|
Advanced Search Options
Customs - Case Laws
Showing 201 to 220 of 40545 Records
-
2025 (6) TMI 277
Absolute confiscation of certain gold items and conditional confiscation of electronic goods - It is the case of the Petitioner that no Show Cause Notice was issued and no personal hearing was also granted to the Petitioner prior to passing of the impugned order - Violation of principles of natural justice - HELD THAT:- The Petitioner is willing to pay the redemption fine for the iPhones and prays for the gold items to be released.
Considering the above, the gold items shall be released to the Petitioner without any storage charges. However, insofar as the iPhones are concerned, the storage charges and redemption fee shall be payable.
Petition disposed off.
-
2025 (6) TMI 276
Invocation of jurisdiction under section 28AAA of the Customs Act, without the DGFT having initiated process for cancellation of the license - whether adjudication could be done as the DGFT did not cancel the instrument or not - HELD THAT:- This issue was examined by the Delhi High Court in M/s Amit Exports [2024 (11) TMI 1150 - DELHI HIGH COURT]. The Delhi High Court held that it was not possible to recognize a right that may be to said to inhere in the customs authority to doubt the issuance of the instrument. After referring to the FTP 2015-20, the Delhi High Court held that it provides in paragraph 2.57 that it would be the decision of the DGFT on all matters pertaining to interpretation of policy, provisions in the handbook of procedures and so it would be impermissible for the customs authority to deprive a holder of the instrument the benefits that can be claimed, absent any adjudication of declaration of invalidity by the DGFT.
This apart, the impugned order has relied upon the statement of Imran Mirza, the proprietor of the Freight Forwarder, that the manual amendments in the copies of the shipping bills were made by him in his own handwriting and that to endorse the said manual amendments, he had forged the signatures of the Customs Superintendent and appended the stamps of the Customs Superintendent. The Principal Commissioner, therefore, held that a transaction based on fraud precludes the party from deriving any benefit.
Whether the statement of Imran Mirza recorded under section 108 of the Customs Act could be considered as evidence under section 138B of the Customs Act? - HELD THAT:- Reference can be made to the decision of the Tribunal in M/s Surya Wires Pvt. Ltd. vs. Principal Commissioner, CGST, Raipur [2025 (4) TMI 441 - CESTAT NEW DELHI]. The Tribunal examined the provisions of sections 108 and 138B of the Customs Act as also the provisions of sections 14 and 9D of the Central Excise Act, 1944 and observed that 'In view of the provisions of subsection (2) of section 9D of the Central Excise Act or sub-section (2) of section 138B of the Customs Act, the provisions of sub-section (1) of these two Acts shall apply to any proceedings under the Central Excise Act or the Customs Act as they apply in relation to proceedings before a Court. What, therefore, follows is that a person who makes a statement during the course of an inquiry has to be first examined as a witness before the adjudicating authority and thereafter the adjudicating authority has to form an opinion whether having regard to the circumstances of the case the statement should be admitted in evidence, in the interests of justice.'
Clearly, if the exporter applied for FMS scrips, it is the responsibility of the exporter to ensure that the goods reach that market and to produce proof. The responsibility of the exporter does not end with obtaining the Let Export Order. In this case, neither side produced before us the documents which were produced as proof that the goods reached the Focus Market. The Customs authorities investigating the matter should have summoned the relevant documents from the DGFT. Either the goods must have reached the Focus Market or if they were diverted, the exporter may have submitted fake documents as proof of landing or the DGFT may have issued the scrips without obtaining the proof of landing. The impugned order, however, does not address this issue.
Levy of penalties - HELD THAT:- The title of the goods passed to the buyer as soon as the Let Export Order was issued and the appellant was not responsible for any changes that may have been made in regard to the destination port. Section 114AA provides that if a person knowingly or intentionally makes, signs or uses or causes to be made, any material particular, in the transaction of any business for the purposes of the Customs Act, shall be liable to a penalty not exceeding five times the value of goods. The Principal Commissioner has relied upon the statement made under section 108 of the Customs Act that the changes were made on the instructions given by the appellant. This statement cannot be relied upon as evidence. Thus, penalty under section 114AA of the Customs Act could not have been imposed upon the appellant.
