‘Slack Adjuster Assembly’ not entitled for DEPB benefit.

PJ/Case Laws/2012-13/1405

Case:-M/s HALDEX INDIA LTD Vs COMMR OF CUSTOMS (EXPORT) NHAVA SHEVA

Citation:-2013-TIOL-102-CESTAT-MUM

Brief facts:-The applicant manufactured and exported the goods describing as ‘Roller for Auto Brake Shoe” and availed DEPB benefit on the said product. The case of the Revenue is that the applicant wrongly described the goods as Roller for Auto Brake Shoe' whereas in fact the goods were ‘Slack Adjuster Assembly'. Slack Adjuster Assembly is not entitled for DEPB benefit. Hence by mis-declaring the goods as Roller for Auto Brake Shoe, the applicant availed undue DEPB benefit.

Appellant’s contention:-The applicant contented that in the Shipping Bill filed by the applicant the description is given as Roller For Auto Brake Shoe (Slack Adjuster Assembly) and the goods have been exported. Previously, a query was raised regarding eligibility of such benefit in respect of the same goods and the matter was examined and ultimately it has been decided that the goods are eligible for DEPB benefit. Thereafter, now the Revenue wants to deny the benefit in respect of the same goods. The contention is that as the applicant is not the importer and therefore, the demand of customs duty under Sec. 28 of the Customs Act cannot be made. The demand of customs duty can be made from the importer.

Respondent’s contention:-Respondent relied upon the findings of the lower authority to submit that as the applicant were clearing the goods to DTA market as Slack Adjuster Assembly and therefore the applicant has misdeclared the goods in the Shipping bill as “Roller for Auto Brake Shoe” just to avail undue DEPB benefit. Hence the demand is rightly made. It is also submitted that the DEPB script issued by DGFT is now cancelled by DGFT as Slack Adjuster Assembly is not entitled for DEPB benefit. Hence the applicant has misdeclared the goods to avail undue DEPB benefit. The applicant is liable to pay duty in respect of the goods which were imported on the basis of such DEPB script.

Reasoning of judgment:-It was held that in the Shipping Bill, the applicant declared the goods as Roller For Auto Brake Shoe (Slack Adjuster Assembly). In respect of the earlier export, the matter was examined by the Customs authorities and it was decided that the applicant are entitled for DEPB benefit in respect of the same goods. Now the Revenue wants to deny the benefit on the ground that Roller for Auto Brake Shoe are different from Slack Adjuster Assembly. In these circumstances, as the applicant declared Slack Adjuster Assembly also in the Shipping Bill, prima facie, there is merit in the contention that the allegation of mis-declaration or suppression of fact is not sustainable. Hence pre-deposit of dues is waived and recovery thereof is stayed during the pendency of the appeal.

Decision:-Stay petition is allowed.

Comment:-It was alleged in this case that the description of goods was made as Roller for Auto Brake Shoe instead of Slack Adjuster Assembly purposely in order to claim DEPB benefit by mis-declaring the goods in question. But, as description of Slack Adjuster Assembly was also done in the Shipping Bill, it cannot be considered as suppression on part of the assessee.

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PJ/Case Laws/2012-13/1405

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