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Showing 41 to 60 of 38275 Records
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2024 (5) TMI 19 - CESTAT KOLKATA
Smuggling - Absolute confiscation of the twelve gold biscuits of foreign origin - No licit document produced in support of acquisition, possession or transportation of the gold - Penalty - retracted statements - 'reasonable belief' - Applicability of sec. 123 - carrying the gold at the time of interception - HELD THAT:- We observe that the ‘reasonable belief’ on which the officers presumed that the gold bars/pieces were of smuggled nature is not supported by any corroborative evidence. There is no document available on record to establish that gold bars/pieces were smuggled into India without payment of customs duty. The impugned order has concluded that the said gold bars/pieces were smuggled into India only on the basis of assumptions and presumptions without any concrete evidence to substantiate this claim. Hence, we hold that material evidence available on record does not establish the ‘reasonable belief’ that the gold bars/pieces were smuggled into India without any valid documents.
Applicability of the provisions of Section 123 of Customs Act 1962 in this case, we observe that Section 123 puts the burden of proving that the gold is not smuggled one on the person who claims ownership of the gold. This section is applicable only when there is a ‘reasonable belief’ that that the gold in question are smuggled in nature. In this case, the discussion in the preceding paragraphs has established that there is no ground for holding the reasonable belief that the gold are smuggled in nature. When there is no material evidence available on record to establish that the gold bars/pieces were smuggled into India without any valid documents, the provisions of Section 123 of the Customs Act are not applicable.
The purity of the gold is 995.2 mille, 995.1 mille and 995.0 mille which is below the International Standard of Purity. Accordingly, we hold that the Order passed by the Adjudicating Authority confiscating the gold bars/pieces mainly on the basis of the statements, is not sustainable in law. Thus, the gold bars/pieces cannot be confiscated based on the retracted statements without any other independent corroborative evidence.
Penalty imposed u/s 112(b)(ii) - Under Section 112(b), penalty is imposable when the person is found to be dealing with goods for which prohibition is in force or the goods are liable for confiscation. The gold bars/pieces found in possession of the appellant were not established as smuggled in nature and hence they are not prohibited goods. The gold bars/pieces were seized at Imphal, away from the Indo-Myanmar international border. The appellant was carrying the gold which he claimed that they were domestically purchased by his father and he inherited the same. We observe that the investigation has not brought in any evidence to counter this claim. Hence, we find merit in the argument of the appellant that penalty is not imposable on him u/s 112(b)(ii) of Customs Act, 1962.
Thus, we set aside the impugned order and allow the appeal filed by the appellant.
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2024 (5) TMI 18 - CESTAT NEW DELHI
Re-classification of Thorn - Transaction value - Undervaluation and Mis-declaration - erroneous classification - ineligible exemption - demand duty - Confiscation - Penalty - Imports Aluminium scrap described as ‘Thorn‘ - Violation of import restrictions under the FTDR Act - FTDR Act has three categories of goods ‘free‘, ‘restricted‘ and ‘prohibited‘, the Customs Act has only ‘prohibited goods‘ and everything else is considered freely importable - HELD THAT:- No dispute about the rejection of the classification of the imported Thorn under CTI 7602 00 10 and its reclassification under CTI 7602 00 90. The importer‘s only contention is that it had mistakenly classified it under CTI 7602 00 10. Therefore, the re-classification must be upheld.
Transaction value under Valuation Rule 12 and re-determination of the value under Valuation Rule 9 - The Additional Commissioner recorded that since Thorn was a restricted item, there were no contemporaneous imports of identical or similar goods. Valuation Rule 6 is not a method of valuation and it only states that if the value cannot be determined under Valuation Rules 3,4 or 5, it shall be determined under Valuation Rule 7 or Valuation Rule 8 and at the request of the importer, Valuation Rule 8 can be applied without applying Valuation Rule 7 first. Valuation Rule 7 is a deductive method and it provides for determination of value based on the value of such goods sold in India and after making certain deductions. Valuation Rule 8 provides for computed value based on the cost of production of such goods in India. The Additional Commissioner, having recorded that these were not possible in this case, followed Valuation Rule 9 which is the residual method. He determined the value as per the method recommended by the Directorate General of Valuation in such cases based on the aluminum content of the imported scrap and the London Metal Exchange (LME) prices of the metal.
We find that the method followed by the Additional Commissioner for determining the value is correct and proper and this decision has been correctly upheld by the Commissioner (Appeals) in the impugned order. We find no reason to interfere with the valuation.
Absolute confiscation of the imported Thorn - We find that clause (d) makes the goods imported into India contrary to any prohibition under the Customs Act or under any other law for the time being in force. Import of Thorn was restricted under the FTP and therefore, it could not have been imported without a licence. Since Thorn was imported in violation of the prohibition under FTP, it was liable to confiscation u/s 111(d).
The imported goods cannot be confiscated u/s 111(m) because of a wrong classification or claim of an ineligible exemption notification. In this case, the importer imported Thorn and entered an incorrect classification at the 8-digit level in the Bill of Entry and gave a value as per its transaction value. When examining the self-assessment, the incorrect classification was discovered.
