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Customs - Case Laws
Showing 21 to 40 of 110 Records
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2023 (3) TMI 1215 - CESTAT CHENNAI
Valuation of imported goods - inclusion of fee of EURO 40,000 for transfer of technical knowhow in the assessable value on import of new capital goods - whether the order passed by the Deputy Commissioner, Special Valuation Branch directing to modify the order so as not to include the technical knowhow fee to the assessable value of imported goods is legal and proper?
HELD THAT:- The collaboration agreement has been perused and it is found that the transfer of knowhow and related technical assistance was not a condition for sale of the capital goods.
The Hon’ble Apex Court in the case of J.K. Corporation Ltd. [2007 (2) TMI 1 - SUPREME COURT] held that Any amount paid for post-importation service or activity, would not, therefore, come within the purview of determination of assessable value of the imported goods so as to enable the authorities to levy customs duty or otherwise. The Rules have been framed for the purpose of carrying out the provisions of the Act. The wordings of Sections 14 and 14(1A) are clear and explicit. The Rules and the Act, therefore, must be construed, having regard to the basic principles of interpretation in mind.
Thus, the view of the Commissioner (Appeals) that technical knowhow fee of EURO 40,000 need not be included in the assessable value of imported goods is legal and proper - appeal dismissed - decided against Revenue.
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2023 (3) TMI 1182 - GUJARAT HIGH COURT
Seeking provisional release of seized goods - import of assorted fresh Kiwi fruits - perishable goods - unfit for human consumption or otherwise - HELD THAT:- While the court has gone through the averments and contentions raised in the affidavit, they primarily relate to repeat use of the Phytosanitary Certificate for more than one consignment. It is not the stand of the authorities for seizure of the goods that the goods are unfit for human consumption. It was accepted by the respondent authorities also that it is not the ground that the goods are not worth of human consumption.
Under the statutory provisions, the seizure of the goods would follow the inquiry and investigation to be further followed by adjudication process which may or may not ultimately lead to confiscation of imported goods as contemplated in section 111 of the Act. The stage of inquiry has yet not been started. It is reflected that though goods were seized on 20.11.2022, so far the petitioner is not issued show cause notice. In any case, the adjudicatory proceedings have not started - The court finds that when the goods are perishable in nature, the authorities should act with greater swiftness to proceed with the adjudicatory mechanism and take a final decision.
In the facts and circumstances of the case, when the petitioner has agreed to abide by the conditions which may be imposed in light of the decision of this court in M/S. A AND A SHIPPING SERVICES VERSUS UNION OF INDIA [2022 (12) TMI 778 - GUJARAT HIGH COURT], which could be applied to guide the final order to be passed, this court is inclined to grant the prayer by allowing the provisional release of the goods.
As far as the conditions on which the goods may be released to the petitioner, the court leaves the said aspect to the competent authority concerned who shall prescribe the conditions on the lines of the conditions prescribed by this court in M/s. A and A Shipping Services exercising sound discretion in that regard and upon compliance of such conditions shall provisional release the goods.
The authorities shall permit the release of the goods on stipulated directions - petition disposed off.
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2023 (3) TMI 1181 - ALLAHABAD HIGH COURT
Seeking grant of bail - imported goods were allowed for movement without payment of customs duty from one warehouse to another warehouse on the basis of the bond executed by the importer - applicant submitted that all the allegations raised by learned counsel for the Custom Department, are against Mohd. Jahas and he is main accused for importing the goods and he has been granted bail by co-ordinate Bench by detail order.
HELD THAT:- Considering the entire facts and circumstances of the case, submissions of learned counsel for the parties and keeping in view the nature of offence, evidence, complicity of accused and the fact that the case of the applicant is similar to that of co-accused, who have been granted bail and without expressing any opinion on the merits of the case and the law laid down by the Apex Court in Satendra Kumar Antil Vs. C.B.I. & Another, [2022 (8) TMI 152 - SUPREME COURT], the Court is of the view that the applicant has made out a case for bail.
The bail application is allowed, subject to conditions imposed.
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2023 (3) TMI 1180 - MADRAS HIGH COURT
Eligibility for SAD exemption - Classification of imported goods - import of Rock Phosphate from Egypt for manufacturing copper under the description “Natural Calcium Phosphate” - to be classified under the tariff head 25101010 or under the classification of ‘Minerals or Chemical Fertilizer Phosphotic’ falling under Tariff head 3103? - HELD THAT:- By exempting Special Additional Duty on fertiliser or raw material used for manufacturing fertilizers, the end user namely the farmers will be getting the benefit of the said exemption. Whereas if fallacious interpretation for the term 'fertilizer' unconnected to the context is given, then may lead to miscarriage of the object for which the concession granted.
The importer admits that the goods imported required in the process of manufacturing copper. They admit that they are not involved in manufacturing fertilizer nor holder of any license to manufacture fertilizers. At the time of import, they declared that the goods is covered under Tariff 25101010 and the name of the product is “natural calcium Phosphate”. It is admitted by the importer that no permission obtained under FCO, since the product 'rock phosphate' imported does not require such permission being not within the specification for rock phosphate to be qualified as 'fertiliser' under FCO.
It is well settled principle of law that in case of exemptions, law should be strictly interpreted and liberal interpretation detrimental to revenue is not advocated. In the present case, the impugned order due to the infirmities noted has caused injury to the revenue hence to be redressed.
The order of the Customes Department declining to grant SAD exemption is upheld - Appeal allowed.
