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Customs - Case Laws
Showing 101 to 120 of 38200 Records
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2024 (4) TMI 125
Levy of penalty u/s 114(iii) and 114AA of the Customs Act, 1962 on Customs House Agent (CHA) - Misuse of signature by an employee of the CHA - attempt to avail fraudulent drawback benefits - HELD THAT:- There is no dispute as regards fact of duty drawback claimed by the exporter and there is also no dispute that all the four shipping bills were filed by the appellant-CHA, though the appellant has claimed that it was one Suresh, his ex-employee who has used / misused his name by filing the shipping bills. But however, there is no evidence placed in this regard.
Here in the case on hand, the appellant is found to have blamed his ex-employee, the another person for misusing his signature / office seal but, however, no supporting document is filed and hence, the initial burden stands undischarged.
Section 114 empowers levy of penalty for attempt to export goods improperly and it is not specific to the exporter alone. In the case on hand, since the exporter had accepted the Order in Original by not challenging the same, the fact of improper export stands proved and the appellant’s role being a CHA who filed shipping bills, thus becomes ‘any person’ u/s 114 - There is also no rebuttal as to the finding of the Revenue authorities that his license had already been suspended on earlier two occasions which should have been taken seriously by the appellant to prevent further misuse and the same should have acted as a deterrent but, however, the appellant appears to have allowed the further misuse of his CHA license which has resulted in filing the shipping bills in question.
There are no infirmity in the order of the first appellate authority - appeal dismissed.
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2024 (4) TMI 124
Levy of redemption fine and penalty - valuation of imported goods - brass scrap - import of brass scrap in the guise of aluminium scrap - enhancement of value - HELD THAT:- On perusal of the impugned order, there is no market survey conducted by the adjudicating authority. However, it has to be noted that the appellant is not contesting the enhancement of value of the goods. Further, there is no evidence put forward by department to conclude that there was any deliberate intention on the part of appellant to import brass scrap. The purchase order and other documents show that the importer had placed the order only for import of Aluminium scrap. Due to the urgent requirement, the appellant sought for release of the goods. This does not indicate that they had placed order for import of brass scrap.
The redemption fine and penalty imposed are on the higher side. The redemption imposed is reduced to Rs.2,50,000/- and the penalty imposed is reduced to Rs.20,000/-. The impugned order is modified to the extent of reducing the redemption fine and penalty - Appeal allowed in part.
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2024 (4) TMI 123
Denial of benefit of N/N. 46/2011-Cus dtd. 01.06.2011, as amended - concessional rate of Customs duty benefit on the basis of county of Origin Certificate - Malaysian Origin goods - HELD THAT:- In the present disputed matter appellant has claimed the goods to be originating in Malaysia as provided under Rule 5 of the AIFTA Rule i.e. not wholly obtained or produced. In respect of all the subject consignments, the appellants produced certificate of origin in Form A-1 issued by the Ministry of Internal Trade and Industry (MITI) of Government of Malaysia showing the Regional Value content of the subject goods as more than 35% +CTSH . However case of the department is that intelligence gathered by the DRI officers suggested that the said RVC was misstated as the overseas suppliers and goods also not origin of Malaysia.
It is also noticed that in the disputed matter the Revenue without getting confirmation from the Malaysia Government about their doubt of authenticity of the country of origin certificate and activity of respective suppliers of the goods proceeded to deny the benefit in respect of COOs issued by Suppliers to the appellants is not genuine and consequently denied Exemption Notification No. 46/2011, dated 1-6-2011 and consequential demand was confirmed - as per the documents submitted by the appellants it prima facie appears that there is no doubt on the authenticity of the country of origin certificate issued and import of the goods by Appellants on the basis of said COOs.
However, to clear any doubt it is the burden on the department to get the verification from the Malaysia Government regarding authenticity of Certificate of origin which has not been discharged by the department in the present matter. Without checking the authenticity of certificate of origins, the certificate of origins cannot ne discarded and on that basis benefit cannot be denied - in the interest of justice, one chance is given to the department to get the verification from concerned authorities about the genuineness of the certificate of origin issued by supplier of Malaysia to importers, thereafter to pass a fresh order.
The impugned orders are set aside - Appeals are allowed by way of remand to adjudicating authority for passing fresh orders preferably within a period of six months from the date of this order.
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2024 (4) TMI 122
Extended period of limitation - authenticity of the country of origin certificate - concessional rate of duty under N/N. 46/2011-Cus dated 01.06.2011, as amended and N/N. 53/2011-Cus. dated 01.07.2011, read with N/N. 189/2009-Cus (N.T.) dated 31.12.2009 - misrepresentation of the Regional value content (RVC) to be above 35%, whereas the actual RVC was much less than 35% - valuation of CR SS Flat products - HELD THAT:- In the present disputed matter appellant has claimed the goods to be originating in Malaysia as provided under Rule 5 of the AIFTA Rules i.e. not wholly obtained or produced. In respect of all the subject consignments, the appellant produced certificate of origin in Form A-1 issued by the Ministry of Internal Trade and Industry (MITI) of Government of Malaysia showing the Regional Value content of the subject goods as more than 35% +CTSH . However case of the department is that intelligence gathered by the DRI officers suggested that the said RVC was misstated as the overseas supplier M/s. Bahru did not have integrated stainless steel factory and had only facility to manufacture CR SS products with annealing and pickling lines, sendzimir, skin-pass and finishing line during the material time and mainly used hot-rolled coils supplied by other factories belonging to the group from Non-AIFTA countries.
