C.E.A.No.126 of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CEA No.126 of 2006 Date of Decision:-February 1,2010 M/s H.B.Fibres Limited, 356, Industrial Area, A, Ludhiana. ...Appellant Versus Customs, Excise & Service Tax Appellate Tribunal, West Block No.2, R.K.Puram, New Delhi and another ...Respondents CORAM: HON'BLE MR.JUSTICE ASHUTOSH MOHUNTA HON'BLE MR.JUSTICE MEHINDER SINGH SULLAR Present:- Mr.Akshay Bhan, Advocate for the appellant. Mr.Sanjeev Kaushik, Advocate for the respondents. Mehinder Singh Sullar, J. The compendium of facts, relevant for disposal of present appeal and emanating from the record, is that the assessee-M/s H.B.Fibres Limited (for short “the assessee”) imported two consignments from M/s Bollag International Corporation, Newell, USA and filed bills of entry Nos.1823 and 1824 dated 7.9.1998, whereby the goods were declared as “Wool Waste”. As in the wake of examination and chemical analysis, the goods were found to be Acrylic Fibre, therefore, a show cause notice dated 21.9.1998 was issued to the assessee under sections 111 (m) and 112 (a) of the Customs Act, 1962 (for brevity “the Act”). The penal action was also proposed to be taken under sections 112 and 114-A of the Act against the Managing Director/partners of erring firms, who were stated to be instrumental in importing the goods in question. 2. Originally, the Commissioner of Customs adjudicated the matter, vide order dated 31.3.2001 and the goods in question were ordered to be classified as Acrylic Fibre and assessed to the duty at CIF value at the rate of US$ 1.12 per kg. On appeal filed by the assessee, the matter was remanded back for examining its plea regarding re-computing of the Anti-dumping duty, after affording the opportunity of being heard. The claim of the assessee before the authority below was that the assessee is only liable to pay revised Anti- dumping duty and since it has already paid the excess amount of provisional C.E.A.No.126 of 2006 2 Anti-dumping duty, so it (assessee) is liable to refund of the same. On re- examination of the matter, the Commissioner negatived the claim of the assessee, for refund of excess amount of Anti-dumping duty and imposed the penalty of Rs.3 lacs on the Managing Director of M/s Youngman Industries Limited, Ludhiana under section 112 (a) of the Act, vide order dated 24.11.2003 (Annexure A1). 3. Aggrieved by the impugned order Annexure A1, the assessee filed the appeal, which was also dismissed by the Customs Excise and Service Tax Appellate Tribunal, New Delhi, vide order dated 5.12.2005 (Annexure A2). 4. The assessee still did not feel satisfied with the impugned orders Annexures A1 and A2 and filed the present appeal. 5. The appeal was admitted to decide the following substantial question of law:- “Whether in the facts and circumstances of the present case the action of the authorities below not to refund the anti-dumping duty paid by the present appellant in excess, is legally sustainable in the eyes of law?” 6. Assailing the impugned orders, learned counsel for the assessee has contended that the rate of Anti-dumping duty fixed in the show cause notice and paid by the assessee was provisional in nature and thereafter the same was revised, pertaining to the relevant period. The argument is that as per Rule 21 (2) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter to be referred as “the Rules”), if, the anti-dumping duty fixed after the conclusion of the investigation is lower than the provisional duty already imposed and collected, the differential shall be refunded to the importer. Raising a variety of arguments, in all, according to the learned counsel for the assessee that the Anti-dumping duty was fixed at a higher rate in the show cause notice, which was provisionally paid and thereafter, as the rate of duty was revised, so the assessee is entitled to the refund of amount of excess duty paid. In order to substantiate the argument, he has placed reliance on the judgment of CEGAT in C.E.A.No.126 of 2006 3 case Thai Acrylic Fibre Co.Ltd. v. Designated Authority, 2001 (128) E.L.T. 537 (Tri. - Del.). 7. Hailing the impugned orders, on the contrary, learned counsel for the Revenue has argued that the goods were assessed under Notification No.81 of 1997 and as this notification was not challenged, therefore, the assessee was not entitled to take the benefit of reviewed rate of Anti-dumping duty. 8. A perusal of the impugned order would reveal that the main ground, which appears to have weighed with the Tribunal in rejecting the claim of the assessee was and now the argument of learned counsel for the revenue is that the goods were assessed under Notification No.81 of 1997 and as this notification was not challenged, therefore, the assessee was not entitled to take the benefit of reviewed rate of Anti-dumping duty. Here, to us, the Tribunal fell in error in this respect. 