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2023 (3) TMI 1179 - CESTAT KOLKATA
Smuggling - 7,000 Kgs of Black Pepper - foreign origin goods or not - burden to prove - confiscation alongwith penalty - HELD THAT:- Admittedly, the Consignment of 7,000 kgs of Black Pepper were being transported under proper GST Invoices, E-Way Bills and under proper Consignment Notes. The seizure also was affected, not in any border area, but after traveling for three to four days from the place of origin i.e. Mizoram. The Appellant has demonstrated that all the transactions were carried through proper banking channels. The Seizure Report has provided the two witnesses. From the signatures, it looks as if they were not well educated, there is no detail of their address.
The Recorded Statements on their own fail to corroborate the Department’s case. When any statement is recorded under Section 108, it has been clarified by the High Court that when a person who has earlier given the statement before the Gazetted Officer should reiterate the same before the Adjudicating Authority in terms of Section 138B(1). Then only the Adjudicating Authority should admit the same as an evidence. After admitting as an evidence, he should allow these persons to be crossed-examined by the other party. In the present case, the statement itself was not recorded under Section 108.
In the present case, as the statements have not been recorded in the terms of Section 108 nor the procedure specified under Section 138B(1) have been followed - The documentary evidence shown like GST Invoice, E-way Bill and Consignment Notes were available right at the time of Seizure and Department has not brought in any evidence to the effect that these are not legal documents. Once the Appellant is able to provide such documentary evidence, the burden of proving that the goods are of a foreign origin falls on the Department, which has not been done by them in the present case.
The confiscation of 7000 kgs of Black Pepper is set aside along with penalties imposed on the Appellants - Appeal allowed.
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2023 (3) TMI 1178 - CESTAT CHENNAI
Benefit of exemption from duty - Classification of imported goods - 12V SMPS consisting of Main PCB, lightening protector, DC/AC cables, fuse/fuse holders and others - Customs Notification No.21/2005-Cus. dt. 1.3.2005 and Notification No.6/2006-CE dt. 1.3.2006 - goods sold on High Sea Sale basis - to be classified under CTH 85299090 or under CTH 85049090?
Whether SMPS is an integral part of IFWT so as to make the parts of SMPS to be part of IFWT? - HELD THAT:- SMPS is intended to be used in Float-cum-charge mode as a regulated DC power source. It is simply an electrical power supply that incorporates a switching regulator to convert the electrical energy more efficiently. Though the UPS used for computers also do the same function, UPS has back up facility which is lacking in the case of SMPS. From the specifications, function and use, it cannot be said that SMPS are vital and integral part of IFWT. It is an option.
After perusing the description of 12V SMPS as given in G.R as well as the images in service manual, there are no ground found to hold that IFWT cannot function without 12V SMPS. It is in the nature of energy supplying device which would regulate voltage flow of electricity. IFWT can function even if 12V SMPS is not connected to it. This means IFWT can function if directly plugged to an energy source. Thus there exists no doubt to hold that SMPS is not an integral part of IFWT. The goods imported cannot be considered as part of IFWT.
The notification exempts parts, components and accessories of mobile handsets including cellular phones from customs duties when imported. In the case of STATE OF PUNJAB & OTHERS VERSUS NOKIA INDIA PVT. LTD. [2014 (12) TMI 836 - SUPREME COURT], the Hon’ble Apex Court was considering the issue under the Punjab Value Added Tax Act, 2005 where in the assessee, Nokia India Pvt. Ltd., had sold the cell phone along with battery charger as composite package and discharged lesser duty @4% on the charger. The appeal by the state that assessee has to pay tax @12.5% on the battery charger was allowed. In the said case, the Hon’ble Apex Court did not consider as to the interpretation of ‘accessory’ in terms of Notification No.21/2005-Cus. - Again, in the case of MEHRA BROS. VERSUS JOINT COMMERCIAL OFFICER [1990 (11) TMI 144 - SUPREME COURT], the Hon’ble Court was considering the issue of tax ability of seat covers under the Tamil Nadu General Sales Tax Act, 1959 - These decisions are distinguishable on facts.
The decision of the Hon'ble Apex Court in the case of State of Punjab Vs Nokia India has been relied to counter the view taken by the Tribunal earlier with respect to the batteries. The issue in the case was in regard to a complete product in the nature of mobile phone charger. In the present case, the goods imported are parts of SMPS. It is already held that SMPS is not a part of IFWT. The goods imported cannot be considered as accessory as these parts are not used to increase the effectiveness or convenience of IFWT. It is thus held that the goods imported are neither parts nor accessories of IFWT and therefore cannot avail the benefit of notification.
It is made clear that the issue of classification not addressed.
The assessee’s appeal is dismissed.
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2023 (3) TMI 1177 - CESTAT MUMBAI
Revocation of Customs broker licence - dismissal of request for cross-examination - regulation 22(7) and 20(1) of Customs House Agents Licensing Regulations (CHALR), 2004 - HELD THAT:- It certainly fails in appeal to logic and reason that a licence, issued under the Customs House Agents Licensing Regulations, 2004 that has been revoked by competent authority accompanied by forfeiture of security deposit, can, in the same metaphorical breath, be revived by the same authority for being subjected to revocation and forfeiture of deposit once again. Nor can it don the saving grace of rational purpose in such sequential detriment unless, at best, it had occurred to the licensing authority that one of the two erasures lacked sufficient foundation to sustain or, at worst, that ‘customs brokers’ are fair game for whimsical scattering of retribution. The patent nonapplication of mind in, thus, merging two separate, and independent, proceedings for reasons not adduced, and incomprehensible, should not pass unnoticed.