The Revenue without getting confirmation from the Malaysia Government about their doubt of authenticity of the country of origin certificate and activity of M/s Bahru proceed to deny the benefit in respect of COOs issued by M/s Bharu is not genuine and consequently denied Exemption Notification No. 46/2011, dated 1-6-2011 and consequential demand was confirmed. We find that as per the documents submitted by the appellant it appears that there is no doubt on the authenticity of the country of origin certificate issued and import of the goods by Appellant on the basis of said COOs.
However, to clear any doubt it is the burden on the department to get the verification from the Malaysia Government regarding authenticity of Certificate of origin which has not been discharged by the department. Therefore, in the interest of justice, one chance is given to the department to get the verification from concerned authorities about the genuineness of the certificate of origin issued by M/s Bahru and their manufacturing activity, thereafter to pass a fresh order.
The impugned order is set aside - Appeals are allowed by way of remand to adjudicating authority for passing a fresh order.
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2024 (4) TMI 85
Classification of imported goods - Menthol Scented Supari - to be classified under Chapter 21 as a product of betel nut known as Supari or under Chapter 8 as just areca nut? - HELD THAT:- Firstly, vide Finance (No.2) Act, 2009 dated 19th August, 2009, there has been an insertion of Note 6 in Chapter 21, which specifically relates to Tariff Item 2106 90 30 relating to ‘supari’ and stating that the process of adding or mixing cardamom, copra, menthol, spices, sweetening agents or any such ingredients other than lime, katha (catechu) or tobacco to betel nut, in any form, shall not amount to “manufacture”. However, this amendment was only under the Central Excise Tariff Act and not the Customs Tariff Act.
Secondly, w.e.f. 1.7.2017, the GST Act was introduced and the concept of taxation itself has undergone a change from ‘manufacture’ to ‘supply’. The Supplementary Note 2 in Chapter 21 of CGST Tariff is also verbatim the same as Supplementary Note 2 under Chapter 21 of the Customs Tariff Act, 1975. This only exemplifies the intention of the legislature to have always treated ‘supari’ as a special entry and not as a betel nut under the general entry of ‘nuts’.
There are force in the submission of the Learned Counsel for the Appellant that the Customs Tariff Act still continues to employ the same phraseology that was available under the unamended Central Excise Tariff Act and that too when the Apex Court had dealt with the same issue, the ratio laid down by the Apex Court in CRANE BETEL NUT POWDER WORKS VERSUS COMMR. OF CUS. & C. EX., TIRUPATHI [2007 (3) TMI 6 - SUPREME COURT] case would still hold the field and apply to the case on hand, it cannot be accepted that the said limb of argument, in view of our categorical finding that there being a specific entry for ‘Supari’ under Chapter 21 and it would take precedence over the general entry under Chapter 8, the question of applying the ratio laid down by the Apex Court would not even arise for the simple reason that the issue on hand is only revolving around classification of ‘Supari’ under Chapter 8 or Chapter 21 and the facts of the case before the Apex Court was entirely different and the issue was whether process involved in manufacture of sweetened betel nut pieces would result in a totally new product or not.
Under the Customs Tariff Act, the question of manufacture loses its relevance since the Act deals only with the tariff applicable to the goods or products imported from outside the country, in an as is where is basis, or rather the product as imported in whatever form is the basis for levy of Customs Tariff. Thus, the judgment of the Hon'ble Supreme Court in Crane Betel Nut Powder Work's case cannot be said to be a bar U/s. 28(i) of the Customs Act.
The findings of the CAAR are just and proper, applying the legal position in a proper perspective. The same does not warrant interference in appeal. There are no irregularity in the Advance Ruling issued by the Authority and the same is not hit by Clause B of sub-section 2 of Section 28-I of the Customs Act, 1962 as not being covered by earlier rulings on the same subject matter, by the Appellate Tribunal or Court.
Appeal dismissed.
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2024 (4) TMI 84
Import of hot rolled steel plates and steel sheets - Fixing of minimum import price - The petitioner argues that they applied for registration within the stipulated timeframe of 15 days, as required by paragraph 1.05(b) of the Foreign Trade Policy, despite a delay in actual registration. - Violation of principles of natural justice - irrevocable commercial letter of credit not registered with the jurisdictional Regional Authority (RA) within 15 days - importer neither appeared for personal hearing nor replied to the show cause notice.
HELD THAT:- The respondent decided to proceed ex-parte on the basis that the importer had neither appeared for personal hearing nor replied to the show cause notice. As indicated earlier, the reply of the petitioner to the show cause notice along with the acknowledgement is on record. Even proceeding on the assumption that such reply was not received by the respondent for any reason, the impugned order becomes unsustainable in the face of such reply and the contents thereof.