The importer declared the value as per its transaction value. This transaction value was rejected by the officer and its value was re-determined. Thus, the two deviations from the declaration of the importer in the Bill of Entry are- the change in classification and re-determination of value by the officer. Simply because the officer has changed the classification and the valuation, the goods do not become liable to confiscation u/s 111(m) because the goods did correspond to the declarations and only the classification and the valuation which are matters of opinion were changed by the officer.
Thus, we find that the Thorn imported by the appellant was correctly confiscated u/s 111(d) and 111(o) but its confiscation u/s 111(m) was not correct. The question which arises is, if in this factual matrix, was the absolute confiscation of the imported Thorn correct or it could have been released on payment of redemption fine.
We find no reason to believe that aluminium scrap with only 1.2% of other material such as iron, plastic, etc. will be hazardous to the society if released into the hands of a manufacturer of ingots. On the other hand, import of Thorn requires a licence which the importer did not have and hence it was confiscated.
In the factual matrix of this case, considering all relevant factors, we find that it would meet the ends of justice if the confiscated Thorn valued at Rs. 27,48,405 is allowed to be redeemed by the importer u/s 125 on payment of a fine of Rs. 4,00,000/-.
Penalties u/s 112(a) (i) and 114AA on the importer and Shri Jain - The importer imported Thorn without the required licence and therefore it is squarely covered by section 112(a). Penalty not exceeding the value of the goods could be imposed under this section. The value of the goods as determined by the impugned order is Rs. 27,48,405/- and therefore, a penalty of Rs. 4,00,000/- is within the limits and is in the factual matrix, in our opinion, just and proper.
As far as the penalty on Shri Jain is concerned, we find that he was a partner of the importer and in that capacity, he played the role in importing the goods. We do not find sufficient justification to also impose penalty on Shri Jain u/s 112 (a) (i). We, therefore, set aside the penalty on Shri Jain under this section.
The importer only made an erroneous classification which is not a declaration or document but is its self-assessment. The importer also declared the value as per its transaction value which the officer deemed it necessary to re-determine. The importer can only declare the value based on what he knows and there was no mis-declaration. Thus, we find that there is no mis-declaration, let alone, one with intent either by the importer or by Shri Jain. Therefore, the penalties imposed u/s 114AA on the importer and Shri Jain cannot be sustained and need to be set aside and we do so.
Thus, both appeals are disposed of as below:
(a) CUSTOMS APPEAL filed by the importer is partly allowed and the impugned order is modified to the extent of allowing redemption of the confiscated goods on payment of redemption fine of Rs. 4,00,000/- u/s 125 and setting aside the penalty imposed u/s 114AA.
(b) CUSTOMS APPEAL filed by Shri Jain is allowed and the penalties imposed on Shri Jain u/s 112 (a) (i) and 114AA are set aside.
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2024 (5) TMI 17 - CESTAT CHENNAI
Undervaluation - Imports of high-end foreign cars - concessional duty benefit - Notification No.21/2002–Cus - Interest - Penalty - Whether the revenue authorities are correct in redetermining the assessable value of the car imported by the appellant - HELD THAT:- The first appellate authority, while ordering the re-determination of the assessable value, has inter alia held that the imported vehicle was undisputedly new, which finding has again been accepted by the revenue without challenging the same. In the impugned order, the first appellate authority has referred to an alleged e-mail and an alleged original sale invoice raised by the Japanese dealer on the UK dealer, which according to the first authority, justify the fixing of assessable value at ₹49, 84, 163. Further, the Ld. first appellate authority has held that since the vehicle is held to be a new one, the same would also entitle the appellant for concessional rate of BCD.
We have seen the invoices, one which was raised on the Broker at UK by the Japanese dealer and the other one which was raised by the UK Broker on the appellant; both are for two different cars; one refers to Ultimate Silver colour car carrying an invoice amount of 8,900,000 Yen and the other refers to a Black colour car carrying an invoice amount of 63,000 USD. That apart, invoice raised by the Japanese dealer is dated 18.08.08, but the invoice raised by the UK dealer and the appellant is 30.06.08 which is much before the date of even purchase by the UK dealer, hence, there has been much ado about nothing insofar as the invoices are concerned and therefore, the alleged difference in the purchase value by the appellant as made out in the Order-in-Original which was upheld in the impugned order lacks any merit.
We reiterate that it was the revenue, which alleged irregularities/under-valuation and hence, it was incumbent upon the revenue to prove its case. But however, other than uncorroborated e-mail and two different invoices, no documentary evidence is furnished before us by the revenue, in support.
Hence, we cannot agree with the stand of the revenue which lacks merit, for which reason the impugned order becomes unsustainable. In the result, we set aside the impugned order and allow the appeal with consequential benefits, if any, as per law.
