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2024 (4) TMI 250
Maintainability of petition - alternative remedy of appeal - Validity Of show-cause notice - No opportunity of personal hearing - violation of principles of natural justice - diverting cut and polished diamonds - without following the procedure prescribed under the Special Economic Zone Act, 2005 (‘the SEZ Act’) - HELD THAT:- We are of the opinion that though the petition is maintainable under Article 226 of the Constitution of India, the petitioner is unable to point out as to whether the notices were served upon him by the respondent-Assessing Officer. In the impugned order, it is categorically mentioned that though the notices were served upon the petitioner, the petitioner neither attended the hearing nor submitted any request letter for adjournments on four occasions whereas, in the memo of the petition, it is stated that no such notices were served upon the petitioner. Thus, it involves disputed questions of facts as to whether the notices were served upon the petitioner or not by the respondent-authority which can be considered by the appellate authority while examining the record. We would therefore not like to entertain this petition on ground of not providing opportunity of hearing to the petitioner.
We therefore do not entertain this petition as there is alternative efficacious remedy available under the provisions of the Customs Act to be availed by the petitioner and accordingly, without entering into the merits of the matter, the petitioner is relegated to avail such alternative efficacious remedy with a liberty to raise all the contentions which are raised in this petition before the appellate authority.
We make is clear that the time spent by the petitioner before this Court in pursuing this petition may be considered as bona fide by the appellate authority in case of any delay which may be considered by the appellate authority to condone the delay, if any, in preferring the appeal by the petitioner within a reasonable time from today. The petition is accordingly dismissed.
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2024 (4) TMI 249
Import of Baggage - opportunity to declare the contents of their baggage to the proper officer - Challenged the Order passed for Confiscation and detention - Period of limitation for presenting statutory appeals - HELD THAT:- On examining the orders impugned herein, I find that the dispute turns on questions of fact. Moreover, it appears that the detentions and confiscation challenged herein relate to action taken against a group of about 148 persons. Therefore, it is appropriate that the respective petitioner files a statutory appeal. Since these writ petitions were filed within the period of limitation, the time taken in prosecuting these petitions is liable to be excluded for purposes of computing the period of limitation for presenting statutory appeals.
Consequently, these writ petitions are disposed of by granting leave to the respective petitioner to present statutory appeals. If such appeals are presented within a maximum period of ten days from the date of receipt of a copy of this order, the appellate authority is directed to receive and dispose of such appeals on merits without going into the question of limitation. This order will not stand in the way of the respondents proceeding with adjudication pursuant to the detention orders.
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2024 (4) TMI 248
Valuation of export goods on which duty has to be paid - iron ores - modification of transaction value between the buyer and seller based on the test report of the chemical examiner of CRCL when the price should be finalised as per the test report of CIQ as per the agreement between the buyer and seller - inclusion of additional consideration for sale.
HELD THAT:- The value for the purpose of determining the duty is the transaction value subject to four conditions (a) that the sale is for delivery at the time and place of exportation; (b) buyer and seller are not related; (c) price is the sole consideration for sale; and (d) subject to other conditions which may be specified by the Rules. The proviso to this section indicates that in case of imported goods, the value of commissions and few other charges have to be included. However, it does not provide for inclusion of commissions in case of exports.
The Customs Export Valuation Rules do not provide for addition of any amount to the negotiated price (Transaction Value) or any reduction from it where the parties are not related and the price is at arm’s length. If the transaction value has to be determined as per the contract based on the test report of CIQ, it has to be determined so. The test report by CRCL is not relevant to determining the transaction value. It is not for the department to substitute the requirement of test report of CIQ in the contract between the importer and its overseas supplier with the test report of CRCL.
The export price is the transaction value subject to adjustment as per the clause in the contract between the parties. It is also found that it is not the case of Revenue that the appellant received anything over and above the transaction value or the amount mentioned in the final invoice on the basis of test report i.e. certification of quantity and quality at the discharge port, on the basis of report of the mutually agreed laboratory.
Reduction of US$16 per MT from the invoice - HELD THAT:- Any compensation paid for any purpose under some other contracts, needless to say, cannot modify the transaction value in this contract. Therefore, the transaction value must be determined without deducting this amount of US$ 16 per MT. Since this compensation has been deducted from the invoice value, it must be added to determine the correct FOB value of the goods.
