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Customs - Case Laws
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2025 (4) TMI 1608
Interest payable on CVD levied under Section 3 of the CT Act or on SAD levied under Section 3A of the CT Act - Constitutional validity of the Notification No. 18/2015-Cus dated 01.04.2015 - HELD THAT:- It is not inclined to interfere with the impugned judgment; hence, the present special leave petition is dismissed.
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2025 (4) TMI 1607
Personal liability of petitioner for non-fulfilment of export obligations by the Company - Petitioner was appointed as an independent non-executive director of the Company in the year 1985 and was neither a promoter nor was involved in the day-to-day affairs of the Company - time barred SCN - HELD THAT:- This Court has in Pankaj Mehra case while relying on the judgments passed in Krishan Kumar Bangur case [2006 (4) TMI 256 - HIGH COURT OF DELHI] and Ved Kapoor case [2013 (9) TMI 706 - DELHI HIGH COURT], and on the judgment of the Supreme Court in the Santanu Ray vs. Union of India [1988 (8) TMI 106 - DELHI HIGH COURT], has held that unless specific allegations have been made which discuss the role of a director in the export performance, there is no question of finding the director personally liable for the same. The order impugned or even the Four O-I-O's have failed to fulfil this or show any adjudication on this aspect. In the absence thereof, the Respondent cannot now by, taking additional grounds and pleas, attempt to go beyond the Impugned Order or the Four O-I-O's.
There is another aspect which has to be taken into consideration. The export licences were issued during the time period of 1989-1991. Between 27.06.2002 and 11.09.2008, the Respondent issued multiple notices, summons, and orders concerning various Advance Licenses held by the Company. The Four O-I-O's were then passed on 08.09.2009 and 17.09.2009. No explanation has been provided by the Respondent in these Four O-I-O's for the delay in taking steps against the Petitioner or the Company. No reason has been urged before this Court either.
In any event, the Petitioner has stated that he was appointed as an independent non-executive director and that he had no role to play in the company's day to day affairs or export obligation or licences - The Respondent has also not disputed the fact either in the Impugned Order or in the Four O-I-O's that the Company went into liquidation in 1998, and that all documents and records were taken over by the Official liquidator. Thus, once a company goes into liquidation, all proceedings to be initiated against such company for the failure to submit documents in compliance with export obligations could only be initiated as is mandated in law. There is no evidence of this being done by Respondent either.
This Court therefore finds no merit in the contentions of the Respondent - Petition disposed off.
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2025 (4) TMI 1606
Seeking grant of anticipatory bail - smuggling foreign origin gold and cash - applicability and scope of Section 135 of the Customs Act, 1962 - HELD THAT:- Relevant aspects have been dealt with in detail by Co-ordinate Bench of this Court in Ram Krishna Jaldhar Parai versus Union of India and others [2024 (10) TMI 847 - ALLAHABAD HIGH COURT] and has recorded a prima facie satisfaction with regard to Sections 135 of the Customs Act to the effect that a person can be punished for the limited offence if ingredients of the said sections are made out which prescribe a maximum sentence of upto 7 years. The order also indicates the fact that the recovery seems to be of the firm Messrs Ram Laxman and Company which is a proprietorship and duly registered with GST & NSMP. The order also adverts the income tax and GST return of the firm. Prima facie satisfaction also has been recorded that quantum of business generated by the firm can gave rise to the turn over as suggested and the said owners of the firm may have sources to justify availability of quantity of gold and jewellery recovered.
Considering aforesaid aspects as well as the fact that there is no recovery made from the applicant and the complaint having already been filed against the applicants, and considering judgment rendered by Hon'ble Supreme Court in the case of Sanjay Chandra v. Central Bureau of Investigation, [2011 (11) TMI 537 - SUPREME COURT], this court finds that the applicant is entitled to grant of anticipatory bail.
It is provided that in the event of arrest, the applicant- Avijit Manna shall be released on anticipatory bail in the aforesaid Case Crime number on his furnishing a personal bond with two sureties each in the like amount to the satisfaction of the arresting officer/investigating officer/S.H.O. concerned with the conditions imposed.
Conclusion - The charge under section 135 of the Customs Act is yet to be established in trial and since the maximum punishment which can be made applicable is upto 7 years, the applicant is entitled to grant of anticipatory bail.
The bail application allowed.
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2025 (4) TMI 1605
Levy of penalty under Section 117 of the Customs Act, 1962 on the Customs House Agent (CHA) and Rajiv Sahni, who was working merely as Business Development Associate of M/s. Essar Oil Limited - alleged violations related to clearance of goods under a Project Authority Certificate (PAC) - no direct contravention by the CHA is established.
Penalty on Customs broker - HELD THAT:- After going through the provision of Section 46 of the Customs Act, it is clear that under Section 46 of the Customs Act, duty has been imposed upon the importer of the goods and not upon the Custom Broker or Customs House Agent, therefore, no penalty can be imposed upon the appellant Mahendra N. Thacker who worked as Custom Broker for the violation of Section 46 by the importer.
