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2023 (9) TMI 668 - DELHI HIGH COURT
Revocation of Custom Broker License - failure to consider the specific submissions / grounds so raised by the appellant - HSS Agreement incorrect or not - requirement on the part of CESTAT to consider the merit of the appellant’s contention that the sale and purchase of goods between TDAAL and IDDSL on HSS basis - revenue neutrality - HELD THAT:- The Adjudicating Authority passing the offence report (Order-in-Original dated 15.03.2017) as well as the respondent relied on the definition of ‘High Seas’ as per the “Convention of High Seas done at Geneva on 29th April, 1958, United Nations, Treaty Series” - according to the concerned authorities, HSS necessarily mean sale in respect of the goods that are outside the territorial waters of the country of export or the country of import. This is the foundation of the punitive measure imposed on the appellant. However, none of the authorities have discussed as to how the sale and purchase of the goods between IDDSL and TDAAL offended the Sales tax Act, as according to the said authorities the said transaction was effected while the goods in question were still in Singapore.
It is also material to note that there is a serious dispute whether the sale transaction between IDDSL and TDAAL was incorrectly reflected as HSS. According to the appellant, the goods had been handed over to the carrier and thus, were outside the control of the Beetel and IDDSL. Thus, even though the goods had not left the shores of Singapore, the same would be in transit and therefore, their sale was correctly reflected as HSS.
Even though it is considered that reflecting the sale as HSS is incorrect; the error is not of material consequence. Assuming that reflecting the sale and purchase transaction of goods in question while they are in Singapore, as a HSS, was erroneous; it is found difficult to accept that the same would require a seller to file the Bill of Entry and not the purchaser. The Revenue and the respondent have proceeded on the basis that because the goods did not left the shore of Singapore, when the sale and purchase agreement was entered into, thus there was no sale at all. And, the HSS Agreement is void - the same cannot be accepted and the learned counsel for the Revenue had not referred to any statutory provision or any authority in support of the view that sale and purchase transaction of the goods in question is void on account of reflecting the same as sale and purchase on high seas.
According to the learned counsel for the Revenue, the fact that the transaction was revenue neutral was of no consequence - The question whether there was any loss of revenue as a consequence of actions of the appellant is a material factor for consideration by the respondent while determining the punitive measure to be inflicted on the appellant. It is also a settled law that failure to take into account the relevant factors in the decision making process render the decision arbitrary and thus, amenable to challenge as offending the equal protection clause.
The appellant’s CB License was valid till 25.04.2023 and thus in any event would have expired. However, the learned counsel appearing for the respondent do not controvert the appellant’s contention that in normal course, the appellant would be entitled to seek renewal of CB License - the impugned order revoking the appellant’s CB License is set aside - appeal disposed off.