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2024 (4) TMI 1107 - SC ORDER
Sustainability of supplementary Show Cause Notice, prior to insertion of second proviso to Section 124 of the Customs Act, 1962 w.e.f 29.03.2018 - effect to the second proviso to Section 124 of the Customs Act, 1962 which is effective from 29.03.2018 - retrospective or prospective effect? - High Court held that the supplementary show cause notice, although termed as the supplementary, is actually an independent show cause notice even though it relates with the case of smuggling which is also a subject matter of the first show cause notice dated 26.08.2016 - HELD THAT:- We dispose of this special leave petition reserving liberty to the petitioner to raise all contentions with regard to the show cause notice issued by the respondent-department which the High Court has termed as an independent show cause notice in accordance with law.
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2024 (4) TMI 1106 - SC ORDER
Maintainability of Appeal before CESTAT - Baggage Rules - Interpretation of statute - Smuggling - seizure of foreign currency - legislative edicts manifested in first proviso to section 129A of Customs Act - misreading of the terms ‘goods’ and ‘baggage’ defined in the Customs Act, 1962, to arrogate the jurisdiction - proper interpretation to the expression ‘beneficial owner’ defined in section 2(3A) of the Customs Act, 1962 - High Court held that Once the respondent themselves had asserted that the goods in question were liable to be confiscated in terms of Section 113(d), the objection taken to the maintainability of the appeal would not sustain - HELD THAT:- We are not inclined to interfere in the matter. The Special Leave Petition is hence dismissed. However, any question of law that may arise in this case is kept open.
Pending application(s), if any, shall stand disposed of.
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2024 (4) TMI 1105 - SC ORDER
Classification of imported goods - import of furnace oil from UAE - to be classified under CTH 27101950 (furnace oil) as declared by the appellant or under CTH 27109900 (waste oil) as alleged by the revenue? - Tribunal held that Since the test report of CRCL Vadodara/Delhi cannot be accepted the declaration made by the appellant in respect of nature of goods, classification and also valuation are found to be absolutely correct - HELD THAT:- We are not inclined to interfere in the matter. The civil appeal is hence dismissed.
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2024 (4) TMI 1104 - SC ORDER
Review Petition - Condonation of delay of 243 days in filing this appeal - Benefit of exemption from duty - 12V SMPS consisting of Main PCB, lightening protector, DC/AC cables, fuse/fuse holders and others - SMPS is not a part of IFWT - Supreme Court held that the delay is condoned - HELD THAT:- Having carefully gone through the Review Petition, the order under challenge and the papers annexed therewith, we are satisfied that there is no error apparent on the face of the record or any merit in the Review Petition, warranting reconsideration of the order impugned.
The Review Petition is, accordingly, dismissed.
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2024 (4) TMI 1103 - CESTAT NEW DELHI
Imposition of penalties u/s 114 (iii) and 114A on employees / manager of CHA - benami shipping bills - mis-declaration of the description quantity and value of export consignments in order to avail ineligible drawback - HELD THAT:- The appellant’s submission that he was not aware that the IEC holder was only dummy and Shri Ashok Sharma was the master mind cannot be accepted considering that all documents were received by the appellant Shri Ashok Sharma himself. The appellant’s submission that it was not required to verify the existence of the IEC holder of physically verifying the premises also cannot be accepted in the factual matrix of the case. Had the case been one where the IEC holder had supplied all the documents to the appellant and the appellant filed the shipping bills in good faith, the situation would have been different. However, in this case without the knowledge of the IEC holder, the appellant filed benami shipping bills. The appellant was required verify if the exporter in whose name he was filing the shipping bills was indeed the exporter, and was issued IEC, etc.
The appellant’s submission that he did not abet the commission of any offence u/s 114 (iii) of the Customs Act also cannot be accepted for the reason that the appellant had filed benami shipping bills with mis-declared quantities and values at the behest of Shri Ashok Sharma. It is the discovery of this mis-declaration which rendered the goods liable for confiscation. Therefore, the appellant was liable to penalty u/s 114 (iii) of the Customs Act. The appellant’s contention against the imposition of penalty u/s 114AA of the Customs Act also cannot be accepted for the reason that this section provides for penalty for willfully mis-declaring facts in any declaration before the customs authorities which the appellant did. Considering the value of the goods involved, we do not also find that the penalties imposed were excessive. We, therefore, find no reason to interfere with the order.
Thus, the impugned orders are upheld and all the appeals are dismissed.
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2024 (4) TMI 1102 - CESTAT NEW DELHI
Imposition Of Penalty - Revocation of the Customs Brokers’ licence - non-existent entities - violation of regulation 10 (n) of the Customs Brokers Licensing Regulations, 2013 - No opportunity to cross examine - violation of the principles of natural justice - HELD THAT:- DGARM did some analysis and came to the conclusion that several GST registrants did not exist and did not operate from their business addresses at all. It is undisputed that their registrations were issued by the very department which initiated the investigation. Thus, the irresistible conclusion is that if the DGARM is correct, then the department issued several benami (pseudonymous) GSTIN registrations to several entities which did not exist at all. Some of these non-existent entities were also filing GST returns with the department.
These allegedly non-existent entities were also issued importer exporter codes (IEC) by the DGFT. Thus, if the DGARM is correct, DGFT had issued benami IECs.
