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2020 (10) TMI 550 - DELHI HIGH COURT
Waiver of charges in accordance with the existing policy of Container Corporation of India Limited. - HELD THAT:- The petitioner undertakes that the aforesaid balance amount along with any additional demurrage shall be paid within four weeks. He craves leave and liberty to file an application (after making the aforesaid payment) with respondent no.2-Container Corporation of India Limited for waiver of charges in accordance with the existing policy of Container Corporation of India Limited. - The aforesaid undertaking and statement is accepted by this Court and the petitioner is held bound by the same. The petitioner is also given liberty to file an application for waiver and the same shall be decided by the Container Corporation of India Limited in accordance with law. 6. In the event of breach of the aforesaid undertaking, respondent no.2Container Corporation of India Limited shall be at liberty to auction the nine containers of the petitioner forthwith.
Petition disposed off.
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2020 (10) TMI 549 - CESTAT MUMBAI
Misdeclaration of imported goods - Aluminium Scrap Tread - old and used pipes were found - restricted goods or not - Special Import License (SIL) for the import not submitted - rejection of transaction value - Confiscation - redemption fine - penalty - HELD THAT:- Since, correct information was not furnished in the import documents, the transaction value was appropriately rejected under Rule 12 of the Customs Valuation Rules, 2007 and the value was re-determined considering the same as serviceable goods.
The appellant had not submitted any plausible evidence either before the authorities below or the Tribunal that the goods in question were corresponding to the declaration made in the Bill of Entry. Thus, the appellant is exposed to the consequences provided under the statute for payment of differential duty, fine and penalty.
Appeal dismissed.
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2020 (10) TMI 500 - BOMBAY HIGH COURT
Extended period of Limitation for issuing SCN - Release of seized goods - situation during COVID-19 lockdown - Smuggling - Gold - Section 110(2) of the Customs Act, 1962 - case of petitioner is that the seized gold bars were not smuggled gold, those were purchased by the father of the Petitioner for the marriage of his sister long back from the local market in Kerala. Petitioner had carried six gold bars to Mumbai for making ornaments for the marriage.
HELD THAT:- A conjoint reading of Sections 110(2) and 124 of the Customs Act would make it clear that a show-cause notice has to be issued to the person from whom the goods were seized within six months of seizure, failing which the goods shall be returned to the person from whose possession the goods were seized. However, it is provided under the first proviso that the said period of six months can be extended for a further period not exceeding six months by the higher authority for reasons to be recorded in writing with intimation to the person concerned within the extended period.
Coming to the facts of the present case, it is seen that the goods were seized from the Petitioner on the intervening night of 4th and 5th October 2019. The period of six months would have expired on 5th April 2020. It was during this period that the show-cause notice under Section 124(a) was required to be issued as per the requirement of Sub Section (2) of Section 110. However, as per the proviso this period could be extended for a further period not exceeding six months after complying with the conditions mentioned in the first proviso. Within the initial period of six months Petitioner was informed by the office of Commissioner of Customs, Pune that Commissioner of Customs, Pune being the competent authority had accorded sanction under the proviso to Section 110(2) and had granted further time to issue show-cause notice.
The extended period of limitation upto six months as per the first proviso to Sub Section (2) of Section 110 of the Customs Act stood extended by Section 6 of the above Ordinance till 29.09.2020. This is fortified by the order of the Supreme Court dated 23.03.2020 passed in exercise of powers under Article 142 of the Constitution of India read with Article 141 thereof - It is during such extended limitation period that Joint Commissioner of Customs, Pune has issued show-cause notice to the Petitioner under Section 124(a) of the Customs Act dated 21.09.2020 calling upon the Petitioner to show-cause in writing before the adjudicating authority as to why the seized gold should not be confiscated besides imposition of penalty.
Thus, it is evident that show-cause notice under Section 124(a) has been issued to the Petitioner within the extended limitation period. Therefore, the rigour of Sub Section (2) of Section 110 would not be applicable in the case of the Petitioner. Consequently, question of returning the seized goods to the Petitioner under Section 110(2) would not arise.
It is true that Delhi High Court in KRAMPE HYDRAULIK (INDIA) AND ORS. VERSUS UNION OF INDIA (UOI) AND ORS [2003 (7) TMI 694 - DELHI HIGH COURT] had held that the total effect of the provisions of Section 110(2) read with Section 124(a) would be that not giving notice within six months of seizure or within the further extended period of six months would entitle the person concerned to return of the seized goods without any condition. Had the pandemic not intervened, had the Supreme Court not passed the order on 23.03.2020 and had the Ordinance not extended the limitation period across board till 30.06.2020 and thereafter till 29.09.2020, certainly Petitioner would have had a valid claim to return of the seized goods under Section 110(2). But because of the aforesaid developments, the limitation period stood further extended and within such extended limitation period the show-cause notice under Section 124(a) of the Customs Act was issued.
Petition dismissed.