In the circumstances in which the appellant approached the Tribunal on the former occasion, viz., unanticipated revocation despite favourable findings in inquiry report, with no premonition of the justification likely to be appropriated for extinguishment of licence, neither would it have been necessary to visit the statements of the persons till responding to disagreement memo nor to impugn those statements in appeal before the Tribunal then. Hence, such cavalier dismissal of request for cross-examination affects the credibility of the disagreement memo - In combining both the proceedings and, that too, of one which had been remanded by the Tribunal, specifically directing that the deficit, in the not so usual circumstances of supplanting of inquiry findings, be bridged, with another that was on entirely different facts and imputation of breach of obligations, the licencing authority has desecrated the sanctity of higher judicial authority, and compromised the impugned order thereby, warranting status quo ante for revisit of each, separately, for shedding the taint of extraneous influence and prejudiced disposal.
Matter remanded back to the licensing authority for fresh decisions - appeal allowed by way of remand.
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2023 (3) TMI 1133 - GUJARAT HIGH COURT
Seeking provisional release of the goods - import of consignments of fresh Kiwi Fruits from UAE - perishable nature of goods - section 110 of the Customs Act, 1962 - HELD THAT:- Under the statutory provisions, the seizure of the goods would follow the inquiry and investigation to be further followed by adjudication process which may or may not ultimately lead to confiscation of imported goods as contemplated in section 111 of the Act. The stage of inquiry has yet not been started. It is reflected that though goods were seized on 16.1.2023, so far the petitioner is not issued show cause notice. In any case, the adjudicatory proceedings have not started - The court finds that when the goods are perishable in nature, the authorities should act with greater swiftness to proceed with the adjudicatory mechanism and take a final decision.
As far as the prayer for provisional release of the goods are concerned, it could be considered not only on the basis of the facts obtaining, but also in view of decision of M/S. A AND A SHIPPING SERVICES VERSUS UNION OF INDIA [2022 (12) TMI 778 - GUJARAT HIGH COURT] as could be gathered from the contents of para 9.2 of the said decision. In that case, the seizure of the goods of very nature was based on identical allegation namely that the same Phytosanitary Certificate issued by the Chilen authorities were used for different consignments by different importers.
In the facts and circumstances of the case, when the petitioner has agreed to abide by the conditions which may be imposed in light of the decision of this court in M/s. A and A Shipping Services, which could be applied to guide the final order to be passed, this court is inclined to grant the prayer by allowing the provisional release of the goods.
As far as the conditions on which the goods may be released to the petitioner, the court leaves the said aspect to the competent authority concerned who shall prescribe the conditions on the lines of the conditions prescribed by this court in M/s. A and A Shipping Services exercising sound discretion in that regard and upon compliance of such conditions shall provisional release the goods.
The authorities shall permit the release of the goods on directions imposed.
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2023 (3) TMI 1132 - CESTAT NEW DELHI
Seeking refund of the excess additional duty of customs paid - period 26.03.2015 to 22.06.2015 - application was filed beyond the period of one year and hit by time limitation or not - principles of unjust enrichment - HELD THAT:- It is undisputed that the issue was decided by the Hon’ble High Court of Delhi in its judgement dated 06.08.2018 and the matter was remanded to the original authority to decide the refund on merits. It is also evident from the judgment that the question of limitation was asserted by the Revenue before the High Court and it was not accepted. Therefore, there was no error on the part of either the Assistant Commissioner or the Commissioner (Appeals) in sanctioning the refund without considering the limitation as both authorities were bound by the order of the Delhi High Court.
Unjust enrichment - HELD THAT:- By examining what treatment was given to the disputed amount of duty or tax in the accounts, it can easily be verified whether it was passed on, either directly or indirectly, to the customers. In this case it has not been so passed. Learned special counsel for the Revenue vehemently argued that the Chartered Accountant’s certificate cannot be relied upon. However, on a query from the Bench, he could not produce any document whatsoever to either establish the fact that duty has been passed on by the respondent or to show that the Chartered Accountant certificate’s was incorrect. There are no force in this submission of the learned special counsel.
In the absence of any evidence by the Revenue on this count, the submission by the respondent that during the relevant period, M/s Naveen Associates were their Chartered Accountants must be accepted. Even otherwise, there is no requirement in law that a certificate must be issued only by the statutory auditors. So long as the certificate is issued by a Chartered Accountant and it is consistent with the accounts such as Balance Sheet and Profit and Loss statement, the certificate deserves to be accepted.
The appeal filed by the Revenue deserves to be dismissed - Appeal dismissed.
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2023 (3) TMI 1131 - CESTAT NEW DELHI
Classification of imported goods - import of 3040 pieces of Manual Breast Pump, Electric Breast Pump and Conduit Connector Cover for medical use - classifiable under CTH 9018 or under CTH 3926 - HELD THAT:- The heading of chapter 9018 provides instruments and appliances used in medical, surgical, dental or veterinary sciences including scientigraphic apparatus, other electro medical apparatus and sight testing instruments. The breast pump does not fall in any of the categories under the chapter heading. They are not used to perform any specialized surgical procedure nor is used by any medical practitioner. They are simple devices for self use to facilitate the lactating mother in discharge of breast milk as per their convenience. The goods do not require any medical supervision and are available in the market without any prescription. The heading covers a very wide range of instruments and appliances which, in the vast majority of cases are used only in professional practice (e.g. by doctors, surgeons, dentist, veterinary surgeons midwives) either to make a diagnosis, to prevent or treat an illness or to operate etc. - The Chapter Heading 3926 on the other hand provides other articles of plastics and articles of other materials. This heading covers articles not elsewhere specified or included, of plastics (as defined in Note 1 to the Chapter) or of other materials of heading 39.01 to 39.14.