From the perusal of the provision of Section 117, it is clear that where there is no express penalty elsewhere in the Act then penalty may be imposed under Section 117 for contravention of any provisions of this Act. In the impugned order, the Adjudicating Authority has not made it clear that the appellant Mahendra N. Thacker violated which provisions of Customs Act which he was duty bound to follow. Therefore, penalty cannot be imposed upon the appellant arbitrarily without clearly defining the violation of any specific provision of the Customs Act.
As far as the violation of Customs House Agents Licensing Regulations, 2004 is concerned, no penalty can be imposed upon the Customs Broker or CHA and only his licence may be suspended or may be cancelled under Regulation 20 - the learned Adjudicating Authority has imposed penalty upon the appellant M/s. Mahendra N Thacker arbitrarily without proper justification and the order imposing penalty upon the appellant Mahendra N Thacker is liable to be set aside.
Penalty on Shri Rajiv Sahni - HELD THAT:- There is sufficient evidence on the record which prove beyond doubt that Shri Rajiv Sahni, Business Development Associate (BDA) was on the lookout for potential bulk buyers of the HSD imported by M/s. Essar Oil Limited. He was well aware that projects funded by World Bank are eligible to obtain Customs Duty free HSD for use in the project. Contractors doing the project work aided by the World Bank approached him for help and procurement of duty free HSD as they were in possession of Project Authority Certificate. Shri Rajiv Sahni helped them to register themselves with M/s. Essar Oil Limited to procure imported Customs Duty free HSD and to complete all the necessary formalities - from the material available on the record, it is clear that Shri Rajiv Sahni played a key role in the diversion of the imported HSD cleared under PAC in collusion with the importer and the PAC holder M/s. Agrawal (J.V.) and thus aided and abetted in the diversion for 460 KL HSD valued at Rs. 89,13,340/- and having a duty liability of Rs. 23,08,357/-. Therefore, the order of the Principal Commissioner imposing penalty of Rs. 2,00,000/- on Shri Rajiv Sahni Business Development Associate of M/s. Essar Oil Limited is sustainable and is liable to be confirmed.
Conclusion - i) Under Section 46 of the Customs Act, duty has been imposed upon the importer of the goods and not upon the Custom Broker or Customs House Agent, therefore, no penalty can be imposed upon the appellant Mahendra N. Thacker who worked as Custom Broker for the violation of Section 46 by the importer. ii) Shri Rajiv Sahni played a key role in the diversion of imported HSD cleared under PAC in collusion with the importer and the PAC holder M/s. Agrawal (J.V.) and thus aided and abetted the diversion for 460 KL HSD valued at Rs. 89,13,340/- and having a duty liability of Rs. 23,08,357/-.
Appeal dismissed.
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2025 (4) TMI 1604
Revocation of customs broker licence - forfeiture of entire amount of security deposit - levy of penalty - misuse of the export promotion schemes and other fraudulent activities - HELD THAT:- Regulation 10(n) does not place an obligation on the Customs Broker to oversee and ensure the correctness of the actions by Government officers. Therefore, the verification of documents part of the obligation under Regulation 10(n) on the Customs Broker is fully satisfied as long as the Customs Broker satisfies itself that the IEC and the GSTIN were, indeed issued by the concerned officers. This can be done through online verification, comparing with the original documents, etc. and does not require an investigation into the documents by the Customs Broker. Therefore, the appellant was correct in verifying the GSTIN issued by the department on the GST portal. The presumption is that a certificate or registration issued by an officer or purported to be issued by an officer is correctly issued. Section 79 of the Evidence Act, 1872 requires even Courts to presume that every certificate which is purported to be issued by the Government officer to be genuine.
The onus on the Customs Broker cannot, therefore, extend to verifying that the officers had 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.
The Regulation, in fact, gives to the Customs Broker the option of verifying using documents, data or information. If there are authentic, independent and reliable documents or data or information to show that the client is functioning at the declared address, this part of the obligation of the Customs Broker is fulfilled - 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, IEC issued by the DGFT also shows 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, 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.
Conclusion - The appellant Customs Broker did not fail in discharging its responsibilities under Regulation 10(n) of CBLR 2018. The impugned order is not correct in concluding that the Customs Broker has violated Regulation 10(n) of CBLR 2018 because the exporter was found to not exist during subsequent verification by the officers.
The impugned order dated 05.04.2021 cannot be sustained and, therefore, is set aside - Appeal allowed.
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2025 (4) TMI 1580
Anti-dumping investigation - Condonation of Delay in filing of response - technical delay of 19 minutes in submission - Imports of Plastic Processing Machines originating or exported from China and Taiwan - HELD THAT:- The Court has seen the email dated 4th November, 2024. Considering that in such matters, the investigation has to be comprehensive and the Petitioners have already been permitted to participate in the proceedings. A few minutes’ delay in the exporters’ questionnaire response cannot oust the Petitioners’ response from being heard and participating fully in the proceedings.