It should also be recognized that that the petitioner has placed on record not only Notification No.38 but also the irrevocable letter of credit dated 02.01.2016 and evidence that the petitioner applied for registration on 18.02.2016, which is within the stipulated 15 day period. In these circumstances, it is just and necessary that the petitioner be provided an opportunity.
Therefore, the impugned order is quashed and the matter is remanded to the respondent for reconsideration. The petitioner is permitted to re-submit the reply dated 11.09.2021 along with all supporting documents to the respondent within 15 days from the date of receipt of a copy of this order - Petition disposed off.
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2024 (4) TMI 83
Classification of imported goods - Rice Mill Rubber Roller - classifiable under CTH 4016 or under CTH 8437? - N/N. 12/2012-CE (Sr. No. 155) dated 17.03.2012 - HELD THAT:- The reading of the serial number 9, clearly suggests inclusion of Rice Mill Rubber Rollers under this Heading within its ambit as pertained to machine and appliances of Section XVI. Elaborate reference was made to the Apex Court’s decision in KOHINOOR RUBBER MILLS VERSUS COLLECTOR OF C. EX., CHANDIGARH [1997 (2) TMI 125 - SUPREME COURT]. Relevant portions of the Hon’ble Apex Court’s Order in holding the classification under 4016 of the CTH.
As observed by the Hon’ble Apex Court what supplements the aforesaid classification is the Explanatory Note at serial number 9 under Item 40.16 of the Harmonized Commodity description and Coding System (HSN), as also noted by the Hon’ble Apex Court in its order. While it is not disputed that parts of rice mill machinery are incorporated under CTH 84379020, however, by virtue of the relevant Chapter Notes and Section Notes as referred above and in accordance with Rule 1 of the General Rules for the Interpretation of the Tariff Schedule, of the import tariff schedule, it is undeniable that the imported goods merit classification under Heading 4016 9990.
This Tribunal in the case of COMMISSIONER OF CUSTOMS, CHENNAI VERSUS M/S. NIRMALA AGENCIES [2016 (6) TMI 863 - CESTAT CHENNAI] had also considered the impugned question of classification of Rice Milling Rubber Roller, Paddy De-husking Rubber Roller, wherein the identical question of law is concerned with and following the decision of the Hon’ble Apex Court, the Tribunal in the aforesaid decision held that the said goods were appropriately classifiable under 4016 9990.
There are no infirmity in the order of the learned Commissioner (Appeals) - appeal dismissed.
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2024 (4) TMI 82
Smuggling - Gold - absolute confiscation - redemption fine - penalty - failure to produce any documents regarding the possession of gold - discharge of onus to prove - HELD THAT:- Admittedly, the seizure of the 2 gold bits is a town seizure at Renigunta Railway Station when the employee of the appellant was on-board the train. Further, admittedly the 2 gold bits totally weighing 697 gms are of irregular shape and size, having no foreign markings. Further, the person who was in possession at the relevant time - Mr Kaluva Hari Obulesu had stated that he had purchased the said gold at Chennai and was carrying it to Proddutur for his employer/appellant. Under these facts, there was no basis on which the Customs Officer could have formed an opinion that the gold is of foreign origin and/or smuggled in nature.
Both the appellant and his employee Mr Kaluva Hari Obulesu have stated that the gold have been purchased at Chennai from Mr Hari Gopal against payment made in cash. They also gave the proper address and location of Mr Hari Gopal at Chennai. The appellant also explained the source of money for the purchase of gold - Revenue have rejected this contention on the basis of report received from Chennai Customs, that when their person went to enquire from Mr Hari Gopal, he could not locate him - the report received vide letter dated 17.08.2020 from the office of Commissioner of Customs is not a RUD and hence no reliance can be placed on the same. Accordingly, the appellant have discharged the onus under Section 123 of the Customs Act.
All the allegations made by Revenue are by way of assumptions and presumptions which have no legs to stand.
The impugned order set aside - appeal allowed.
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2024 (4) TMI 81
Classification of imported goods - quicklime - to be classified under tariff item 2522 1000 of First Schedule to Customs Tariff Act, 1975 or under tariff item 2825 9090 of First Schedule to Customs Tariff Act, 1975? - concessional rate of basic customs duty (BCD) vide N/N. 50/2017-Cus dated 30th June 2017 (at serial no. 120) and of ‘integrated goods and service tax (IGST)’ vide rate N/N. 01/2017-Integrated Tax dated 28th June 2017 - HELD THAT:- Besides the appropriateness of logic claimed as justification for revision of classification by adjudicating authority, which fails in the light of decisions supra, the impugned order relies on ruling by an Authority which does not bind the appellant herein or the Tribunal.
It is also found inappropriate that the adjudicating authority has chosen to denigrate the findings of an appellate authority which is only in the domain of constitutional courts, for discarding the plea of precedent in rulings of the Tribunal in COMMISSIONER OF CENTRAL EXCISE, HYDERABAD-III VERSUS M/S BHADRADRI MINERALS PVT. LTD. [2015 (10) TMI 1836 - CESTAT BANGALORE] and in M/S. JINDAL STAINLESS (HISAR) LTD. VERSUS COMMISSIONER OF CUSTOMS NEW DELHI [2020 (8) TMI 743 - CESTAT NEW DELHI] and suffices to set aside the impugned order.