Reference to the catalogue as (Annexure D) by the appellant to say that breast pump is a medical device is also not correct as it itself says that this website provides general information on breast pumps and is not intended to provide medical advice. Further, the appellant has referred to the definitions across the European Union and the USA FDA etc of the term 'medical device' (Annexure E), however on perusal of the same, it is found that the definition of medical device basically implies to devices used for the purpose of diagnosis, prevention, monitoring, treatment or alleviation of disease, injury or handicap or investigation, replacement, modification or support of the anatomy or of a psychological process. This itself supports the view that the breast pump does not merit classification as a „medical device‟ as it has no such use.
There is no quarrel with the principle that most specific entry prevails over general entry, however there is no specific entry for manual breast pump. The product is made of plastic and is a common usable item - the product has nothing to do with any medical or surgical procedures nor is it used by any medical practitioner. It is only a facilitating device for self use by lactating mothers. The impugned order classifying the manual breast pump under CTH 39269090 is upheld.
Appeal dismissed.
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2023 (3) TMI 1130 - CESTAT NEW DELHI
Seeking restoration of appeal - application for restoration of appeal has been filed after more than six years - seeking recall of order - in a related matter which was the cause of initiation of action in these proceedings has now been remanded by the Tribunal to the Commissioner - HELD THAT:- There was no infirmity in the final order passed by this Tribunal based on the circumstances available on that date. Having passed the Final Order, this Tribunal has became functus officio. If the appellant was aggrieved by the final order the proper course of action could have been to file an appeal. Simply because in a related matter which was the cause of initiation of action in these proceedings has now been remanded by the Tribunal to the Commissioner, the final order does not become invalid and we find no ground to recall our final order and restore this appeal.
It also needs to be pointed out that the action against the appellant was initiated based on a letter of Commissioner of Customs, Kandla dated 3.12.2010 addressed to the Commissioner, Jodhpur and NOT based on any Order-in-Original passed by any Commissioner. Consequent upon the investigation by DRI a show cause notice came to be issued to the exporter M/s Dadi Impex. During investigation, it came to light that the applicant/appellant before us acted as CHA and in discharging his functions, violated certain provisions of CHA Licensing Regulations. These allegations of violation of CHALR by the appellant/applicant have been confirmed by the Commissioner, Jodhpur and upheld by the Final Order dated 9.8.2016. Any decision regarding action under the Customs Act against the exporter and/or the appellant are separate proceedings.
The application for restoration application is accordingly, dismissed.
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2023 (3) TMI 1084 - CESTAT NEW DELHI
Confiscation - penalty - Smuggling - Foreign marked gold bars - gold ornaments - cash - burden to prove - retraction of statements - cross examination on whose statements the whole case is based, were not provided - HELD THAT:- It is inconceivable that the officer recording the statement had these details. It suggests that the statements were voluntary. These statements also indicate the appellant’s relationship with Deepak Handa and that the appellant would sell gold to Deepak. The retraction does not indicate what part of the statement recorded by the officers was incorrect and what the truth is- his personal details, the fact that he would sell gold to Deepak or the nature of the seized gold. If officers had compelled him to write incorrect facts, the retraction should have brought out the correct facts - If one has legitimately bought foreign marked gold and is accused by DRI officers of possessing smuggled gold, it is inconceivable that when one is produced before the learned CMM that one would NOT say that he had actually bought duty paid gold and produce the documents. It needs to be reiterated that no duty paid documents have been produced till date even before us. Therefore, these submissions of the learned counsel will not carry the case of the appellant any further.
Section 111(d) nowhere indicates whether it applies to town seizures or seizures at the ports and airports. All that it states is that ‘any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force’ are liable for confiscation. Gold is not freely importable. Import of gold in any form, is prohibited except by nominated agencies as per the Foreign Trade Policy notification above issued under the Foreign Trade (Development and Regulation) Act, 1992. Unless this condition of the import (only by a notified agency) is fulfilled, gold is a prohibited good. The appellant also does not dispute that the gold can be imported only by the nominated agencies. If gold is imported by anyone else, it will be prohibited goods.
The gold bars and piece of gold were correctly held liable for confiscation under section 111(d) by the adjudicating authority and such confiscation was correctly upheld in the impugned order. Confiscation under sections 111(i) and (p) need to be set aside.
Gold jewellery weighing 581.71 grams seized from the appellant - HELD THAT:- It is not in dispute that the gold jewellery was not smuggled but is made in India. If it was established with some evidence that the jewellery was manufactured out of smuggled gold, then such smuggled gold would have been covered under Section 123 and by virtue of section 120, would have been liable for confiscation notwithstanding the change in its form into jewellery. However, there is no such evidence on record - therefore, the jewellery is not liable to confiscation in the absence of any evidence that it is smuggled or it has been made by converting smuggled gold. The mere fact that the jewellery was found along with the smuggled gold bars makes no difference. Confiscation of the gold jewellery cannot be sustained and needs to be set aside.
