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Customs - Case Laws
Showing 1 to 20 of 96 Records
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2020 (9) TMI 1292 - MADRAS HIGH COURT
Recovery of demand - HELD THAT:- The Respondent Department are directed not to take coercive steps for recovery of demand raised on account of the issue which is now pending with the Adjudicating Authority in pursuance of the remand order passed by the learned Tribunal on 4.11.2019.
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2020 (9) TMI 1251 - MADRAS HIGH COURT
Seeking provisional release of goods - Used Rubber Tyre Cut in Two Pieces - Section 110A of the Customs Act - Mis-declaration of goods - prohibited goods or not - HELD THAT:- The issue is covered in the decision in the case of M/S. BLACK GOLD TECHNOLOGIES VERSUS UNION OF INDIA, THE COMMISSIONER OF CUSTOMS, TUTICORIN, THE ASSISTANT COMMISSIONER OF CUSTOMS (SIIB) , TUTICORIN [2020 (9) TMI 137 - MADRAS HIGH COURT] where it was held that petitioners are entitled to provisional release of the goods under Section 110A of the Customs Act, 1962.
The respondents are directed to assess and permit the provisional release of the goods in question upon payment of applicable duties of customs subject however to the eventual adjudication. The respondents shall release the goods after assessing and collecting the customs duty and other charges provisionally within a period of three weeks from the date of receipt of a copy of this order. The adjudication proceedings can go on. The respondents will bear in mind the usual approach adopted in the case of provisional release of goods in terms of 110A of the Customs Act.
Petition allowed.
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2020 (9) TMI 1248 - BOMBAY HIGH COURT
Permission of parking Drill Ship Aban Ice at Inner Anchorage Mumbai Port - removal of Drill Ship Aban Ice from Inner Anchorage Mumbai Port by the Applicant without intimation - HELD THAT:- It may be mentioned that on 26-04-2017 this Court had passed an order in the related writ petition directing that the petitioners would deploy the subject vessel for the contract and no activity including moving of the vessel beyond the limits of contractual stipulation would be undertaken. On such condition, statement made by Mr. Jetly, learned senior counsel, that no coercive measures would be initiated against the petitioners on the basis of order- in-original, was accepted.
The Drill Ship Aban Ice be permitted to park at Inner Anchorage, Mumbai Port - the interim application is disposed of.
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2020 (9) TMI 1208 - GUJARAT HIGH COURT
Seeking grant of anticipatory bail - Used Foreign Origin Printing Machine - import of machinery for re-export after repairing and/or refurbishing - applicant was sufficiently interrogated by the DRI and yet no complaint is registered against the applicant - power under Section 438 of the Code to be exercised or not - HELD THAT:- It appears that M/s. PVD Enterprise imported 211 numbers of Used Foreign Origin Printing Machine for repairing and refurbishing. 114 numbers were imported vide Bill of Entry No.4361330 dated 05.08.2019 and 97 numbers were imported for which they filed Bill of Entry No.4814912 dated 07.09.2019.
In M/S PVD ENTERPRISE VERSUS ADDITIONAL DIRECTOR GENERAL [2021 (9) TMI 834 - GUJARAT HIGH COURT] preferred by M/s. PVD Enterprise, affidavit in reply was filed by the respondent no.2 before this Court on 10.01.2020. The dispute between M/s.PVD Enterprise and the respondent no.2 is pending before this Court on judicial side in respect of machine imported for the purpose of repairing and refurbishing. In connection with this dispute, inquiry was initiated by the department and the applicant was issued summons, time and again, to remain present before the office.
The Hon’ble Apex Court, in the case of SIDDHARAM SATLINGAPPA MHETRE VERSUS STATE OF MAHARASHTRA AND OTHERS [2010 (12) TMI 1085 - SUPREME COURT], has held that under Section 438 of the Code, it is not extraordinary in the sense that it should be invoked only in exceptional or rare cases. A great ignominy, humiliation and disgrace are attached to arrest. In cases where the Court is of considered view that the accused has joined investigation and he is fully cooperating with the Investigating Agency and is not likely to abscond, in that event, custodial interrogation should be avoided and anticipatory bail should be granted which after hearing public prosecutor, should ordinarily be continued till end of the trial. There cannot be any dispute regarding the law settled down by the Hon’ble Apex Court or any observations made in the judgment - In the similar facts of the case on the identical issue, the Hon’ble Apex Court has set aside the order of the Hon’ble High Court directing the custom authorities restraining to arrest a person when summons under Section 108 of the Customs Act for recording the evidence was issued.
Application dismissed.
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2020 (9) TMI 1191 - BOMBAY HIGH COURT
Effect of issuance of notification dated 14th September, 2020 on export of goods, which were loaded and were with the customs authority, prior to issuance of the said notification - Onions - validity of shipping bills - HELD THAT:- It appears that the consignments of the Petitioners were with the customs authority prior to issuance of the impugned notification. While the decision taken by the Respondents are appreciated, to mitigate the hardship of those exporters where consignments were already loaded for export, it would be in the interest of justice if the same benefit is extended to the goods of the Petitioners because according to them their consignments were with the customs authority prior to issuance of the notification.
It is expected that a decision to be taken expeditiously as admittedly the goods are perishable - also,the shipping bills prior to issuance of the impugned notification shall not be construed to have lapsed till the matter is decided - Stand over to 29th September, 2020.
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2020 (9) TMI 1184 - MADRAS HIGH COURT
Maintainability of petition - Territorial Jurisdiction - import of consignment at Tuticorin Port - petitioner is residing at Kerala and the authority is based in Haryana - HELD THAT:- A mere look at Article 226 of the Constitution of India would indicate that even if the authority is located outside the territorial limits of the High Court where the writ petition has been filed still orders can be passed, if at least a part of the cause of action had arisen within the territorial limits of this Court. It is not in dispute that the petitioner had imported the consignment in question only at Tuticorin Port. Thus, not a mere part of the cause of action but the basic cause of action had arisen only within the territorial limits of this Court.