It is found that the benchmark of purity, as settled by above decisions, was not attained at the time of import of the impugned goods. Further, the elaborate and detailed discussion in M/S VIRAJ PROFILES LIMITED VERSUS COMMISSIONER OF CUSTOMS (PREVENTIVE) , MUMBAI [2023 (10) TMI 1260 - CESTAT MUMBAI] resolves the controversy, once and for all, on heading 2522 of First Schedule to Customs Tariff Act, 1975 being the correct one.
The impugned order set aside - appeal allowed.
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2024 (4) TMI 80
Revocation of Customs Broker License - forfeiture of security deposit - imposition of penalty - export of textile articles - overvaluation and misdeclaration with intent to claim drawback under section 75 of Customs Act, 1962 - HELD THAT:- From the records, it appears that the offence by the exporter was one of overvaluation with intent to claim drawback under section 75 of Customs Act, 1962 beyond that entitled. Though misdeclaration too, has been cited, there is nothing on record to evince that description or quantity was also called into question. It is apparent that, in the absence of evidence to the contrary, the appellant was not responsible for ascertainment of value or declaration of value. There is nothing on record to indicate that undue benefits were received by them either.
The appellant was found to have contravened the obligation to advise compliance with Customs Act, 1962 and to report non-compliance. Value, being a contractual element, is convergence of intent in monetary terms; it can be limitless but, for the purposes of assessment, is limited to a conceptual framework that is rarely without controversy when disputed. An adjudicatory finding of overvaluation is based on certain parameters which has consequence in law without altering the contracted engagement - There is no evidence to substantiate the charge; moreover, this is a tertiary consequence of one of the other charges, viz., that of not having been in contact with the exporter to which failure to advice does not add for enhancing gravity of breach but merely conjoins.
The appellant has been charged with failure to verify antecedents and identity of client as well as operations at the declared address. This is, probably, the only obligation that specifies identifiable action on the part of ‘customs broker’ and against which failure to measure up can be ascertained. It is on record that the appellant had not contacted the exporter at all. That is the most fundamental of obligations and breach thereof jeopardizes the reliability of the broker.
The only breach that survives does not merit harshest of retribution - the revocation of licence under regulation 20 of Customs Broker Licencing Regulations, 2013 and the penalty imposed under regulation 22 of Customs Broker Licencing Regulations, 2013 is set aside - forfeiture of deposit is upheld - appeal allowed in part.
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2024 (4) TMI 79
Classification of imported goods - plastic regrind - waste or not - restricted goods or prohibited goods - to be classified under tariff item 3915 1000 of First Schedule to Customs Tariff Act, 1975 or under tariff item 3901 1090 of First Schedule to Customs Tariff Act, 1975 - discharge of onus for displacing the declared classification - confiscation - redemption fine - penalty - HELD THAT:- The entirety of the dispute lies within the entry of goods for import under section 46 of Customs Act, 1962 and to be cleared, in terms of section 48 of Customs Act, 1962, for ‘home consumption’ subject only to satisfaction of ‘proper officer’ that duties, as leviable, has been discharged and that goods are not prohibited for import. Duties of customs are assessed as leviable by application of ‘rate of duty’ – determined by classification within First Schedule to Customs Tariff Act, 1975 – to value as determined by the valuation provisions emanating from section 14 of Customs Act, 1962. The other, viz., ‘prohibition’, is an entirely different facet of clearance and undertaken as agency function which, though resort is permissible to the Central Government in section 11 of Customs Act, 1962.
The findings of the lower authorities appear to have been caught in circular reasoning of cause and effect as re-classification is seen to have been caused by references to purported restriction on import of ‘waste’ in Foreign Trade Policy (FTP) and standards formulated by Bureau of Indian Standards (BIS), which the imported goods were held to be, and the restrictions on import of ‘waste plastics’ brought to bear upon the goods consequent to determination that the goods are ‘waste’ corresponding to tariff item 3915 1000 of First Schedule to Customs Tariff Act, 1975. It is moot if the different statutes intended ‘waste’ of plastics to coincide so but that caution does not seem to have impressed itself on the lower authorities.
The determination that impugned goods had been misdeclared and prohibited for import is rooted in the purported designating of ‘plastic regrind’, in two of the three consignments, as ‘waste’ by the Central Revenue Control Laboratory (CRCL) - it cannot be concluded from the test reports if the Deputy Chief Chemist concerned intended this to inform classification exercise or to be acted upon for furtherance of restriction in the Foreign Trade Policy (FTP).
The onus for displacing the declared classification has not been discharged. The test reports do not lead to the conclusion that classification was to be altered or that the goods are restricted for import. In fact, the entire proceedings are vitiated by lack of any expert ascertainment of the nature of the goods - Between uninformed zeal and deliberate harassment is a very thin dividing line and no whit is added to the credibility of an institution when such blurring occurs in patently ill-considered enforcement.