Indian currency amounting to Rs. 8,86,500 seized from the appellant - HELD THAT:- It is for the Revenue to establish that the cash which has been seized are (a) the sale proceeds; (b) the goods that were sold were smuggled goods; and (c) the person who has so sold the goods had either the knowledge or had reason to believe that the goods were smuggled. Merely because some unaccounted cash is lying, it cannot be confiscated unless the three conditions in Section 121 are fulfilled - It is not found that the Revenue has established any of these factors or even identified which were the smuggled goods which were sold by the person from whom the cash is seized. Confiscation of this cash is therefore, liable to be set aside.
Penalty of Rs. 25,00,000 imposed on the appellant under Section 112 - HELD THAT:- The penalties imposed on Shri Deepak Handa and Shri Ravi Handa reduced - confiscation of the cash and jewellery seized from the appellant set aside - it is deemed fit to reduce the penalty imposed on the appellant also to Rs. 5,00,000/-.
Appeal allowed in part.
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2023 (3) TMI 1083 - CESTAT NEW DELHI
Refund of SAD - rejection of refund claim for the reason that the claims were filed beyond one year from the date of payment of duty and hence were time-barred as per condition 2 (c) of the notification - HELD THAT:- The Commissioner (Appeals), by the impugned orders, allowed appeals of the respondent relying on the judgment of the jurisdictional Delhi High Court in SONY INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CUSTOMS [2014 (4) TMI 870 - DELHI HIGH COURT] in which the it was held that the notification must be read down insofar as it places the restriction of one year for filing the refund claim.
Revenue filed these appeals on the ground that in another case of Wilhem Textiles India Pvt. Ltd. [2016 (9) TMI 1370 - DELHI HIGH COURT], involving the same issue, Revenue’s appeal to Delhi High Court on the same issue was dismissed and Revenue’s SLP against the dismissal by the Delhi High Court has been admitted by the Supreme Court. Therefore, according the Revenue, Commissioner (Appeals) has erred in observing the judicial discipline and following the ratio of the judgment of the jurisdictional High Court and should have defied Delhi High Court while passing the impugned order.
We are surprised as to how the Committee of two Commissioners has not only concluded that the Commissioner (Appeals) does not have to follow judicial discipline but have gone further to say that the Commissioner (Appeals) has erred in following the binding precedent of the jurisdictional High Court. The prayer before us is to hold that the Commissioner (Appeals) erred in following judicial discipline and that he should have not followed the binding precedent of the jurisdictional High Court because in some other case, on the same issue in which also the High Court dismissed the Revenue’s appeal, an SLP has been admitted by the Supreme Court. The submissions of Revenue in this appeal that the Commissioner (Appeals) should have not followed the binding ruling of the jurisdictional High Court can only result in considerable harassment to the assessee-public through needless litigation without any benefit to the Revenue.
Both these appeals filed by the Revenue are dismissed.
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2023 (3) TMI 1082 - CESTAT CHENNAI
Refund of SAD - Time Limitation - rejection of refund claim on the ground that the review order as required under Sub Section (2) of Section 129 D of Customs Act, 1962 has been passed beyond the period of three months as envisaged in Sub Section (3) of Section 129 D of Customs Act, 1962 - HELD THAT:- As per Sub Section (2) of Section 129 D of Customs Act, 1962, the review authority has to examine the decision or order passed by adjudicating authority so as to satisfy the legality or propriety of such decision or order and has to pass a review order directing the department to prefer an appeal before the Commissioner (Appeals). Sub Section (3) of Section 129 D provides that every such order under Subsection (2) shall be made within a period of three months from the date of communication of the decision or order passed by the adjudicating authority.
In both these appeals it is argued that when the period of three months is computed from the date of receiving the Order-in-Original by the reviewing authority, the review orders passed are well within time as prescribed under Sub Section (3) of 129 D of Customs Act, 1962. From the Section as noticed above it can be seen that the period of three months has to be computed from the date of communication of the decision or order passed by the adjudicating authority.
In both review order, the date of receiving the Order-in-Original by the Reviewing Cell is not mentioned. When Sub Section (3) of Section 129 D prescribes a time frame of three months from the date of receiving the order passed by adjudicating authority, it is necessary and would be convenient to mention it in the review order - What prevented the department from producing it before the Commissioner (Appeals) even after repeated request. How did the seal appear for the purpose of filing an appeal before the Tribunal. The Bench raised these doubts to the learned AR as to what is the reason that the Commissioner (Appeals) was not able to take notice of such seal if it was present on the order while considering the appeal. The learned AR was not able to reply.
It is opined that the seal seen affixed on the photo copy of the Orders-in-Original found in the annexure to the appeal filed by the department, purporting to show the date of receipt of the order in the review section, to be suspect - the strong inference that can be drawn is that there was no evidence available to establish as to the date on which the order-in-original was received by the Review Cell and apparently there was a delay in passing the review order.
The Registry is directed to issue a copy of this order to the jurisdictional Principal Chief Commissioner who is directed to issue instructions to the Committee of Commissioners, so that appeals of this nature are filed with due seriousness and after satisfying themselves about the truth of the matter - the contention of the department that the orders were received by the reviewing authority only on 11.3.2010 / 16.3.2010 cannot be accepted - appeal dismissed.