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2020 (10) TMI 499 - CESTAT MUMBAI
Imposition of penalties u/s 114(iii) of the Customs Act - Wrongful availment of the duty drawback - drawback availed fraudulently by forging and manipulating documents without exporting any item - appellant submits that he was neither served show-cause notice nor intimated about the personal hearing - HELD THAT:- The learned Commissioner has observed in para 6.7 that appellant had disappeared after the investigation was initiated and that the appellant has knowingly conspired with Shri G. S. Kohli in fraudulent drawback availment. It is seen that learned Commissioner has relied upon the statements of Shri G. S. Kohli and Shri Jagmohan Basant Singh Kohli. Therefore, the submissions of the appellant that his case is similar to that of other noticees against whom proceedings were dropped by the Commissioner, are factually incorrect. However, we find that his role is limited to the allegation of being a front for operating the current account of M/s. G.S.K. Exports in Bombay Cooperative Mercantile Bank; two pay-in slips bear the signature of the appellant. To this extent, the appellant has abetted the crime of M/s. G.S.K. Exports. However, it is not clear from the show-cause notice or the Order-in-Original that if there was any financial gain obtained by the appellant. In such circumstances, we find that the penalty imposed is very high. Penalty should be commensurate with the offence committed.
Penalty reduced from ₹ 35,00,000/- to ₹ 5,00,000/- - appeal allowed in part.
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2020 (10) TMI 448 - MADRAS HIGH COURT
Refund of SAD - sanctions were reviewed under Section 129D(2) of the Customs Act and found to be incorrect - N/N. 102/2007 dated 14.09.2007 - HELD THAT:- The CESTAT, had earlier passed orders in favour of the dealers, holding that, so long as appropriate VAT/Sales Tax was paid, the SAD refund was admissible. These CESTAT orders were referred to by the learned Standing Counsel for the department and had conceded that the issue of refund of SAD was in favour of the importer and accordingly, this Court, in the cases of M/S. GOYAL IMPEX AND INDUSTRIES LIMITED VERSUS THE ASSISTANT COMMISSIONER OF CUSTOMS CHENNAI (REFUNDS-SEA) [2019 (9) TMI 1331 - MADRAS HIGH COURT ] and M/S. ADITYA INTERNATIONAL LTD, M/S. GOYAL IMPEX & INDUSTRIES LTD, M/S. AACHI MASALA FOODS PVT. LTD, VERSUS THE COMMISSIONER OF CUSTOMS (APPEALS-II) , THE ASSISTANT COMMISSIONER OF CUSTOMS (REFUNDS-SEAPORT) , THE ASSISTANT COMMISSIONER OF CUSTOMS [2020 (4) TMI 317 - MADRAS HIGH COURT], had allowed the writ petitions and ordered for refund of the SAD in favour of the importer.
Petition allowed.
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2020 (10) TMI 398 - CESTAT MUMBAI
Classification of imported goods - air-conditioners - classified under tariff item no. 84151010 of the First Schedule to Customs Tariff Act, 1975 or otherwise - argument of Revenue that the expansion of the description corresponding to tariff item no. 84151010 of the First Schedule to Customs Tariff Act, 1975, by Finance Act, 2016 is demonstrative of legislative intent to classify ‘ceiling mounted’ and ‘ceiling suspended’ air-conditioning units in other sub-headings does not find favour with us - HELD THAT:- The sanctity of the classification narrative lies in its inexorable logic from beginning to end and within itself. Hence, the groupings, as well as descriptions, have a significance that are not to be ignored. The General Rules for Interpretation also acknowledges this inherent logic and rule 3 is applicable when goods are classifiable under two headings. It is now settled law that though the importer may seek a classification it is the responsibility of the assessing officer to determine the appropriate heading; hence the application of rule 3 of General Rules of Interpretation are not intended for resolving difference of opinion between importer and assessing officer but for guiding the assessing authority in clarifying for itself when in doubt over two headings. From the impugned order, the adjudicating authority did not appear to have been beset with such dilemma. Furthermore, the said Rules, except for rule 6, are concerned with headings and hence the first mandate to an assessing authority is to determine the appropriate heading at the four-digit level. Thereafter, the six-digit and eight-digit level are to be ascertained with reference to the descriptions. The deemed erasure of any other heading thereafter precludes comparison with any tariff item that is not within the determined sub-heading. Hence, the rival entries must lie within the same group.
Under the primary residuary grouping at the ‘-’ level, the distinction among the three sub-headings is determined by the incorporation of ‘refrigerating unit’, at the first instance, in ‘air conditioning machines’ and the incorporation of ‘valve for reversal of heat or cooling cycle’ subsequently. As these sub-headings and tariff items within the residuary category are so distinguished and the expression ‘refrigerating unit’ is not defined, it cannot be supposed that it refers to the ‘cooling unit’ for if it did, the first heading would have no place within the description of ‘air conditioning machines’. It, therefore, is intended for some component other than the normal cooling facility built into all ‘air conditioning machines’ and, by not subjecting that expression to the test of existence in the impugned goods, the show cause notice has tripped upon itself in its haste to carry the impugned goods beyond the scope of eligibility for the exemption notification. The applicability of sub-heading no. 841581, 841582 and 841583 to the impugned goods lacks substance.