Neither of the documents were enclosed to the SCN or provided to the appellant, let alone giving the appellant an opportunity to cross examine those who sent them. This is clearly a violation of the principles of natural justice and on this ground alone, the impugned order deserves to be set aside.
The onus on the Customs Broker cannot, therefore, extend to verifying that the officers have correctly issued the certificate or registration. Of course, if the Customs Broker comes to know that its client has obtained these certificates through fraud or misrepresentation, nothing prevents it from bringing such details to the notice of Customs officers for their consideration and action as they deem fit. However, the Customs Broker cannot sit in judgment over the certificate or registration issued by a Government officer so long as it is valid. In this case, there is no doubt or evidence that the IEC, the GSTIN and other documents were issued by the officers. So, there is no violation as far as the documents are concerned.
Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to only collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. Documents such as GSTIN, IEC and PAN card issued etc., certainly qualify as such documents as none of these departments have any interest in the relationship between the client and the Customs Broker and these documents are presumed to be authentic and reliable having been issued by the Government officers. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or even private parties (so long as they qualify as independent, reliable and authentic) could meet this requirement. While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs broker can also, as an alternative, fulfill this obligation by obtaining data or information. In the factual matrix of this case, we are fully satisfied that the appellant has fulfilled this part of the obligation under Regulation 10(n).
The fourth and the last obligation under Regulation 10(n) requires the Customs Broker to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information. This responsibility, again, can be fulfilled using documents or data or information so long as it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. Customs formations are only in a few places while exporters or importers could be from any part of the country and they hire the services of the Customs Brokers.
In fact, the entire verification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent.
The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete as discussed, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker.
We, therefore, find that the Customs Broker has not failed in discharging his responsibilities under Regulation 10(n). The impugned order is not correct in concluding that despite obtaining and providing authentic documents issued by various Government officers, the Customs Broker has violated Regulation 10(n) because the exporters were found to not exist during subsequent verification by the officers.
Thus, the appeal is allowed and the impugned order is set aside with consequential relief to the appellant.
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2024 (4) TMI 1101 - CESTAT NEW DELHI
Validity Of Order in original passed by the Commissioner - Demand - Penalty - Import of Internal Remote Electrical Tilt Switches (iRET) - benefit of Exemption notification no. 50/2017-Cus - Whether the amperage of the iRETs imported by the appellant were of 5 Amps as declared in the Bills of Entry or were of less than 5 Amps as now asserted by the appellant relying on the aforesaid documents - HELD THAT:- The Commissioner has also wrongly declined to accept the test report of a government laboratory of another Ministry which certifies the amperage of the iRETs of the two models which were imported. The Commissioner has also declined to accept the clarificatory letter from the overseas supplier that due to a typographical error ‘<’ was not typed in all the invoices although the letter also clarifies that the actual amperage was 1.3 amperes. The logic of the Commissioner in declining to accept the letter of the supplier is that the supplier can only supply goods which are in its inventory and invoices are issued accordingly and he cannot now claim to have supplied iRETs of a different amperage. In our considered view, the Commissioner has gravely erred in not accepting the clarification from the supplier when it is consistent with the technical specifications in the product brochure and also consistent with a test report from a Government laboratory. If the supplier contended that a typographical error was committed in preparing the invoices and this assertion is supported by the product brochures, it was incorrect for the Commissioner to have rejected the clarification.
As the product brochures, the test reports and the letter from the supplier all confirm that the iRETs which were imported were of less than 5 amperes, it is not necessary for us to examine the other evidence adduced by the appellant. Clearly, there was a typographical error in the Bills of Entry and the invoices which has resulted in the audit objection, the SCN and the impugned order.
There is a discrepancy between what is stated to have been imported in the documents and the Bill of Entry and what is actually imported, duty can be charged on what is actually imported and not on what is said to have been imported. For instance, if 80 MT of goods are said to have been imported in the Bill of Entry and actually 100 MT of goods are imported, duty has to be charged on 100 MT and not on 80 MT. Similarly, if silver is declared to have been imported and actually gold is imported, duty has to be charged on gold and not on silver.
In this case, if the Bill of Entry, invoice, packing list, etc. mention 5 amperes but there is no dispute that the goods were of particular models and the product literature as well as the test reports show that they are of less than 5 amperes, it is not open to the department to charge duty treating the goods as of 5 amperes merely because the Bill of Entry and other documents say so due to a typographical error.
Thus, the appeal is allowed and the impugned order is set aside with consequential relief to the appellant.
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2024 (4) TMI 1100 - CESTAT NEW DELHI
Smuggling - Prohibited goods - confiscation of cigarettes containers concealed in HDPE granules - Penalty u/s 112 (a) &(b) and 114AA - seeking return of the goods or return of the market value of the goods - Validity of SCN issued by DRI - demand duty - HELD THAT:- The cigarettes were not mentioned in the Bill of Entry or Bill of Lading and therefore, were also not in the Import General Manifest (IGM) filed by the Shipping Line. The Shipping Line files the IGM based on the Bills of Lading and the goods which the containers are “said to contain” because the Shipping Line has no way of knowing what is actually in the containers. What was declared by the appellants was HDPE granules and the cigarettes were not declared. Therefore, the cigarettes were squarely covered by section 111(f) and are liable to confiscation under that clause. They have also not been indicated in the Bill of Entry and therefore, they are also liable to confiscation u/s 111(l). They do not correspond to the declaration made in the Bill of Entry and therefore, they are also liable to confiscation u/s 111(m). Therefore, the confiscation of the cigarettes under sections 111(f), (l) and (m) need to be upheld. Since the cigarettes are prohibited goods and are certainly harmful to the society being not as per the statutory requirement of health warnings in India, the Commissioner was correct in absolutely confiscating them and not giving an option of redemption.