There are jurisdiction to maintain this writ petition - the first respondent to dispose of the petition mentioned appeal on merits and in accordance with law within a period of two weeks from the date of receipt of a copy of this order.
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2020 (9) TMI 1182 - MADRAS HIGH COURT
Maintainability of petition - requirement of certified copy of the petition mentioned order - HELD THAT:- All that the petitioner wants is that he should be provided with certified copy of the petition mentioned order. In this regard, the petitioner has given a representation on 30.01.2020 - No exception can be taken to the said request.
The respondent are directed to furnish the petitioner with certified copy of the said order at the earliest - petition allowed.
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2020 (9) TMI 1168 - SC ORDER
Release of detained goods - applicability of ‘Electronics and IT Goods (Requirement for Compulsory Registration) Order (CRO), 2012’ - HELD THAT:- The goods are to be released on the same terms as have been released in the other cases.
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2020 (9) TMI 1121 - KERALA HIGH COURT
Seeking implementation of the order of CESTAT - Right of Revenue to file an appeal in the HC against the order of tribunal - It is the submission of the learned counsel for the petitioner that the mere fact that the respondent is contemplating the filing of an appeal against Ext.P7 order cannot be a reason for not issuing directions for the implementation of Ext.P7 order - HELD THAT:- It is trite that the appellate remedy being a statutorily conferred one, no litigant can be deprived of the statutorily permitted period for availing the appellate remedy, through coercive steps that effectively curtail the said period. Just as an assessee, who suffers an order of assessment cannot be compelled to fast track an appellate remedy through coercive steps initiated against him before the expiry of the statutory period available to him for approaching the appellate authority, the respondent herein cannot be compelled to implement Ext.P7 order when the statutorily granted time for filing an appeal against the said order is not over, and it is their stated case that they are preferring such an appeal against Ext.P7 order before a division bench of this Court. The right of the petitioner to insist on the respondent's complying with Ext.P7 order will arise only in the event of the respondents not filing an appeal within the statutory period provided for the same or if an appeal, when preferred within the said time, is dismissed by the appellate authority.
Assuming that this court directs the respondent to implement Ext.P7 order of the appellate tribunal, before the statutory period for filing an appeal against the said order before the appellate authority is over, and the respondent fails to implement the directions of this court on the contention that it intends to file the statutory appeal within the time granted by the statute, this Court would not view the said conduct of the respondent as contumacious for the purposes of a contempt action at the instance of the petitioner herein - Prudence would dictate, therefore, that this court refrain from issuing peremptory directions at the said stage of the proceedings by following the well settled principles informing the exercise of writ jurisdiction, one of which is that the courts should not issue writs that are futile in nature.
Petition dismissed.
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2020 (9) TMI 1120 - MADRAS HIGH COURT
Customs Brokers Licensing - Validity of N/N. 41/2018-Cus. (N.T.), dated 14-5-2018 - Examination with respect to screening and selection of candidates from "H" Card to "G" Card - permission to hold "G" Card license - HELD THAT:- It is clear that the respondent authorities have conducted the examination not with a view to upgrade the licence holder, but with a view to reject the upgradation from "H" to "G". The object of any examination is to ensure that the qualified candidate is promoted to the next post. If an examination is conducted with the object to reject candidates, then the examination itself has to be struck down. In this case, the respondent had no right to conduct any oral examination. It is not provided in the Rules. The Rules stipulate that written examination alone must be conducted.
Except merely stating that only two candidates passed in the oral examination, no other specific details have been given in the counter-affidavit. The counter-affidavit has to be rejected - The conducting of the examination on 30-1-2019 and the Public Notice No. 1 of 2019, wherein both the written examination and the oral examination were stipulated, has to be struck down and accordingly struck down. A direction is issued to the respondent, insofar as the petitioner is concerned, since he has passed the written examination, to appoint him as "G" card licence holder on or before 31-3-2020, if he is otherwise eligible.
Petition allowed.
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2020 (9) TMI 1039 - KERALA HIGH COURT
Import of Vehicle or not - whether bringing of a vehicle by the petitioner under Ext.P1 can be termed as import of a vehicle and even if it cannot be strictly termed as import, is the petitioner eligible to import the said vehicle paying customs duty and availing depreciation benefits in respect of the vehicle? - HELD THAT:- The Customs Act provides for an appellate mechanism to decide such issues. The petitioner has not availed the same. Therefore, it is only just and proper that the petitioner is relegated to appellate remedy available under the Customs Act at the first instance.
The writ petition is disposed of permitting the petitioner to prefer an appeal against Ext.P4 before the Commissioner (Appeals) under Section 128 of the Customs Act, within a period of two weeks, along with a petition to condone the delay - Petition disposed off.
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2020 (9) TMI 1006 - DELHI HIGH COURT
Interpretation of the Exemption Circular - Circular No.128/95-Cus dated 14.12.1995 - Demand for Cost Recovery Charges [CRC] towards cost of the Customs staff posted at the station - respondents contend that the petitioner has not met the performance benchmark stipulated in the exemption Circular - whether Petitioner fulfils the eligibility criteria for availing the benefit of exemption or waiver of CRC in terms of the Circulars issued by the Revenue?
HELD THAT:- The evaluation of the performance of the Petitioner is based primarily upon two criteria: firstly, on the number of containers/TEUs handled by CFS as given in Clause 1 (ii), and secondly, on the number of BoE/SB processed by CFS as given in Clause 1 (iii).The simple question that hinges before us is whether these criteria at Clauses 1 (ii) and 1 (iii) were to be satisfied simultaneously, or whether the satisfaction of any one of the Clauses would suffice, in order to make the Petitioner eligible for waiver of CRC.