The impugned goods are not ‘window’ type but they are all of the ‘split’ type with an external condenser unit and an indoor evaporator unit. In the Explanatory Notes to the Harmonized System of Nomenclature pertaining to sub-heading no. 841510, we find no qualifying characteristic that restricts the adoption thereof to ‘cooling facility’ alone; neither is there any capacity qualification included therein - There is no doubt that the expression ‘refrigerating unit’ is not defined and we have observed that, to deem the ‘cooling unit’ to be the ‘refrigerating unit’, an entire sub-heading the tariff would stand earsed which is neither within the empowerment of the Tribunal let alone the adjudicating authority. In the absence of definition, the appreciation of common parlance meaning would have rendered the task of the adjudicating authority in this exercise more meaningful.
The adjudicating authority has insinuated non-existent restrictive qualifications on the description of, and tariff item under, sub-heading no 841510 of the First Schedule to Customs Tariff Act, 1975 and that, too, without the assistance of definition of, or common parlance understanding of, the expression ‘refrigerant unit’ rendering the re-classification to lack the authority of law - Appeal allowed - decided in favor of appellant.
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2020 (10) TMI 346 - BOMBAY HIGH COURT
Re-export of goods - Clove - petitioner submits that petitioner would comply with the condition imposed in the aforesaid order, namely, payment of redemption fine - HELD THAT:- No further order is required in the present proceeding save and except to close the same.
Petition disposed off.
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2020 (10) TMI 345 - CESTAT NEW DELHI
Condonation of delay of about 211 to 228 days in filing appeal - sufficient cause shown for the delay - HELD THAT:- The delay is apparently attributable to the incident of theft which occurred in the first week of February, 2019 wherein the Supervisor Shri Mahipal was also involved, and he was the key person who has received the orders on behalf of the appellant company. Further, due to this incident there was disturbance in the normal functioning of the office of the appellant and from 02.02.2019 Shri Mahipal suddenly left the job without any notice period and without informing any responsible person regarding the receipt of impugned orders and appeals to be filed. Further, it is evident from the record that appellant has not slept over the case. After hearing before the Commissioner (Appeals), they have been making enquiries from time to time regarding status of their appeals, particularly vide letters dated 15.11.2018 and 20.05.2019. Further, it is evident from the record that the appellant traced the impugned orders on 21.07.2019.
There is reasonable cause for the delay in preferring these appeals which have been properly explained - COD application allowed.
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2020 (10) TMI 344 - CESTAT NEW DELHI
Condonation of delay in filing appeal - Revocation of Customs broker License - forfeiture of security deposit - HELD THAT:- In the impugned order that the Customs Broker licence has been revoked leading to loss of livelihood of the appellant. Further, it has been explained that there is no deliberate delay or latches on the part of the appellant and the delay was caused due to mix-up of the documents of this appellant with the files of other clients in the office of the Counsel.
It is just and proper to condone the delay, in the interest of justice - Application allowed.
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2020 (10) TMI 343 - CESTAT NEW DELHI
Condonation of delay in filing appeal - section 129A(3) of the Customs Act, 1962 - HELD THAT:- In the present case a review order dated August 7, 2019 was passed by a Committee of Chief Commissioner of Customs in exercise of powers conferred under section 129D (1) of the Act. The provisions of section 129A of the Act shall not apply in the present case and it is the provisions of section 129D dealing that the powers of the Principal Commissioner of Customs to pass certain orders that will be applicable - the review order was passed by a Committee of Chief Commissioners of Customs on August 7, 2019 and the appeal was filed before the Tribunal on August 19, 2019. It was within a period of one month, even if the date of communication of the order of the Committee is not taken into consideration. The appeal is, therefore, within a time.
COD application dismissed.
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2020 (10) TMI 342 - CESTAT KOLKATA
Revocation of Customs Broker License - prohibition from transferring or selling his licence - smuggling - red sanders - Regulation 11 of CBLR, 2013 - HELD THAT:- It is not in dispute that there was an attempt to smuggle Red Sanders in the impugned consignment and that shipping bill in respect of these consignments was filed in the name of the appellant. During investigation, the appellant had no documents pertaining to the export in their possession. In fact, in the first statement given by Shri Somnath Sarkar, partner of the appellant firm, he said that he allowed Shri Sudhir Kr. Jha of M/s.U.S. Clearing Agency to handle export and import work using their licence and therefore all original documents are lying with them - In this case since the ARE-1 itself was fake as admitted by Shri Sudhir Kr. Jha. Evidently, the container was stuffed with Red Sanders and fake documents were prepared in an attempt to smuggle the contraband out. But for the intelligence and investigation by DRI, this consignment would have left the country.
There are no force in the arguments of the appellant that Shri Sudhir Kr. Jha was their own employee when all facts of the case show otherwise. Evidently, the appellant has transferred his licence or sublet it to allow unlicensed Shri Sudhir Kr. Jha and his firm M/s.U.S. Clearing Agency to clear exports and imports. Not only with respect to this consignment, but the appellant also had no records of the previous consignments exported in the name of the same exporter where the shipping bills were filed indicating the appellant as the Customs Broker. The totality of these circumstances would show that the appellant has indeed sublet his licence to Shri Sudhir Kr. Jha of M/s.U.S. Clearing Agency.