Section 114(iii) of the Customs Act provides that any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113 of the Customs Act shall be liable to a penalty not exceeding the value of the goods, as declared by the exporter or the value as determined under the Customs Act, which ever is greater. The Principal Commissioner has confiscated the goods under section 113 of the Customs Act for the reason that the appellant and Imran Mirza colluded. This finding is again based on the statement made by Imran Mirza under section 108 of the Customs Act, which statement cannot be relied upon for the reasons. Confiscation of goods would, therefore, have to be set aside and consequently, penalty under section 114(iii) of the Customs Act could not have been levied upon the appellant.
Penalty under section 114AB of the Customs Act could not have been imposed upon the appellant as the appellant had not obtained any instrument by fraud, collusion, wilful mis-statement or suppression of fact. Such allegations have been made in the impugned order based on statements of persons who were not examined by the Adjudicating Authority in accordance with the procedure prescribed under section 138B of the Customs Act. The statements, therefore, could not have been considered.
The impugned order cannot be sustained - appeal allowed.
-
2025 (6) TMI 275
Jurisdiction under section 28AAA of the Customs Act could have been invoked without the DGFT having initiated process for cancellation of the license - adjudication could be done as the DGFT did not cancel the instrument or not - HELD THAT:- This issue was examined by the Delhi High Court in M/s Amit Exports [2024 (11) TMI 1150 - DELHI HIGH COURT]. The Delhi High Court held that it was not possible to recognize a right that may be to said to inhere in the customs authority to doubt the issuance of the instrument. After referring to the FTP 2015-20, the Delhi High Court held that it provides in paragraph 2.57 that it would be the decision of the DGFT on all matters pertaining to interpretation of policy, provisions in the handbook of procedures and so it would be impermissible for the customs authority to deprive a holder of the instrument the benefits that can be claimed, absent any adjudication of declaration of invalidity by the DGFT.
The impugned order, therefore, is without jurisdiction as the DGFT has neither cancelled the instrument nor even initiated proceedings for cancellation of the instrument.
Clearly, if the exporter applied for FMS scrips, it is the responsibility of the exporter to ensure that the goods reach that market and to produce proof as above. The responsibility of the exporter does not end with obtaining the Let Export Order. In this case, neither side produced before us the documents which were produced as proof that the goods reached the Focus Market. The Customs authorities investigating the matter should have summoned the relevant documents from the DGFT. Either the goods must have reached the Focus Market or if they were diverted, the exporter may have submitted fake documents as proof of landing or the DGFT may have issued the scrips without obtaining the proof of landing. The impugned order, however, does not address this issue.
Likewise, penalty could not have been imposed on Vijay Kumar Maggu, Director of the appellant under sections 114AA and 114(iii) of the Customs Act.
Conclusion - i) The invocation of section 28AAA without DGFT cancellation or initiation of cancellation proceedings is without jurisdiction and invalid. ii) The statement of Imran Mirza under section 108 is inadmissible evidence as procedural safeguards under section 138B were not complied with. iii) The appellant, as FOB exporter, is not responsible for diversion of goods post Let Export Order, but must ensure and prove goods reach the focus market to claim benefits. iv) Penalties on the appellant and its director are unsustainable due to lack of evidence and procedural infirmities. v) Confiscation order is ineffective as goods were exported and not available for confiscation.
The impugned order set aside - appeal allowed.