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2023 (3) TMI 1081 - CESTAT MUMBAI
Confiscation of imported goods - barge - rejection of declared value under rule 12 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - section 28 and section 114A of Customs Act, 1962 - HELD THAT:- It is found that the adjudicating authority has incorporated facts, not suitably tested by offering opportunity to challenge, which is anathema to just and fair adjudication. The deficiency in not placing the appellants on notice of these allegations would need to be remedied and it is only by a fresh adjudicating process that the factual position may be established. As pointed out by Learned Council, the restricted framework of section 28 and section 114A of Customs Act, 1962 would have to be adhered to in in the fresh proceedings. The adjudicating authority is also obliged to explain the different positions adopted for valuation of the same vessel which, but for a brief while, was within Indian territorial waters and, yet, was found to be valued with substantial difference on the two occasions; this could have a significant bearing on the manner in which the residual method is used for conformity with the scheme of valuation espoused in rule 3 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007.
Matter remanded back to the adjudicating authority for fresh determination of all issues that the appellants have raised the proceedings - appeal allowed by way of remand.
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2023 (3) TMI 1080 - CESTAT AHMEDABAD
Valuation of imported goods - 100% Non-Textured Polyester Lining Falling - Mix Lot of 100% Polyester Knitted Fabrics - to be classified under CTH 54076190 and CTH 60053200 of the Customs Tariff Act, 1975 or not - redetermination of value of goods as per NIDB data under Rules of Customs Valuation Rules, 2007 and assessed bills of entry - benefit of Notification No. 30/2004-CE dtd. 19.07.2014 as amended by Notification No. 34/2015-CE dtd. 17.07.2015 - HELD THAT:- Section 14 of the Customs Act, 1962 read with Customs Valuation Rules makes it abundantly clear that transaction value in the ordinary course of commerce is to be taken as the assessable value. The Customs Valuation Rules outlines the step-by-step methodology to be adopted for re-determination of the assessable value in certain cases. The primary requirement for re-determination of the value is that the transaction value should be rejected for cogent reasons prescribed in the Customs Valuation Rules. If the transaction value is rejected, then the Customs Valuation Rules prescribes the basis for arriving at the assessable value. However, the requirement of Section 14 and the Customs Valuation Rules need to be satisfied for enhancement of value. Nothing is forthcoming from the record of the case from which the basis for such re-assessment can be made out. Rejection of declared value on Bill of Entry is a serious affair and the same could have been rejected on the basis of cogent examination of evidences and justifiable reasons.
From plain reading of the Rule 12 it is quite evident that the word “doubt” used in the rule has to be based on cogent reasons and evidences. No cogent evidence or reason has been put forth in the present case to justify the “doubt” of the assessing officer. Clearly, for rejection of the transaction value under Rule 12, there has to be a reasonable ground and it cannot be rejected merely on the ground that similar goods have been imported at higher value without examining the applicability of Rule 5 of Customs Valuation Rules, 2007.
In the present case, the adjudicating authority enhanced the value as the declared value appears to be low compared to value available in NIDB data, otherwise, there is no material available. The Tribunal consistently observed that the declared value cannot be enhanced merely on the basis of NIDB data - Tribunal in the case of NEHA INTERCONTINENTAL (P) LTD. VERSUS COMMISSIONER OF CUSTOMS, GOA [2006 (5) TMI 279 - CESTAT, MUMBAI] has held in the absence of rejection of transaction value, invoice value requires acceptance and when the contemporaneous import of similar goods is not established, value cannot be enhanced.
Whether appellant are eligible for exemption Notification under Notification No. 30/2004-CE dtd. 09.07.2004 which provide exemption form Countervailing Duty (CVD)? - HELD THAT:- An identical issue has been decided by this tribunal in the appellant’s own matter of SEDNA IMPEX INDIA PVT LTD. VERSUS C.C. MUNDRA [2022 (2) TMI 1355 - CESTAT AHMEDABAD] where it has been held that the appellant are clearly entitled for the exemption Notification No. 30/2004-CE dated 09.07.2004 for exemption from CVD on the imported goods - it is settled that the appellants are entitled for the exemption from payment of CVD under notification No.30/2004-CE.
Appeal allowed - decided in favour of appellant.
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2023 (3) TMI 1029 - CALCUTTA HIGH COURT
Confiscation of imported goods - levy of redemption fine and penalty - import of 2249.867 M/T Palm Fatty Acid distillate in bulk and 1502.079 M/T Palm Acid Oil in bulk - restricted item or not - department took a stand that the two items imported are canalised items permissible for import by State Trading Corporation only - contravention of Clause 3(2) of Import (Control) Order, 1955 and with Section 3 of the Import and Export (Control) Act, 1947.
HELD THAT:- Admittedly on the date when the orders were placed by the appellant for purchase of the products i.e. on 12th and 14th March, 1986 legal position was clearly in favour of the appellant. Added to that the clarifications issued by the Joint Chief Controller of Imports dated 17.03.1986, the minutes of the meeting of the Central Board of Excise and Customs and Principal Collector of Customs dated 03.04.1986, the circular issued by the Under Secretary to the Government of India to port authorities dated 23.04.1986 and the letter addressed by the Principal Collector of Customs to the Federation of Indian Export Organization dated 14th/15th May, 1986 all clarified position that the appellant would be entitled to import canalized items under the additional licenses which were issued to them.
It cannot be disputed that the contract having been entered into and processed, it is virtually next to impossible to stop, the consignment mid sea which the Customs Department would be well aware and there are several procedures intervening such matters if at all it is feasible of being performed. Therefore, the Collector of Customs has faulted the appellant not performing of an act (stoppage of the shipment in the mid sea) which was next to impossible. In any event, the conduct of the appellant should be examined on the date when they placed the order i.e. on 12th and 14th March, 1986 and as stated earlier the law on the subject was clearly in favour of the appellant and the concerned department were also of the clear view that canalized items can be imported on additional license. Therefore, failure to examine bonafides of the appellant on the above facts has led to an erroneous approach by the department.