In terms of Regulation 11(b) of CBLR, 2013, the appellant has to transact business at the Customs station whether directly or through an approved employee. In this case neither appellant had transacted the business directly nor through their employees, but had sublet their licence to another person. Therefore Regulation 11(b) has been violated - In this case we do not find that Shri Sudhir Kr. Jha was the employee of the appellant at all. If he was an employee he should have been paid a salary by the appellant not the other way round. Recorded statements would show that Shri Jha was, in fact, paying ₹ 8,000/- per month to the appellant. Therefore, we do not think that any employee of the appellant was involved in the present case but only a person to whom the appellant had sublet his licence. For this reason we do not find any violation of Regulation 17(9).
The appellant has, by subletting their licence to another person in complete violation of CBLR, 2013 has created an open channel through which any contraband can be smuggled out of India with impunity. Since export consignments, especially if the documents show that the container was sealed by the Central Excise Officer, are not checked by the Customs officers, by creating fake ARE-1s shown to have been signed by the Central Excise Officers, an open channel for smuggling has been created by the appellant by sub-letting their licence.
Appeal dismissed.
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2020 (10) TMI 341 - CESTAT KOLKATA
Levy of penalty - Smuggling - gold bars bearing foreign origin - Reliability of statements - retraction of statements or not - HELD THAT:- In the case of Shri Nirmalendu Paul, the circumstantial evidence produced by the Department shows that he was caught with the seized gold bars. In his statement under Section 108 of Customs Act, 1962 given on 14.06.2016, and subsequently on 22.08.2016 during investigation, he has confessed that he was carrying the seized gold in his person and that the actual owner was Shri Debraj Paul (Appellant No. 2). He never retracted his statements during the investigation stage. He has also given the mobile number of Shri Debraj Paul and Calls Details Record (CDR) in respect of the mobile numbers given by Shri Nirmalendu Paul showed that users of these mobile numbers were known to each other. Shri Debraj Paul in his voluntary statements denied any link to Shri Nirmalendu Paul and also refused to recognize him - Shri Debraj Paul could not explain as to why Shri Nirmalendu Paul took his name immediately after interception and in the voluntary statements during investigation. He has also stated that he does not have any other business except the grocery shop. But his son Shri Debasish Paul stated that Shri Debraj Paul used to do export import business also and has a valid IEC number.
It is found that only after issuance of the Show Cause Notice Shri Nirmalendu Paul, appellant No. 1. changed his version which appears to be an afterthought. During the personal hearing his Advocate claimed that the seized gold were actually recovered from a bag kept under the seat of the bus which was being occupied by Shri Nirmalendu Paul. His advocate also sought for cross examination of the independent witnesses present of the time of the seizure and that his statements were taken under threat and duress.
It is found the appellant no. 1 had never altered his statements and until the end of the investigation he maintained that the gold bars were acquired by him on behalf of the appellant no. 2.
The confiscation of the seized goods and imposition of personal penalties are justified - quantum of penalty reduced - Appeal allowed in part.
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2020 (10) TMI 289 - CESTAT MUMBAI
Classification of imported goods - Sucrose (pharmaceutical grade) - classified under CTH 17029090 of Customs Tariff Act, 1975 or under CTH 17019990? - contention of the Revenue is that the imported sugar spheres or Non-pareil seeds 40-60 Mesh Sugar sphere (pharmaceutical grade) are classifiable under CTH 17019990 whereas the appellant while filing the Bill of Entry declared classification under CTH 17029090, but later during the appellate/adjudication proceedings claimed its classification alternatively under 17049090 of Customs Tariff Act, 1975.
HELD THAT:- In confirming the classification under Chapter heading 1701, the learned Commissioner (Appeals) in the impugned order held that chemically pure sucrose as mentioned under the Tariff Heading cannot be construed that it should consist of chemically pure sucrose only; but the chemically pure sucrose could also be in mixture with other materials like starch and water as in the present case. It is his reasoning that what is to be seen in classifying the mixture is the essential character of the product i.e. among all the elements the one that provides the essential character to the said product. He has observed that in the present case, it is sucrose, which is present in the range of 80 to 90% provides the essential character to the imported product Non-pareil seeds 40-60 Mesh Sugar sphere (pharmaceutical grade). In arriving at the said conclusion the Ld. Commissioner (Appeals) referred to rule 3(b) of General Rules of Interpretation, applicable to classification of products in mixture.
There are merit in the observation of the learned Commissioner (Appeals). The argument of the appellant that the product chemically pure sucrose specified under chapter heading 1701 if mixed with any other ingredients except with flavouring or colouring agent, it would fall outside the scope of the said heading - The contention of the appellant that chemically pure sucrose mixed with other items would fall outside the scope of the said heading as it is not designed to bring within its scope other than pure sugar except when added with colouring or flavouring agent therefore devoid of merit.
The Ld. Commissioner (Appeals) in determining the classification of the chemically pure sucrose mixed with starch and water, correctly applied Rule 3(b) of General Rules of Interpretation. He has observed that the classification of principal constituent in the mixture which provides essential character to the product be adopted for the mixture - In the present case chemically pure sucrose is the main constituent and provides the essential character to the mixture as neither the starch which acts as binder nor water which is used in the process can be called as the essential item to be used in the pharmaceutical industry, the purpose for which the mixture is manufactured.