HDPE granules imported and declared were used to conceal the cigarettes smuggled in the containers. Therefore, they are liable to confiscation u/s 119. However, as they are not prohibited goods, the Commissioner gave an option of redemption u/s 125. We find this part of the order to be fair and balanced requiring no interference.
The cigarettes were liable to confiscation and therefore all persons whose acts or omissions rendered them liable to confiscation are liable to penalty u/s 112. Ajay, Parshottam and Gagan are admittedly, and even according to the appeals filed before us, are the importers of the goods (both the cigarettes and the HDPE granules). Therefore, penalties on them u/s 112 need to be upheld. The quantum of penalty imposed is also proportionate to their offence. Section 112 provides for a penalty not exceeding the value of the prohibited goods.
The value of the cigarettes was Rs. 1,22, 03,500/- and the penalty imposed on Ajay, Parshottam and Gagan was Rs. 15,00,000/- each which is only about 12% of the value of the prohibited goods. Considering the gravity of the offence of smuggling such large quantity of cigarettes which would cause great damage to the health of the people, we find that the quantum of penalty was very balanced and certainly not excessive.
As far as the CHA, M/s. Guha Sarkar and Co. and its employee Shri Sunil Dixit are concerned, they filed the benami Bill of Entry at the behest of Ajay, Parshottam and Gagan in the name of R S Imports and Exports thereby facilitating the smuggling of the cigarettes. Therefore, they are squarely covered by section 112. A perusal of the appeal of these two appellants before us shows that they played an active part and it is not that the Bills of Entry were filed carelessly. Both Guha Sarkar and Co and Sunil Dixit have prayed for the goods to be released and return of the goods- essentially the same as the prayer of Ajay, Parshottam and Gagan. It is not their case that they had nothing to do with the imports and their failing was merely carelessly filing the Bill of Entry. The penalty of Rs. 5,00,000/- each imposed on Guha Sarkar and Co. and on Sunil Dixit in the impugned order u/s 112 is quite mild considering their role and the gravity of the offence. This does not call for any interference or reduction.
Penalty u/s 114AA can be imposed if any person knowingly and willingly makes a wrong declaration. Ajay, Parshottam and Gagan as the admittedly de-facto importers and S Guha Sarkar & Co. and Sunil as the CHA and its employee have deliberately filed the Bill of Entry in the name of R S Import & Export when the actual importers were Ajay, Parshottam and Gagan. They have also not declared the true nature of the goods imported and smuggled in cigarettes.
We have no hesitation in holding that all the five appellants are squarely covered by section 114AA. The maximum penalty imposable under this section is five times the value of the goods. The value of the smuggled cigarettes was Rs.1,22,03,500/- and the penalties imposed on Ajay, Parshottam and Gagan under this section is Rs. 20,00,000/- each and the penalty imposed on Guha Sarkar and Co. and Sunil Dixit is Rs. 5,00,000/-. We find these penalties to be balanced considering the gravity of the offence. These also call for no interference.
Thus, we uphold the impugned order insofar as these five appellants are concerned and dismiss all five appeals.
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2024 (4) TMI 1099 - CESTAT NEW DELHI
Revocation of Customs Brokers’ licence - forfeiture of security deposit and penalty - violation of regulation 10 (n) of the Customs Brokers Licensing Regulations, 2013? - non-existent entities have also been filing GST returns with the department - HELD THAT:- We have considered the submissions on both sides. DGARM did some analysis and came to the conclusion that several GST registrants did not exist and did not operate from their business addresses at all. It is undisputed that their registrations were issued by the very department which initiated the investigation. Thus, the irresistible conclusion is that if the DGARM is correct, then the department issued several benami (pseudonymous) GSTIN registrations to several entities which did not exist at all. Some of these non-existent entities have also been filing GST returns with the department.
These allegedly non-existent entities were also issued IEC by the DGFT. Thus, if the DGARM is correct, DGFT had issued benami IECs.
Even taking the reports at their face value, they do not show that the exporters never existed or had not existed at the time exports had taken place. There was no basis to draw such a conclusion, let alone, extrapolate it to conclude that the appellant had not fulfilled its obligations under Regulation 10(n).