In Hindustan Steel Limited Versus State of Orissa [1969 (8) TMI 31 - SUPREME COURT], it was held that the discretion to impose penalty must be exercised judicially, penalty will ordinarily be imposed in cases where party acts deliberately in defiance of law or is guilty of contemptuous or dishonest conduct or acts in conscious disregard of its obligation but not in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from bonafide belief that the offender is not liable to act in the manner prescribed by the statute. Thus, bearing in mind the above legal principles and taking note of the facts which were set out above, the case on hand is a case where no penalty could have been imposed.
Whether the imposition of redemption fine of Rs. 80,00,000/- was justified? - HELD THAT:- Admittedly on the date when the goods arrived in the Calcutta Port and when the appellant sought for clearance of the said goods the decision in UNION OF INDIA VERSUS GODREJ SOAPS PVT. LTD. AND ANOTHER [1986 (9) TMI 203 - SUPREME COURT] held the field and consequently import was unauthorized as the goods imported were canalized items and could not be imported under additional licenses. If that be the case, the appellant can have no other option except to accept the fact that the import is unauthorized, but however we have considered the conduct of the appellant and we were satisfied with the bona of the appellant. Nevertheless, on the date when the goods were sought to be cleared from the Kolkata Port there was a clear bar for importing such goods under the additional licenses and this being a bar created under the policy which binds the appellant as additional licenses were issued under the policy, the appellant cannot escape from the rigour of imposition of redemption of fine - In the case on hand the total quantity of both the products imported by the appellant more or less is 3700 metric tons and if the same yardstick as applied by the department in the case of Shashi Kant is applied to the case on hand the redemption fine could at best be imposed to the tune of around Rs. 50 to 53 lakhs and definitely not Rs. 80,00,000/-. Therefore, the redemption fine imposed on the appellant was excessive and disproportionate and inconsistent with the stand taken by the department in other contemporaries imports of same product in the same factual background. Therefore, we are inclined to interfere with the quantum of redemption fine which was imposed.
The orders passed by the authority imposing a redemption fine of Rs. 80,00,000/- is set aside and the fine stands reduced to Rs. 50,00,000/- and the penalty imposed on the appellants is set aside in its entirety - Appeal allowed in part.
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2023 (3) TMI 1019 - CESTAT AHMEDABAD
Classification of imported goods - seamless tubes and pipes - to be classified from CTH 75051220 to CTH 72189910? - applicability for Sr. No. 384 of Notification No. 50/2017 dated 30.06.2017 - whether the requirement of sub heading 1 (b)(i), 1 (b) (ii) and 1 (b) (iii) have to be satisfied together or independently?
HELD THAT:- Between sub heading note 1 (b) (i) and 1 (b) (ii) there is no mention of “and” or “or”. Between sub heading 1 (b) (ii) and 1 (b) (iii) there is specifically mention of word “or”. Interpreting the above text the revenue has come to the conclusion that to qualify as nickel alloy sub heading note 1 (b)(i) has to be mandatory satisfied along with the conditions specified in sub heading note of 1 (b) (ii) or condition specified in sub-heading note 1 (b)(iii) - it is apparent that whenever legislature intended that two conditions have to be simultaneously satisfied it has specifically mentioned word “and” between those condition and whenever any one of the two conditions or more conditions are to be satisfed, the legislature has specifically put the word “or” in between those conditions.
It is also noticed that the sub-heading note 1 (b) (i) requires the content weight of cobalt to exceed 1.5%. The sub heading note 1 (b) (iii) requires the total content of nickel + cobalt to exceeds 1 %. If the subheading note 1 (b) (i) is held to be a necessary requirement then the sub heading note 1(b) (iii) becomes otiose in so far as if the alloy contains cobalt in excess of 1.5% then it will obviously satisfy the condition of Nickel + cobalt exceeding 1 % . In this background also it is seen that the sub heading note 1(b) (i), 1(b) (ii), 1(b) (iii) need not to be simultaneously satisfied for the purpose of classification of goods as nickel alloy.
Nickel predominates in weight being 62.15 to 62.26 % in weight. It is seen that the iron content ranges from 4.56% to 4.59 %, therefore, sub heading note 1 (b) (ii) stands satisfied. Consequently, the goods qualify as nickel alloy in terms of Section note 5 of Section XV read with sub- heading note 1 (b)(ii) of chapter 75 - It is also not disputed by the Revenue that the said product is commercially also known as nickel alloy and not steel. This specific assertion has been made by appellant and the same has not been disputed by the Revenue.
The goods qualify as nickel alloy under sub heading note 1 (b) (ii) - the impugned order classifying the goods as steel cannot be sustained and is therefore set aside - Appeal allowed.
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2023 (3) TMI 959 - CESTAT KOLKATA
Valuation of imported goods - Enamelled Aluminum Wire - re-determination/enhancement of the transaction value based on the LME price - reliability of NIDB data - NIDB data comparison pertained to Braiding Wire of Aluminium Alloy - HELD THAT:- It is found that the impugned orders passed by the ld. Commissioner suffer from legal infirmity inasmuch as the comparison offered based on NIDB Data is with reference to an altogether different product viz. Braiding Wire of Aluminium Alloy and therefore, it certainly cannot be considered as identical or similar goods, viz. Enamelled Aluminum Wire. Also reliance placed by the Ld. Çommissioner on NIDB Data relating to import of some Aluminium Magnesium Alloy Wire imported at Nhava Sheva can also not offer a realistic comparison of identical goods as they do not match in terms of the description and quantity. The manufacturers’ Certificate state that Enamelled Aluminum Wire under import was manufactured out of scrap.