In terms of the facts of the present case, the response to the questionnaire is directed to be taken on record. The delay, if any, in filing the same is condoned. The enquiry shall now proceed in accordance with law.
Petition disposed off.
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2025 (4) TMI 1551
Territorial jurisdiction of High Court to entertain the writ petition challenging the SCN - petitioner was not given reasonable opportunity of hearing - Violation of principles of natural justice - HELD THAT:- It is true that Article 226 (2) of the Constitution of India allows a High Court to exercise its power, to issue writs, even if the authority or person against whom the writ is sought is outside its territorial jurisdiction, as long as the cause of action or part of it arises within its territorial jurisdiction. It is also equally well settled that a small portion of cause of action within the High Court’s jurisdiction is sufficient to trigger its power to issue writs - Cause of action is the bundle of facts that are necessary to be proved to obtain a relief or a judgment in favour of the petitioner, more particularly, the material facts which are essential. Material facts are those facts which are necessary to establish the right to relief.
The impugned order is challenged on the ground that the seizure statements were obtained in duress and the petitioner was not allowed to cross-examine the co-accused and seizure witness in derogation of section 138(b) of the Customs Act, 1962. Thus the impugned order in original dated 18.02.2025 lacks legal standing and was passed solely on unverified custodial statements of accused persons which were subsequently retracted - the material cause of action and bundle of facts which are necessary to be proved to obtain a relief at the hands of this court is relatable to the procedure followed by the authorities under the Directorate of Revenue Intelligence and also by the Customs Adjudicatory Authorities. The fundamental allegation is as regards violation of principles of natural justice by not allowing the petitioner to cross-examine the witnesses by the Customs authorities while adjudicating the matter. The other facts required to be proved by the petitioner to grant him relief at the hands of this court is the conduct of the seizing authorities in recording the statement of the co-accused.
This court is of the considered opinion that the fact that the petitioner is carrying out business at Karimganj, that the allegedly smuggled goods were transported from Karimganj etc have no connection, whatsoever, with the allegation made by the petitioner that the seizure was illegally done, that the cross-examination was not allowed, that the impugned orders are having no legal standing.
The case pleaded is alleged procedural lapse in the seizure as well as in passing the impugned order in original and not relatable in any way to the factum of residence of the petitioner in the state of Assam or to the fact that it was alleged that the gold was smuggled from the state of Assam - the facts in the opinion of this court, don’t give rise to any cause of action within the jurisdiction of this court to adjudicate the validity of the impugned order dated 18.02.2025 and show cause notice dated 04.08.2023.
Conclusion - The fact that the petitioner is carrying out business at Karimganj, that the allegedly smuggled goods were transported from Karimganj etc have no connection whatsoever with the allegation made by the petitioner that the seizure was illegally done, that the cross-examination was not allowed, that the impugned orders are having no legal standing. The facts don't give rise to any cause of action within the jurisdiction of this court to adjudicate the validity of the impugned order dated 18.02.2025 and show cause notice dated 04.08.2023.
The present writ petition stands closed for want of jurisdiction by this court.
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2025 (4) TMI 1550
Smuggling of gold - detention and confiscation of the Petitioner's personal gold jewellery by the Customs Department without issuance of a Show Cause Notice (SCN) or personal hearing - Respondent has also not produced any voluntary signed waiver declaration - violation of principles of natural justice - HELD THAT:- This Court has held in several matters that signing of waiver of SCN and waiver of personal hearing by a way of preprinted waiver form would be contrary to principles of natural justice and, in any case, cannot be recognized as legally followed procedure by this Court. In the cases of Mr Makhinder Chopra vs. Commissioner of Customs, New Delhi, [2025 (3) TMI 19 - DELHI HIGH COURT] and Amit Kumar v. The Commissioner of Customs, [2025 (2) TMI 385 - DELHI HIGH COURT] this Court has discussed various issues arising in several cases where the goods have been detained from a tourist by the Customs Department, including the issue of personal jewellery being part of personal effects under the Baggage Rules, 2016 and waiver of SCN and personal hearing by way of a preprinted waiver form.
Moreover, once the Commissioner of Customs (Appeals) has also allowed redemption, the decision to file revision cannot be a ground to withhold the release of the goods. Further, there is no stay which has been granted by the Commissioner of Customs (Appeals).
This Court is of the opinion that the items deserve to be released to the Petitioner in terms of the OIA dated 29th January, 2025 - no warehouse charges shall be collected from the Petitioner.
Petition disposed off.
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2025 (4) TMI 1549
Smuggling of gold - Detention of the one gold kada of the Petitioner - personal effect under the Baggage Rules, 2016 or not - HELD THAT:- Considering the fact that the gold kada seized is merely a personal effect of the Petitioner, in the opinion of this Court, the detention itself would be contrary to law - the detention of the gold kada is set aside.
Petition disposed off.
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2025 (4) TMI 1548
Seeking grant of regular bail - demand of bribe for release of shipment - HELD THAT:- The applicant is in jail for about two months. As the investigation is over, further detention of the applicant is not warranted. Considering the overall facts and circumstances of the case, the applicant is released on bail.