9. As is evident from the record and as also it is not a matter of dispute that the assessee imported two consignments from USA and submitted the bills of entry Nos.1823 and 1824 dated 7.9.1998. Subsequently, on chemical analysis and examination, the goods were found to be Acrylic Fibre. Originally, the Adjudicating Authority, vide order dated 31.3.2001, directed that the acrylic fibre in question be assessed to duty at CIF value at the rate of US$ 1.12 per Kg. Accordingly, the assessee provisionally paid the Anti-dumping duty at the rate of 42.92 per Kg., in pursuance of the show cause notice dated 21.9.1998. Thereafter, the rates of Anti-dumping duty were revised and re-fixed at the rate of 0.296 US$ per Kg. during the relevant period 1.4.1998 to 31.3.1999. Thus, it would be seen that the facts of this case are neither intricate nor much disputed. That being so, the core question, that arises for determination in this appeal, is whether the assessee is liable to pay the revised rate of Anti-dumping duty and is entitled to the refund of the amount of excess duty already provisionally paid by it or not. 10. Having regard to the rival contentions of learned counsel for the parties and the legal position, we are of the view that the Tribunal fell in grave error in dismissing the appeal and the assessee is entitled to the refund of the C.E.A.No.126 of 2006 4 amount of excess duty paid. 11. Rule 21 (2) of the Rules postulates that “if, the anti-dumping duty fixed after the conclusion of the investigation is lower than the provisional duty already imposed and collected, the differential shall be refunded to the importer.” 12. The bare perusal of the judgment in Thai Acrylic Fibre Co.Ltd's case (supra) would reveal that the Acrylic Fibre Manufacturers moved Designated Authority constituted under the Rules for imposing Anti-dumping duty on imports of acrylic fibre from Thailand, Korea and U.S.A. Designated Authority initiated investigation to review Anti-dumping Duty. After considering the matter, the Tribunal observed in para Nos.9 and 10 as under:- “9. Learned Counsel representing the Designated Authority rightly and fairly conceded that the Designated Authority did not approach the issue in the manner in which Clause (2) of Annexure 1 was warded and understood by us as stated above. When it was found that there was variation in the period of investigation adopted by the Designated Authority and that notified, Learned Counsels representing the appellant and Designated Authority were directed to sit together and re-work the data with the help of technical experts. After joint sitting the officers of the Designated Authority came out with new computation of Anti-dumping duty confining strictly to the period of investigation notified. Calculation of the Anti-dumping duty in that situation also was not found to be correct because of the wrong understanding of clause (2) of Annexure 1. Thereupon, the officers of the Designated Authority were directed to requantify the Anti-dumping duty in the light of our understanding of Annexure II to the Rules. Officers have thus come forward with the correct Anti -dumping duty imposable on the parties in terms of our understanding of Annexure II. As per statement filed by them the Anti-dumping duty imposable on all exporters from USA comes to 0.296 US$ per Kg., Anti-dumping duty on all exporters from Korea R.P. works out to 0.534 US$ per Kg. and in the case of M/s Thai Acrylic Fibre Company Ltd. it is 0.180 US$ per Kg. and all other exporters from Thailand at 0.784 US$ per Kg. It is given in a tabular form herein below: C.E.A.No.126 of 2006 5 Sr.No. Name of the Name of the Exports Amount of duty Country (US $ per Kg.) 1. USA All Exporters 0.296 2. Korea RP All Exporters 0.534 3. Thailand (i) Thai Acrylic Fibre Co. 0.180 Ltd. (ii) All Other Exporters 0.784 10. In view of what has been stated above, we dispose of this appeal by modifying the notification issued by the Government of India and impose Anti-dumping duty on the acrylic fibre from US, Korea R.P. and Thailand in terms of the Table shown above.” 13. Meaning thereby, the competent authority has actually revised and fixed the rates of acrylic fibre at the rate of 0.296 US$ per Kg. Thus, the assessee was only liable to pay the rate of Acrylic Fibre imported from USA, as per the revised rate of assessment Anti-dumping duty, notwithstanding, the fact that it has not challenged the original notification of 1997, which was subsequently modified. Therefore, the department can only recover the (actual) revised rate of Anti-dumping duty, during the relevant period as tabulated above. In that eventuality, if the assessee had already paid the excess amount provisionally, it (assessee) is entitled to its refund, as contemplated under Rule 21 (2) of the Rules, in the obtaining circumstances of the case. 14. In the light of the aforesaid reasons, the appeal of the assessee is hereby accepted. The impugned orders Annexures A1 and A2 are set aside and the assessee is held entitled to the refund of amount of excess duty paid. The question of law is accordingly answered in favour of the assessee. However, keeping in view the peculiar facts and circumstances of the case, the parties are left to bear their own costs. ( Mehinder Singh Sullar) Judge (Ashutosh Mohunta) Judge 1.2.2010 AS Whether to be referred to reporter? Yes/No