The data presented reflects that, for instance, in the year 2014-15, while the petitioner had processed 5218 TEUs, in contrast, it had only processed 602 BoE/SBs. Upon analysis of the data given, the petitioner has computed that for one BoE/SB, there were 9 TEUs i.e. to say, a ratio of 1:9. On this basis, it is implied by the petitioner that one BoE/SB pertains to more than one TEU. To buttress this contention, the petitioner also relied upon data from Kolkata Port Trust which indicates a ratio of 1:4 i.e. for one BoE/SB there are minimum of 4 TEUs. On the strength of the aforesaid workload data, it was argued before us that, even if the lower ratio of 1:4 was applied to the present factual matrix, a minimum requirement of 1200 BoE/SB would translate into 4800 TEUs. By this analysis, it was argued by the petitioner that if the requirement of 1200 BoE/SB is fulfilled by a custodian, then requirement of 1200 TEUs as prescribed in Clause 1(ii) would be rendered meaningless as it would automatically stand fulfilled - This, in our view, is an incorrect and distorted way to look at and interpret the exemption criteria laid down in the said Circular. The purpose behind the exemption clauses is that those ICD/CFS which achieve the necessary performance benchmark are not burdened with CRC. In the absence of the conjunction ‘or’ between the conditions, it cannot be suggested that the aforesaid criteria have to be applied in the alternative, as sought to be presented by the petitioner. Further, the benchmark at Clause 1 (iv) makes it clear without any ambiguity that the benchmark at Clauses 1(ii) and (iii) have to be taken into consideration cumulatively in order to be eligible to claim exemption or waiver of CRC.
The benchmarking is evaluated both on the basis of number of containers handled by ICD/CFS, as well as the number of BoE/SB processed, and both these conditions need to be satisfied simultaneously and not just one of them in order to be eligible to claim waiver from the payment of CRC.
Both criteria envisage different parameters of performance by an ICD/CFS operator. Clause 1 (ii) envisaged number of and volume of goods handled (container/TEUs), whereas, Clause 1 (iii) envisaged the number of documents and volume of business handled. As pointed out by Mr. Bansal, there can be a situation where a document (BoE/SB) may contain goods that require more than one container, but conversely, there can also be an eventuality where a container may contain goods that are subject matter of more than one document. This would largely depend on the nature of goods. Thus, there can be a situation when there would be no correlation between the two. Mr. Bansal has further explained that a container is provided by the shipping line and it is for them to determine how to extract them. He submits that for less bulky goods, there might be more than one BoE/SB container. This situation, as portrayed by Mr. Bansal, cannot be ignored. There can be circumstances where there may be more than one BoE/SB per container. It is for this reason that the benchmarking criteria has been prescribed in such a manner that the performance can be evaluated on dual parameters for deciding the eligibility for exemption from CRC. The same is also evident on the basis of the file noting which have been placed on record by the respondent, a perusal of which throws light upon the rationale behind the issuance of the Exemption Circular.
According to the petitioner’s written rejoinder submissions, the rationale behind such incentivization was to promote the import/export of goods, to encourage business efficacy by targeting increase in actual business of importing/exporting of TEUs, and not the quantum of paper-work required for the same. Firstly, we must point out that this is an inference of the Petitioner which lacks material foundation. Secondly, this argument is wholly misconceived and self-contradictory. We cannot interpret business efficacy in the manner that the Petitioner contends. We also cannot agree with the Petitioner’s rationale that actual business is only TEUs, and not the documents i.e. BoE/SB, or that efficacy will always be achieved when more TEUs are imported/exported in one BoE/SB, and not when the same TEU is imported/exported through multiple BoEs/SBs. If we accept this contention, it would mean that those CFS which have higher volume of paper-work should be deemed as inefficient and be denied the exemption, which cannot be correct. Clause 1 (iii) of the Exemption Circularis not to be rendered dead letter or meaningless. In our opinion, the quantum of documentation vis-avis TEUs would be driven by the requirements of each business, and it is not for the court to construe a provision merely on the perceived understanding of some data analysis. Both conditions foresee different parameters of evaluating the performance of CFS. The statistical ratio cannot be used to interpret the provision.
The petitioner has contended that the plain and ordinary meaning of the benchmark shows that each benchmark is a separate criterion and there is nothing in the Exemption Circular to indicate that the petitioner was required to simultaneously satisfy more than one benchmark prescribed. On the basis of the above discussion, we are unable to agree with this interpretation of the petitioner. Furthermore, in our opinion, this viewpoint is flawed because we cannot read something that does not emerge from a plain reading of the exemption circular. The bare reading of the provision leads to a conclusion that the conditions or the performance benchmarks are required to be fulfilled simultaneously. We cannot read any requirement to the contrary.
We also find the emphasis on the comma punctuation mark (,) used in Clause 5.5 of the Circular dated 23.03.2009 to be misdirected. The stress given to this separator is entirely out of context. The surrounding words both preceding and succeeding the comma have to be read together to give a complete meaning. The complete sentence reads as-“These norms include parameters such as the total number of import or export containers handled, the customs declarations filed for import or export, etc” The sentence expressly uses the expression “such as”, and then mentions some of the parameters by way of illustration or example, separated with the use of a comma, and followed by the word ‘etc’. This makes it clear that the comma has been merely used to separate the descriptive parameters, which are being mentioned inclusively. It is also obvious that these are a few of the parameters, which have been illustrated, and there may be more. All of the above makes it abundantly clear that the sentence cannot be construed to mean that the parameters, as separated by the comma, are to be read disjunctively to imply satisfaction of individual parameter separate from the rest.