The products enumerated in the said Explanatory Notes clearly indicates that confectionary are mostly for immediate consumption and sometimes added with therapeutic value classified under Chapter 30 as pharmaceutical products. Also, applying the common parlance test, it cannot be claimed that the imported sugar spheres/neutral pellets are used by a common man like the use of a confectionary even if the same manufacturer manufactures both these items. The use of the imported pellets is in pharmaceutical industry not as confectionary by the common man - it can safely be concluded applying the aforesaid tests that the imported product in question common in both the Appeals fall under CTH 17019990 - the demand of duty and interest confirmed for the normal period is upheld.
Penalty - HELD THAT:- Since the issue relates to classification of goods between two competing Headings being a question of interpretation of law, hence, imposition of penalty is uncalled for and unwarranted, accordingly set aside.
Time Limitation - HELD THAT:- On a change of view by the department, allegation of mis-declaration or suppression of facts in classifying the product at the times of its import under CTH 17029090 is incorrect and cannot be sustained. The Revenue, on the other hand, argued that in the era of self-assessment, it is burden of the assessee to classify and discharge duty properly, hence, failure of classifying the product under correct sub-heading amounts to mis-declaration. Hence, invoking the extended period of limitation is justified.
The appellant have been continuously declaring classification of the product under Heading 1702 after providing full and description of the goods in their Bills of Entry; duly filed all literatures on process of manufacture, its usage etc. as and when called for by the department during assessment proceedings. In such circumstance, allegation of suppression of facts or mis-declaration solely on the basis that the correct classification which according to the Department would fall under different Tariff Heading i.e. 1701 attracting higher rate of duty during the period under dispute cannot be sustained - the demand confirmed in the impugned Order invoking extended period is set aside on the ground of limitation.
Appeal disposed off.
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2020 (10) TMI 288 - CESTAT MUMBAI
Misdeclaration of export goods - mis- declaration of attempt to export 22 “carat gold jewellery” - Outright Scheme for manufacture of Gold Jewellery with an obligation to export the same with certain quantity of gold within stipulated period of ninety days with required value addition - allegation is that in order to show that the export of gold in the form of Gold Jewellery was in compliance with the said scheme, the appellant SGPL mis-declared the actual quantity of gold containing in the said jewellery - Confiscation - Redemption Fine - penalty.
HELD THAT:- From the statement of Roshan Vernekar and that of the other persons recorded in the impugned Order, one thing is very clear that the export quantity of gold declared in the Shipping Bill is incorrect and the same was detected by the Customs authority on a thorough re-examination of the declared gold jewellery meant for export. It is not disputed by SGPL at any stage of the proceeding that the content of the gold in the jewellery meant for export was found to be 3540 gms. instead of the declared quantity of 13,633.730 gms - Ld. Commissioner was justified in directing confiscation of the goods and imposition penalty on SGPL under the respective provisions of the Customs Act, 1962. However, the quantum of fine directed and penalty imposed appears to be on higher side in the circumstances of the case and the evidence brought on record. Hence, to meet the ends of justice the redemption fine is reduced to 20.00 lakhs and penalty to ₹ 5.00 lakhs on SGPL.
While imposing penalty on Shri Roshan Vernkear, learned Commissioner analyzing the evidences observed that Shri Roshan Vernekar did not take any steps to examine the content of the gold in the gold studded jewellery before export and declaration made on behalf of the appellant company M/s SGPL. The learned Commissioner also did not accept the submission of Shri Roshan Vernekar that the making of jewellery was entrusted to one Shri Hitesh Desai, who met him only once and also without visiting the premises of Bengali Babu, who carried out the making of jewellery for export, and the said gold jewellery was accepted as genuine and declaration with Customs for export was filed accordingly. Thus, he found him guilty and imposed penalty both under section 114(iii) & 114AA of Customs Act, 1962.
There are no justification to interfere with the said finding of the Ld. Commissioner which points out to omission of necessary steps required to be taken by Shri Roshan Vernekar in the verification of the jewellery and preparation of export documents on behalf of SGPL. Also, it cannot be ignored that as a remedial action, necessary criminal case was initiated against the karigar - the penalty imposed on him seems to be disproportionate and consequently deserves to be reduced. Consequently, penalty on Shri Roshan Vernkear under Section 114AA is reduced to ₹ 2.00 lakhs and penalty under Sec. 114(iii) is set aside as imposition of penalty under Sec. 114AA would meet the ends of justice.
In imposing penalty on Directors Mrs. Deepa Vernekar and Mrs. Shilpa Vernekar, the learned Commissioner observed that even though they have not signed any export documents, they are liable for penalty for the mis-declaration and misdeeds of Shri Roshan Vernekar. I do not find merit in the observation of the learned Commissioner imposing penalty on Directors Mrs. Deepa Vernekar and Mrs. Shilpa Vernekar, as neither of them was examined nor in any of the statements of other witnesses, anyone implicated them stating that they had knowledge about handing over the gold to Hitesh Desai for making the jewellery and/or they had the knowledge of the content of the gold in the jewellery declared for export was less than the declared quantity in the export documents. Therefore, imposition of penalty on them cannot be sustained.