The impugned order is accordingly modified to the extent that the FOB value shall be the transaction value as finalised between the appellant and its overseas buyer but without deducting the amount of US$ 16 per MT which was the compensation paid by the appellant with respect to some past transactions. Since the invoices have deducted this amount, the same needs to be added so that the correct FOB value is determined - There is no case to impose any penalty on the appellant and accordingly all penalties are set aside.
The matter is remanded to the Adjudicating Authority for the limited purpose of arithmetical calculation of the duty - appeal allowed.
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2024 (4) TMI 247
Refund claim - Special Additional Duty paid at the time of import of goods under Notification No.102/2007 - Original authorities rejected the refund claim observing that the description of the goods in the bill of entry does not match with the description of goods in the sales invoices - HELD THAT:- The appellant has described the goods as ‘MS Plates’ and ‘HR Sheets’ for the reason that they are known as such in the market on the basis of variation in thickness. I am convinced with the explanation put forward for the variation in the description and is satisfactory. Further, the appellant had produced Chartered Accountant certificate as well as the correlation statements along with the refund claim. In such circumstances the original authority ought not to have denied the refund claim. The Tribunal in the case of Ganesha Impex Vs. Commissioner of Customs (Sea-Import),[2019 (3) TMI 1949 - CESTAT CHENNAI] had occasion to consider a similar issue. The Tribunal held that when the documents established that of the goods imported co-related with the invoices, the refund should not be denied on some minor variation in describing the goods.
The Hon’ble jurisdiction of High Court in the case of P.P. Products Ltd., Vs. Commissioner of Customs, [2019 (5) TMI 830 - MADRAS HIGH COURT] held that when the CA certificate is produced the same cannot be brushed aside without proper reason. In the present case the adjudicating authority has not put forward any finding as to disregard the CA certificate. In such circumstances the refund claim ought to be allowed. I hold that the appellant is eligible for refund.
The impugned order is set aside. The appeal is allowed with consequential relief if any.
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2024 (4) TMI 246
Valuation of goods transacted between related persons - Royalty addition - Addition to assessable value to the extent of 5% of ‘net sale price’ of ‘precipitated calcium carbonate’ - remand jurisdiction of appellate authority to issue directions to ‘proper officer’ - No notice issued u/s 28 of Customs Act, 1962 - cross-border trade transaction - HELD THAT:- From the absence of show cause notice, as well as submission on behalf of appellant, it is again clear that such imports that are subject to Special Valuation Branch (SVB) oversight are, invariably, kept provisional for finalization to be undertaken upon completion of ascertainment by Special Valuation Branch (SVB). Therefore, at this stage, the quantification ordered by the first appellate authority pertains to finalization under section 18 of Customs Act, 1962 devolving on ‘proper officer’ that Deputy Commissioner, Special Valuation Branch (SVB) is not. As appeal has not been directed before first appellate authority against order of such ‘proper officer’, it transgresses the remand jurisdiction of such appellate authority to issue directions to ‘proper officer’ who has yet to complete the process of finalization. Direction to the ostensible ‘original authority’ is an exercise in futility and direction to the ‘proper officer’, and the statutorily empowered potential ‘original authority’, is beyond appellate jurisdiction of Commissioner of Customs (Appeals) before whom the order impugned did not challenge a ‘yet to occur’ assessment.
In these circumstances, it behoves us to focus on the competence of the reviewing authority to have gone before the first appellate authority against the opinion of the Deputy Commissioner, Special Valuation Branch (SVB) that there was no need to add the ‘royalty’ to assessable value. Section 128 of Customs Act, 1962 stands on two limbs – decision being that of officer below the rank of Commissioner of Customs and from the decision causing a grievance. The author of the order impugned before the first appellate authority is certainly subordinate to Commissioner of Customs.
However, as pointed out above, that opinion was not even persuasively binding on the ‘proper officer’ who, as assessing authority and obliged to issue speaking order, is required to arrive at assessment uninfluenced, even if not uninformed, by external sources. Therefore, there was no cause for grievance to initiate appellate remedies. Such opportunity would have presented itself after finalization. Implicit in acknowledgement of appellate remedy against ‘advisory’ of Special Valuation Branch (SVB) is another round of appeal through the first appellate authority on the same goods and facts which does not sit well with the principle of comety of courts. The appeal before the first appellate authority was, thus, premature. This aspect of disposal of the appeal within the scheme of Customs Act, 1962 and the role of Deputy Commissioner, Special Valuation Branch (SVB) within it was not evaluated by the Commissioner of Customs (Appeals).