Any of the three methods can be employed by the Customs Broker to establish the identity of his client. It is not necessary that it has to only collect information or launch an investigation. So long as it can find some documents which are independent, reliable and authentic to establish the identity of his client, this obligation is fulfilled. Documents such as GSTIN, IEC and PAN card issued etc., certainly qualify as such documents as none of these departments have any interest in the relationship between the client and the Customs Broker and these documents are presumed to be authentic and reliable having been issued by the Government officers. However, these are not the only documents the Customs Broker could obtain; documents issued by any other officer of the Government or even private parties (so long as they qualify as independent, reliable and authentic) could meet this requirement. While obtaining documents is probably the easiest way of fulfilling this obligation, the Customs broker can also, as an alternative, fulfill this obligation by obtaining data or information. In the factual matrix of this case, we are fully satisfied that the appellant has fulfilled this part of the obligation under Regulation 10(n).
The fourth and the last obligation under Regulation 10(n) requires the Customs Broker to verify the functioning of the client at the declared address using reliable, independent, authentic documents, data or information. This responsibility, again, can be fulfilled using documents or data or information so long as it is reliable, independent and authentic. Nothing in this clause requires the Customs Broker to physically go to the premises of the client to ensure that they are functioning at the premises. Customs formations are only in a few places while exporters or importers could be from any part of the country and they hire the services of the Customs Brokers. Besides the fact that no such obligation is in Regulation 10(n), it will be extremely difficult, if not, totally impossible, for the Customs Broker to physically visit the premises of each of its clients for verification.
In the factual matrix of this case, we find that the GSTIN issued by the officers of CBIC itself shows the address of the client and the authenticity of the GSTIN is not in doubt. In fact, the entire verification report is based on the GSTIN. Further, IECs issued by the DGFT also show the address. There is nothing on record to show that either of these documents were fake or forged. Therefore, they are authentic and reliable and we have no reason to believe that the officers who issued them were not independent and neither has the Customs Broker any reason to believe that they were not independent.
The responsibility of the Customs Broker under Regulation 10(n) does not include keeping a continuous surveillance on the client to ensure that he continues to operate from that address and has not changed his operations. Therefore, once verification of the address is complete as discussed in the above paragraph, if the client moves to a new premises and does not inform the authorities or does not get his documents amended, such act or omission of the client cannot be held against the Customs Broker.
We, therefore, find that the Customs Broker did not fail in discharging its responsibilities under Regulation 10(n). The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) because the exporters were found to not exist during subsequent verification by the officers.
Thus, the appeal is allowed and the impugned order dated 16.06.2021 passed by the Commissioner is set aside with consequential relief to the appellant.
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2024 (4) TMI 1098 - CESTAT KOLKATA
Rejection of request of the appellant for conversion of free shipping bills to drawback shipping bills - Section 149 of the Customs Act, 1962 - HELD THAT:- N/N. 39/2003-C.E.(N.T.) allows drawback on petroleum products. The appellant has exported petroleum products to M/s. Nepal Oil Corporation and hence, they are eligible for the benefit of duty drawback as provided in the aforesaid Notification. The appellant could not claim the drawback benefit because they had not filed the drawback shipping bill at the time of export. The appellant has filed applications dated 12.08.2004 and 24.04.2007 requesting for conversion of their free shipping bills to drawback shipping bills. When their request was not considered, they approached the Tribunal and this Tribunal vide Final Order No. FO/75188/2016 dated 17.02.2016 [2016 (3) TMI 889 - CESTAT KOLKATA] has categorically directed the adjudicating authority to allow the conversion of free shipping bill into drawback shipping bill subject to the satisfaction of the conditions stipulation in Section 149 of the Customs Act, 1962.
The Tribunal in the Final Order dated 17.02.2016 [2016 (3) TMI 889 - CESTAT KOLKATA] has categorically directed the proper officer to allow conversion of the free shipping bills to drawback shipping bills in terms of Section 149 of the Customs Act independent of the C.B.E.C. Circular dated 16.01.2004. It is observed that the ld. adjudicating authority in the impugned order has rejected their applications for conversion on the grounds which are not there in Section 149. Since the appellant has all the documents necessary for considering the amendment, under Section 149 of the Act, the impugned order denying the request for conversion of free shipping bills to drawback shipping bills is legally not sustainable. In view of the above, the impugned order is set aside and the conversion of the free shipping bills to drawback shipping bills is allowed.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 1097 - CESTAT KOLKATA
Seizure of plastic granules - Valuation - Confiscation of the vehicle - payment of redemption fine - Penalty - Interception and seizure of a truck carrying plastic scrap and granules allegedly of Nepalese origin. - HELD THAT:- In respect of the plastic scrap seized valued at Rs.2,16,180/-, I find that the documentary evidence clarifies that the Appellant had imported the 11,000 kgs. on 15.06.2016 vide Bill of Entry No.5638434, which is also affirmed by the Asstt. Commissioner and the invoice raised by them is for 10,000 kgs., whereas, the goods in question were weighted at 9388 kgs.. Reading together all these documents, I find that enough evidence has been provided by the Appellant to the effect that these are not procured illegally from Nepal, but are legally procured goods. Therefore, I set aside the confiscation order and the redemption fine of Rs.50,000/- imposed on the scrap valued at Rs.2,16,180/-. The Revenue is directed to release the plastic scrap to the Appellant forthwith.