-
2025 (6) TMI 274
Levy of penalties u/s 114(iii) and section 114AA of the Customs Act, 1962 - instead of exporting the goods to countries listed in the Focus Market Scheme, goods were diverted to Dubai to enable the exporter to avail undue benefits under the said Focus Market Scheme - whether the statement recorded under section 108 of the Customs Act could be considered as evidence under section 138B of the Customs Act? - HELD THAT:- Reference can be made to the decision of the Tribunal in M/s Surya Wires Pvt. Ltd. vs. Principal Commissioner, CGST, Raipur [2025 (4) TMI 441 - CESTAT NEW DELHI]. The Tribunal examined the provisions of sections 108 and 138B of the Customs Act as also the provisions of sections 14 and 9D of the Central Excise Act, 1944 and observed that 'Once this determination regarding admissibility of the statement of a witness is made by the adjudicating authority, the statement will be admitted as an evidence and an opportunity of cross-examination of the witness is then required to be given to the person against whom such statement has been made. It is only when this procedure is followed that the statements of the persons making them would be of relevance for the purpose of proving the facts which they contain.'
In this view of the matter, the statement of Shanti Swaroop Sharma made under section 108 of the Customs Act would not be relevant - This apart the finding that Shanti Swaroop Sharma and Sangeeta Tuteja knowingly prepared and gave false or indirect information regarding the country of export destination is not based of any evidence but is based on mere statements recorded under section 108 of the Customs Act. These statements cannot be relied upon.
The penalty imposed upon Shanti Swaroop Sharma and Sangeeta Tuteja under section 114AA of the Customs Act cannot also be sustained - Appeal allowed.
-
2025 (6) TMI 273
Smuggling of gold - abetment under Sections 112(a) and 112(b) of the Customs Act, 1962, for allegedly orchestrating the smuggling of the gold through two carriers - passed without properly appreciating the facts, the law and the binding judicial precedents or not - burden to prove - violation of principles of natural justice - HELD THAT:- Though there is contradiction in the statements of two passengers viz. Sh. Parvesh Joshi and Shri Narinder Kumar Joshi but one thing is very clear that these two passengers who have stated in their statements regarding their monthly income amounting to Rs.25,000/- and their bank details recovered by the Department clearly shows that the seized gold cannot be purchased by them. Further, in the statement made by Sh. Parvesh Joshi, he has said nothing about the payment made to the seller and moreover, the invoice placed on record only shows the quantity recovered and payment made through cash whereas these two passengers never made any payment. It is pertinent to note that during the investigation, the appellant was called to appear by the Department but he never appeared which clearly proves that the specific allegation levelled against him by these two carriers that the gold belongs to the appellant. Further, I find that the entire expenses of the visit of these two carriers and their stay in the hotel was borne by the appellant as stated by these two carriers in their statements.
Further, the argument of the learned Counsel that these two passengers who have made statements before the Department were never allowed to be cross-examined by the appellant. This argument does not have force as the appellant has not appeared before the Customs Officer in spite of repeated summons to him. Further, the submissions of the learned Counsel for the appellant that the entire case has been made on the basis of oral statements of these two passengers and simply on the basis of these statements, penalty cannot be imposed on the appellant under Section 112(a) and 112(b) of the Customs Act, 1962 - Further, it is found that the appellant did not cooperate with the Department and did not appear in spite of summons issued to him which clearly proves that he is the mastermind in the whole smuggling of seized gold. It is also found that the carriers i.e two passengers in spite of ample opportunities have failed to prove by any evidence, documentary or otherwise, the legitimate purchase of seized gold in the form of source of funds, general use to transfer the said funds to UAE for purchase of gold, income as declared in the income tax returns etc., even their bank statements do not prove their capacity to buy the seized gold.
Conclusion - The seizure and confiscation of gold were lawful and justified under the Customs Act. The appellant was liable for abetment of smuggling and rightly penalized under Sections 112(a) and 112(b).
There is no infirmity in the impugned order passed by the Commissioner (Appeals) - Appeal dismissed.
