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Customs - Case Laws
Showing 361 to 380 of 1607 Records
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2023 (10) TMI 898
Revocation of Customs Broker License - forfeiture of security deposit - levy of penalty - contravention of conditions of re-export bond and instead of re-exporting, they diverted the goods for home consumption - HELD THAT:- The Custom Broker has a limited role of filing the bills of entry as per the instructions of importer and the authority of deciding the admissibility of any Exemption Notification was exclusively bestowed on Assistant/ Deputy Commissioner concerned as the Proper Officer under Section 143 of the Customs Act, 1962. In case of any violation of terms and conditions of the Exemption Notification by the importer, invocation of the terms and the conditions of Bond including that of re-export Bond is the exclusive liability of the Departmental Officer and in no way the responsibility can be shifted to the Customers Broker. The appellant as the customs broker at no stretch of imagination can be held liable for violation for the post import conditions of the Exemption Notification against which the consignment was cleared since no such authority has been bestowed on the appellant. Thus, the Appellant cannot be held responsible for the violation, if any, committed by the importer.
Attention drawn to Tribunal’s decision in the case of MR. G.N.D. CARGO MOVERS VERSUS COMMISSIONER OF CUSTOMS (GENERAL) , NEW DELHI [2017 (4) TMI 1160 - CESTAT NEW DELHI] wherein it has been held that the requirement of Customs Broker to exercise due diligence to ascertain the correctness of any information which he imparts to clients with reference to work relating to clearance of cargo would arise only when the Customs Broker is aware of the importer’s motive to mis-declare. In that case in each and every case of mis-declaration by the exporter, it can be concluded that Customs Broker did not suitably inform his clients. There has to be some evidence on record to show that either the Customs Broker was aware of such misdeclaration and suppressed the same with a mala fide mind or he has taken efforts to get the goods cleared from the Customs on the basis of wrong declaration made by him or has connived with the importer so as to aid and abet the wrong declaration which is not the case here.
The impugned order revoking the Appellant’s Custom Broker License and forfeiture of the Security Deposit, amounting to Rs. 75,000 under Regulation 18 of the Customs Brokers Licensing Regulations, 2013, is not sustainable - appeal allowed.
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2023 (10) TMI 832
Denial of exemption from payment of customs duty - non-fulfilment of export obligation - sale outside the DTA - HELD THAT:- The Court is of the opinion that for the purpose of calculating duty and interest, the respondent-assessee should be given the benefit to the extent of valuation based upon the exports already made (i.e. Rs. 3,89,87,054/)-. The export commitments were fulfilled to this extent is not in dispute.
The impugned order is modified. Instead of the depreciated value, a proportion may be duly worked out taking into account the export commitment actually fulfilled by the respondent - assessee while working out the duty liability component payable as well as its liability, towards interest.
Appeal allowed in part.
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2023 (10) TMI 831
Revocation of Customs Broker License - forfeiture of security deposit - it is alleged that the report has been drawn excluding vital evidence and the report is not legal - HELD THAT:- Admittedly, no action has been initiated under the provisions of the Customs Act against the exporter nor any show cause notice was issued under Section 124 of the Customs Act against the exporters or the respondent customs broker. After having found that the exporters are not traceable, there appears to be a feeble attempt made by the Department to confer upon Customs broker by proposing to examine as to whether the Customs broker has done proper verification in terms of the obligation under Regulation 10(n) of the CBLR.
It is not the case of the department that the documents which were produced by the respondent/customs broker were false and fabricated documents and there is nothing on record to even remotely suggest such an allegation. The Tribunal has rightly held that the obligation of the customs broker under regulation 10(n) does not include keeping a continued surveillance on the client to ensure that he continues to operate from that address and has not changed its operations - The stand taken by the respondent even at the time of enquiry that all set of documents which were produced clearly would satisfy the mandate under regulation 10(n) of the Act - the learned Tribunal has rightly explained the scope and obligation under regulation 10(n) and the finding would not call for any interference.
The substantial questions of law are answered against the revenue - Appeal dismissed.
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2023 (10) TMI 830
The impact of imposing penalty and purpose of reduced penalty not fulfilled - deterring the appellant from repeating the offence - Continued violation of policy conditions - Reduction of redemption fine and penalty imposed on the respondents - import of Prime hot rolled steel plates shotblasted/ coated with Zinc Silicate - revision of assessable value on account of Minimum Import Price fixed by DGFT - HELD THAT:- In respect of the said items Notification No. 38/2015-20 dated 05.02.2016 places restriction in nature of the prescribed Minimum Import Price. The notification prohibits imports at price less than USD 643/MT for the impugned item by placing the minimum import price as condition of import. The appellants have imported the goods at USD 398/MT, practically half the price prescribed by DGFT by the aforesaid notification. The goods were, therefore, confiscated and offered for release on payment of redemption fine and penalty to the respondents. Initially the assessable value was also revised by the original adjudicating authority to the Minimum Import Price prescribed by the DGFT. However, in appeal the valuation at the declared import price was accepted by Commissioner (Appeals) and no appeal on that ground has been filed by revenue.