So far as the penalty of Rs.14,854/- imposed on Shri Bindeshwari Poddar is concerned, I find that in respect of plastic scrap, there is no case made out against the Appellant. However, in case of plastic granules, the Appellant though initially has not claimed the ownership, but has come forward to redeem the same on payment of redemption fine and the relevant payment of the relevant Customs duty. Based on these facts, the penalty of Rs.14,854/- is reduced to Rs.5,000/- (Rupees Five Thousand only).
The Appellant has made a Security Deposit of Rs.64,854/-. This amount should be utilized to appropriate the redemption fine of Rs.20,000/- in respect of granules and the penalty imposed on Shri Bindeshwari Poddar and against the balance Customs duty and interest to be paid by the Appellant.
The Appeal is disposed of thus.
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2024 (4) TMI 1068 - CESTAT NEW DELHI
Revocation of the custom broker license - forfeiture of security deposit - penalty - goods exported were falling under SCOMET list - export of the same without obtaining the license from the DGFT - violation of Regulation 11(d), 11(e) and 11 (n) of CBLR, 2013 - HELD THAT:- To verify whether the export items as described in the export documents would fall under the SCOMET List, it is first required to first examine the amendment introduced in the SCOMET List. Notification No. 29/2015–20 dated 21.09.2017 was issued by the DGFT whereby amendments were introduced in Appendix –3 of SCOMET List.
On examining the description of goods as mentioned by the exporter in the invoice, packing list and shipping bill with the description given in the entry, there are no similarity found to connect the goods in question to fall in the amended entry. The components designed for such fermenters in the entry have been specifically provided as cultivation chambers designed to be sterilised or disinfected, cultivation chamber, holding devices or process control units, capable of simultaneously monitoring and controlling two or more fermentation system parameters. That is the reason why neither the appellant nor the Customs Authorities were able to ascertain that the goods are covered as fermenters or as components for which export license is required.
Since the goods exported do not fall in terms of the entry in the notification, there is no justification to penalise the appellant.
Violation of provisions of Regulation 11(d)? - HELD THAT:- The CHA was aware and had knowledge that the products falling under the SCOMET list required license from DGFT for its clearance but they were not aware that the fermenters and their components are falling under SCOMET list and export of the said items required export authorization for their clearance. From the export documents, it is apparent that the description of the goods is not such which would fall under the SCOMET list and therefore there was no scope for the appellant to advise the exporter for compliance of the export authorisation. Moreover, the amendment was introduced on 21.09.2017 and within two months thereafter the goods were exported and since it is an extremely technical matter, it appears that neither the CA nor the customs authorities were aware of its applicability. The Revenue has not clarified as to how the goods in question would fall under the entry of fermenters and components thereof nor the Adjudicating Authority has applied its mind to the respective shipping bills covering different items with reference to the description given in the entry - thus, the appellant who is merely a Customs House Agent cannot be expected to be an expert in SCOMET List and therefore the provisions of Regulation 11(d) cannot be invoked against the appellant.
Violation of provision of Regulation 11(e) of CBLR - HELD THAT:- The allegation on which the violation of Regulation 11(e) has been made out is the statement of the appellant where they have admitted that they never verified the product or parts manufactured in the factory nor verified the use of the export product and their parts. The allegation do not fall within the obligation as provided in Regulation 11(e) which requires the CHA to exercise due diligence to ascertain the correctness of information which he imparts to a client with reference to any work related to clearance of cargo baggage and hence, invocation of Regulation 11(e) is unsustainable - the appellant cannot be held guilty for violating Regulation 11 (e).
Violation of provision of Regulation 11(n) of CBLR - HELD THAT:- Regulation 11(n) requires the CHA to verify antecedent, correctness of Importer Exporter Code (IEC) number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information. Here, also, Regulation 11(n) has been invoked on the same statement of the appellant that he was not aware that the fermenters and their components are falling under SCOMET list and the export of the said items required export authorisation for their clearance. These allegations are not relevant for the purposes of Regulation 11(n). Neither the Revenue has pointed out, nor the Adjudicating Authority has ascertained the actual violation in terms of Regulation 11(n), though the appellant claimed that in compliance to its obligations, they had verified the correctness of IEC code of the exporter, identified its client and its functioning as per the KYC norms as also the statutory documents issued by other Government Authorities - In the absence of any such allegations, it is unreasonable to say that the appellant had violated the provisions of Regulation 11(n) of the CBLR and hence the findings that the appellant failed to discharge their obligation under Regulation 11(n) is rejected.
In similar circumstances, this Tribunal in the case of M/s. Trinity International Forwarders [2023 (8) TMI 133 - CESTAT NEW DELHI] concluded that the Customs broker cannot be held guilty for violating the Regulation 11(d), 11(e) and 11(n) of CBLR, 2013 where the case of the Revenue was that the Customs Broker by filing the shipping bills with over-invoiced export values of the garments exported by the exporter so as to claim ineligible drawback. In that context, it was observed that the Customs Broker has no authority to inspect or examine the goods and the possibility of the Customs Broker suspecting that the goods may have been overvalued also does not arise.
