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Commissioner of Customs (Export) Nhava Sheva v. M/s Mascot International

Civil Appeal · 2017 INSC 582Decided 3 Jul 2017
Civil Appeal No. 10483 of 2013
Justice A.K. Sikri · Justice Ashok Bhushan

Background

The Government had imposed anti-dumping duty on imported cold-rolled stainless steel sheets of certain widths, and later issued a clarifying notification adding a tolerance of up to 30mm to that width band to stop importers from evading the duty by mis-declaring widths just over the original limit. The respondent-importer brought in steel with widths between 1251mm and 1280mm, within the new tolerance band, and the CESTAT (customs tribunal) ruled in its favour, holding the duty notification's original width cap of 1250mm did not cover it. The Revenue (customs department) appealed this to the Supreme Court, along with a connected batch of appeals involving goods that were never cleared but re-exported.

Decision Breakdown

The Supreme Court held that the CESTAT had failed to properly account for the later tolerance-widening notification, which made clear that widths up to 1280mm (1250mm + 30mm tolerance) were squarely covered and liable for the anti-dumping duty; since the respondent's imports fell in that window and happened after the tolerance notification, the duty was payable and the CESTAT's ruling in the lead appeal was set aside. In the connected batch (Civil Appeal Nos. 2407-2408/2014), however, the goods had never actually been cleared into India and were re-exported, so no anti-dumping duty liability arose on them at all, and the CESTAT's ruling in the importer's favour on that distinct ground was upheld, dismissing the Revenue's appeal there.

Lesson Learnt

Importers cannot rely on the technical wording of an original customs notification once the Government has issued a tolerance/clarifying amendment that closes the gap, but if goods are genuinely re-exported without ever entering the domestic market, no import duty (anti-dumping or otherwise) is payable on them regardless of width or classification disputes.

Official source (sci.gov.in)View Judgment (PDF)

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