-
2025 (6) TMI 272
Entitlement to the concessional rate of duty under Notification No.12/2012-Cus dated 17.03.2012 for imported rubber tracks used as replacement parts rather than in the manufacture of 'track type combined harvesters' - levy of penalty - HELD THAT:- The he appellant admittedly imported rubber tracks and claimed exemption under Sl.No.399 of Notification No.12/2012-Cus. dated 17.03.2012 even though the same are not used in the manufacture of harvesters, transplanters etc. but used as replacement of parts. The appellant admitting their mistake discharged the entire amount of differential duty with interest before issuance of show-cause notice. It is the contention of the appellant that under a bona fide belief and interpretation of the said Notification, they have claimed the benefit on the imported goods; hence imposition of penalty under Section 112(ii) and Section 114AA are unwarranted when the penalty had already been imposed under Section 114A of the Customs Act, 1962 which they have discharged.
In the interest of justice, therefore, the penalties imposed under Section 114A is upheld. The penalties imposed under Section 112(ii) and Section 114AA are liable to be set aside and accordingly set aside. Since there is no evidence on record regarding involvement of the Manager, the penalty imposed on him under Section 112(ii) deserves to be set aside and accordingly set aside.
There are merit in the contention of the learned advocate for the appellants that the fine imposed in the present case is excessive. Consequently, taking note of the facts and circumstances of the case, it would be appropriate to reduce the fine to Rs.5.00 lakhs in the interest of justice. Accordingly, the redemption fine is reduced to Rs.5.00 lakhs.
The impugned order is modified to the extent of setting aside the penalties imposed under Section 112(ii) and Section 114AA of the Customs Act, 1962, on the appellant company. Penalty imposed on the individual is set aside. Redemption fine is reduced to Rs.5.00 lakhs - Appeal allowed in part.
-
2025 (6) TMI 271
Undervaluation of imported goods - failure to disclose the correct assesable value at the time of import of the goods - Confiscation - redemption fine - penalty - HELD THAT:- There is no dispute that the appellant has initialy declared the value of the product “Firepower 4110 NGFW APPL 1U 2X NETMOD Bays K9” as per the commercial invoice issued by their overseas entity as USD 100, whereas on subsequent enquiry by the Customs Department, the true value has been disclosed as USD 64,496.42 which is equivalent to Rs. 42,01,942/-. The appellant in explaining the non-disclosure of the correct value of the imported goods for the purpose of assessment submitted that due to inter-office correspondence mistake, the invoice was raised disclosing the value of the product as USD 100 which was meant for local transfers. He submits that they have no intention whatsoever to evade payment of duty, therefore, quantum of fine and penalty is too harsh. It is informed that the appellant is a STP unit and also disclosed the true value immediately after being enquired by the Department and have waived the issuance of show-cause notice as well as personal hearing admitting their mistake.
The impostion of penalty both under Sections 112(ii) and 114AA, in my opinion is not justified. Therefore, penalty under Section 114AA needs to be set aside. Also, the imposition of Rs. 10,00,000/- as fine also excessive and in the facts and circumstances of the case, the same is reduced to Rs. 5,00,000/- to meet the ends of justice. In the result, the impugned order is modified and penalty under Section 112(ii) is confirmed and penalty under Section 114AA is set aside. Redemption fine is reduced to Rs. 5,00,000/-.
Appeal is disposed of accordingly.
-
2025 (6) TMI 270
Reasonable belief to seize 3499.750gm of alleged foreign origin gold - evidences available on record prove that the seized gold bars were smuggled into India from Myanmar without any legal documents or not - discharge of burden of presumption under section 123 of Customs Act, 1962 - not-following the procedure prescribed under section 138B and non-granting of opportunity to cross-examine - statements of Shri Abhishek Kumar and Shri Ritesh Kumar, retracted, can be relied upon to establish that the goods seized are liable for confiscation under Section 111 or not - HELD THAT:- Though seizure is effected, vide the power bestowed in Section 110 of the Customs Act, 1962, it is with the pre-condition that the proper officer should have reasons to believe that that such goods are liable for confiscation under the Act; once such seizure is done, Section 123 of the Customs Act, 1962, shifts the burden of proof to prove that goods are not smuggled on the person from whom the goods are seized.