The appellant has been regularly importing by violating the Minimum Import Price (MIP) condition prescribed by the DGFT. It is noticed that the original authorities have been imposing redemption fine roughly equal to the amount of differential duty demanded. However, the Tribunal in the earlier cases had reduced the redemption fine and personal penalty by 90%. The impugned order in the instance case has followed the earlier order of Tribunal and reduced the redemption fine and personal penalty by 90% relying on the Tribunal order in appellant’s own case. It is noticed from the pattern of continuing violation that the redemption fine and penalty imposed earlier are not discouraging the repeat of offence. It is seen that the appellants continue to violate the import policy in respect of Minimum Import Price with impunity.
The redemption fine imposed earlier has not deterred the appellant from violating the policy.
The impugned order is set aside and the matter is remanded to the original adjudicating authority to go into the facts of the case and come up with proper quantification of fine and penalty which is adequate to deter the appellant from repeating the offence - Appeal allowed by way of remand.
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2023 (10) TMI 829
Classification of goods cleared from SEZ - plastic stickers - restricted goods or not - classifiable under 39 19 as declared by the appellant or classifiable under Customs Tariff Heading 39 15 as plastic waste and scrap claimed by the Revenue? - enhancement of the value by the Customs Authority.
Classification of goods - HELD THAT:- From the test report, it is clear that the institute has clearly accepted the description declared as ‘plastic stickers’ in the test result in Sr.No. 1(a) and also described the goods as ‘ cut pieces of clear film with paper sticker’ as per the said result since the goods was found as stickers, the goods should be classified in the form it was found i.e. sticker, which is correctly classifiable under 39 19 9010.
In view of the Hon’ble Gujarat High Court judgment in the case of UNION OF INDIA VERSUS OSWAL AGRICOMM PVT. LTD. [2010 (7) TMI 712 - GUJARAT HIGH COURT] as well as the clear observation of the Tribunal in the earlier remand order now the entire reliance can be made on the CIPET report only and no reliance can be made on customs laboratory report. Therefore, in view the above clear report of the CIPET the goods cleared from appellant’s SEZ is a plastic sticker and correctly classifiable under Customs Tariff Heading 39 19 9010.
Whether the goods are undervalued or otherwise? - HELD THAT:- There is no evidence was found to established that the appellant have undervalued the goods. Accordingly, the value declared by the appellant are correct being a transaction value and no addition can be made. The whole purpose of restriction is to avoid clearance of Plastic Waste and Scrap in the DTA as per the policy is that the hazardous goods should not be supplied in the DTA - In the present case the CIPET report clearly states that the goods i.e. Plastic Stickers are not hazardous in the nature. This also strengthen the case of the appellant that the goods is neither restricted nor prohibited. Hence, the entire case of the department fails. In view of the foregoing discussion and findings, the goods in question are held to be plastic stickers and there is no undervaluation in respect of such goods.
The impugned order is not sustainable. Hence, the same is set aside, appeals are allowed.
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2023 (10) TMI 828
Condonation of delay of 8 days in passing the review order - HELD THAT:- It is seen that even after much efforts, the Commissioner (Appeals) could not get details from the department as to the date of receipt of the Order in Original by the Review Cell. If the Department had knowledge about the date of receipt of the Order in Original by the Review Cell as being 11.3.2010, they ought to have furnished such evidence before the Commissioner (Appeals) itself.
The Tribunal in similar matters in COMMISSIONER OF CUSTOMS (EXPORTS) , CHENNAI VERSUS M/S. VCR TIMBER ENTERPRISES AND M/S. MEHNDIPUR BALAJI IMPEX (P) LTD. [2023 (3) TMI 1082 - CESTAT CHENNAI] held that 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.
Thus, the appeal filed by the department is without merits - impugned order is sustained - appeal is dismissed.
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2023 (10) TMI 827
Confiscation of Gold bar with an option to pay redemption fine - absolute confiscation of currency - levy of penalty under Section 112(b) Customs Act - misuse of EOU Scheme by mis-declaring export jewellery in terms of purity of the gold - burden to prove - HELD THAT:- There are force in the contention of the learned Counsel for the Appellant that the entire case is built on assumptions and presumptions against the appellant. In the very first instance on the next day after DRIs search and seizure of gold bar and cash, the Appellant gave documentary evidence like Purchase Invoice of M/s Somya Bullion & Jewellers, Cash Ledger, Stock Ledger, Balance Sheet and Trial Balance showing legal acquisition and ownership of the gold and cash. The Appellant’s Stock Ledger clearly showed that he had 1218.255 grams of gold on 19.12.2016 from which DRI seized 1kg gold bar.