In view of the manufacturers certification provided at the time of import and with no claim to doubt the veracity of the said contention, the test results as offered by the CRCL and the Sriram Institute for Industrial Research, New Delhi, the Department’s claim of disputing the description and valuation of the import goods is bereft of any merit. Also the comparisons offered of allegedly similar goods either by way of proforma invoice of NIDB data are also without any merits as they cannot stand legal scrutiny. The Department’s contention of taking LME prices as the bench mark price is not on a sound footing in view of the certification from the manufacturers that the import goods were produced out of scrap. Therefore to contend the valuation of import goods based on the value of prime material holds no legal substance and is liable to be quashed as the said imported goods viz. Enamelled Aluminium Wire are not the products of virgin material but manufactured out of scrap.
It would not be appropriate to allege mis-declaration on the part of importer either for the description of the goods or for their valuation as the comparison rendered by the Department cannot be upheld under the facts and circumstances herein. The price of the import product based on the price of prime virgin material does not withstand scrutiny in view of the explanation and contention offered by the manufacturers, which has not been disputed by the Department.
This Tribunal in the case of M/S. B.B.M. IMPEX PVT. LTD., VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , NEW DELHI [2020 (6) TMI 425 - CESTAT, NEW DELHI] has held that NIDB Data cannot be relied upon when it is relating to different quantity and quality of goods. The test report and the manufacturer’s certificates have not been contested by the Department. The contemporaneous evidence cited in support by the Department, are not inconsonance with the description of the goods under import.
Appeal allowed.
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2023 (3) TMI 958 - CESTAT NEW DELHI
Eligibility for exemption notification - Benefit subject to the condition of manufacture - Notification no 30/2004-CE dated 9.7.2004 as amended by N/N. 34/2015-CE dated 17.7.2015 - additional duty of Customs - case of the appellants is that they are entitled to the benefit of the exemption notification even after the amendment on 17.7.2015 and it is the case of the Revenue that the appellants are not entitled to this benefit after the amendment.
Whether or not the appellants would be entitled to the benefit of the exemption notification 30/2004-CE dated 9.7.2004 as amended by Notification No. 34/2015-CE dated 17.7.2015 read with the explanation dated 21.7.2015?
HELD THAT:- Before 17.7.2015, the only condition in the exemption notification was that no CENVAT credit should have been availed on the inputs used in manufacture of the goods. It is obvious that the CENVAT credit will not be available at all if the goods are manufactured outside India and therefore, it is impossible to have availed CENVAT credit on the goods manufactured outside India. Therefore, it is fair to assume that no CENVAT credit was availed on the inputs used in the manufactured of imported goods. Therefore, the condition that no CENVAT credit should have been availed is fulfilled with respect to imported goods.
After 17.5.2015, a second condition has been added that Central Excise duty should have been paid on the inputs. Just as it is impossible for the manufacturer outside India to have availed CENVAT credit, it is equally impossible for Central Excise duty to have been paid on the inputs used in the manufacture of the goods. Therefore, it is reasonable to assume that this condition was not fulfilled with respect to imported goods just as it is reasonable to assume that no CENVAT credit has been availed.
If the exemption notification is read as per the appellant‟s submissions, it will put the domestic industry at a disadvantage and unduly favour the imported goods. To claim the benefit of the same exemption notification, the domestic industry will have to manufacture it out of duty paid inputs while the imported goods will get this benefit without paying duty on the inputs. Any exemption notification must be strictly interpreted as it is drafted and there cannot be any intendment while interpreting it. The person claiming the benefit of the notification will have to fulfill all the conditions in the notification. If the conditions are not fulfilled, the benefit is not available.
The benefit of the exemption notification 30/2004-CE dated 9.7.2004 as amended by Notification No. 34/2015-CE dated 17.7.2015 will not be available to the goods which are imported - Hon'ble High Court of Madras in M/S HLG TRADING VERSUS UNION OF INDIA, JOINT SECRETARY, TRU CENTRAL BOARD OF EXCISE AND CUSTOMS, CHIEF COMMISSIONER OF CUSTOMS, COMMISSIONER OF CUSTOMS, M/S ADITYA INTERNATIONAL LTD AND OTHERS [2015 (11) TMI 313 - MADRAS HIGH COURT] and in THE COMMISSIONER OF CUSTOMS (EXPORTS) VERSUS M/S. PRASHRAY OVERSEAS PRIVATE LIMITED, CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL [2016 (5) TMI 1106 - MADRAS HIGH COURT] held that the benefit of the exemption notification will not be available to the imported goods.
In the facts of these cases, the matters pertained to the period after the amendment 34/2015-CE dated 17.7.2015 adding the new condition that central excise duty should have been paid on the inputs was introduced and further after the explanation was inserted by 37/2015-CE dated 21.07.2015. The undisputed position is that there are two conditions (1) no CENVAT credit should have been availed which is fulfilled and (2) that excise duty should have been paid on the inputs which has not been fulfilled.
Respectfully following the judgment of the Madras High Court, it is held that the appellants were not entitled to the benefit of 30/2004-CE dated 9.7.2004 as amended by Notification No. 34/2015-CE dated 17.7.2015 for the CVD on the imported goods.
There is no infirmity in the impugned orders - Appeal dismissed.
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