It would be incumbent on the Customs authorities to prove that the seized goods are subject to confiscation. In the event of failure to prove so, there would be no question of confiscation and penalty. It gives an understanding that the Sections 111(b) and 111(d) are applicable only when it is established that the goods are of foreign origin and smuggled into the country without payment of applicable customs duties - the existence of Reasonable belief becomes suspect. Other than the statements of Shri Abhishek Kumar and Shri Ritesh Kumar statements dated 13.02.2021, which were retracted on 18.02.21, no other evidence has been put forth by the revenue to establish that the impugned gold is smuggled.
Hon‘ble Delhi High Court in the case of Shanti Lal Mehta v. UOI and Others [1982 (11) TMI 56 - HIGH COURT OF DELHI]. The Hon‘ble High Court reviewed the jurisprudence on the matter till then and set aside the confiscation and penalty on the ground that there was lack of reasonable belief on part of the proper officer before the seizure was affected and section 123 was not to be invoked.
Tribunal in the case of Balanagu Naga Venkata Raghavendra Vs CC Vijayawada [2021 (2) TMI 612 - CESTAT HYDERABAD] (Tri-Hyd) held that the burden under section 123 will not shift on the Appellants when the seizure of gold without foreign markings are seized from city.
There was no meaningful Enquiry/ investigation was undertaken to prove the smuggled nature of the gold; it is also not mentioned as to how the gold was smuggled from Myanmar, except making a bland statement that shri Girish Mitruka and shri Harish Mitruka have smuggled it from Myanmar - Going by various judicial pronouncements, it is found that Revenue needs to prove the smuggled nature of goods with cogent evidence. It is another matter that the persons involved may have committed any offence, in respect of the gold carried, punishable under any other law for time being in force. It itself does not make goods liable for confiscation under Customs Act and persons involved liable for penalty - neither the seized goods are liable for confiscation under Section 111 nor the persons involved are liable for penalty under Section 112. The provisions of Section 123 are not attracted.
Whether in the facts and circumstances of the case, the appellants have discharged the Burden of Proof as envisaged under Section 123 of Customs Act,1962? - HELD THAT:- There is merit in the submissions of the appellant on the transactions made by them through banks in respect of the purchase of gold and the issuance of invoices under GST populating the details in GSTN-1. The claim cannot be brushed aside on the basis of an investigation stated to have been conducted by the DRI at the back of the appellants and particularly, when copy of the same was not provided to the appellants. The presumption or burden under Section 123 is not absolute. Initially, yes, the burden is on the accused from whom the notified goods are seized. But once that burden is discharged by that person, it is to be rebutted or proved wrong by the Revenue. Account details, financial transactions and GSTN returns cited by the appellants could have been easily corroborated and verified. Revenue has not done the same. Instead, they rely on an investigation said to have conducted by DRI, at the back of the appellants and copy of which is neither given to the appellant nor part of the proceedings. Therefore, not only the claim of the appellant is not negated but also the principles of natural justice have been violated.
In the instant case, presence of reasonable belief is not established as the seizure took place at a place not specified under a Section 111(H), as notified under Section 6 of the Customs, Act,1962; there were no foreign markings on the gold pieces seized and that the purity was only 98.52% and 96.73% by weight Therefore, the claim of reasonable belief is nothing but a presumption that the gold bars/pieces were of smuggled nature. It is not supported by any corroborative evidence - Reasonable belief is not established in the instant case. It is another matter that the persons involved may have committed any offence, in respect of the gold carried, punishable under any other law for time being in force. It itself does not make goods liable for confiscation under Customs Act and persons involved liable for penalty. The Revenue requires to prove that the gold is of smuggled nature even when it is notified under Section 123. Efforts to prove the existence of 'Reasons to believe' after the seizure of the impugned goods, is like reading the provisions of the repealed Gold Control Act, while interpreting the provisions of the Customs Act.