There are force in the arguments of the learned Counsel for the Appellant that the marking on the gold bar seized from the appellant’s premises matches neither with the gold imported by M/s Mahalaxmi Jewel Exports by Bs/E No 8974 dated 2.10.2016 and 10240 dated 1.12.2016, nor the gold recovered from the residential and factory premises of Shri Prem Sagar Arora. This also points to the fact that the gold bar seized from the appellant is not diverted duty free gold by M/s Mahalaxmi Jewel Exports - also no link has been found between the gold imported by M/s Mahalaxmi Jewel Exports and the 1kg gold bar seized by DRI from the appellant’s shop.
Since documentary evidence has been presented in favour of the gold showing the Appellant’s legal ownership and acquisition, it is held that tenets of Section 123 Customs Act are satisfied and the Appellant has discharged the burden of proof. The Appellant’s statement also reiterates the same - the appellant’s submission agreed upon that the Department has not shown any proof that the seized cash was sale proceeds of smuggled gold and thus confiscation under Section 121 Customs Act is unsustainable, more so since the appellant’s Books of Accounts clearly reflect that this was part of his Cash in Hand and had been received from legitimate sources.
There can be no confiscation of the seized gold bar and currency under the Customs Act, 1962 and it is accordingly quashed. Imposition of penalty on the Appellant is also untenable and is set aside. Since the impugned order qua the Appellant cannot be sustained, it is set aside - Appeal allowed.
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2023 (10) TMI 826
Levy of penalty on CHA and Clearing and forwarding agents - Role restricted to filing of the documents - HELD THAT:- There is no allegation in the impugned order that they have violated any of the provisions of the CHA Regulations - the contention of the Appellants agreed upon that they cannot be held responsible for over invoicing if any, done by the exporter for the purpose of getting excess drawback.
It is found that this Tribunal has already decided similar issue in M/S. UNITED CUSTOM HOUSE AGENCY, SHRI RAJ KUMAR SHAW, PROPRIETOR, M/S. SUNDARY FASHION, AND SHRI PRAKASH GHOSH, PROPRIETOR, M/S. OVERSEAS SHIPPING AGENCY, PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , KOLKATA [2022 (9) TMI 862 - CESTAT KOLKATA], wherein the orders passed by the Lower Authorities were set aside.
Following the ratio of the said decisions, no penalty is imposable on the Appellants, as they have no role in the alleged offence - the penalties imposed on the Appellants in the impugned order set aside - appeal allowed.
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2023 (10) TMI 825
Demand of Customs Duty foregone - Non-fulfilment of export obligation - non-submission of bank realization certificate to the Appellant - HELD THAT:- It is a settled position in law that a new condition which does not form part of the Notification cannot be introduced through a Circular. Accordingly they contended that the demand of duty from them is against the conditions of the notification.
The issue is no longer res integra as the CESTAT, Bangalore in Appellant's own case BANK OF NOVA SCOTIA VERSUS COMMISSIONER OF C. EX. (ADJ.), BANGALORE [2008 (7) TMI 246 - CESTAT BANGALORE] categorically held that the provisions of the Exemption Notification 57/2000 read with erstwhile Circular No. 24/98- Cus dated 24.04.1998 nowhere states that non-realization of sales proceeds by Exporters will result in demand of Customs duty foregone from the Nominated Agency. Accordingly, the Tribunal has held that no duty can be demanded from them. We observe that the ratio of this decision is squarely applicable in this case.
In respect of Circulars specifying the conditions which are not there in the Notification, it is found that the Hon’ble Supreme Court has decided in the case of M/S. SANDUR MICRO CIRCUITS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, BELGAUM [2008 (8) TMI 3 - SUPREME COURT] where it was held that it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed.
By following the decision of the Hon’ble Supreme Court and the Tribunal the demand of customs duty from the Appellant is not sustainable - the demand of duty confirmed in the impugned order set aside.
Non imposition of redemption fine and penalty under Section 112(a) and 114A of the Customs Act, 1962 - HELD THAT:- Since the demand of duty itself is not sustainable, the question of demanding redemption fine and imposing penalty does not arise. Accordingly, the department's appeals are rejected.
Appeal filed by appellant allowed.
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2023 (10) TMI 824
Import of old and used parts of plate leveler machines - requirement of possession of valid licence for import - Valuation of imported goods - redetermination of value by recourse to rule 9 of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 - confiscation - penalty.
Description of the goods - HELD THAT:- The appellant has chosen to describe the goods as ‘plate leveller’ in the bill of entry and, in accordance with section 17 and section 47 of Customs Act, 1962, there is no reason to expect a different classification to be substituted. Even now, it is not their claim that goods are ‘scrap’ but merely that it is not intended to be erected as machinery and the goods, in disassembled form, have not been claimed to fit any other classification with declaration disowned as in error. Usage after import is not a criterion for classification. Therefore, the goods merit assessment in accordance with the declaration.