Criminal Bail Application is allowed.
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2025 (4) TMI 1547
Overvaluation of imported goods - deficiency in discharge of duties of customs - jurisdiction of adjudicating authorities and appellate bodies, to determine the value of imported goods outside the statutory framework of assessment, particularly for the purpose of confiscation under section 111(m) of the Customs Act, 1962, when no duty shortfall or prohibition exists - HELD THAT:- The scheme of valuation, as set out in the extant Rules, is for the price to be the transaction value and, thereby, the value for assessment where duties of customs are to be charged on the basis of value. The optimal description of acceptable price, in rule 3 of Customs Valuation (Determination of Value of Imported Goods Rules), 2007, is also considered to be the default, save for any additions pertaining to costs and services related to the imported goods warranted by rule 10 of Customs Valuation (Determination of Value of Imported Goods Rules), 2007, except in two specified and mutually exclusive circumstances, viz., transaction between related parties with the relationship having influenced price or upon discard by recourse to rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, permitting substitution with ‘surrogate value’ by sequential application of rule 4 to rule 9 therein, as the ‘gold standard’ of ‘transaction value’, as the governing concept, had been elevated to the substance itself in, with amendment of 2007 to, section 14 of Customs Act, 1962.
The re-determination, by adoption of price, truncated to the extent of ‘unacceptable value addition’ in the ‘document chain’, is tantamount to freezing the ‘consideration chain’ at a stage prior to the last in the billing for the very goods under assessment; it is neither in accord with ‘surrogate value’ drawn from other legitimate transactions permitted to be appropriated for re-assessment by recourse to rule 4 to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 nor ‘depressed’/ ‘enhanced’ consideration for the goods under assessment permitted by rule 3 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. The ‘transaction value’ in rule 4 therein is intended to be drawn from consignment of ‘identical goods’ which ‘goods under assessment’ is not and the ‘price’ of ‘goods under assessment’ is alterable only in the manner permitted in rule 3 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Synthesis of the two has neither approval in law nor precedent of judicial determination.
The grounds of appeal, to the extent concerned with justifying non-applicability of the leading judgements on disputes about overvaluation before the Tribunal, are not to be dignified by being even taken into consideration. To do so would be at the cost of judicial discipline and to the detriment of the responsibility assigned, especially on valuation and classification, to the Tribunal in the appellate hierarchy of national jurisdiction. The attempt by a subordinate executive authority to have the findings therein re-considered, after the Central Government withdrew its appeal in one and lost its appeal in the other, is not in keeping with the finality attributable to judicial determination.
Conclusion - The scheme of valuation does not stand in support of the manner in which the value has been sought to be substituted in the notice. The facts evinced are not sufficient to tear down the weave of commercial engagement and for recourse, thereby, to discard of declared value. The mark-up is not of such unreasonable magnitude as to suggest that transaction should be penalized for obfuscation. Even without pressing into service the law, as judicially determined, on jurisdictional competence and on evidentiary value of documents for visiting penalties on the respondents under Customs Act, 1962, and as found in the impugned order too, the facts alone suffice to erase the proposals in the notice.
Appeal dismissed.
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2025 (4) TMI 1419
Prohibiting the employment of contract labour at the Central Warehousing Corporation's Inland Clearance Depot (ICD) - Challenge to notification dated 17 November 2006 issued by the Ministry of Labour and Employment, Government of India, whereby employment of contract labour in the petitioner’s establishment was prohibited - non-application of mind, as required by, and in accordance with, Section 10 (2) of Customs Act, 1962.
Whether Incidental or Necessary, the Nature of Work Carried Out by Contractual Labourers at CWC’s ICD, Patparganj? - HELD THAT:- From interpretation of Section 10 (2) (a), it appears that the argument of work carried out being incidental to, rather than a core function of the enterprise, holds no water. Furthermore, keeping in mind the language of the section – “incidental to, or necessary for the industry,”, the finding of the committee that contract labour has been carried on by the same workers despite changes in contractors since 1985 speaks to a certain necessary nature of the work being carried out.
Whether the Work is of a Perennial nature - HELD THAT:- The CACLB’s findings on the subject are that the work is of perennial nature, and that the same is evidenced by the continued hiring of the same workmen since 1985. Their analysis confirms the argument of the UOI that regardless of trends of mechanisation, a manpower element will always be required given the nature of work - This drastic decline in total staff employed by the CWC from the year 2000 until 2020 does not reflect in the fluctuations of contract labourers deployed, which were largely similar over 18 years out of the 20-year period for which data was produced.
Whether work is done ordinarily through regular workmen in that establishment or an establishment similar thereto? - HELD THAT:- The UOI echoes the unequivocal finding of the CACLB in its 53rd MoM that similar work is being carried out by regular employees at a similar establishment of the CCI.