Lastly, we also do not find any merit in the contention of the Petitioner that file noting dated 04.08.2006, cannot be used to explain the rationale behind the language used in the Exemption Circular, on account of the noting being made after the date of issue of the Exemption Circular. The file noting was prepared pursuant to certain queries raised by the Finance Minister, minuted in the noting as “(1) Will the cost recovery be prospective, i.e. after date of issue or orders? (ii) Is it ensured that no claim for past period (i.e. from date of establishment of ICD/CFS) will be made or entertained? (iii) Is It correct to infer that the benchmark will apply to actuals and not on the basis of projections made at the time of establishment of ICD/CFS?”. The noting reiterates the rationale behind the concept of exemption. Therefore, in our opinion, the noting, though subsequent to the Exemption Circular, is still relevant in order to gauge the intent of the Exemption Circular.
The petitioner had failed to satisfy all the conditions for becoming eligible for the exemptions - Petition dismissed.
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2020 (9) TMI 953 - MADHYA PRADESH HIGH COURT
Grant of Bail - smuggling of Gold - breach of Section 135(1)(b) of the Customs Act, 1962 - HELD THAT:- In the present case as well, learned counsel for the nonapplicant has infact admitted that investigation as against the applicant has already been completed and only sanction to prosecute the applicant is remained to be obtained and it is only then the charge-sheet would be filed - It is true that no gold has been seized from the possession of the applicant, as per own admissions made by the counsel for the non-applicant, as investigation in respect of applicant has already been completed hence, in view of such situation, the bail application is liable to be allowed. Without commenting upon the merits of the case, this bail application is allowed and it is directed that applicant – Rajesh Neema shall be released on bail subject to his furnishing a personal bond in the sum of ₹ 2,00,000/- with one local surety to the satisfaction of the concerned Trial Court/Committal Court for his regular appearance before the Trial Court/Committal Court on all dates of hearing as may be fixed in this behalf by the Court concerned during trial.
Application allowed.
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2020 (9) TMI 952 - CESTAT MUMBAI
Classification of imported goods - heavy melting scrap - benefit of concessional rate of duty - serial no. 368 in N/N. 50/2017-Cus dated 30th June 2017 - applicability of note no. 7 in Section XV of the First Schedule to Customs Tariff Act, 1975 - Difference of Opinion - matter placed before Hon’ble President for reference.
HELD THAT:- In view of difference of opinion as to allowing of appeal, as held by Member (Technical), and remanding the matter for re-test, as held by Member (Judicial) in appeal no C/88315/2019, Registry is directed to place the records before Hon’ble President for reference, under section 129C (5) of Customs Act, 1962, to Third Member for answering the following points:
i. In the light of concurrence of finding that the impugned goods are not ‘copper alloy’ in paragraph no.13, and the show cause notice proposing classification in tariff item no. 74040029 below sub-heading for ‘copper alloy’ in chapter 74 of First Schedule to Customs Tariff Act, 1975,
whether the decision of Member (Technical) that incorrectness thereof of proposed classification leaves no option but to accept the declared classification against tariff item no. 72044900 in chapter 72 of First Schedule to Customs Tariff Act, 1975 for concluding proceedings
OR
whether the decision of Member (Judicial) that inappropriateness of the classification proposed in the show cause notice notwithstanding re-test and consideration of other submissions made by noticee is warranted
is the correct position in law?;
ii. Whether direction for re-testing of fresh samples during adjudication proceedings, that may have the consequence of helping the adjuidcator to arrive at the proper decision of the matter, as decided by Member (Judicial), will have the effect of adding facts to the show cause notice?
OR
that the resolution of dispute cannot go beyond the facts recorded in the show cause notice, as decided by Member (Technical)
reflects the statutory competence, under Customs Act, 1962, of the Tribunal in exercise of authority to remand matter back to the original authority?
iii. Whether, on the conclusion in the show cause notice, in the light of recorded declining by all laboratories to re-test the samples,
the decision of Member (Technical) that no purpose will be served by insisting on re-test
OR
the decision of Member (Judicial) that re-test must necessarily be carried out in the laboratories suggested by the appellant or at any other laboratory.
is the proper procedure to be adopted?
iv. Whether, on the facts available on record,
the view of the Member (Technical) that the inability expressed by National Metallurgical Laboratory arises reports lack of capacity to perform test sought by customs officers
OR
that of Member (Judicial) that it should be presumed that it was declined only owing to non-availability of samples
is the appropriate conclusion?
v. Whether circular no. 30/2017-Cus dated 18th July 2017, relied upon by the adjudicating authority to accept the first report of National Metallurgical Laboratory, authorizes such option where the second report is inconclusive as held by Member (Judicial)
OR
recourse to choose between tests only when two complete test reports are available as held by Member (Technical),
AND
vi. Whether the second test report, referred in paragraph no.13, had given erroneous findings, as held by Member (Judicial), in the context of their clarification furnished on 22nd February 2019
OR
Whether the result was not erroneous but inconclusive, as held by Member (Technical), in the context of response and clarifications furnished on the reference made by the department.
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2020 (9) TMI 951 - CESTAT MUMBAI
Classification of imported goods - split air-conditioners - classified at sub-heading no. 841510 of First Schedule Customs Tariff Act, 1975 at serial no. 49 or not - benefit of N/N. 85/2004-Cus dated 31st August 2004 denied - HELD THAT:- From heading no. 8415 of First Schedule to the Customs Tariff Act, 1975, it is seen that air conditioning machines comprise of a motor driven fan and elements for controlling humidity and temperature. Generally, and more particularly in the retail segment, such machines are either of ‘window or self-contained’ or ‘split system’ types. There are several other equipment which are designed for larger spaces and for applications that go beyond residential or commercial. In the structuring of the sub-headings, emphasis is placed on the ‘split system’ and, by default, the ‘window’ types. All other air-conditioning equipment are relegated to the residuary categorization and it is within such that ‘split air-conditioners’ finds deployment. From this, it can be inferred that ‘split system’ air conditioning machines and ‘split air-conditioners’ are distinct. Neither has the show cause notice nor the adjudicating authority forayed an elaboration of either; that these existed at the eight digit level under different sub-headings did not appear to have impressed itself, let alone the need for appreciating the distinction on the adjudicating authority - The additional feature, whose presence or absence, determines the sub-heading within the residuary category, has not been established as incorporated in the impugned goods. In the absence of such, customs authorities are not enabled to proceed to the tariff item below the sub-heading. The impugned order is flawed for that reason.