The goods are admittedly of ‘1942 vintage’ and it is seen that paragraph 2.31 of the Foreign Trade Policy restricts ‘second hand goods other than capital goods’ and, as it is not the case of customs authorities that these are not ‘capital goods’, the impugned goods would be freely importable. Consequently, confiscation under section 111(d) of Customs Act, 1962 lacks authority of law.
Value for assessment - HELD THAT:- The system for valuation in Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 for operation of section 14 of Customs Act, 1962 has neither been followed by the adjudicating authority nor such departure taken note of in the impugned order. The law exists for a purpose and that purpose must be served.
Appeal allowed.
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2023 (10) TMI 764
Validity of search and seizure - Ownership of goods when goods were found in possession of different person - Proof of smuggling of goods - Prayer for declaration, delivery of the goods, damages along with other reliefs - Maintainability of suit under the Sea Customs Act, 1878 - HELD THAT:- The authorities under the Sea Customs Act 1878 are not vested with jurisdiction to decide on this issue or pass declaratory order as to the title or ownership of the confiscated goods. The Plaintiffs were the third parties to whom show-cause notices were not issued. The articles were seized assuming that the Defendant no. 6 illegally imported these articles from foreign countries infringing the provisions of the Sea Customs Act 1878. Neither is there any provision nor is there any machinery under the Act to decide upon the issues.
The same considerations apply in cases of Bengal Public Demand Recovery Act and Income Tax Act. Although both the statutes are special statues providing with machineries for enforcement of special provisions consideration and adjudication of declaration of title is not barred by any of the statues.
Whether the original Plaintiffs were the owner of the articles and goods set out respectively in Schedule ‘A’, ‘B’ and ‘C’ of the plaint? - whether the goods wherein possession of Plaintiff no. 1 and the Plaintiff no. 2 at the time of seizure? - HELD THAT:- Law is well-settled. Section 101 of the Indian Evidence Act provides for burden of proof and on whom such burden of proof lies. Section 102 states that burden of proof should in a proceeding lies on that person who will fail if no evidence is at all given on either side. Section 106 is also relevant to consider in this context. According to the Section 106 when any fact is specially within the knowledge of any person burden of proof of that fact is upon him. The statute never states that any specific or particular kind of evidence is to be tendered to discharge burden of proof - Once the burden of proof is discharged by the Plaintiffs to adduce evidence to substantiate their claims, onus of proof shifts on the Defendants. DW1 Shankar Ghosh stated in evidence that diamond, watches and gold ornaments were suspected to be smuggled and were in the possession of late Ramnath Bajoria. DW 1 was a member of a search party recovery were made from safe key kept in the bedroom of the original Defendant no. 6.
Nothing is there in the evidence of DW. 1 to show that the articles in question whereof foreign origin. DW.1 stated in evidence that it was suspected that articles were smuggled and that it was believed that the articles were smuggled without indicating anything else or adducing any evidence that these articles were either imported or not available in the country. There is no concrete or cogent evidence adduced on behalf of the Defendants’ witnessed to rebut the evidences so adduced by the Plaintiffs witnesses disproving their evidences. It is admitted that in the search list the remarks column were penned through - Issues decided in favour of the Plaintiff.
Propriety of search and seizure as well as prohibitory order - HELD THAT:- Sea Customs Act, 1878 as well as the Code of Criminal Procedure provides for search and seizure and procedure to be followed therein. Civil Court in exercise of ordinary jurisdiction cannot decide on the propriety of search and seizure; civil court in exercise of ordinary civil jurisdiction is neither authorized nor vested with such power. Similarly, the prohibitory order was passed in exercise of power conferred under the then existing Income Tax Act. Vires could have been challenged in appropriate forum. But exercising ordinary jurisdiction, this Court cannot decide on the same. Therefore, this Court desists from deciding the issues.
The Plaintiffs are entitled to a declaratory decree - the instant suit succeeds.
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2023 (10) TMI 763
Extension of period of seizure - Actual date of Seizure of imported goods - Flashforge WaxJet 400 3D Prototypeing Machine, Purple Wax, White Wax and Machine Accessories - HELD THAT:- Although the panchanama in the present case was held on 26 July 2022, the actual seizure of the goods under seizure memo in question had taken place on 8 August 2022. The date of the seizure would have relevance in the context of what Section 110 subsection (2) would provide.
Admittedly the first six months from the date of the seizure memo expired on 8 February 2023. If in such situation, the department if nonetheless intends to issue a show cause notice under Section 124 of the Customs Act, necessarily recourse to “the proviso” below sub-section (2) of Section 110 is required to be taken to extend the period for a period of further six months - the proviso, confers powers on the Principal Commissioner of Customs or a Commissioner of Customs for reasons to be recorded in writing, to extend such period if further period has exceeding six months and inform the person from whom such goods were seized before the expiry of the periods so specified.