The impugned order is not based on appreciation of facts in totality and has not taken the proposals in the show cause notice to legal and logical conclusion - the impugned order set aside - appeal allowed.
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2024 (4) TMI 78
Valuation of imported goods - Quinizarine - enhancement of value - determination of value on the basis of value of contemporaneous import by same importer (Appellant) from the same supplier - HELD THAT:- In the present case though the Bills of entry of contemporaneous import were relied upon, the adjudicating authority failed to consider the circumstance of the variation of the price of the imported goods existed at the time of export from China to India. Further it is also noticed that Ld. Commissioner (Appeals) has not given any finding on the reason of price variation of goods submitted by the Appellant. It is also observed that other than Bills of entry of contemporaneous import, there is no other evidence to show that the assessee have suppressed the value.
It is also observed that the appellant have relied upon various judgments on the disputed issue which Learned Commissioner (Appeals) had no occasion to consider. The judgments relied upon by the appellant shall apply directly only after verifying the facts of each case.
Since the above issues have not been dealt in a proper manner by both the lower authorities, the matter needs to be reconsidered as a whole. Accordingly, the impugned order is set aside and the matter remanded to the Ld. Adjudicating Authority for passing a fresh after providing sufficient opportunity of personal hearing to the appellant - appeal allowed by way of remand.
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2024 (4) TMI 77
Classification of imported goods - Sea Squad Swim Seats - Arm Bands - Bio Fuse Fitness Fin - Swimming Goggles - other Headgear of rubber or plastics - Fabric hats - to be classifiable under CTH 9506/9004/6505/6506 respectively or otherwise? - benefit of Customs N/N. 12/2012-Sl. No. 503 and C.Ex. N/N. 1/2011-Sl. No. 126 and Customs N/N. 21/2012-Sl. No. 1 with effective rate of duty (BCD-Nil & CVD-6%) - HELD THAT:- CTH 95062900 covers any item as long as they are categorised as water sports equipment. Once the items are accepted as used for swimming, be it for recreation or otherwise in the swimming pool, classification of these items under CTH 95069990 as meant for “Outdoor games” is not correct. The impugned orders have accepted the fact that the items in question are meant for kids and used for swimming but the finding that they are not used for competition but used for fun and so not classifiable as water sports equipment is not a logical finding. If kids swim for pleasure and not for competition, it does not become an activity other than swimming. Having held that the items under consideration viz. Sea Squad Swim Seats, arm bands and bio fuse fitness fins are meant for kids while swimming and the more specific heading would be 95062900 and not 95069990 which heading covers various outdoor games like boxing, badminton, hockey which are distinguishable from swimming.
The impugned orders have erred in classifying Sea Squad Swim Seats, Bio-Fuse Fitness Fin and arm Bands under 95069990 as they were meant for recreation of babies/ kids in relation to swimming and the classification of these items under the category of outdoor games under CTH 95069990 is legally incorrect. CTH 95069990 falls under 950691 which covers “Articles and Equipment for general, physical exercise, gymnastic or athletic”. Once having agreed that the Swim squad seats, bio fuse fitness fin and arm bands meant for kids to remain afloat in water, it cannot be thereafter held that these items can be classified for use in ‘Outdoor games’ - Generally, swimming is considered as a sport rather than a game. It does not mean that no game is played in swimming. Water polo is played in water which is considered as a game. Further the items under consideration cannot be used for any of the ‘Outdoor’ games specifically listed out under 950691. These items can only be used for swimming and so the classification under 95069990 is incorrect - these items are more appropriately classifiable under 95062900.
The impugned order in 3rd appeal has erred in classifying Head Gear, Fabric hats and Swimming Goggles under CTH 95069990. Instead goggles are classifiable under 90049090, headgear under 65069100, Fabric hat under 65050090 which are specific headings for these items which has never been disputed by the Department or the Assessee in earlier imports. Accordingly, the head gears, swimming goggles and fabric hats are not classifiable under CTH 95069990.
Thus, appropriate classification of Sea Squad Swim Seats, Arm Bands, Tech Paddles, etc., is under CTH 9506 2900 of Customs Tariff Act, 1975 - The impugned order set aside - appeal allowed.
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2024 (4) TMI 49
Recovery under demand notices based on alert issued 5 years ago - Bonds for Warehoused goods has already expired - For almost ten (10) years from the date of issuance of the said notice, no concrete measures were adopted by the respondents - HELD THAT:- Having noted the statutory scheme in regard to the recovery of the amounts in respect of goods warehoused and as relevant in the present context, we may observe that it is not in dispute that there were four bills of entries of the year 2005 and 2010 in respect of which goods were partially cleared and some / balance goods part of the said bills of entry had remained to be cleared and were warehoused. The case of the petitioner is that for certain reasons the goods could not be cleared and removed from the warehouse. In such circumstances, the petitioner has contended that although the demand notice dated 8 March 2013 was issued to the petitioner, the same was not acted upon for a substantial period of time, and what was sought to be done by the respondents was to insert a alert after about five years that is on 23 March 2018, which was certainly not a step to execute the demand notice issued under Section 72(1). Having not executed the demand notice dated 8 August 2013 after almost 10 years, a fresh notice under Section 72(2) of the Customs Act, being the impugned notice, came to be issued on 11 December 2023.