The classification declared by the appellant at the time of import corresponds to the description of ‘split system’ and the scope of ‘split system’ is elaborated in the subheading notes in the Explanatory Notes to the Harmonised System of Nomenclature. From this, it can be inferred that the description corresponding to sub-heading 841510 is intended for ‘window’ and ‘split system’ air-conditioning machines - Undoubtedly, every article under heading no. 8415 has to have a cooling facility. Nevertheless, the adjudicating authority set out with the assumption that, irrespective of the cooling equipment in ‘split systems’, the cooling system in the impugned goods was a refrigerant unit. Neither is there any ground for such supposition in the show cause notice nor is there reason to conclude that the cooling source in the ‘split system’ was absent in the impugned goods and substituted by another. There is no descriptive restriction in sub-heading no. 841510 to conclude that heating capability is not intended for coverage by that tariff entry. The impugned order has failed to exclude applicability of description of ‘split systems’ to the impugned goods which would have entailed some knowledge of what that is.
‘Split systems’ are air conditioners that have two parts and these operate together to cool space. Likewise, it may heat space also without compromising conformity with the description corresponding to heading no. 84151010 of the First Schedule to Customs Tariff Act, 1975. It is only by exclusion from this description that the impugned order could have attempted an alternative classification. The General Rules of Interpretation, with emphasis on hierarchical elimination of non-conformity, precluded classification of the impugned goods under the general residuary description when conformity with the specific is not established as incorrect - the impugned goods are classifiable under tariff item no. 84151010 of First Schedule to Customs Tariff Act, 1975.
Appeal allowed - decided in favor of appellant.
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2020 (9) TMI 950 - CESTAT BANGALORE
Conversion of shipping Bills - conversion of free shipping bills into drawback shipping bills - duty drawback - rejection on the ground of non-fulfillment of conditions of Notification No. 158/95 dated 14.11.1995 - HELD THAT:- The appellant initially exported Phycocyanin and a part quantity of the same was rejected for quality reasons which was re-imported by him without payment of duty in terms of Notification No. 158/95-Cus dated 14.11.1995 on executing Bond with Bank Guarantee. Also the appellant have re-exported the said goods after rectifying the defect and the identification of the re-exported goods is not disputed by the Department. Further, we find that the appellant also paid an amount of ₹ 13,81,543/- as demanded by the Department. Further, it is found that after payment of the duty along with interest, the appellant sought suitable amendment to the re-exported shipping documents to enable the appellant to claim drawback in terms of Section 74 but the same was not considered and his request was rejected without affording him an opportunity of hearing which is in violation of the principles of natural justice. Also, it is substantive right of the exporter to claim drawback and it has been consistently held by various High Courts that substantive right should not be denied on account of procedural irregularities.
CBEC issued Circular No. 1063/2/2018-CX dated 16.02.2018 whereby they have compiled orders of Hon’ble Supreme Court High Courts and CESTAT which have been accepted by the Department on which no review petitions have been filed by the Department.
The Communication dated 12.03.2019 is set aside and the matter remanded back to the Commissioner to consider the claim of the appellant for conversion of free shipping bills into drawback shipping bills, after following the principles of natural justice and after affording an opportunity of hearing to the appellant - appeal allowed by way of remand.
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2020 (9) TMI 949 - CESTAT MUMBAI
Legality of import of ‘wheat gluten amygluten 160’ - production of ‘duty-free import authorization (DFIA)’ licenses, permitting import of ‘flour’ for the manufacture of ‘biscuits’ - N/N. 40/2006-Cus dated 1st May 2006 or of notification no. 98/2009-Cus dated 11th September 2009 - period between November 2011 and September 2012 - HELD THAT:- With the removal of starch from dough made of ‘flour’, the resultant product is wheat gluten. Hard ‘wheat flour’ is hydrated to activate the gluten within it, processed for removal of the inherent starch by washing which, after dehydrating, is then powdered. Thus the composition of wheat, in a depleted form, in the flour does not appear, to us, to be an alteration of the essence of the product.
With the threshold eligibility thus settled, the allegation pertaining to ineligibility arising from import by an entity other than ‘actual user’ and of ineligibility arising from utilization of a different ingredient in the exports effected by the original license holder remain to be evaluated. The ‘duty-free import authorizations’ procured by the appellant-importer had been made transferable in accordance with the provisions of the Foreign Trade Policy and there is no whiff of allegation that the said endorsements had been procured unlawfully. The prescription of ‘actual user’ condition in the Foreign Trade Policy, and reflected in the corresponding notification issued under section 25 of Customs Act, 1962, cannot be said to be extended to transferees of such licences unless particularly specified, either in the policy prescriptions or in the notification, for that would be tantamount to imposing a condition that was not intended by the Central Government. Neither the adjudicating authority nor Learned Authorised Representative have been able to establish that ‘post-export, endorsed for transfer’ license continued to be entailed with such actual user condition. In any case, the ultimate usage of such goods by an actual user renders the logic of Revenue to be unacceptable.
There is no evidence on record that the appellants were aware of the composition of the exported goods. Hence, the appellant cannot be expected to conform to such imports as they are not cognizant of. From the available records and submissions made, we are unable to conclude if any of the inputs permitted for import to enable manufacture of biscuits are enumerated among the goods specified for conformity in the Handbook of Procedures.