Penalty on CHA - HELD THAT:- There are force in the contention of the CHA inasmuch as the Department could not produce any cogent evidence to establish the fact that either Shri Vinay Shah or CHA was aware of the fact that the gold jewellery meant for export did not contain the quantity of gold as declared along with other imitation stone, assuming for a while that Shri Vinay Shah was the employee of the CHA. He has prepared the document as declared to him on behalf of the exporter - the imposition of penalty on Shri Vinay Shah and the CHA cannot be sustained.
Application allowed in part.
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2020 (10) TMI 287 - CESTAT MUMBAI
Levy of ADD - imported stainless steel CR Coils having width less than 1280 mm - It is alleged that the goods were stuffed in seven containers, and in three containers weighing around 54.294 MTs Stainless Steel CR Coils having width less than 1280 mm , hence liable to Anti Dumping duty amounting to ₹ 49,14,756/- - N/N. 14 of 2010 dated 20.02.2010 read with N/N. 86/2011 dated 6.9.2011 - Confiscation - Penalty - HELD THAT:- The issue is no more res integra and settled by the judgment of Hon'ble Supreme Court in favor of Revenue in the case of COMMISSIONER OF CUSTOMS (EXPORT) VERSUS M/S. MASCOT INTERNATIONAL [2017 (7) TMI 276 - SUPREME COURT] setting aside the judgment of the Tribunal in this regard. Thus, the Stainless Steel CR Coils of 54.298 MT having width less than 1280 mm are liable to Anti Dumping duty of ₹ 49,14,756/- and the confirmation of the duty by the authorities below does not suffer from any infirmity. This is also not disputed by the Appellant during the course of hearing.
Confiscation - Redemption fine - HELD THAT:- The adjudicating authority while confirming the demand of Anti Dumping duty directed confiscation of the goods observing that the goods are liable to anti dumping duty and there has been mis-declaration/non-declaration of goods in the respective Bills of Entry. The confiscation of the goods was directed under Section 111(d) and 111(o) of the Customs Act, 1962 and allowed redemption of the same on payment of fine of ₹ 4.00 lakhs.
There is merit in the contention of the learned AR for the Revenue inasmuch as when the goods were imported, the appellant did not appropriately declare the width of the stainless steel CR coils in the Bills of Entry only in respect of 54.294MTs when the width of other coils having width more than 1280mm declared, resulting into nonpayment of Anti Dumping duty. After initiation of investigation, the Anti Dumping duty of ₹ 49,14,756/- has been deposited by them. Subsequently, the goods were provisionally released on execution bond and cash security. On their application, the Commissioner of Customs allowed re-export of the goods in May, 2014 and the goods were subsequently re-exported in September, 2014.
Penalty on Shri Ketan R Jain - HELD THAT:- The Department could not bring out any evidence against personal involvement of Shri Ketan R Jain indicating that he has involved actively in non-payment of anti dumping duty by mis-declaring the width of the coil. On the contrary, he has signed the relevant import documents filed with Department in normal course. Accordingly, imposition of penalty on him is unwarranted and the same is accordingly set aside.
There are no merit in the contention of the appellant in as much as the amount of Anti Dumping duty was paid during the course of investigation in February, 2014, which later resulted into issuance of show-cause notice in August, 2014 after completion of the investigation. The said show-cause notice was adjudicated by the Assistant Commissioner in 2017 and the appeal against the said order was finally decided by the learned Commissioner (Appeals) by order dated 19.09.2018.Consequent to the said Order the refund of anti dumping paid during investigation became due to them. Consequently, on their filing of refund claim on 26.11.2018, the Assistant Commissioner after scrutinizing the refund claim from all aspects including unjust enrichment etc., sanctioned the refund to the Appellant.
Appeal allowed in part.
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2020 (10) TMI 285 - CESTAT MUMBAI
Valuation of imported goods - Cut Orchid Flowers (Dendrobium Hybrid) of various varieties and colour - undervaluation of goods - demand of duty on the enhanced value on the basis of the certain market enquiries - principles of natural justice - HELD THAT:- From Public Notice No 48/2003 dated 08.12.2003, issued by the Commissioner of Customs (Import), Air Cargo Complex, Mumbai it is quite evident that the procedure of Kaccha Bill of Entry is a special procedure for facilitating the immediate clearance of consignments of certain categories of goods. Public notice makes it clear that Kaccha Bill of Entry shall be filed as a prior bill of entry and processed accordingly. It also prescribes that these Bill of Entries shall be system appraised on the basis of the declarations made by the importer and the duty payment challan shall be system generated. In case the department finds that any duty has been short levied or short paid against a Kacha Bill of Entry, then it will communicate to the importer about short payment of duty, and also initiate the legal action as per law. Importer has to pay the duty immediately or this facility of allowing clearance on the basis of Kaccha Bill of Entry shall be withdrawn.