Whether the work is sufficient to employ a considerable number of whole time workmen? - HELD THAT:- The deployment of around 300 contractual labourers each year over 18 years out of a 20-year timeframe speaks to a sufficiency of work. This number is no small one, and cannot be brushed aside as being insignificant.
Conclusion - i) There has been no error committed by the Government in the passing of the impugned notification and that the CACLB’s 53rd MoM shows application of mind to the factors enshrined within Section 10 (2) (a) with specific consideration of data pertaining to the ICD at Patparganj. ii) The impugned notification 17 November 2006 issued by the Ministry of Labour and Employment, Government of India, under Section 10 (1) of the Act in respect to the prohibition of employment of contract labour at the CWC’s ICD at Patparganj is upheld.
Petition disposed off.
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2025 (4) TMI 1418
Classification of imported Roasted Areca Nuts - to be classified under Chapter Heading 2008 19 20 (Chapter 20) or under Chapter Heading 080280 (Chapter 8) of the Customs Tariff Act, 1975 for the purpose of levy of Basic Customs Duty (BCD)? - HELD THAT:- Considering the submissions made by learned advocates for the respective parties, without entering into the merits of the matter, the petition is disposed of by issuing the directions in the interest of justice - The petitioner shall deposit Rs.3,25,000/- being 15% of 30% Basic Customs Duty and 10% SWS on BCD on declared value of the goods imported.
Petition disposed off.
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2025 (4) TMI 1417
Waiver of detention and demurrage charges on imported goods detained by Customs - respondent No. 4 is a delivery agent of the shipping line - respondent No. 4 is bound by the waiver letter issued by respondent No. 2 to deliver the Cargo to the petitioner or not - Authorized Sea Carrier or an Authorized Carrier under the SCMTR, 2018 - HELD THAT:- As per the provisions of the Regulations, 2018, the ‘Authorized Carrier’ means an Authorized Sea Carrier, authorized train operator or a custodian, registered under Regulation 3 and postal authority. Respondent No. 4 is registered under sub-regulation (3) as Authorized Sea Agent which is apparent from the inquiry made by respondent Nos. 1 and 2 on the portal of the regulation. Therefore, the contention of the respondent No. 4 that the Regulations are not applicable to respondent No. 4 cannot be accepted.
The contention raised on behalf of respondent No. 4 that the respondent No. 4 is only a delivery agent appointed by authorized Sea Carrier as per the definition of section 2 (1) (d), respondent No. 4 is neither the authorized Carrier nor Authorized Sea Carrier nor an authorized train operator or a custodian as defined under section 2 (1) (e) and 2(1) (f) and therefore, the Regulations are not applicable to the respondent No. 4 who is only the owner of the containers and was asked to deliver the goods to the petitioner as a delivery agent of the Authorized Sea Carrier and therefore, the contention that, the impugned waiver letter dated 17.01.2025 is not binding upon the respondent No. 4, is not tenable in view of the fact that respondent No. 4 is already registered as an Authorized Sea Agent and was an agent of the Authorized Sea Carrier who has filed the Bill of Lading in question.
The provision of Regulation 10 (1) (l) of Regulations, 2018 makes it clear that the Authorized Carrier is not permitted to demand any container detailed charges if the containers are detained by the customs for the purpose of verifying the entries made under section 46 and section 50 of the Act, if the entries are found to be correct. In the facts of the case by letter dated 10.10.2025, respondent No. 2 has granted No Objection Certificate for release of the goods as the Bill of Entry was found correct and accordingly waiver letter dated 17.01.2025 was issued and accordingly, the petitioner is exempted from making payment of detention charges from 24.12.2024 to 10.01.2025.
Conclusion - i) The waiver order/letter dated 17.01.2025 issued by respondent No. 2 is binding upon respondent No. 4 and respondent No. 4 is required to implement waiver order passed by the respondent No. 2 as per the provisions of the Regulation 10 (1) (l) of the Regulations,2018. ii) The respondent No. 4 is hereby directed to release the goods which is under their custody and not under the detention of the Customs authority by implementing waiver letter dated 17.01.2025 for waiver of the detention charges under Regulation 10 (1) (l) Regulations, 2018 for the period from 24.12.2024 to 10.01.2025 as stated in the waiver letter.
Petition disposed off.
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2025 (4) TMI 1416
Vires of Impugned Policy Circular No. 06/2018 dated 22.05.2018 - unlawfully inserting additional conditions - benefits under the Service Export from India Scheme (SEIS) - issuance of SCN to cancel the scrips issued to the petitioner under the scheme notified as Service Export from India Scheme (SEIS) - HELD THAT:- On perusal of Section 28AAA of the Customs Act, 1962, it is clear that the impugned show cause notice is in nature of recovery of consequential proceedings to the order passed by the DGFT which still holds the field and as such the respondent authorities are required to adjudicate the show cause notice in the facts of the case and no interference is called for at this stage.
The Hon’ble Supreme Court in catena of decisions has held that the Court should not interfere at the stage of issuance of show cause. Whereas in the facts of the case when the impugned show cause is consequential to the order in original passed by the DGFT, any observation or interference by this Court may hamper further challenge to such order-in-original passed by DGFT before appropriate forum.