Penalty - HELD THAT:- There are no specific discussion on the applicability of the parameters provided in the regulations so as to hold the appellant guilty of contravention thereof. The punishment of forfeiture of license is a very serious punishment affecting the livelihood of a person for all times to come, hence it was necessary for the Adjudicating Authority to have considered the issue of violation of the provisions of the Regulations on merits with an open mind as the punishment imposed on the appellant in the proceedings under the Customs Act was only penalty of Rs.20,000/- separately under both the Sections.
The appellant has not violated the obligations under Regulation 11(d), 11(e) and 11 (n) of CBLR, 2013 and therefore the punishment of revocation of the Customs Broker License, forfeiture of security deposit and imposition of penalty is unsustainable. Consequently, the impugned order deserves to be set aside - Appeal allowed.
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2024 (4) TMI 1048 - SC ORDER
Conspiracy with the consignee and other persons - Smuggling - cigarettes - alloy wheels - metal scrap - initiation of proceedings under Sections 112 and 117 of Customs Act - notice was issued in compliance of provisions of Section 155(2) of the Act - It was held by High Court that The larger issue thus, remains whether there was a conspiracy with the consignee and other persons. These are factual aspects which the writ Court will not go into. Since the reply has already been filed, it is opined that it is for the authorities to take a decision on the above said show cause notices and it is not for the writ Court to entertain the petition of an employee who prima facie is guilty of eating the fence.
HELD THAT:- There are no reason to interfere with the order impugned herein under Article 136 of the Constitution of India.
The Petition for Special Leave to Appeal is dismissed.
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2024 (4) TMI 1047 - CALCUTTA HIGH COURT
Maintainability of Appeal - Appropriate forum - matter relates to the valuation of a car which was imported - rejection and redetermination of value - HELD THAT:- The matter concerns valuation of the imported goods and there is the clear bar of this Court (High Court) in entertaining this appeal.
The appeal is held to be not maintainable before this Court.
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2024 (4) TMI 1046 - MADRAS HIGH COURT
Seeking amendment of bill of entry - grant of benefit of N/N. 152/2009, dated 31-12-2009 - HELD THAT:- In the present case, it appears that nothing has been mentioned in the assessed bill of entry by the respondent with regard to the petitioner’s entitlement of exemption under Notification No. 152/2009, dated 31-12-2009. Hence, the petitioner made a rectification application on 1-6-2023. However, in the said rectification application, no order has been passed by the respondent till date.
The respondent is directed to dispose of the rectification application dated 1-6-2023 filed by the petitioner in accordance with law after affording an opportunity of personal hearing to the petitioner - the writ petition is disposed off.
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2024 (4) TMI 1045 - CESTAT NEW DELHI
Request for conversion of free Shipping Bills into Drawback Shipping Bills rejected - long lapsed period between exports (1998) and the request for conversion (2007) - section 149 of Customs Act, 1962 - HELD THAT:- The free shipping bills in question pertain to 1998 and the request for conversion was made in 2007. Although the request was made in terms of section 149 of the Act, as per the interpretation of this section by Delhi High Court in M/S. TERRA FILMS PVT. LTD. VERSUS COMMISSIONER OF CUSTOMS [2011 (4) TMI 13 - DELHI HIGH COURT] and Madras High Court in THE COMMISSIONER OF CUSTOMS (SEAPORT-EXPORT) VERSUS M/S. SUZLON ENERGY LIMITED [2013 (3) TMI 506 - MADRAS HIGH COURT], conversion of shipping bill from one scheme to another is not an amendment because it changes the entire nature of the document.
Viewed in this legal position, the appellant’s request for conversion of free shipping bills to drawback shipping bills cannot be accepted for more than one reason - Firstly, it changes the entire nature of the Shipping Bills and it is not merely amendments to them - Secondly, any amendment can be permitted only on the basis of documents available at the time of export. The appellant’s prayer that the rates notified much later may be applied to it’s case retrospectively cannot be accepted because the notified All-Industry Rates are always prospective and also because these rates had not existed when the goods were exported - Thirdly, any amendment under section 149 is a matter of discretion of the officer and not a right of the exporter.
Considering the long period that lapsed between exports (1998) and the request for conversion (2007), the Commissioner was correct in not allowing the conversion.
The impugned order is upheld - Appeal dismissed.
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2024 (4) TMI 1044 - CESTAT KOLKATA
Provisional release of the goods allowed - SCN not issued within time limitation - seizure of goods under Section 110 (2) of the Customs Act, 1962 - HELD THAT:- As per Section 110 (2), the adjudicating authority was required to issue show cause notice under section 124 of the Customs Act within six months of seizure. The period of six months may on sufficient cause being shown can be extended for another period of six months, but in this case, neither any show cause notice has been issued to the appellant under section 124 of the Act nor the period for issuance of the show cause notice has been extended till date. Admittedly the goods have been seized on 22.09.2023 and presently it is 19.04.2024.
As the provision of section 110(2) of the Customs Act has not been complied with, therefore, the goods in question are to be released to the appellant immediately - the adjudicating authority is directed to do so.
The goods in question are to be released to the appellant immediately without any condition for provisional release - Appeal disposed off.
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