In their submission and arguments appellants submit that they have no grievance with the order of the Commissioner (Appeal) as he has remanded the matter back to the original authority to pass a fresh order (refer para 11), following the principles of natural justice. Their grievance is against the observations made by the Commissioner (Appeal) in para 7, 8 & 10 (reproduced above in para 3 of this order). The learned counsel submits that as per the observations made in para 10, Commissioner (Appeal) has decided the issue himself upholding the assessment orders enhancing the duty. By doing so he has seriously constrained the original authority from examining the issue afresh and passing the speaking order following the principles of natural justice.
In terms of the public notice referred above, it is quite evident that allowing clearance against Kacha Bill of Entry, is a special dispensation made by the revenue for allowing speedy clearance of consignments of certain category of goods. Hence by availing this special dispensation, appellants are bound by the requirements laid down by that public notice, specifically in respect of the payment of duty as per the assessment made. Hence we do not find any merits in the submissions of the appellants that they were coerced and forced to pay the enhanced duty.
Section 17(5) of the Customs Act, 1962, specifically provides that in case where the Customs Officer amends any assessment made by the importer, then Custom Officer will issue a speaking order giving the reasons for making the amendments in the assessment as made by the importer - In the present case Customs has not issued any such order under Section 17(5). In absence of any order under Section 17(5) of the Customs Act, 1962, Commissioner (Appeal) was justified in remanding the matter to the original authority for passing the order under Section 17(5).
Appeal disposed off.
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2020 (10) TMI 237 - SUPREME COURT
Provisional release of goods - Section 110A of the Customs Act, 1962 - High Court has directed provisional release, subject to the respondent furnishing a bank guarantee quantified at ₹ 10 crores, besides other incidental conditions - HELD THAT:- The quantum of the bank guarantee which has been directed to be furnished by the High Court, should be enhanced from ₹ 10 crores to ₹ 15 crores. Mr Salve has stated on instructions that he has no objection to an enhancement of the quantum of the bank guarantee.
The order of the High Court is modified by directing that the quantum of the bank guarantee shall stand enhanced to ₹ 15 crores. The other conditions which have been imposed by the High Court shall continue to govern - SLP disposed off.
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2020 (10) TMI 236 - DELHI HIGH COURT
Smuggling - charas - attempt to export illicit substance - whether the provisions of Section 42 of the NDPS Act have been violated? - HELD THAT:- Undisputedly, the provisions of Section 42 of the NDPS Act are mandatory. It is also not disputed that none of the Customs Officers had recorded any reasons for believing that an offence punishable under Chapter IV of the NDPS Act has been committed or that a search warrant or authorization cannot be obtained without affording an opportunity for concealment of the evidence or facility for the escape of an offender. It is also relevant to note that the complaint filed by the respondent also expressly indicates that proceedings were undertaken under Section 42 of the NDPS Act. It is also mentioned in the panchnama (Ex.PW4/E) that the substance was recovered and seized under Section 42 of the NDPS Act - Indisputably, if the provisions of Section 42 of the NDPS Act are applicable then it is apparent that the same have not been complied with. As stated above, the provisions of Section 42 of the NDPS Act are mandatory and therefore, non-compliance of the same would vitiate the proceedings. However, the key question to be addressed is whether the provisions of Section 42 are applicable in the given facts.
Notwithstanding the averment made in the complaint that the recovery and seizure was done under Section 42 of the NDPS Act, the same is clearly not applicable since the recovery and seizure was done in a public place. The contention that the provisions of Section 42 of the NDPS Act was not complied with, is irrelevant.
Testing conducted on the spot and drawing of samples from the charas allegedly recovered from the appellant’s trunk - whether the samples drawn were representative of the substance recovered from the appellant’s baggage? - HELD THAT:- Although the panchnama refers to a Customs Officer, it is obvious that the Customs Officer in question is Pawan Kumar (PW-4). The print out of the test result would indicate the number of tests conducted. If the contents of each of the packet was tested separately, there would be four such print-outs or one print-out recording the result of four such tests. However, the print out in question has not been brought in evidence, even though it is stated that it was in the possession of PW-4. It is also material to note that it is not the prosecution’s case that any heroin was recovered from the appellant. The CRCL test result also does not disclose any presence of heroin in the sample sent for analysis. But the alleged test had also returned a positive result for heroin - this Court is unable to accept that the prosecution has established that the contents of each of the four packets that were allegedly recovered, were tested and found to be charas prior to the contents of the said packets being placed together.
This Court is unable to accept that the prosecution was not required to lead any evidence to establish that the substance recovered from the appellant was charas - Since the prosecution has failed to establish that the sample drawn by PW-4, which was sent for chemical examination, is a true representative of the entire substance recovered, it has failed to establish that the substance allegedly recovered was charas. The appellant is, therefore, liable to be acquitted for the offence for which he was charged and convicted by the Trial Court.
Whether the prosecution has failed to establish that the sample sent to CRCL and/or the remnant substance recovered from the appellant’s trunk, was not tampered with? - HELD THAT:- Whether the prosecution has failed to establish that the sample sent to CRCL and/or the remnant substance recovered from the appellant’s trunk, was not tampered with - it is the prosecution’s case in the complaint that he had withdrawn the same by acknowledging its receipt on the detention receipt bearing No. 66564. However, the detention receipt bearing that number (that is, 66564) which has been exhibited as Ex.PW4/C does not mention any such acknowledgment. There is yet another copy of the said receipt, which records the noting that “AI sample was received from SDO(A) and handed over to Sh. Prabodh Kumar, Inspector Customs” however, that document has not been exhibited. Further, there is no explanation as to how two detention receipts bearing the same number have been placed on record. It is material to note that since the receipt bearing the said acknowledgement has not been exhibited, it is not in evidence - the prosecution has failed to establish the chain of custody of the samples in question.