Thus, we set aside the impugned order and restore the appeal to first appellate authority to dispose off the pleas of the appellant- Deputy Commissioner in accordance with the scheme of Customs Act, 1962. Appeal is, thus, allowed by way of remand.
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2024 (4) TMI 245
Revocation of CHA License - forfeiture of security deposit - Penalty - violation of Regulations 11(a), 11(b), 11(d), 11(n) & 11(j) of the Custom Broker Licensing Regulations, 2013 - appellant failed to verify the address at which the two clients operated and that requirement of ‘know your customer (KYC)’ was entirely different - HELD THAT:- The appellant had, admittedly, filed bills of entry for twenty consignments of ‘diamonds’, valued at ₹ 66.15 crores and ₹ 31.5 crores, imported by the two holders of ‘import export code (IEC)’ that, after clearance, were handed over and, doubtlessly, against authorization of the importers to a service provider. Investigation revealed that these were actually transacted by other persons and it is on record that the appellant had no connection with them. In the course of investigation, it was ascertained that multiple remittances were made overseas against the same goods indicating collusion among the several entities and persons.
It is not the case of the respondent-Commissioner that the appellant had anything to do with the transactions beyond that of filing of bills of entry and coordinating clearance thereafter. Nonetheless, in the belief that obligations under the Customs Broker Licencing Regulations, 2013 had been breached, impugned proceedings got underway. The facts, as elicited during the inquiry, persuaded dropping of the charges pertaining to handling of imports without authorization from client and of failure to advise client to comply with statutory prescriptions.
The appellant had, no doubt, undertaken ‘know your customer (KYC)’ exercise which did not reveal anything untoward. However, the client claimed to be in the ‘diamond trade’ which has its own peculiarities of confidentiality, of capital adequacy and of operating proximity and equations among its practitioners; all of these warranted a closer look at the antecedents of the client. It is not the defence of the appellant that the client was in the diamond trade and it is on ‘lending of name’, with its consequences, that the impugned transactions came in for adverse notice. It is that lack of diligence which was of significance to the finding in the inquiry report.
The appellant has been found to have failed to verify antecedents and identity of client as well as that operations are carried out at the declared address. This is, probably, the one obligation that specifies action in the context of easily comprehended stipulation and against which failure to undertake those can be ascertained. It is on record that the appellant had not carried out any ascertainment of the premises of the client either directly or through another. That is the most fundamental of obligations and breach thereof jeopardizes the reliability of the broker.
Thus, the charge sustains against the appellant. However, the consequence, insofar as offence under customs law is concerned, is far from clear in the record of proceedings as to immediately conclude that all three detriments in Customs Broker Licencing Regulations, 2013 must necessarily follow. The only breach that survives does not merit such harsh retribution.
We, therefore, set aside the revocation of licence under regulation 18 of Customs Broker Licencing Regulations, 2013 and the penalty imposed under regulation 22 of Customs Broker Licencing Regulations, 2013. The forfeiture of deposit is upheld and, should the appellant, choose to operate the licence, the same shall be subject to fresh deposit being made towards security as prescribed in Customs Broker Licencing Regulations, 2018. Accordingly, the appeal is disposed off on these terms.
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2024 (4) TMI 244
Levy of penalty u/s 112(a) of the Customs Act - alleging that the appellants have not checked the antecedents before undertaking the responsibility of a CHA for the consignments - Misdeclaration of goods - HELD THAT:- On examination of the goods, it was found that the goods had been mis-declared. However, no allegation against the appellants has been made during the course of investigation to the effect that the appellants were having the details of the goods imported by the importer or having any connivance with the importer for mis-declaration of goods in question.
Moreover, for the allegation with regard to checking of the antecedents of the importer or its representative, proceedings are warranted under the Customs Brokers Licensing Regulations, which proceedings against the appellant have already been dropped. Thus, no penalty is imposable on the appellants as held by this Tribunal in the case of Chandan Chatterjee v. Commissioner of Customs (Port),[2024 (1) TMI 682 - CESTAT KOLKATA].
In view of this, we drop the penalty imposed on the appellants - In the result, the impugned order is set aside and the appeals are allowed with consequential relief, if any.