In the present case, the initial period of six months to release the consignment expired on 8 February, 2023, considering the date of seizure to be 8 August, 2022. The Deputy Commissioner however invoked the proviso by issuing a communication dated 7 February, 2023 to the petitioner at the first instance extending the time period merely by three months - Such extended period of three months by the first extension expired on 7 May 2023. Thus, the balance period which could be extended by further invocation of the proviso below sub-section (2) of Section 110 was a period of three months upto 11 August, 2023 so as to complete the period of six months under the said proviso - The second extension of two months expired on 11 July 2023. As noted, if the extended period of six months under the proviso to sub-section (2) if was to be invoked, it would have expired on 11 August 2023.
Thus, by operation of law, that is, by application of the provisions of sub-section (2) of Section 110, read with the proviso the seizure of petitioners goods has ceased to operate and has became invalid, which would entitle the petitioner for the release of the goods.
Petition disposed off.
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2023 (10) TMI 762
Valuation of imported goods - Glass Beads Chaton - rejection of declared value - reassessment of goods by loading the value as per the contemporaneous imports of identical goods which was done on the ICES EDI System - request a personal hearing not considered - goods were reassessed without following the principles of natural justice - HELD THAT:- It is on record that under EDI system, the assessing officer had made a query and also requested for certain documents and also email ID for conducting personal hearing but the respondent had replied to the query and provided certain documents but did not provide email ID for conducting personal hearing. Therefore, the Commissioner (A) was wrong in stating that the principles of natural justice was not followed. Moreover, the evidences provided before the Commissioner (A) vide Bill of Entry 3636934 dated 20.04.2021 was a Bill of Entry cleared subsequently to the item imported vide Bill of Entry No.2902619 dated 25.2.2021. Therefore, the Commissioner (A)’s observation that on “given the fact that earlier imports from the same supplier of Glass Beads Chatons” have been accepted by the Department was incorrect and baseless.
The matter is remanded back to the original adjudicating authority for deciding the matter afresh. The fact that the subsequent imports were cleared without enhancement of value may be taken on record before deciding the assessment of Bill of Entry in question.
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2023 (10) TMI 761
Valuation of imported goods - branded goods or not - goods needed to be treated as branded because of embossing of SORL on the parts or not - reliance placed on value of contemporaneous imports available in NIDB data - penalty on appellant as well as on his partner - HELD THAT:- The Appellant sell the goods in wholesale in bulk, without any printed package. The goods sold by them do not have any replacement warranty. The part number and the embossing of SORL mentioned for identification purpose cannot be considered as sale of branded goods. There were contemporaneous imports with lesser value than the value declared by the Appellant, which was not taken into consideration by the adjudicating authority while re-determing the value. As the details of the Bills of Entry are not available, the value relied upon by the revenue on contemporaneous imports cannot be considered as value of similar goods.
The value available on NIDB data cannot be relied upon to reject the declared value. This view has been held by the Tribunal in the case of AGARWAL FOUNDRIES (P) LTD. VERSUS COMMISSIONER OF CUSTOMS [2019 (6) TMI 1544 - CESTAT HYDERABAD].
The rejection of the value declared by the Appellant based on NIDB data on similar goods is not sustainable. Accordingly, in respect of the import made by the Appellant under Bill of Entry No 8177874 dated 10.10.2012, there is no evidence available on record to reject the transaction value declared by them and hence the differential duty arrived at by the adjudicating authority based on the value available on contemporaneous import of similar goods is not sustainable. Since the demand is not sustainable, the penalty imposed on the Appellant on this count is not sustainable.
Penalty of Rs.7,00,000/- on the Partner Shri. Puneet Samalia under Section 112(a) and 112(b) of the Customs Act, 1962 - HELD THAT:- The impugned order has not brought in any evidence against the partner in the alleged offence. As the allegation of suppression of value is not established, the penalty imposed on the partner is liable to be set aside. Accordingly, the penalty imposed on the Partner Shri. Puneet Samalia is set aside.
Appeal allowed.
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2023 (10) TMI 760
Advance Authorization Scheme - Non-fulfilment of Export obligation - levy of redemption fine and penalty - denial of concessional rate of duty - import of prime non alloy steel slabs falling under customs tariff item 7207 1290 - whether the appellants have violated the provisions of Customs notification No.64/2008-Cus. dated 09.05.2008, in terms of the show cause proceedings or not, and the impugned order confirming the adjudged demands, confiscation of goods and penalty is sustainable?
HELD THAT:- From the perusal of Notification No.96/2009-Customs dated 11.09.2009, it is clear that the import of goods specified in the Import Authorisation issued by DGFT in the name of the appellants, are exempt from the whole of the duty of customs, additional duty of customs and safeguard duty or anti-dumping duty, if any, leviable on such imported goods. However, the said exemption was subjected to certain conditions specified therein.