From a bare perusal of the notice, it is clearly seen that after issuance of the demand notice dated 8 August 2013, which were four demand notices, in respect of four bills of entries, only in respect of one bill of entry, the impugned notice under Section 72(2) has been issued without any action being taken to recover any duty as subject matter of the earlier demand notices. There is no explanation whatsoever coming forth, in regard to the inaction on the part of the Customs officers in enforcing the earlier notice during the period 2013 to 2023, for any recovery that is under the demand notice dated 8 August 2013 - Once such a position was taken by the petitioner and made clear to the department, it was clearly open to the respondents to proceed in accordance with law and deal with the goods, although, such course of action was immediately and always available with the customs officers immediately after the demand notices dated 8 August 2013 was issued to the petitioner under Section 72(1) of the Customs Act, on which the officers did nothing.
It is thus difficult to accept that in such situation the law would permit the respondents to issue a fresh notice, when the earlier demand notice dated 8 August 2013 itself was not acted upon and/or had stood lapsed, as no action was taken for a period of 10 years. Such a course of action would also not to be permissible from the reading of the provisions of Section 72(2) and more particularly from a cumulative reading of Sections 59, 61 and 72 of the Customs Act.
Thus, once the recovery under the demand notices dated 8 August 2013 issued under Section 72(1)(b) itself, was rendered redundant, a recovery under the impugned notice dated 11 December 2023 would not have been foisted upon the petitioner. Consequently, any attempt on the part of the respondents to recover such amounts by the impugned Alert notice dated 23 August 2018, and which was reiterated in the impugned communication dated 24 January 2018 would also be required to be held to be illegal and invalid.
Petition allowed.
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2024 (4) TMI 48
Seeking defreezing of petitioner’s bank account - export under Duty Drawback Scheme under Section 75 of Customs Act, 1962 - HELD THAT:- The petitioner is entitled to duty drawback to the tune of Rs. 4,97,202/- in respect of the aforesaid shipping bills corresponding to the exported goods to the value of Rs. 66,11,867/-. However, at the time of consideration, the petitioner was not in a position to submit a statement of bank realization. The claim of the petitioner was also rejected on the ground that he had not produced the bank realization certificate. Now, the petitioner is before this Court. In the type set, the petitioner has enclosed the bank realization statement.
This Court is of the considered opinion that the matter needs to be remitted back for reconsideration. The petitioner is directed to submit the bank realization statement to the respondents and the respondents shall consider the same and pass orders, without insisting on limitation. Hence, the impugned orders are set aside. The respondents shall also grant personal hearing to the petitioner.
The writ petition is allowed.
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2024 (4) TMI 47
Valuation of the export goods on which duty has to be paid - case of the Department is that the contract price entered into by the appellant and its overseas buyer should be determined as per the test report of the Chemical Examiner of CRCL - inclusion of additional consideration for sale or not.
Can the transaction value between the buyer and seller be modified by the Customs 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? - HELD THAT:- In this case, the transaction value as per the agreement has an adjustment clause which provided that the value shall be re-determined as per the test report of CIQ. The Customs officers cannot change this transaction value or the stipulation of the test report of CIQ being the determinant of the transaction value. The report of Chemical examiner, CRCL is irrelevant to the transaction value. It will be a different matter if the testing has to be done for some Customs purpose, say, to determine the nature of the goods or if the availability of the exemption notification depended on the Fe content of the export goods, etc. Then, the customs officers can rely on the CRCL’s test report. Thus, the impugned order re-determining the transaction value based on the CRCL test report is not correct and cannot be sustained.
The decision of this tribunal in KIMMI STEELS PVT. LTD. VERSUS COMMISSIONER [2019 (11) TMI 741 - SC ORDER] upheld by the Supreme Court has been relied on by the Revenue. That case was completely different although the goods were iron ore fines in that case as well. During the relevant period in that case, export duty was chargeable on weight with a partial exemption notification if the Fe content was below a certain threshold. There were conflicting test reports regarding the Fe content and in the absence of clarity regarding the entitlement to the exemption notification, it was denied.
This question is answered in favour of the exporter and against the Revenue.
Can the US$ 10 per MT be added as additional consideration for sale in the case? - HELD THAT:- As is evident from the proviso to sub-section (1) of Section 14 and the Export Valuation Rules, unlike in case of import valuation, Commissions paid cannot be added for the purpose of determining the value in case of exports even if it was paid by the exporter - The case of the Revenue, however, is that the amount paid by the buyer to M/s. Reliance, Hong Kong, the agent, is an additional consideration for sale as this amount which was to be paid by the exporter was, instead paid by the importer and thereby the transaction value was reduced. Therefore, according to the Revenue, price was not the sole consideration for sale in this case.