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2024 (4) TMI 243
Valuation of imported goods - demand of differential customs duty due to reassessment of the value of goods - recovery of interest - Penalty - Whether the expenditure incurred by the appellant towards advertising, marketing and promotion of the goods imported by the appellant under the Agreements with the foreign suppliers is liable to be added to the transaction value of the imported goods - HELD THAT:- In the present case, it clearly transpires from the Agreements entered into between the appellant and the foreign suppliers that the foreign suppliers had granted to the appellant the right to import the products for distribution and sale in India but the appellant had to incur, on its own account, the expenditure towards advertising, marketing and promotion of the products. In some of the Agreements the appellant was required to use its best efforts to promote and develop the distribution and sale of the products and the Agreement could be terminated at the discretion of the foreign supplier if the appellant did not spend the amount indicated in the Agreement.
Note to rule 3(2)(b) of the Interpretation Notes also needs to be remembered. Though it provides that if the sale or price is subject to some condition or consideration for which a value cannot be determined with respect to the goods being valued, the transaction value shall not be acceptable for customs purposes but it also provides that if the buyer undertakes on his own account, even though by agreement with the seller, activities relating to the marketing of the imported goods, the value of these activities is not part of the value of imported goods nor shall such activities result in rejection of the transaction value.
It cannot, therefore, be urged that the appellant incurred expenditure to satisfy obligation of foreign sellers. Thus, the first requirement of rule 10(1)(e) of the 2007 Valuation Rules is not satisfied. The second requirement of rule 10(1)(e) is that payment should be made by the buyer to a third party to satisfy an obligation of the seller towards the third party. A Division Bench of the Tribunal in Adidas India [2020 (3) TMI 324 - CESTAT NEW DELHI] examined almost similar terms of the Agreements and held that the requirements of rule 10(1)(e) of the 2007 Valuation Rules are not satisfied.
Thus, the second criterion is also not satisfied.
In this view of the matter, the reasoning of the Principal Commissioner in the impugned order that since the appellant was required and obliged to undertake marketing/ advertising in terms of the Agreements with the foreign suppliers, the price of the imported goods cannot be said to be the sole consideration within the meaning of section 14 of the Customs Act and, therefore, the transaction value is liable to be rejected under rule 12 of the 2007 Valuation Rules is clearly contrary to the categorical stipulation in the Interpretative Notes to rule 3 that activities relating to marketing of the imported goods undertaken by the buyer, even though under agreement with the seller, cannot be considered to be additional consideration and cannot form part of the value of the imported goods, nor shall such activities result in rejection of the transaction value.
The impugned order dated 29.05.2020 passed by the Principal Commissioner, therefore, cannot be sustained and is set aside. The appeal is, accordingly, allowed with consequential relief(s).
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2024 (4) TMI 187
Classification of imported goods - Quicklime - Tribunal held that the imported goods ‘quicklime’ would be appropriately classifiable under Customs Tariff Item 2522 10 00 and not as ‘other’ under the Customs Tariff Item 2825 90 90, as claimed by Revenue - HELD THAT:- We are not inclined to interfere with the judgment and order passed by the Custom Excise Service Tax Appellate Tribunal, West Zonal Bench at Mumbai on 20-10-2023 in Custom Appeal Nos. 85377/2020 and 86172/2021 in Final Order No.A/87057-87058/2023.
The Civil Appeals are dismissed accordingly.
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2024 (4) TMI 186
Application for discharge u/s 245(2) of CrPC - learned Magistrate dismissed the application for discharge - High Court held that in the absence of any material the cognizance taken by the learned Magistrate is impermissible - HELD THAT:- We are not inclined to interfere with the impugned judgment and order passed by the High Court. Hence, the Special Leave Petition is dismissed.
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2024 (4) TMI 185
Petition against dismissal order of Learned Single Judge - Appeal filed belatedly after the period of condonation in terms of Section 128 of the Customs Act - HELD THAT:- While the approach of the appellant before this Court itself was more than seven years after the order of appellate authority, the appellant did not even approach the First Appellate Authority within the time permitted under the Customs Act. It is trite that when the statute prescribes a period of limitation for approaching the appellate authority and the assessee does not approach the appellate authority within the time granted under the statute, the scheme of finality accorded to the statutory orders cannot be ignored by the High Court when exercising the jurisdiction under Article 226 of the Constitution of India. That apart this Court cannot also ignore the long delay in approaching this Court under Article 226 of the Constitution of India. Thus in any view of the matter, we see no reason to interfere with the judgment of the Learned Single Judge. The writ appeal fails and is therefore dismissed.