From the records of the case, it is clear that the appellants have produced the Advance Authorisation at the time of import of goods through the notified sea port Mumbai, and executed the Bond for Rs.47,58,98,750/- along with necessary undertaking before the Customs authorities in respect of Advance License No. 0310746001 dated 20.08.2013. There is no case of sale or transfer of advance authorisation in this case. Thus, it is found that prima facie the appellants have fulfilled the conditions (i), (ii), (iv) and (vi). In respect of the conditions (iii) and (v), since the competent authority as per the Notification No.96/2009-Customs is the DGFT, who would issue an export obligation fulfilment or discharge certificate, redemption, regularization certificate upon scrutiny of exports and other relevant details as in ANF 4F document, these conditions will be able to be met upon production of such certificate from DGFT authorities.
The appellants were liable to pay customs duty against 12514.22 MTs of unutilised raw material, calculated on prorata basis after deducting the imported raw material used in the exported quantity, as per Annexure-A worksheet of the show cause notice dated 04.03.2021, as these were imported by availing the customs duty exemption notification but failed to fulfil the proportionate export obligation. From the records of the case, it is also seen that the appellants had written a letter on 06.02.2018 to the Additional DGFT, Mumbai, i.e., the licensing authority for extension of the export obligation period due to adverse international business scenario faced by them and had also requested the Policy Relaxation Committee of DGFT to allow export obligation period upto 19.08.2018. Further, as claimed by the appellants it is seen from the record that the appellants had taken a demand draft No.478828 dated 19.09.2018 for Rs.9,10,69,948/- drawn on HDFC Bank, Nariman Point Tulsiani Cahmbers, Mumbai payable to the account of Commissioner of Customs, Mumbai a/c Namco Industries Private Limited, towards the customs duty and interest payable on account of non-fulfilment of export obligation by submitting it in writing to the Deputy Commissioner of Customs, DEEC Monitoring Cell of New Custom House, Mumbai.
The Notification No.96/2009-Customs dated 11.09.2009 provide that for the purpose of this notification, the “Licensing Authority or Regional Authority” would mean the Director General of Foreign Trade appointed under section 6 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992) or an officer authorized by him to grant a licence under the said Act, in terms of Explanation to the said notification. Thus, it is clear that the export obligation discharge certificate shall be issued by the DGFT and the same would be submitted by an importer to the Customs authorities for completion of the Advance Authorisation imports and cancellation of bond and undertaking.
The appellants have fulfilled the conditions of export obligation after the expiry of the export obligation period but upon payment of an amount of Rs.6,46,63,619/- towards differential customs duty and Rs.4,48,80,062/- towards interest thereon to the government. These payments made by the appellants have been duly taken into account by the DGFT in their letter dated 19.02.2020 while giving the redemption cum regularisation permission to the appellants.
There are no reason to agree with the findings of learned Commissioner that the imported goods have violated the conditions of Customs Notification No.96/2009-Customs dated 11.09.2009 and thus it is liable for confiscation under Sections 111(o) and 143 ibid and that the appellants are liable to penalty for their omission in respect of non-fulfilment of export obligation and non compliance with the conditions of the above notification - Since the appellants have already paid the amounts of Rs.6,46,63,619/- towards differential customs duty and Rs.4,48,80,062/- towards interest thereon before the issuance of show-cause notice, the order of the learned Commissioner in confirming the adjudged demands and appropriating the same to the account of government exchequer is upheld - the impugned order insofar as it has imposed redemption fine and penalty on the appellants is set aside.
Appeal allowed in part.
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2023 (10) TMI 759
Disposal of application filed under section 129B of Customs Act, 1994 - rectification of error apparent on record that came to be rejected - bar of limitation in section 28 of Customs Act, 1962 - acceptability of facts relating to the import and assessment under section 17 Customs Act, 1962 - Suppression / mis-representation or not - levy of penalty u/s 114A of CA - extended period of limitation.
HELD THAT:- In the erstwhile framework wherein acceptance of ‘declared value’ as ‘transaction value’ could be jeopardized by the latitude of deviating circumstances, determination of consequent duty liability did not necessarily imply misdeclaration of value and it could well be the inexorable purpose of rule 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 that may have given rise to ‘short payment’ owing to the transactional circumstances having been ‘suppressed’ at the time of assessment with its own consequence.
Had the circumstances which prevailed prior to 1998, depicted in the decision of the Hon’ble Supreme Court in EICHER TRACTORS LTD. VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [2000 (11) TMI 139 - SUPREME COURT], and in accord thereof, be found to have justified the invoking of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 for re-determination of the assessable value by addition to the extent of concealed price of procurement, it would well have been within the scheme of law to confiscate the goods by resort to section 111 of Customs Act, 1962. The fresh determination would have been a consequence of non-compliance with section 14 of Customs Act, 1962 and rule 4 (2) of the said rules arising from deliberate misrepresentation of the ‘transaction value’ in filing bill of entry.
Confiscation of goods - HELD THAT:- Section 111(m) of Customs Act, 1962 may be invoked only upon material particulars being misdeclared and this detriment is in addition to duty liability determined under section 28 of Customs Act, 1962. For such confiscation to be correct in law, it is necessary that the circumscribing circumstances must exist; the ‘value’ itself has not been established as ‘misdeclared’ even if the said ‘value’ was placed on record for assessment without making known the circumstances in which the same goods had been procured from the manufacturer at higher price - A finding on inapplicability of confiscation did not necessarily extend to ‘suppression/ misrepresentation’ deployed for enhancement of value for assessment.