If, indeed, the price was not the sole consideration for sale, the transaction value can be rejected under Rule 8 of the Export Valuation Rules and then, it must be redetermined sequentially through Rules 4 to 6. Rule 4 provides for determining the value based on the transaction value of goods of like kind and quality exported at or about the same time. Rule 5 provides for valuation based on a computed value, including cost of production, manufacture or processing of export goods, charges, if any, for the design or brand and an amount towards profit. Rule 6 is a residual Rule to be applied if Rules 4 and 5 do not apply. None of these Rules provide for addition of an amount as additional consideration for sale - this amount of US$ 10 per MT cannot be added as additional consideration for sale to the export price. If there was additional consideration for sale, the proper course would have been to the officer to reject the transaction value and re-determine the value under Rule 4 or Rule 5 or Rule 6 sequentially.
Both the questions are answered in favour of the appellants and against the Revenue - appeal allowed.
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2024 (4) TMI 46
Classification of imported goods - AJI-NO-MOTO - rightly classifiable under CTH 2106 9060 or under CTH 3824 9900? - denial of benefit of N/N. 46/2011 dated 1.6.2011 - demand of differential duty alongwith interest and penalty - extended period of limitation - HELD THAT:- It should however be understood that a decision is an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically flows from the various observations made in the judgment. In the case of INDO NISSIN FOODS LTD. VERSUS COMMISSIONER OF CUSTOMS, CHENNAI [2001 (5) TMI 378 - CEGAT, CHENNAI], the item imported was flavour enhancers/ potentiators. The issue was whether the goods required a license to be cleared. The Appellant had in the Bill of Entry declared the item to be food additives and paid customs duty under Chapter 3823.00. Therefore, there was no challenge to the classification made in the Bill of Entry. Hence the matter is distinguished.
Sine the correct classification of the goods is under CTH 2106 9060 the goods are not eligible for exemption under Sl. No. 499(I) of Notification No. 46/2011 and the impugned order is upheld in this regard.
Invocation of the extended period - imposition of penalty - HELD THAT:- It is seen that the impugned goods were imported by filing 68 bills of entry, from 1-12-2017 to 29-10-2022 by declaring them as ‘Ajitide I+G’. It is the Revenues case that by making an incomplete declaration of the goods (suppression of facts) and mis-classifying them has lead to evasion of duty and hence the extended period of time as per section 28(4) of the Customs Act 1962 is rightly invokable and the goods are liable for confiscation under Section 111(m) & (o) ibid and the importer is also liable for a penalty.
The Hon'ble Supreme Court in NORTHERN PLASTIC LTD. VERSUS COLLECTOR OF CUSTOMS & CENTRAL EXCISE [1998 (7) TMI 91 - SUPREME COURT] has held that merely claiming the benefit of exemption or a particular classification under the bill of entry does not amount to mis-declaration or suppression of facts. Something more is required. Although the judgment was pronounced before the 'Self-Assessment' system has been introduced in respect of Customs clearance of imported goods under Section 17 of Customs Act,1962, with effect from 8-4-2O11, we find that earlier consignments bearing the same description, same classification were cleared by the department, vide 68 Bills of Entry, from 1-12-2017 to 29-10-2022. In the circumstances it cannot prima facie be said that there was an intention on the part of the appellant to mis-declare the goods. Nor has Revenue brought in some additional facts to prove its case of ‘suppression’. The goods are basically a mixture of chemicals used in the food industry and an arguable case has been made out by the Appellant, which is not a mere excuse to escape payment of duty. Hence the demand will only survive for the normal period and no penalty or fine is imposable.
The impugned order is upheld including the denial of the claim for exemption from duty but with the modification that the demand is limited to the normal period along with applicable interest. The fine and penalty imposed are set aside - Appeal disposed off.
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2024 (4) TMI 45
Imposition of penalties u/s 112(a) of the Customs Act 1962 on Customs broker - import of used Multifunction Digital Photocopiers and Printers - it is alleged that the appellant had connived with the importers - evidence to prove the allegations - HELD THAT:- The Tribunal in SRIVENKATESWARA REPRO GRAPHICS, BEST MEGA INTERNATIONAL, SUPREME ENTERPRISES, BEDY ASSOCIATES, DATA ENTERPRISES, SKYLARK OFFICE MACHINES, LAKSHMI NARAYANAN RAO, SURESH KUMAR KHETTARPAL, MOKSHA BUSINESS MACHINES, MR RAJESH N KUMAR KHATTERPAL, UNISTAR ENTERPRISES VERSUS COMMISSIONER OF CUSTOMS COCHIN-CUS, COMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE, COCHIN [2019 (5) TMI 397 - CESTAT BANGALORE] held that the secondhand Multifunction Digital Photocopiers and Printers (MFDs) were restricted goods and hence, liable for confiscation under Section 111(d) of the Customs Act 1962, and allowed the goods to be redeemed on payment of redemption fine and penalty on the enhanced value. In addition, penalty under Section 112(a) on the firm was also upheld.
There is nothing on record as evidence to prove the involvement of the appellant directly or indirectly that he had connived with the importer. It also intimated that no action was initiated against the appellant under the Customs Broker Regulations till date and therefore, the appellants claim that in good faith he had filed the documents as per the importers’ directions cannot be ignored.