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2024 (4) TMI 184
Classification of goods - Levy of penalty - Bill of Entry for clearance of ‘Sweet Pearl P200’ classified under 29054900 - Revenue reclassified the goods under 21069060 - Burden Of proof - HELD THAT:- We find that it was Revenue which disputed the classification declared by the appellant and hence, the initial burden is on the Revenue to disprove the case of the appellant. The burden is also on the Revenue to justify the reclassification made under 21069060. From the impugned order, we find that the Revenue sought opinions of two experts i.e. EIA and Central Food Laboratory, Mysore but they appear to have been not considered. It is the further case of the appellant that it has been classifying Maltitol crystals / sweet pearl under the very same CTH 2905 4900 since 2004 and hence, as ruled by the Hon'ble Supreme Court in a catena of decisions including the following cases, when the Revenue challenges the classification declared by the importer, the onus is always on the Revenue to establish that the item in question falls under the taxing category as claimed by them
A perusal of the impugned order reveals that it is the case of the Revenue that the goods in question being artificial sweetener and a food ingredient used in the manufacture of chewing gum merits classification as a food flavouring material under CTH 2106. Sweet pearl is a flavour enhancer but the impugned order does not discuss the properties of a flavour enhancer and how the goods in question fit into the said description.
Thus, we are of the clear view that the classification declared by the appellant deserves to be upheld since Revenue has not justified reclassification of the impugned goods under CTH 2106 and therefore, we set aside the impugned order and allow the appeal with consequential benefits, if any, as per law.
Revenue has also preferred an appeal against the impugned order on the ground that the adjudicating authority has erred in not imposing equal penalty u/s 114A of the Customs Act, 1962, since the adjudicating authority has confirmed the duty demand u/s 28 of the Customs Act, 1962. However, as we have set aside the duty demand as confirmed by the original authority vide impugned order, we do not see any merit in the Revenue’s appeal for imposing equal penalty in terms of sec. 114A. Therefore, the department’s appeal is dismissed.
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2024 (4) TMI 183
Misdeclaration of value of goods - Confiscation of goods - Redemption fine - Imposition of penalty - Whether, the Assessable Value for the third machines can be revised on account of the compensation paid by the foreign supplier - HELD THAT:- The appellant had ordered two pieces each of two different machines and the foreign supplier by mistake and sent three pieces of one machines and one piece of the other machine. We find that the it is undisputed fact that the importer had no knowledge about the mistake committed by the foreign supplier. Thus, it can be seen that the importer had in fact declared Assessable Value in excess of the value of goods actually received by US $ 20,000/- as a result of a mistake committed by the foreign supplier. In this background, we do not think that there was any malafides on the part of the importer.
Following the decision in BANSAL INDUSTRIES [2004 (1) TMI 250 - CESTAT, CHENNAI], we do not find that there is any merit in invoking Section 111 and 112 in the instant case. Consequently, the confiscation of goods, imposition of redemption find and imposition of penalty u/s 112 cannot be sustained and the same is set aside.
As regard, revision of Assessable Value for one machine from US $ 39,000/- to US $ 38,000/-, the said aspect has not been challenged by appellant in their appeal memorandum nor are there any assertions in their written submission. Therefore, the said issue has not been disputed by appellant.
Appeal is allowed in above terms.
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2024 (4) TMI 182
Seeking Permission to abandon the goods and remission of duty - Bills of Entry declaring the goods as ‘Aluminium Alloy Ingots’ but shipment contained Stone Chips - Claim for re-credit duty, debited from Advance Authorisation Scrips - Abandoned the goods - confiscation - redemption fine - Penalty - HELD THAT:- In the present case, the goods having been abandoned there is no situation of redeeming the goods. The Adjudicating Authority has ordered for confiscation of the goods only because the goods have been abandoned. In such situation, the goods are taken into possession by the Central Government and disposed of in accordance with law. The goods can be taken into possession only if confiscated. The Adjudicating Authority has ordered for confiscation only to facilitate the custody of goods to the Central Government. The Commissioner (Appeals) has misconceived the provisions under Customs Act, 1962, that as there is confiscation of goods, redemption fine has to be imposed. When the appellant has abandoned the goods, there is no requirement to give option to redeem the goods. When the goods are not being redeemed and abandoned, the goods have to taken custody by the Central Government. In such situation of confiscation, imposition of redemption fine does not arise. Again, even though Adjudicating Authority has imposed penalty of Rs.30,000/-, there is no finding rendered as to the offence committed by the importer. Instead, it has been categorically stated that no offence is committed by the importer. The appellant has paid the penalty and does not contest the same. So, the observation made by the Commissioner (Appeals) that since goods have been confiscated and penalty imposed, redemption fine has to be imposed is erroneous. Further, there is no appeal filed by the Department against the order of the Adjudicating Authority who refrained from imposing redemption fine. The Commissioner (Appeals) ought not to have imposed redemption fine in an appeal filed by the importer.