Levy of penalty u/s 114A of CA - HELD THAT:- The legislative intent of compartmentalization of the two is evident in the incorporation of section 114A in Customs Act, 1962 that empowered imposition of penalty in consequence of such ‘suppression/misrepresentation’ and explicitly excluding recourse to the penalty consequential to ‘misdeclaration’ in proceedings for recovery of ‘short paid’ duty - the submission of the appellant cannot be accepted that relief from confiscation amounts to relief from being subjected to the ‘extended period’ for recovery of duty under section 28 of Customs Act, 1962.
Time limitation - HELD THAT:- As no new facts pertaining to circumstances in which the parallel transaction with manufacturer of the impugned goods was not tantamount to ‘suppression/misrepresentation’ is on record and the non-applicability of the re-determined value is not in dispute in these proceedings, there are no reason to set aside the demand on ground of limitation.
Appeal dismissed.
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2023 (10) TMI 758
Misdeclaration and undervaluation of imported goods - goods declared as steep glass bowl and deep cut glass bowl - seizure of container - HELD THAT:- The container was handed over to the custody of the appellant is an admitted fact. When the said admission is seen through the prism of above quoted interpreted provision, it cannot be denied that the said provisions have been violated and that there is lack of diligence towards responsibility of the custodian. However, the appellant though has pleaded its non involvement with panchas at the time of initial inspection when two contradicted panchnamas were prepared and that there was no information of Customs seal bearing No.594385 having been affixed at the time when the container was handed over to appellant, CONCOR and also that the responsibility of the custodian was otherwise given to CISF.
There are no cogent difference in the contents thereof except that the time of proceeding is slightly different. In panchnama signed on 2.11.2011, proceedings are mentioned to have started at 12.00 hours and to have ended at 23.00 hours. Whereas for panchnama dated 3.11.2011, the proceedings are mentioned to have started at 12.18 hours on 2.11.2011 and to have got concluded at 00.30 on 3.11.2011. Thus, there is not much difference except 15 minutes/ while beginning one and half an hour time duration while ending the proceedings. Since examination ended post midnight, means date got changed by that time. This cannot be the reason to challenge or to doubt the veracity/correctness of the panchnama.
The contention of appellant that it has no knowledge about seal nor any responsibility for the container lying in the customs area/shed is not sustainable.
Objection about Customs seal - HELD THAT:- The appellant has not brought to notice that it was mandatory for the Customs Inspector to cut seal only in the presence of custodian of CONCOR on 2.11.2011. Admittedly, it was case of mis-declaration and undervaluation and till the request of appellant of joint survey on 15.10.2012 no pilferage was at all noticed. It is clear that presence of CONCOR was mandatory neither on 02/03.11.2011 nor even on 15.10.2012. The examination on 15.10.2012 was though, conducted in presence of CONCOR. Hence, there are no reason to differ from the finding in the order under challenge that at the time drawing panchnama dated 2.11.2011, Customs seal No.594385 was affixed on the container and the said seal was handed over to the CONCOR.
Plea about transferring liability to CISF - HELD THAT:- Admittedly, there is no such approval in favour of the CISF. All the allegations as fastened against the custodian are under Regulation 6 HCCAR,2009 and section 45 of Customs Act, 1962 i.e. against the approved by custodian, who is none but CONCOR, the appellant. As per section 45 (2) (b) of Customs Act, 1962, the custodian is duty bound to not to permit such goods to be removed from the customs area, except under and in accordance with written permission of proper officer or otherwise dealt with. Admittedly, there was no such permission with CONCOR for removal of the goods.
There is no denial that the container had shifted from its location within the customs area. Also the seal of the container was found tampered and most of the goods were found pilfered from the said container. As per section 45, the custodian is burdened with the responsibility of safe custody of imported goods unless and until those goods cleared either for home consumption or for being warehoused. Admittedly, the goods got pilfered and container seal found tempered when the goods were not still cleared - there are no reason to absolve the appellant from the responsibility fastened upon him and violation confirmed.
Appeal dismissed.
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2023 (10) TMI 757
Refund claim on account of price rebate granted by overseas supplier - rejection level of Fe content in the iron ore fines was amended - reduction in export price - HELD THAT:- The Appellant has executed a contract dated 14.04.2011, as per which the agreed price of Iron Ore was US$ 153 per DMT. The Appellant have paid export duty amounting to Rs.4,22,58,967/-on the basis of this agreed price. As per Clause 9 of the Contract, Intertek India Pvt. Ltd., the authorized surveyor submitted the “Certificate of weight” and “Certificate of Quality” vide its letter dated 23.05.2011. As per this certificate, the Fe content was 59.11%. As per the agreement, if the Fe content is less than 60%, then the contract is liable to be rejected. Since the chemical composition of Fe was not within the guaranteed limits of 60%, the Contract price was required to the adjusted in the light of clause-5 of the Contract. Accordingly, Addendum No. 3 dated 31.5.2011was signed on mutual agreement.