No interference is made at this stage as the petition is filed at a premature stage in view of the fact that the very issue of challenge to the impugned Circular No. 6 of 2018 shall be the subject matter of challenge by the petitioner or to challenge the order-in-original passed by the DGFT and therefore in such circumstances, the petition is not entertained and accordingly dismissed in limine.
Conclusion - i) The petition challenging Circular No. 06/2018 and the Show Cause Notice dated 21.06.2024 is dismissed in limine as premature. ii) No interim relief restraining the respondents from adjudicating the Show Cause Notice is granted.
Petition dismissed.
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2025 (4) TMI 1415
Reasonable belief to seize 3998.83 grams of gold or not - evidences available on record prove that the seized gold bars were smuggled into India from Bangladesh without any legal documents - discharge of burden of presumption under section 123 of Customs Act, 1962 - failure to follow the procedure prescribed under section 138B vitiated the proceedings in the impugned case - reliability of statements of Manoj Kumar Nishad & Shri Rajan Kumar Sahni, later retracted.
Whether Department could establish the ‘Reasonable belief’ to seize 3998.83 grams of gold valued at Rs 2,12,79,096, from Shri Manoj Kumar Nishad & Shri Rajan Kumar Sahni, travelling by Bus No UP-22AT-0568, on 04-05/09/2020, from Gorakhpur to Delhi? - Whether evidences available on record prove that the seized gold bars were smuggled into India from Bangladesh without any legal documents? - HELD THAT:- The power bestowed in Section 110 of the Customs Act, 1962, places a pre-condition for such seizure. The essential pre-condition being that the proper officer should have reasons to believe that that such goods are liable to confiscation under the Act; once such seizure is done, Section 123 of the Customs Act, 1962 shifts the burden of proof to prove that goods are not smuggled on the person from whom the goods are seized - he impugned Gold was seized from Shri Manoj Kumar Nishad & Shri Rajan Kumar Sahni, travelling by Bus No UP-22AT-0568, on 04-05/09/2020, from Gorakhpur to Delhi. Understandably, seizure took place at a place far away from Customs Station, Air or Sea port, in an area not specified under a Section 111(H), as notified under Section 6 of the Customs, Act,1962; there were no foreign markings on the gold pieces seized; the purity was found to be 99.92, 97.81,99.26 and 89.34 and not 99.99 % by weight. It was not established that the persons apprehended were coming to India, form as place outside India.
Hon’ble Delhi High Court in the case of Shanti Lal Mehta v. UOI and Others [1982 (11) TMI 56 - HIGH COURT OF DELHI]. The Hon’ble High Court reviewed the jurisprudence on the matter till then and set aside the confiscation and penalty on the ground that there was lack of reasonable belief on part of the proper officer before the seizure was affected and section 123 was not to be invoked.
There is no document available on record to establish that gold bars/pieces were smuggled into India from a place outside India. The analysis of CDR only indicates that Shri Sharad Chandra Agrahari was in touch with Shri Manoj Kumar Nishad & Shri Rajan Kumar Sahni at various places and on various dates in India - The impugned order has concluded that the said gold bars/pieces were smuggled into India only on the basis of retracted statements without any concrete evidence to substantiate this claim. Hence, we hold that material evidence available on record that establishes that the officers had reasonable belief to seize the goods.
Whether the appellants Shri Sharad Chand Agrahari of M/s Bajrang Billion Traders, in the facts and circumstances of this case, discharged the burden of presumption under section 123 of Customs Act, 1962? - HELD THAT:- No critical details about the persons who carried the gold from across the border, what was place of crossing the international borders, what was the mode of transport and how the finances were arranged etc. were neither asked by officers nor stated by the accused. The facts claimed to have been confessed regarding the alleged smuggling of the impugned Gold are very general in nature. It would be very naïve to expect that the accused would confess the most minute details, even if they actually smuggled the impugned goods. What is intriguing is that the officers did not even put the relevant and pertinent questions to unearth or establish the act of smuggling. As such, it is not open for the department to draw conclusions from a general statement to particularize the details about the impugned goods. As admittedly, the gold having no foreign markings, the onus would be on department to prove the smuggled nature of the same. This onus was not discharged. Moreover, the provisions of Section 138B of the Customs Act have not been complied with and therefore, the sanctity of the statement recorded under section 108 has been lost and consequently, they cannot be conclusively relied upon.
Whether not-following the procedure prescribed under section 138B vitiated the proceedings in the impugned case? - HELD THAT:- In the instant case the Adjudicating Authority did not follow the procedure, laid down under Section 138B, in order that he could rely on the statements of Shri Manoj Kumar Nishad & Shri Rajan Kumar Sahni, who are co-accused, to conclude that the impugned gold was liable for confiscation. The mandate not having been followed statements of the Shri Sharad Agrahari etc. cannot be held to be voluntary in nature and hence reliable.