Thus, the redemption fine of Rs.19 Lakhs imposed by the Commissioner (Appeals) is not justified and requires to be set aside, which I hereby do.
Appellant has requested for re-credit of the duty - The appellant having not imported Aluminium Alloy Ingots is not liable to pay such duty. The appellant had placed order for Aluminium Alloy Ingots and they have not received the goods. However, the duty was debited in the Scrips. The appellant is therefore eligible for re-credit of duty that in the Advance Authorisation Scrips.
The impugned order is modified to the extent of setting aside the redemption fine and also setting aside the order directing re-credit of duty applicable to Stone Chips. The appellant is eligible for re-credit of duty that has been debited and applicable to Aluminium Alloy Ingots. It is made clear that as the appellant has not contested the penalty, the same is not disturbed.
The appeal is allowed in above terms with consequential reliefs, if any, as per law.
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2024 (4) TMI 181
Smuggling - Absolute Confiscation - levy of penalties - 2060 numbers of green coloured refrigerant gas cylinders believed to be containing HCFC Gas - 5280 packets of Mosquito Repellents - 4800 pieces of Ladies garments - old and used TATA Trucks, which were allegedly used for transportation of the said goods - burden to prove - HELD THAT:- It is found that the mosquito repellents and ladies garments in question are of foreign origin or smuggled one has to be proved by the Revenue. However, the Revenue has failed to prove that the same are smuggled in nature. From the investigation conducted, it is not forthcoming as to how the Revenue has alleged that the impugned mosquito repellents and ladies garments are smuggled ones. Further, the above said items are not notified items under Section 123 of the Customs Act, 1962 - As the Revenue has failed to establish the ‘smuggled’ nature of the goods in question, the impugned mosquito repellents and ladies garments cannot be confiscated.
HCFC gas confiscated from the godown of the appellant - it is the allegation of the Revenue that the same is a restricted item and was manufactured only in China - HELD THAT:- It is found that the goods in question are ‘restricted’ items, but not ‘prohibited’ items. In these circumstances, the onus lies on the Revenue to prove that the said goods were smuggled in nature, which the Revenue has failed to prove. Merely saying that the goods in question can only be manufactured in China cannot form the basis for absolute confiscation of the said goods recovered during the course of investigation. Therefore, we hold that the said HCFC gas cannot be confiscated.
The order of confiscation of the goods in question is set aside - As the goods in question are not liable for confiscation, therefore, no penalty can be imposed on the appellants.
The impugned order set aside - appeal allowed.
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2024 (4) TMI 180
Levy of penalty on Customs Broker - Accepting documents without proper authorization - The Department argued that this constituted abetment of the export of prohibited goods. - Smuggling - Pseudoephedrine and Ketamine Hydrocholoride - concealment of prohibited drugs in cartons containing Pomegranate fruits - violation of the provisions under CHALR / CBLR Regulations - violation of provisions of Customs Brokers Licensing Regulations - HELD THAT:- On perusal of the impugned order, the original authority has recorded findings for imposing penalty on appellant viz. G. Seenivasan who is the CHA. It has been categorically stated by the adjudicating authority that there is no evidence to show that the appellant G. Seenivasan had knowledge that the cartons contained prohibited items. Thus, it can be seen that the investigation has not brought out that appellant Sri G. Seenivasan had any knowledge about the attempt to export the contraband items. In such circumstances, the penalty imposed u/s 114 (i) of the Customs Act, 1962 is not justified.
Violation of provisions of Customs Brokers Licensing Regulations - The proceedings having been initiated under CBLR Regulations for revoking the license and the license having already been revoked, I am of the view that the penalty imposed u/s 114 (i) of the Customs Act, 1962 is not legal and proper, and harsh on the appellant.
