CESTAT Postpones Timber SAD Extradition Case for Reconsideration

MM Saw Mills and Industries and Commissioner of Customs and Service Tax (CESTAT Bangalore)

In the case of Comparison of MM Saw Mills and Industries and Commissioner of Customs and Service TaxCESTAT Bangalore dealt with a dispute regarding a claim for refund of Special Additional Duty (SAD) on timber logs imported by the appellant. On 1 February 2002 the appellant filed two Notices of Entry seeking leave and exemption under the relevant notices. However, the trial court allowed only a partial refund, applying a different conversion rate for the Hoppus Tones than that used at the time of importation. The Commissioner (Appeals) subsequently upheld this decision, but dismissed the appellant’s appeal on the grounds of a 22-day delay in making the application, arguing that sufficient reason had not been given for this delay.

The appellant argued that the delay was due to the authorized person being unavailable for personal reasons and emphasized that this delay was within the tolerable period of 30 days allowed under the Customs Act. They argued that they had a strong case on the merits, citing precedents where the Court had turned a blind eye to delays in similar cases. However, the Revenue Administration representative requested that the objection be rejected, saying that the reasons for the delay were not convincing. After reviewing the allegations, CESTAT found that the appellant’s justification for the delay was reasonable and within the power of the Commissioner (Appeal) to condone. As a result, the Court accepted the delay and remanded the case to the Commissioner for review on merit (Appeals), thus allowing the appellant to adequately present his case.

This decision highlights the importance of providing parties with a fair opportunity to argue their case, especially in complex matters involving tax disputes. The court’s decision reflects a balanced approach to ensure that procedural delays do not cause undue harm to parties with legitimate claims. The request for reconsideration also highlights the ongoing complexities in interpreting customs declarations and the impact of conversion factors on refund claims.

FULL TEXT OF THE CESTAT BANGALOR ORDER

Woman. In the case of MM Saw Mills and Industries, the appellant filed two Bills of Entry dated 01.02.2002 for clearance of ‘Timber Logs’ and claimed exemption to that extent. Notice No. 102/2007-Cus. dated 14.09.2007 as amended by Communiqué No. 93/2008-Cus. dated 01.08.2008. The appellant sought refund of 4% SAD. The adjudicating authority approved part of the refund following conversion of 1 Hoppus Ton=1.8027 CBM instead of 1 Hoppus Ton=1.8027 CBM as per Public Notification No. 21/2012 dated 11.05.2012 issued by the Commissioner of Customs, Mangalore. import time. Aggrieved by the decision, the appellant filed an appeal before the Commissioner (Appeals). Commissioner (Appeals) Appeal Order No. 14.01.2016. On 12-16/2016, it decided, inter alia, to convert ‘Timber Logs’ using the CBM conversion rate of 1 Hoppus Ton = 1.416. This conversion formula was adopted at the time of importation, the same should be adopted for SAD enforcement. However, in relation to the appellant, the Commissioner (Appeals) rejected the appeal on the grounds that the appeal was filed with a delay of 22 (twenty-two) days after the statutory period of 60 (sixty) days for lodging an objection before the Commissioner (Appeals). The plaintiff, who was aggrieved by the rejection of his appeal due to delay, submitted this objection to the Court.

2. In the appeal, the appellant alleged that; Delay of 22 days may be tolerated by the Commissioner (Objections) and is within the tolerable period of 30 days as contemplated under the provisions of Section 128(1) of the Customs Act, 1962; the appeal was dismissed solely on the grounds that insufficient reason had been given by the appellant for the delay in lodging the appeal; The appellant submitted before the Commissioner (Appeals) that the delay in filing the appeal was due to the failure of the authorized person to come to the office due to some personal reasons and that the delay was not due to any willful negligence on the part of the party. that the appellant has a strong claim to merit; The appellant relied on the decision in the following case: Sun Pharmaceutical Industries Ltd. Etc. C. Ex Commissioner. & ST reported in Vadodara 2015 (316) ELT 286 (Tri.-Ahmd.), where the Court allowed a delay of 16 days and remanded to the original appellate authority for decision on the merits; in the case of Shiva Mint Industries Vs. C.Ex. reported in Jalandhar 2010 (262) ELT 397 (Tri.-Del.), here delay was condoned and the matter was referred back to the Commissioner (Appeals) to deal with the matter in accordance with law.

3. The learned Authorized Representative of the Revenue submitted that the reason given for the delay in filing the objection is not convincing and therefore the objection should be rejected. In this regard, he referred to the decision in the case. DHR Holdings India Pvt. Ltd. etc. CC reported at New Delhi 2024 (3) TMI 413-CESTAT-New Delhi.

4. I have heard both sides and reviewed the records.

5. We find that the reason given for the appellant’s delay in filing the appeal was reasonable and that the delay was excusable and within the approvable powers of the Commissioner (Objection).

6. In view of the above, the delay in filing the appeal was condoned and the case was remanded to the Commissioner (Appeals) to decide on merits after giving reasonable opportunity to the appellant to present his case.

(The decision was announced in open court on 19.09.2024)