The provisions of Section 123 are not invited. Even assuming that the same are attracted, the appellants have discharged the burden which is not negated by the department. The proceedings were vitiated for not following the procedure laid down under Section 138B of the Customs Act,1962. Principles of Natural Justice have been violated in not examining the witnesses as per Section 138B.
Whether the statements of Manoj Kumar Nishad & Shri Rajan Kumar Sahni, later retracted, can be relied upon to establish that the goods are liable for confiscation and the persons are liable to pay penalty Section 112(b) of the Customs Act,1962? - HELD THAT:- No case has been made by Revenue, for seizure or confiscation of the impugned gold, Pithu Bag and packing material. Consequently, no case has been made for imposition of penalties.
Conclusion - i) The Department failed to establish reasonable belief at the time of seizure; hence, the seizure was not sustainable and Section 123 could not be invoked. ii) The appellants discharged their burden of proof under Section 123 by producing credible documentary evidence, which was not effectively negated by the Department. iii) Non-compliance with Section 138B vitiated the reliance on statements recorded during investigation. iv) The retracted confessional statements of co-accused cannot be relied upon for confiscation or penalty.
Appeal allowed.
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2025 (4) TMI 1414
Classification of imported silicon steel scraps - classifiable under Customs Tariff Heading (CTH) 7204 49 00 as claimed by the appellants or under CTH 7225 19 00 as held by the adjudicating and appellate authorities - requirement of import authorization under Para 2.17 of the Foreign Trade Policy (FTP) - redetermination of value of impugned goods from 400$ PMT to 650$ PMT - confiscation - penalty.
Whether the silicon steel scraps imported by the appellants is classifiable under CTH 72044900 as declared by the appellants are under CTH 72251900 as arrived at by the impugned order and as to whether the appellants require import authorization from DGFT in terms of Para 2.17? - HELD THAT:- The report of the Chartered Engineer appointed by the Department itself is categorical in holding that the impugned goods are not scrap in view of the Para 8A of Section XV of the Customs Tariff Act, 1975 which states that metal waste and scrap from manufacture or mechanical working of metals and metal goods definitely not usable as such because of breakage, cutting up, wear and other reasons. The original authority finds that there is variation between the Chartered Engineer certificate and the re-examination report by customs officers; Chapter Head 72.04 excludes articles which can be used for their former purposes or can be adopted for other uses with or without repair or renovation.
Though the classification of the goods shall not depend on the end use, it will be in the fitness of things to view the claim of the importer in the facts and circumstances of each case. In the instant case, the fact that the Chartered Engineer has reported that the such kind of goods cannot be are not re-used directly in the present condition for original purposes and are used as scrap cannot be ignored. Also, the request of the appellant for mutilation gives credence to the claim. Moreover, the impugned goods fulfill the condition of Note 8(a) of Section XV of the Tariff Act, that metal waste and scrap from the manufacture or mechanical working of metals, and metal goods definitely not usable as such because of breakage, cutting-up, wear or other reasons, in view of the Chartered Engineer Certificate.
The Appellate Authority is not a metallurgical expert to give a finding of this nature, when the Chartered Engineer and the Shed Officer have given categorical report on the condition of the impugned goods. In view of this, we find that the impugned goods are rightly classifiable as "other waste and scrap" falling under CTH 7204 49 00. In any case, the classification determined in the Impugned Order is incorrect as the goods have a width of 0.20 mm to 0.30 mm, i.e. less than 600 mm and mostly grain oriented, taking them out of the ambit of CTH 7225 19 00 - the Impugned Order is liable to be set aside, both the rejection of classification under CTH 7204 49 00 and classifying the same CTH 7225 19 00 are without any basis, reason and evidence.
Re-determination of value as done by the impugned order - HELD THAT:- There was no misdeclaration of classification, no grounds arise for redetermination of the value. The appellants submit that the value of the impugned goods cannot be rejected under rule 12 of the valuation rules and arbitrarily valued at USD 650 per MT; transaction value is not liable to be rejected as it is in consonance with the contract; essential element in valuation is that each transaction has to be assessed independently. The transaction value, under Section 14 of the Customs Act, 1962, is the price actually paid or payable. As per Rule 3(2) of the Valuation Rules, transaction value cannot be rejected except when the circumstances mentioned in the proviso to Rule 3(2) exist. It is not proved that the exceptions exist in this case - there is force in the appellants submission that enhancing the value of the imported goods solely on the basis of the CE report is not one of the methods provided in Valuation Rules, 2007 - the original authority as well as first appellate authority have arbitrarily determined the value at 650 USD per metric ton (C&F) without showing any basis to arrive at the valuation.
Whether the impugned goods are rendered liable for confiscation and the appellant are rendered liable for penalty? - HELD THAT:- On the issue of applicability of BIS certificate for the impugned goods, as per CBEC iinstructions read with the Quality Control Order, 2012, it applies to CTH 7225 1100 or CTT 7226 1100 and not to the impugned goods falling under CTH 7204 49 00. We are of the opinion that for the same reasons, Para 2.17 of the FTP 2009-14 is also not applicable to the impugned goods which are in the nature of Scrap and not second-hand Goods. As there is no mis-declaration of either the classification or the value of the goods, the question of imposing fines and penalties does not arise and therefore, it is not found necessary to discuss the appellants submissions in this regard.