Penalty imposed on the appellant - The penalty of Rs.50,000/- has been imposed by the Department on Shri S. Murugaram. Since it is clearly brought out that Sri S. Murugaram had no knowledge that contraband items were concealed in the cartons, I find that the penalty of Rs.50,000/- imposed on him is liable to be set aside.
Thus, the impugned order to the extent of imposing penalty on the appellant viz. G.Seenivasan and Rs.50,000/- on the appellant viz. S. Murugaram u/s 114 (i) of the Customs Act, 1962 is to be set aside.
The appeals are allowed with consequential relief, if any.
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2024 (4) TMI 179
Classification - Rate of duty - Goods claimed to be ‘automatic data processing machine’ in heading 8471 - Bureau of Indian Standards (BIS) - shipping marks, viz., Emotix Miko’ - re-classified to take advantage of lower rate of duty - differential duty - confiscation - interest - Import goods as ‘plastic toys with motor’ corresponding to tariff item 9503 0030 - HELD THAT:- It is on record that the imported goods consists of components that do not, by a long stretch, find fitment within products of chapter 95 of First Schedule to Customs Tariff Act, 1975. There is no finding in the impugned order that the composition of the impugned goods is not a combination of a central processing unit and units for input and output. We are informed, without rebuttal, the there is some hardware within that processes oral query for response as sound, motion or image and, therefore, not exactly beyond the scope of coverage within the claimed heading. In the absence of such controverting within rule 1 and rule 3 of General Rules for Interpretation of the Import Tariff in Customs Tariff Act, 1975, a finding of conformity of description corresponding to the proposed tariff item that is not followed by resort to rule 3 of General Rules for Interpretation of the Import Tariff in Customs Tariff Act, 1975 places the exercise by the adjudicating authority in serious jeopardy and motivated by intent to deny duty benefits any which way.
It is admitted that MIKO 1 was declared as ‘toy’ but there is no ground to hold fast to the conviction that a subsequent variant, even if conforming to another description, must continue to be classified against an erroneous tariff item. The impugned order has referred to the rejection of application for registration of MIKO 2 under Electronics and Information Technology (Requirements of Compulsory Registration) Order by Bureau of Indian Standards (BIS) owing to expert opinion of Ministry of Electronics and Information Technology (MeitY). It is on record that the registration was subsequently incorporated. It is also contended that MIKO 2 and MIKO 3 are more akin than MIKO 1 is to MIKO 2. None of this alters the onus that devolves on customs authorities in terms of the decisions of the Hon’ble Supreme Court in re HPL Chemicals and in re Hindustan Ferodo. The lack thereof places the findings in the impugned order in serious jeopardy.
The description of the imported goods is not just ‘toys’ made of plastic. That it has capabilities endowed by technological development does set it apart from a toy and, even if does conform to toy, it was necessary to show that the goods do not contain the essentials enumerated in tariff item 8471 4190 of First Schedule to Customs Tariff Act, 1975. Such finding is glaringly deficient in the impugned order. The classification adopted in other countries may not be a guide for assessment in India when the dispute has its genesis in perceived evaporation of duty; it is inevitable that identical duty rates marginalizes declaration relevance. Reliance thereto will not suffice for the purpose.
We fail to perceive the dearth of complexity that may justify shift of classification from within heading 8471 to heading 9503 of First Schedule to Customs Tariff Act, 1975. The findings are conjectures and assumptions that are not backed by authoritative texts, notes or definitions in law or even logical sequencing. These are not tenable in a classification exercise.
The impugned order has not established the primacy of heading 9503 of First Schedule to Customs Tariff Act, 1975 nor the inappropriateness of heading 8472 of First Schedule to Customs Tariff Act, 1975. The rules of engagement enunciated by the Hon’ble Supreme Court for altering classification has not been followed by the adjudicating authority. The facts, indelibly clear, does not controvert conformity with the essential requirements set out in note 5(A) in chapter 84 of First Schedule to Customs Tariff Act, 1975 There is no finding that the impugned goods, by incorporating or working in conjunction with ‘automatic data processing (ADP) machines’, performs the function of ‘toys’ which should be the consummation of resort to note 5(E) in chapter 84 of First Schedule to Customs Tariff Act, 1975 and such finding is well-nigh impossible in the absence of any authoritative guidance on ‘toys’ and its intended functions. A thought process conditioned by one’s own childhood or parenting experience is not a tenable substitute. Even if this note comes into play insofar as the impugned goods are concerned, the impossibility of appending ‘toys’ renders the claimed classification to be the only one remaining in the ring. Consequently, the classification claimed must remain.