On the inadequacy of credible evidence of the ingredients used in the exported goods, the essential nature of the impugned goods, the apparent conformity with the conditions of the Foreign Trade Policy and the precedent decision in the dispute of the appellant herein - Appeal allowed - decided in favor of appellant.
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2020 (9) TMI 903 - SUPREME COURT
AS PER JUSTICE DR DHANANJAYA Y CHANDRACHUD
Enhancement of Customs Duty - post-Pulwama Attack - Time and date from which enhanced duty comes into effect - issuance of notification under Section 8A of the Customs Tariff Act 1975 introducing a tariff entry by which all goods originating in or exported from the Islamic Republic of Pakistan were subjected to an enhanced customs duty of 200% - the contention of the Union government before the High Court was that under Section 15 of the Customs Act, 1962 the relevant date for determining the rate of duty is the date of the presentation of the bill of entry - submission was that the amended rate of duty under notification 5/2019 came into force on 16 February 2019; hence, the importers were liable to pay duty on the basis of the amended rate. The submission was that the customs authorities were entitled to re-assess the bills of entry under Section 17(4).
HELD THAT:- The purpose of the notification being to discourage the import of goods from Pakistan, it has prospective effect: the object and purpose is not to penalize Indian importers who had completed their imports, presented bills of entry for home consumption and had completed self-assessment in terms of the provisions of the Customs Act and the Regulations, prior to the issuance of the notification.
Determination of the rate under Section 15 of the Customs Act 1962 - HELD THAT:- Section 15(1)(a) uses two expressions (i) the rate and valuation “in force”; and (ii) “on the date” of the presentation of the bill of entry for home consumption under Section 46. The provisions of Section 15(1)(a) have to be read in conjunction with the provisions of Section 46 which are referred to in the former provision. Section 46 has incorporated a regime which encompasses the submission of the bill of entry for home consumption or warehousing in an electronic format, on the customs automated system in the manner which is prescribed. The Regulations of 2018 stipulate the manner in which the bill of entry has to be presented. The deeming fiction in Regulation 4(2) specifies when presentation of the bill of entry and ‘selfassessment’ are complete. The rate of duty stands crystallized under Section 15(1)(a) once the deeming fiction under Regulation 4(2) comes into existence. The regulations have to be read together with the statutory provisions contained in Section 15(1)(a) and Section 46, while determining the rate of duty.
Precedent - HELD THAT:- In Bharat Surfactants (Private) Limited vs. Union of India [1989 (5) TMI 66 - SUPREME COURT], customs duty was imposed on the import of edible oil by the petitioners at the rate of 150 per cent on the basis that the import was made on the date of the inward entry, which was 31 July 1981. The vessel arrived and registered in the Port of Bombay on 11 July 1981 but since a berth was not available, the cargo could not be unloaded. The vessel left Bombay and proceeded to Karachi and returned towards the end of July 1981. The rate of customs duty prevailing on 11 July 1981 was 12.5 per cent and the contention of the importer was that but for the fact that the vessel was unable to secure a berth, it would have delivered the cargo - The Constitution Bench held that the date of entry inwards of the vessel in the Customs’ register was mentioned as 31 July 1981 and the rate of import duty and tariff valuation would be that which was in force on that day.
The presentation of a bill of entry for home consumption under Section 46 is hence the definitive event with reference to which the customs’ duty payable for import is determined. The duty in force on the day when the bill of entry for home consumption is presented is the duty which is applicable under Section 15(1)(a) - It is in view of this principle that the entry of the vessel into territorial waters, before the presentation of the bill of entry, has been held not to fix the rate of duty where the rate of duty has undergone a change.
Interpreting ‘day’ and ‘date’ - HELD THAT:- The submission of the ASG, simply put, is that because notification 5/2019 was issued on 16 February 2019, the court must regardless of the time at which it was uploaded on the e-Gazette treat it as being in existence with effect from midnight or 0000 hours on 16 February 2019. The consequence of this interpretation would be to do violence to the language of Section 8A(1) of the Customs Tariff Act, and to disregard the meaning, intent and purpose underlying the adoption of provisions in the Customs Act in regard to the electronic filing of the bill of entry and the completion of self-assessment.
Notification under Section 8A of the Customs Tariff Act - HELD THAT:- A notification which is issued in terms of the provisions of Sub-section (1) of Section 8A is akin to the exercise of a delegated legislative power. The Central government is empowered to issue a notification enhancing the rate of duty where it is satisfied that immediate action is necessary to increase the rate of customs duty on an article specified in the First schedule. The effect of the notification is to amend the First schedule to the Customs Tariff Act in respect of the import duty leviable on an article under Section 12 of the Customs Act. In issuing a notification under Sub-section (1) of Section 8A, the Central government exercises power as a delegate of the legislature. The issue now to be considered is whether the notification that was issued by the Central government under Section 8A(1) at 20:46:58 hours on 16 February 2019 took effect commencing from 0000 hours on that day.
The rate of customs duty is determined on the date on which the bill of entry for home consumption is presented (Section 15). The presentation of the bill of entry has to be made electronically (Section 46 read with the 2018 Regulations). The presentation is required to be made on the customs automated system. The provisions in the Customs Act for the electronic presentation of the bill of entry for home consumption and for self-assessment have to be read in the context of Section 13 of the Information Technology Act which recognizes “the dispatch of an electronic record” and “the time of receipt of an electronic record” - The presentation of the bill of entry under Section 46 is made electronically and is captured with time stamps in terms of the requirements of the Information Technology Act read with Rule 5(1) of the Information Technology (Electronic Service Delivery) Rules 2011.
Notification 5/2019 was uploaded in the e-gazette at a specific time and date and cannot apply to bills of entry which were presented on the customs automated EDI system prior to it, attracting the legal fiction set out in Regulation 4(2) of the 2018 Regulations.