The fact that the polythene bag containing the substance was not packed in a Delhi Duty Free polythene when the pullanda was opened raises considerable doubt whether the substance had been tampered with. Mr. Aggarwala sought to explain this by stating that the case property had been opened while examining PW-2 and the testimony of PW-2 also indicates that a Delhi Duty Free bag was found in the trunk. He submitted that, therefore, it is possible that the Delhi Duty Free bag could have been taken out at that stage. This contention is unpersuasive - Since the seal as well as the recovered contraband continued to be in possession with the Custom Officers, the possibility of the same being opened and re-sealed cannot be ruled out. It is also apparent that the record maintained regarding the movement of case property is not accurate. In this case PW-4 seems to have access to the articles kept in safe custody and could remove them without making any entry in the SDO(A) Register. This is clearly evident as there was no entry made in the Register for removal of the sample A-1. Thus, the contention that there are doubts that the substance recovered could have been tampered, is merited.
There are minor inconsistencies in the testimonies of the witnesses including the colour of the substance recovered; however, the same are not material.
The appellant is acquitted of the offences punishable under Sections 20(b)(ii)(C) and 23(c) of the NDPS Act. The appellant has been in custody for over eight years and six months. He shall be released immediately if not wanted any other case - Appeal allowed.
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2020 (10) TMI 235 - KERALA HIGH COURT
Search and seizure proceedings - Extension of seizure period - validity of the retention of the goods for carrying out the confiscation proceedings - HELD THAT:- As per the pre-amended provision the mandate was that there should be sufficient cause shown in the order of extension, in which circumstance there was a requirement to apprise the person from whom such seizure was effected as to the cause pleaded by the Investigating Officer to extend the time for issuing a notice under sub-section (1) and under clause (a) of Section 124 within the six month period with respect to goods seized under sub-section (1). The amended provision has done away with the words 'sufficient cause shown' and as of now for extension, what is required is only that reasons be recorded in writing - It is also pertinent that the Central Government had come out with the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020, which provided by Chapter V that the time limits under certain Indirect Tax Laws, including the Customs Act, which falls during the period from 20.03.2020 to 29.06.2020 or any date after 29.06.2020 shall stand extended to 30.06.2020 or such date afterwards as the Central Government may specify. Hence, the proceedings in the present case, which would have normally expired on 15.04.2020, stood automatically extended to 30.06.2020, which may not be very relevant for our purposes since already there was an extension granted on 11.03.2020.
Further in this case, the Investigating Officer had considered a representation made by the appellants, though not statutorily provided for, as per the directions issued by this Court in Ext. P17 judgment. The representation as is revealed from Exhibits P17 and P18, urge that they were in possession of the goods validly and in compliance of statutory formalities. There was no contention as could be urged under Section 110 (1A); which were the aspects; then absent in the statute as highlighted by the Constitution Bench in I.J.Rao to find the requirement of hearing under the un-amended Proviso to Section 110(2).
Admittedly the seizure was conducted on 16.10.2019 and the six months period provided under Section 110(2) expired on 15.04.2020. On 11.03.2020, Annexure R1(a) was passed by the Commissioner invoking the power under the Proviso to Section 110(2). However, we notice with some distress that Annexure R1(a) order was never communicated to the appellants. The communication issued to the appellants was by Exhibit P19, which is of the Investigating Officer merely informing the extension, again without the reasons being explicitly stated therein - Since the period stands extended to 14.10.2020, even now there could be a service effected, which would satisfy the mandate under the proviso to Section 110(2). There is however, no warrant to issue a direction to effect such service, since there is a deemed service and information conveyed as to the reasons for extension.
The refusal of the learned Single Judge to interfere with the impugned order to be perfectly justified - Appeal dismissed - decided against appellant.
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2020 (10) TMI 234 - BOMBAY HIGH COURT
Direction to the Respondent to allow re-export of the goods - Clove - violation of FSSAI Act - HELD THAT:- The order passed by the Commissioner is not what the High Court had intended when it had passed the order dated 03.07.2020. Such disposal of representation is no disposal. This Court had directed the Commissioner to take a decision one way or the other on the representation of the Petitioner to grant permission for re-export of the goods in question in accordance with law. Instead of taking the necessary decision, Commissioner has deferred taking such decision for an indefinite period.
The Commissioner is directed to pass a fresh or consequential order in terms of our earlier order dated 03.07.2020 on the prayer of the Petitioner for re-export of the goods in question by taking necessary decision in accordance with law keeping in mind the observations made above. This shall be done within a period of two weeks from today. This order shall be communicated by Mr. Jetly to the Commissioner. Order passed shall be placed before the Court on the next date - Stand over to 06.10.2020.
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