As there is nothing on record to prove that the appellant had connived/abetted with the importers in filing the documents for importing the restricted products without the mandatory documents, the penalty cannot be sustained. The impugned orders for the said offence have already penalized the importers in terms of redemption fine and penalty.
As held by the Tribunal in the case of G. NARAYAN & CO. VERSUS COMMISSIONER OF CUSTOMS MANGALORE [2021 (3) TMI 560 - CESTAT BANGALORE], since the appellant has not been penalized under the Customs House Agents Licensing Regulations, for any irregularity, the question of imposing penalty under Section 112a of the Customs Act, 1962 does not arise.
The penalties imposed on the appellant are set aside - appeals are allowed.
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2024 (4) TMI 44
Validity of proceedings against importer when the sole proprietor of the firm had expired - mis -declaration and short payment of duty - imposition of penalty on appellant - HELD THAT:- It is found that no proceedings can continue under the Customs Act in case when the sole proprietor, Shri Prahlad Agarwal of M/s Ganpati Enterprises, on 04.03.2010 expired and the Death Certificate was also placed before the adjudicating authority. As the sole proprietor has passed away, then the proceedings against the importer, M/s Ganpati Enterprises, abates and there is no provisions under the Customs Act, 1962 to continue the proceedings against the the legal heir, Shri Ritesh Agarwal in the impugned proceedings as held by the Hon’ble Apex Court in the case of SHABINA ABRAHAM AND OTHERS VERSUS COLLECTOR OF CENTRAL EXCISE & CUSTOMS [2015 (7) TMI 1036 - SUPREME COURT], wherein the Hon’ble Apex Court has held Section 6 of the Central Excises Act, which prescribes a procedure for registration of certain persons who are engaged in the process of production or manufacture of any specified goods mentioned in the schedule to the said Act does not throw any light on the question at hand as it says nothing about how a dead person’s assessment is to continue after his death in respect of excise duty that may have escaped assessment.
Thus, no proceedings can continue against the importer, M/s Ganpati Enterprises and Shri Ritesh Agarwal, who is the legal heir of the proprietor of M/s Ganpati Enterprises.
Imposition of penalty on Shri Jagdish Prasad Khaitan - HELD THAT:- There is no role involved in the import of the impugned consignment by M/s Ganpati Enterprises as he was involved only at the time of delivery of the goods released provisionally, therefore, no nexus has been proved by the Revenue against Shri Jagdish Prasad Khaitan. Accordingly, no penalty is imposable on Shri Jagdish Prasad Khaitan.
The impugned order is set aside and the appeal filed by M/s Ganpati Enterprises abates and the appeals filed by Shri Ritesh Agarwal and Shri Jagdish Prasad Khaitan, are allowed.
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2024 (4) TMI 43
Smuggling - foreign origin Gold - burden to prove purchase has been discharged by the Appellant under section 123 of Customs Act - seized goods are liable to confiscation or not - difference of opinion - HELD THAT:- The Show Cause Notice has proceeded on an erroneous notion that the burden of proof is required to be jointly discharged by Appellant No. 1 to 4 along with Appellant No. 5. In fact the only person who would be required to discharge the burden of proof would be Appellant No. 5. Framing of charges on Appellant No. 1 to 4 on this count is erroneous. The ownership claimant Rinku Verma [Appellant No. 5] has produced 4 Invoices towards purchase from Snehal Gems Pvt Ltd. The transaction details by way of ledger and bank have been produced by him. Taking this lead, the Revenue has caused investigation at the end of Snehal Gems, who have confirmed the transactions in respect of 4 Invoices and also produced their purchase invoices and many other records which are part of the relied upon documents in the Show Cause Notice. No proper conclusion has been arrived at by Revenue to disprove the claims of Rinku Verma and Snehal Gems Pvt Ltd. The issues raised in the reply to Show Cause Notice have not been properly addressed.
The Revenue had an original lead about the procurement of the gold in question by way of cash transaction between Shashi Kant Patil and Rinku Verma. Even as it was important for the Revenue to prove the gold in question was not procured from Snehal, in view of clear lead, the Revenue was also required to prove that the gold in question was procured way of cash transactions from Shashi Kant Patil. This lead has been completely abandoned without any proper reason. This is a serious lapse on the part of the Revenue - In this case, since there were contrary claims, the onus was on the Revenue was on two folds. Firstly, to disprove the claim of Rinku Verma that the gold was procured through proper Invoices, secondly to prove that the gold was in fact procured on cash basis from Shashi Kant Patil. As per my detailed observations, on both these counts, the Revenue has failed.
The onus under Section 123 stands discharged by Appellant No. 5 [claimant of ownership] since Revenue has not come out with any specific adverse evidence against these Invoices and transactions. Also Appellants 1 to 4 were in no way required to discharge this burden in terms of Section 123.
The Hon’ble Member Judicial is agreed upon that burden of proof stands discharged under Section 123 and hold that seized goods are not liable for confiscation - The reference is answered and the difference of opinion stands resolved.
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