Retrospectivity - HELD THAT:- For the purpose of the present decision the point which needs emphasis is that in empowering the Central Government to exercise power under Section 8A of the Customs Tariff Act, Parliament has not either expressly or by necessary implication indicated that a notification once issued will have force and effect anterior in time. The provisions of sub-sections (3) and (4) of Section 7 of the Customs Tariff Act bring to bear legislative oversight and supervision over the power which is entrusted to the Central Government under Section 8A. That however does not lead to the inference that a notification under Section 8A has retrospective effect. Plainly, a notification enhancing the rate of duty under Section 8A has prospective effect.
In the present case the twin conditions of Section 15 stood determined prior to the issuance of Notification 5/2019 on 16 February 2019 at 20:46:58 hours. The rate of duty was determined by the presentation of the bills of entry for home consumption in the electronic form under Section 46. Self-assessment was on the basis of rate of duty which was in force on the date and at the time of presentation of the bills of entry for home consumption. This could not have been altered in the purported exercise of the power of re-assessment under Section 17 or at the time of the clearance of the goods for home consumption under Section 47. The rate of duty which was applicable was crystallized at the time and on the date of the presentation of the bills of entry in terms of the provisions of Section 15 read with Regulation 4(2) of the Regulations of 2018. The power of reassessment under Section 17(4) could not have been exercised since this is not a case where there was an incorrect self-assessment of duty. The duty was correctly assessed at the time of self-assessment in terms of the duty which was in force on that date and at the time. The subsequent publication of the notification bearing 5/2019 did not furnish a valid basis for re-assessment.
Appeal dismissed.
AS PER K.M. JOSEPH, J.
Does a notification under Section 8A of the Customs Tariff Act, 1975 increasing the import duty published late in the evening of 16th Feb 2019, date back to the midnight of the previous day? Does a day include its fractions? - HELD THAT:- The Customs Act is a consolidating Act. It is intended, inter alia, to deal with the menace of smuggling. It contains various sanctions. It also provides for the levy of Customs duty on import and export. It is a law which provides revenue to the State. It is also an important tool in the hands of the nation to arrange its economic affairs to make it best suited to the welfare of the people otherwise. Indisputably, the charging Section is Section 12. The taxable event is import into or export of goods from India. Ordinarily, the Tariff Act provides the rates at which duty is imposed on imports and exports. There is no dispute that India and Pakistan being S.A.A.R.C. Countries they were parties to an agreement under which the trade between the countries was subjected only to duty on concessional rates. It is while so, following the unfortunate incident of Pulwama that the Government of India in exercise of its powers under Section 8A of the Tariff Act decided to increase the rate of import duty on all goods in the manner done. The Notification was issued on 16.02.2019. It was published at about 20:46:58 hrs. In the meantime, during the course of the day, the writ petitioners before us who imported goods had filed Bills of Entry electronically. The goods were present in the Customs Station.
The Tariff Act and whether the notification is a form of Delegated Legislation - HELD THAT:- A Notification issued under Section 8A, increasing the import duty, is a species of delegated legislation. It must be remembered that Article 265 of the Constitution of India declares that no tax shall be levied except by the authority of Law. An increase in the rate of duty cannot obviously be affected by an Executive Order. That is not to say that when the Executive is empowered to increase the rate of duty by way of delegated legislation, it would not fulfill the requirement of Article 265 and there can be no hesitation in holding that it is law within the meaning of Article 13 of the Constitution of India and it is a species of delegated legislation.
The Scheme of the Customs Act Qua Rate of Duty on imports and assessment to duty - HELD THAT:- There is no dispute that the imported goods were very much in the Customs Station and the Bills of Entry were presented under Section 46(1) on 16.2.2019. It is clear that the rate of duty, for the purpose of the cases before the Court, is to be determined with reference to the presentation of the Bills of Entry. The law does not take into consideration even the time of payment of the duty which is self-assessed by the importer. This is noted for the reason that the importer, who presents a Bill of Entry under Section 46 and who carries out self-assessment, is duty-bound to pay such duty on the very same date. The consequence of failure is only the liability to pay interest under Section 47 besides disabling him from clearing the goods. It does not postpone the point of time at which the rate of duty is to be determined.
As far as the Notification issued under Section 8A of the Tariff Act is concerned, the Notification would come into force on the date on which it is published in the Gazette. The question, however, which arises in this case is, as far as this Court is concerned, res integra, viz., whether having regard to the time at which it was published, whether Notification would come into force on 16.02.2019, by including the whole of the day or will it operate from the time of its publication, or whether the Notification is to be enforced only after excluding 16.02.2019 - The question would pointedly arise whether it was to have effect for the whole of the day, viz., 16.02.2019, which means, since the day 16.02.2019 was born, immediately after the midnight on 15.02.2019, does a day mean the first moment after the midnight? If that were the effect, what would be its impact on the Bills of Entry which were electronically presented under Section 46(1) of the Customs Act read with Rule 4(2) of the 2018 Regulations. It is here that it becomes necessary to notice the provisions of Section 9 of the General Clauses Act, 1897.
Section 9 of the General Clauses Act, 1897 - HELD THAT:- Section 9 of the General Clauses Act enunciates the principle, that for, excluding the first in a series of days or any other period of time, it suffices to use the word “from”. It also provides, likewise, for the devise of using the word “to”, for the purpose of including the last in the series of days or other period of time. It is clear from Section 9 that it contemplates a period, or a series of days which is marked by both terminus aquo and terminus ad quem. Section 9 is expressly intended to apply to a Central Act or Regulation.
Cases under Contracts of Insurance - HELD THAT:- It is clear that the situation which is presented before us, is not covered by the principle which is embedded in Section 9 of General Clauses Act, 1897. In other words, having regard to the terms of the Notification, which is a form of delegated legislation, by which the Central Government has increased the rate of import duties of goods imported from Pakistan, though the notification is gazetted on 16.02.2018 at 20:46:58 hrs., there is no period for which it is to last as already noticed, and in that sense, it can be argued that there would be no occasion for exclusion of the date on which it was issued.