The method adopted by the Commissioner (Appeals) is not proper. In the original contract dated 13.04.2011, there was a provision for reducing the price when the Fe content is less than 61%. However, this contract in total will be rejected when the Fe content is less than 60%. In this case as per the Certificate issued by Intertek, the Fe content was 59.11%. Accordingly, the original contract dated 13.04.2011, was liable to be rejected and the terms of arriving at the revised price as per the original contract no longer exists. In view of the Report from Intertek, the agreement was reworked and Addendum 3 dated 31.05.2011 was mutually accepted. As per this Addendum, the revised price agreed was USD 125, wherein the contract will be rejected if the Fe content is less than 58%.
If the buyer and seller are not related and if the price is the sole consideration, the transaction value at the time and place of export will be the assessable value. Thus, the contention of the Appellant is agreed upon that the assessable value of the goods exported with 59.11% Fe content would be USD125. Accordingly, the Appellant was liable to pay export duty on the basis of assessable value of USD 125 Per MT. Since the Appellant has already paid export duty by adopting USD 153 per MT, they are eligible for refund of the excess duty paid. Since the Appellant are eligible for the excess customs duty, the department's appeal challenging the partly allowed refund is not sustainable. Accordingly, the department's appeal is liable to be rejected.
Appeal of appellant allowed.
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2023 (10) TMI 756
Valuation of imported goods - fuel oil (FO) and diesel oil (DO) used during the coastal run of the vessel - vessel converted from ‘foreign run’ to ‘coastal run’ for carriage of coastal cargo - consumption during coastal run to be treated as import or not - inclusion of the elements freight, insurance and handling charges in the assessable value.
Whether the value should be on the basis of contemporaneous import value or on IOCL sale price to bunkers to vessel plus notional freight, insurance and loading & landing charges?
HELD THAT:- When IOCL sells the goods the elements of freight and insurance are already added. Hence, these elements need not be added again to arrive the assessable value for the purpose of charging duty on the Fuel Oil and Diesel Oil used by the vessel during its coastal run - this method of valuation is supported by the decision of the Tribunal in the case of M/S SICAL LOGISTICS LTD. VERSUS CCEX, CUS. & S. TAX, BBSR I [2019 (2) TMI 777 - CESTAT KOLKATA].
The method of valuation of the Revenue is not proper. The elements of freight and insurance and Landing charges need not be added again as the same have already been included in the selling price of IOCL. Accordingly, the assessable value is to be re-determined based on the selling price of IOCL, without including freight, insurance and landing charges. Excess payment of customs duty, if any, needs to be refunded to the Appellant along with interest.
Appeal allowed.
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2023 (10) TMI 755
Valuation of imported goods - old and used Printer cum Multi function Device of Xerox/Canon make from USA - enhancement of value - enhancement of value done on the basis of the value estimation given by the Chartered Engineer - Confiscation of goods - imposition of redemption fine and penalty.
Appellant contended that they have accepted the enhanced value only to avoid demurrage.
HELD THAT:- The contention of the importer is agreed upon. The consent given before clearance of the goods does not take away their right to appeal on this issue. However, it is found that the enhancement of value in this case was done as per the value estimation done by the Chartered Engineer. The Appellant has not submitted any evidence to substantiate their claim that the value was enhanced arbitrarily. Hence, the enhanced value agreed with and it does not require to interfere with the enhanced value determined in the impugned order.
Confiscation of goods - HELD THAT:- The goods imported are used Digital multi function printer, which are not freely importable. Para 2.17 of FTP 2009-14 was amended w.e.f.28.02.2013 and subsequent to the amendment the said goods became importable only against authorization. The goods were imported vide Bill of Entry dated 06/05/2013, ie, after 28.02.2013 and hence the goods were restricted goods. Since the Appellant was not having any authorization, the goods were liable for confiscation. Accordingly, it is found that the goods were rightly confiscated and allowed to be redeemed on redemption fine. Thus, there are no infirmity in the order of confiscation of the goods.
Quantum of redemption fine - HELD THAT:- In the case of NAVPAD ENTERPRISES VERSUS COMMISSIONER OF CUSTOMS, COCHIN [2008 (3) TMI 604 - CESTAT, BANGALORE], affirmed by Hon’ble Kerala High Court, it has been held that fine upto 10% and penalty upto 5% would be reasonable when goods were imported against restriction in EXIM policy - It is observed that the Redemption fine imposed in this case works out to 30% of the declared value, which is very high. Accordingly, the redemption imposed reduced from 4,22,000/- to Rs.2,00,000/-. As the penalty imposed is works out to 5% of the declared value, the penalty imposed in the impugned order is upheld.
Appeal allowed in part.
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