted that after a delay of 14 long years a copy of the order dated 03.11.1999 was served on their employee through Delhi Customs on 12.11.2009. However, the copy of the SCN was never served on them. On perusal of the order, it indicated that the SCN was issued on 28.08.1995 for the differential duty demand of Rs.49,062/- being the difference in the rate of Basic Customs Duty which was applied being 20% instead of 30%. However, the adjudicating authority has gone beyond the scope of the show cause notice and confirmed a higher duty of Rs.2,20,777/- alleging that the appellant has not produced the certificate from Assistant Commissioner of Central Excise, in whose jurisdiction their factory manufacturing the said goods is situated, to the effect that the said goods have been used in the manufacture of finished goods. Ld. Counsel submitted that there is no condition imposed in the notification. Therefore, the demand confirmed by the original authority alleging that the appellant has not fulfilled the condition is erroneous.

4. Counsel adverted to paras 9 & 10 of the order passed by Commissioner (Appeals) and submitted that there is no evidence produced by the department to show that show cause notice as well as the order has been served on the appellant. Further, the Commissioner (Appeals) set aside the confirmation of duty but has upheld the notice which itself is highly improper and not maintainable. He submitted that the impugned order cannot sustain for these inherent defects. He prayed that the appeal may be allowed.

5. Ld. A.R Ms. G. Anandalakshmi supported the findings in the impugned order.

6. Heard both sides.

7. On perusal of the impugned order, it is noticed by Commissioner (Appeals) that stay was granted waiving the requirement of pre-deposit, observing that the appellant was not served with the show cause notice and the order passed by the original authority. Further, in para-11, the Commissioner (Appeals) has set aside the order of confirmation but has upheld the show cause notice, which we find to be improper. On perusal of the order passed by the original authority, it is seen that a notice was issued under sub-section (1) of Section 28 of the Customs Act, 1962 demanding duty to the tune of Rs.49,062/- for the reason that the exemption is only for duty that is in excess of 30% and not 20%. However, it is seen that amount of Rs.2,20,777/- has been confirmed by the original authority on the ground that the appellant has not produced end-use certificate. Indeed, the said finding is beyond the scope of the SCN. On perusal of Notification No.89/1994, we find that there is no such condition attached to the goods imported under List-C. The argument put forward by the Ld. Counsel alleging that the original authority has confirmed a higher amount on grounds which are not alleged in the SCN and has thus traversed beyond the SCN is not without substance. There is also no evidence available from the impugned order or from the records that SCN and the OIO have been served on the appellant. The said plea has been put forward by the appellant from the very beginning of the litigation. For these reasons, in the facts and circumstances of the case, we find that demand cannot sustain which requires to be set aside which we hereby do.

8. In the result, the impugned order is set aside. Appeal is allowed with consequential relief, if any.

(pronounced in the open court on 06.04.2023)

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