Whether Section 5(3) of the General Clauses Act applies to the Notification - HELD THAT:- It is quite clear that the notification which is issued is one which is issued under Section 8A of the Tariff Act. The notification is not one which is made by Central Legislature, namely, the Parliament. It therefore is not a Central Law as defined in the Act. We have also noticed the definition of the word ‘Regulation’. The notification is not a regulation as defined in General Clauses Act. There is no merit in the contention of the Union of India that by virtue of Section of 5(3) of the General Clauses Act, the notification must be treated as effective from the point of time immediately after mid night on 15/16 February, 2019.
Existence of possible views - HELD THAT:- Having regard to the Scheme, which, in the case of import duty, consists of filing of Bill of Entry for home consumption, self-assessment and payment of duty on the basis of the same and the rate being clearly fixed with reference to the particular point of time when the Bill of Entry is presented and there is a deemed presentation and even a deemed assessment, which is otherwise in order, and bearing in mind the principle that Section 8A does not provide power for increase of rate of duty with retrospective effect, the Notification must be treated as having coming into force not before its publication which is at 20:46:58 hrs. on 16.02.2019. This would necessarily mean that the Notification cannot be used to alter the rate of duty on the basis of which, in fact, there was presentation of Bill of Entry several hours ago, the self-assessment was done and what is more, the self-assessment was completed under Regulation 4(2) of the 2018 Regulations. There cannot be reassessment. The interpretation based on time of publication is in harmony with a view that accords respect for vested rights.
Two inconsistent rates at the same point of time - HELD THAT:- There is no merit in the submission of the appellants in this regard. Once it is found that the notification upon publication would take effect from the time of its publication then in regard to the bills of entries which stand presented within the meaning of Section 46 of the Customs Act read with 4(2) of the 2018 Regulations, earlier to such publication, the rate of duty in regard to the same would be only the rate of duty which prevailed at the time of the deemed presentation under Regulation 4(2) of the 2018 Regulations.
Effect of the Word ''Otherwise'' in section 17(4) of the Customs Act, 1962 - HELD THAT:- The expression “otherwise” in Section 17(4), will not come to the rescue of the appellants, in the facts of the instant case. While the word “otherwise” may be capable of taking care of situations which are not covered by the preceding expressions, viz., verification, examination, attesting of the goods, it cannot mean that it will empower the Officer to alter the rate of duty which is prevalent at the time of the self-assessment following the due presentation of the Bill of Entry. If it is otherwise, it will be open to the Department to reopen cases of concluded assessments by virtue of the deemed completion of assessment under Regulation 4(2) without any legal justification. That would be plainly impermissible being illegal. This is not a case where the assessment is assailed on any other ground except by insisting on a rate of duty which is in applicable.
By its very nature, delegated legislation is legislative in character but if it is to be a Central Act within the meaning of Section 5 of General Clauses Act, it must be made by the legislature. Delegated legislation which is called administrative legislation in England, is exercise of legislative power by the executive. It is to be further noticed the fact that the notification issued under Section 8A is in the exercise of its legislative power or that it may have to be read in the same manner as if it is a part of the Act, will not detract the Court from ascertaining as to who is the author of the exercise of the legislative power, namely, whether it is an exercise of power by the legislature or by its delegate. Upon answer to the question, namely, that the author of the legislative effort is the executive, the question would necessarily arise as to whether there is publication. In the scheme of the Customs Act, the Tariff Act and the 2018 Regulations, the time at which the notification under Section 8A is published would indeed have relevance as already found.
Appeal dismissed.
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2020 (9) TMI 902 - CESTAT MUMBAI
Valuation of imported goods -steel nuts - misdeclaration of value - enhancement of value with the consolation of reducing the fine - primary contention of the appellant is that there has been no misdeclaration, that specific authority for adoption of London Metal Exchange (LME) prices is not on record and that the fine and penalty are not proportionate to the extent of alleged undervaluation - HELD THAT:- On perusal of note 1 in chapter 72 of the First Schedule to Customs Tariff Act, 1975, it is observed that several forms of ‘iron and steel’ have been described and while all of them are intended for determining the rate of duty in relation to goods enumerated in the said chapter, those of ‘steel’, ‘stainless steel’ and ‘other alloy steel’ in (d), (e) and (f) in the note are intended to apply to such descriptions anywhere in the schedule. The first appellate authority cannot be faulted for reference to these descriptions for the purpose of chapter 73 of the First Schedule to Customs Tariff Act, 1975.
The lower authorities have relied upon the ascertained chromium content. It is abundantly clear that to conform to description as ‘other alloy’ it should not be ‘stainless steel’ which is distinguished by being ‘alloy steel’ with the carbon content restricted to 1.2% or less and with chromium content of at least 10.5%. Consequently, it would appear that ‘other alloy steel’ should have at least 0.3% of chromium content - As pointed out by Learned Consultant, the proceedings lack any record of determination of such contents. We also take note that the rate of duty is not in dispute.
The evidence on record is not sufficient to determine the impugned goods either as ‘stainless steel’ or as ‘other ally steel’ and, in the absence of such evidence, the declaration cannot be faulted. There is no ground to dispute the valuation. Hence, the enhancement of values and detriment built upon alleged misdeclaration fails - Appeal allowed - decided in favor of appellant.
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2020 (9) TMI 857 - SUPREME COURT
Permission for withdrawal of appeal - Sabka Vishwas (Legacy Dispute Resolution) (SVLDR) Scheme, 2019 - HELD THAT:- The respondent cannot object to the appellant withdrawing any portion of the appeal, provided the appellant is not seeking any benefit from Court on account of the withdrawal.
The appeal shall be treated as withdrawn only in respect of the dispute arising out of the excise component - Application allowed.
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