Conclusion - i) The impugned goods are rightly classifiable as 'other waste and scrap' falling under CTH 7204 49 00. ii) The declared transaction value cannot be rejected merely on suspicion or on the basis of the Chartered Engineer's report which does not provide a basis for valuation. The Revenue has failed to discharge the burden of proof to establish undervaluation. iii) There being no misdeclaration or violation of law, the goods are not liable for confiscation under Section 111(d) or 111(m), and no penalty or redemption fine is imposable on the appellants.
The impugned orders are not sustainable and are liable to be set aside - Appeal allowed.
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2025 (4) TMI 1346
Grant of anticipatory bail in a case for offence under Section 61 (2) of BNS and Sections 7, 7A, 8 and 12 of the Prevention of Corruption Act - prosecution alleged that the accused, a non-public servant, acted as a tout facilitating bribes to public servants for clearance of import-export consignments at the Inland Container Depot, Tughlakabad - HELD THAT:- The RC registered by CBI specifically names the accused/applicant. I have gone through the transcripts of audio recordings of conversation between the accused/applicant and some unknown person, which prima facie show his complicity in the crime. As further submitted by learned SPP, custodial investigation is necessary in this case in order to ascertain the identity of the person with whom the accused/applicant was talking, as depicted in the audio recordings and further, even voice sample of the accused/applicant is required to be taken. Besides, the explanation advanced on behalf of the accused/applicant for his not handing over his mobile phone to the Investigating Officer prima facie fails to inspire confidence.
Keeping in mind the nature of offence and stage of investigation, this is not a fit case to grant anticipatory bail. Therefore, the application is dismissed.
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2025 (4) TMI 1345
Refund of IGST - barred by time limitation or not - date of IGST payment and the date of refund application filing - exclusion of limitation period as directed by the Hon'ble Supreme Court in Suo Moto Writ Petition [2020 (5) TMI 418 - SC ORDER], due to the COVID-19 pandemic - HELD THAT:- As the normal period of limitation was till 30.03.2022 for filing of refund, whereas the appellant filed their refund application on 12.04.2022 with a delay of 13 days. The Hon’ble Supreme Court directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purpose of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi judicial proceedings. It is also directed by the Hon’ble Supreme Court that the balance period remaining as on 03.10.2021, if any, shall become available with effect from 01.03.2022.
Therefore, refund application filed by the appellant was within time as the period is covered within second surge of COVID-19 cases, which was directed to be excluded by Hon’ble Supreme Court, as above. Moreover, the direction issued by Hon’ble Supreme Court was within the knowledge of public domain and it is surprising how the Commissioner (Appeals) was unaware of this direction.
Conclusion - i) The refund application filed by the appellant was not barred by limitation due to the exclusion of the limitation period by the Supreme Court's order. ii) The Supreme Court's order excluding the period from 15.03.2020 to 28.02.2022 from limitation calculations applies to the refund application under Customs law.
The impugned orders passed by Commissioner (Appeals) are liable to be dismissed. Accordingly, the impugned orders are dismissed and the appeals filed by the appellant are allowed.
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2025 (4) TMI 1344
Denial of interest on seized traveller’s cheques that were seized, encashed, and deposited by the Customs Department - HELD THAT:- The reason for encashing the travellers’ cheque and depositing the same in the Customs Department’s account is not available in the case record, so as to justify disposal of the seized documents in the manner prescribed by the Central Government as contemplated in Section 110(1-A) of the Customs Act since those were not perishable or hazardous in nature and depreciation of their value with the passage of time would not even be a rare probability, as those were Dollars equivalent whose value has been consistently increasing over the years. It is also not understood as to why provisional release of those goods under Section 110-A was not made after obtaining adequate security and bond for the same. Therefore, encashment of those travellers cheque, converting them into Rupees and taking the encashed amount to the Respondent-Department’s account can’t be said to be free from arbitrariness, apart from the fact that those being not confiscated goods by that time, could have been kept in interest bearing account.
In carrying-forward the judicial precedent set on the issue for decades and while going with the observation made in the above referred paragraph in Matta Paints and Hardware Store [2022 (12) TMI 93 - CESTAT NEW DELHI] judgment alongwith observation of the Tribunal that had the amount in question being kept in fixed deposit by the Appellant himself for all these years, it would have earned a handsome amount of interest and therefore, retention of the said interest could be considered as on unjust enrichment on the part of the Respondent-Department as well as deprivation of Appellant’s right to his property, the following order is passed.
Conclusion - The appellant is entitled to interest on the deposited amount from the date of deposit, less redemption fines and penalties, and including interest on the pre-deposited amount, payable within two months.
Appeal allowed.
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