2026-VIL-1636-CESTAT-CHE-CU
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  2. 2026-VIL-1636-CESTAT-CHE-CU

CUSTOMS CESTAT Cases

Customs – Anti-Dumping Duty – Maintainability of proceedings for recovery of short-levied duties after expiry of levy notification – Appellant imported parts of wind operated electricity generators, classifiable under tariff heading 85030090, which fell within the scope of countervailing duty and anti-dumping duty notifications issued for castings for wind operated electricity generators – The Department issued a show cause notice proposing recovery of differential duty under Section 28 of the Customs Act, and appellant contended that proceedings could not be initiated after the notifications had expired – Whether recovery proceedings initiated after expiry of the relevant levy notifications are legally maintainable – HELD – Proceedings for recovery of duties short-levied or not levied can be maintained even after expiry of the relevant levy notification, provided the liability accrued during the currency of the notification. The taxable event is the importation of goods, and where goods were imported while the notification was operative and in force, the subsequent expiry of the notification does not extinguish such liability nor does it render recovery proceedings unsustainable under Section 28. Expiry by efflux of time is conceptually distinct from repeal, rescission or amendment. The expiry of a procedural provision or notification cannot obliterate or defeat substantive liability, nor can it extinguish the statutory power to recover duties otherwise lawfully recoverable. Section 28 provides the statutory machinery for demand and recovery of duties that have escaped assessment or collection, notwithstanding the subsequent expiry of the notification. Any interpretation treating expiry as equivalent to repeal would produce anomalous consequences by unsettling concluded actions undertaken during the notification's validity – The appeal is allowed on this issue - Customs – Advance Authorisation Scheme – Entitlement to exemption from countervailing duty and anti-dumping duty – Appellant effected imports under valid Advance Authorisations issued under the Foreign Trade Policy and satisfied the prescribed export obligations as evidenced by Export Obligation Discharge Certificates, Redemption Certificates, Chartered Accountant's Certificates and bond discharge orders – Whether imports effected under valid Advance Authorisations with fulfilled export obligations are entitled to exemption from countervailing duty and anti-dumping duty under Notification No. 18/2015-Customs – HELD – Imports effected under valid Advance Authorisations are entitled to exemption from countervailing duty and anti-dumping duty, provided the conditions prescribed under Notification No. 18/2015-Customs are duly fulfilled. The Notification expressly exempts materials imported against a valid Advance Authorisation from the whole of duty of customs, additional duties, safeguard duty, countervailing duty and anti-dumping duty, subject to fulfilment of prescribed conditions. The statutory scheme incorporates a comprehensive mechanism whereby exemption is granted at the time of import subject to the importer executing a bond and subsequently furnishing satisfactory evidence of fulfilment of export obligation. Once the competent licensing authority issues Export Obligation Discharge Certificates and Redemption Certificates, and the jurisdictional Customs authorities discharge and cancel the statutory bonds, the contingency contemplated for recovery of duty foregone ceases to exist. The Customs authorities cannot disregard valid and subsisting statutory acts and certificates issued by competent authorities in accordance with law. An Export Obligation Discharge Certificate is not a mere declaration but a statutory certificate issued after due verification and is entitled to full legal effect. The rights and liabilities of parties stand conclusively governed by the statutory mechanism embodied in the notification and cannot be determined on the basis of apprehension or speculation – The appeal is allowed and exemption cannot be denied - Customs – Anti-Dumping Duty – Scope of Product Under Consideration – Classification of imported goods as castings for wind operated electricity generators – Appellant contended that imported goods comprised forged components, machined assemblies, fabricated structures, electrical systems and non-casting products falling outside the scope of the Product Under Consideration, supported by technical literature, engineering drawings, metallurgical reports and test reports from CSIR National Metallurgical Laboratory – Whether imported goods answer the statutory description of castings for wind operated electricity generators falling within the scope of respective countervailing duty and anti-dumping duty notifications – HELD – The imported goods do not qualify as castings for wind operated electricity generators within the meaning of the Product Under Consideration. The notifications impose a product-specific levy based on the intrinsic character of the article as a casting, not merely its end-use in wind operated electricity generators. The burden lies upon the Revenue to establish by cogent technical and documentary evidence that each disputed article answers the statutory description of a casting. The Designated Authority has specified that only those goods which retain the essential character of a casting fall within the scope, whereas components manufactured through processes such as forging, fabrication, machining or assembly cannot be brought within scope merely because used ultimately in a wind operated electricity generator. The Department failed to adduce any expert reports, test reports or comparable technical evidence to rebut the appellant's technical material, including the CSIR National Metallurgical Laboratory report concluding that examined articles were forged components and not castings. Scientific evidence concerning manufacturing process of technically specialised engineering products constitutes relevant and material evidence which cannot be brushed aside without adequate reasons. The burden to show that appellant is exigible to tax is squarely on the Department, and this burden has not been discharged – No duty liability survives on the imported goods - Customs – Limitation – Invocation of extended period under Section 28 – Barring of demand for imports crossing statutory outer limit – Appellant contended that part of the demand related to imports which had already crossed the statutory outer limit of five years prescribed under Section 28(4) of the Customs Act, and that an earlier show cause notice dated 29.01.2018 covering substantially similar imports demonstrated that the Department was already aware of the nature of goods – Whether demand relating to imports beyond the statutory outer limit of five years is sustainable, and whether the extended period can be invoked for substantially similar imports already covered by an earlier show cause notice – HELD – The demand insofar as it relates to imports falling beyond the statutory outer limit prescribed under Section 28(4) of the Customs Act is barred by limitation and cannot be sustained. Section 28 itself prescribes the maximum period within which proceedings may be initiated by invoking the extended period, and any demand travelling beyond this maximum period is ex-facie barred by limitation. Further, where the Department has already issued a show cause notice on certain facts, it cannot ordinarily invoke the extended period again on the basis of the very same material, since suppression or wilful misstatement cannot be alleged in respect of facts already within its knowledge. The nature of appellant's imports was well known to the Department at the time of issuance of the earlier SCN, and therefore the Department cannot invoke the extended period of limitation once again. Suppression must be deliberate, wilful and with intention to evade duty, and a mere dispute relating to classi
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