The impugned order is set aside to allow the appeal.
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2024 (4) TMI 178
Valuation - Imported 20 MT of Aluminium powder 99.7% - enhancement of value - duty paid under protest - Non speaking order - appellant waived the show cause notice as well as Personal Hearing - HELD THAT:- There is no detailed discussion as to how the enhancement has been arrived at by the assessing authority. For this reason we are of the considered view that the matter has to be remanded to the adjudicating authority for re-considering the assessment of the imported goods. The appellant is at liberty to furnish details of contemporaneous imports before the adjudicating authority who shall look into these evidences also.
In the result, the impugned order is set aside. The appeals are allowed by way of remand.
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2024 (4) TMI 127
Jurisdiction - proper officer to issue SCN - Valuation of imported goods - power tools and its parts and accessories - mis-declaration of value - HELD THAT:- The view taken by the Division Bench of this Court in the case of LAXMI ORGANIC INDUSTRIES LTD VERSUS UNION OF INDIA, THROUGH ITS SECRETARY, DEPARTMENT OF REVENUE & ORS. [2023 (12) TMI 1157 - BOMBAY HIGH COURT], needs to be followed in the present proceedings inasmuch as, in the present proceedings, the Show Cause Notice is dated 31st December 2020, which was issued during the COVID-19 Pandamic. For such reason, the Show Cause Notice could not be taken forward. In the meantime, the Supreme Court pronounced its decision in the case of M/S CANON INDIA PRIVATE LIMITED VERSUS COMMISSIONER OF CUSTOMS [2021 (3) TMI 384 - SUPREME COURT]. What has been laid down by the Supreme Court in such decision is the law of the land under Article 141 of the Constitution of India. The adjudicating officer is thus bound by the law as laid down by the Supreme Court in the said decision. The Petitioners can certainly raise such plea placing reliance on the said decision of the Supreme Court, and in that case it would be incumbent for the adjudicating officer to consider the applicability of the said decision, and if so applicable, abide by the said decision in adjudicating the said Show Cause Notice dated 31st December 2020.
The Petition is accordingly disposed of directing the Respondents to adjudicate the Show Cause Notice dated 31st December 2020 as expeditiously, as possible, and, in any event, within a period of six months from today. As the show cause notice is issued more than three years back, there cannot be any further delay in the adjudication of the same.
Petition disposed off.
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2024 (4) TMI 126
Levy of penalty on the Directors of the Company - Valuation of imported goods - import of luxury vehicles by misusing the Transfer of Residence (TR) Scheme - re-determination of value - HELD THAT:- The Custom House found that the car import violated the EXIM policy and the value declared was also low. They hence cleared the goods only after enhancing the value, denying concessional rate of duty under the TR facility and collecting fine and penalty for the violations noticed. The goods after clearance were purchased by the Appellants. As per post clearance investigation by DRI the car was once again subject to adjudication proceedings based on fresh violations that were allegedly unearthed by DRI.
M/s Mothers Pride is a limited company and is an independent legal entity. The learned Original Authority has not clearly brought out any charge against the appellants other than that they were involved in the purchase of the car. There is no allegation that the Appellants were the importers of the impugned car. The main charge and the action that follows in the Order in Original was mainly against M/s Mothers Pride. Since they are not before me, the issues relating to valuation, duty, interest and penalty pertaining to them are not of concern in this appeal.
The fact that the car was not in the possession of the importer for one year was noticed by the assessing officers at the time of import itself and penal action taken for the same. Hence a subsequent penal action does not survive for the same FTDR Act violation. Moreover, once the penalty was paid and the goods cleared for home consumption, the restrictions of sale etc. which would have been present had the goods been cleared under TR concession no longer holds good. In such a situation the Appellant cannot be said to have infringed any provision of the Customs Act, even if they had due to ignorance, participated in procuring the impugned car for the company and sought to cloak the purchase under a veil of legalese involving a car loan.
The impugned order in as much as it relates to the penalty imposed on the Appellants is set aside - Appeal allowed.
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