Conclusion - The provisions of Section 123 are not invited. Even assuming that the same are attracted, the appellants have discharged the burden which is not negated conclusively, by the department. Going by various judicial pronouncements, it is found that Revenue needs to prove the smuggled nature of goods with cogent evidence. It is another matter that the persons involved may have committed any offence, in respect of the gold carried, punishable under any other law for time being in force. It itself does not make goods liable for confiscation under Customs Act and persons involved liable for penalty. The proceedings were vitiated in not following the procedure laid down under Section 138B of the Customs Act, 1962. Principles of Natural Justice have also been violated in not providing the verification report of DRI to the appellants, depriving them of an opportunity to defend themselves. In view of the same, the impugned order is not sustainable and is liable to be set aside.
Appeal allowed.
-
2025 (6) TMI 269
Town seizure - subject gold bars were seized from Shri Sumit Verma while he was travelling from Kolkata to Jaipur and there were also no foreign markings on the subject gold bars - Confiscation of seized gold bars along with seized packing materials under Section 111(b), (h), (l) & (m) & Section 118 of the Customs Act, 1962 - imposition of penalty on Shri Sumit Verma under Section 112(a) & (b) of the Customs Act, 1962 - HELD THAT:- Section 110 confers powers on the proper officer to seize goods only if he has reasons to believe that the goods are liable for confiscation.
Hon'ble Delhi High Court in the case of Shanti Lal Mehta vs. Union of India & Ors. [1982 (11) TMI 56 - HIGH COURT OF DELHI], elaborately dealt with town seizures and the evidences required to have the 'reasonable belief' that the goods are smuggled in nature, in such cases.
The seizure was made on the basis of statement of Shri Sumit Verma. On perusal of the statement as reproduced in the SCN, it is found that the fact of smuggling and melting was not stated by Shri Sumit Verma on the basis of his own knowledge but on the basis of what was told to him by Shri Anil Soni. While the revenue is heavily relying on the statement of Shri Sumit Verma and its evidentiary value, we cannot lose sight of the fact that the statement of Shri Sumit Verma, at best, constitutes a hearsay statement, as what was stated by him was only hearsay. At the same time, Shri Anil Soni in his statement nowhere admitted the fact of smuggling or foreign origin of recovered gold bars. In these facts, it was incumbent upon the revenue to bring on record some other corroborative evidence to support the charge of smuggling. However, no further corroboration has been made by the revenue by leading any other evidence to show smuggled nature of subject gold bars. Thus, it is observed that the reason to believe on which the officers presumed that the recovered gold bars were of smuggled nature is not supported by any corroborative evidence. There is no document available on record to establish that gold bars were smuggled into India without payment of customs duty. Hence the statement of Shri Sumit Verma does not establish ‘reason to believe’ that the gold bars were smuggled into India without any valid documents.
The objection of the revenue that the tax invoice was issued on 31.01.2023 and not on 26.01.2023 is completely incorrect. In fact, the invoice itself refers to both the dates i.e. 26.01.2023 as the date of issuance of tax invoice and 31.01.2023 as the date on which the tax invoice was acknowledged by IRP. From the FAQ issued by the Board for ‘steps of e-invoicing’, we find that the tax payer is first required to create GST invoices on their own accounting system, thereafter the invoices are reported to any one of the six IRP, on reporting, IRP returns a signed e-invoice with a unique ‘invoice reference number’ along with QR code whereupon the invoice is shared with GST systems for auto-population in the suppliers GSTR-1 return. The entire mechanism to report a tax invoice on IRP and thereafter issuance of e-invoice with a unique ‘invoice reference number’ along with QR code, is to ensure that the details of invoice gets auto-populated in GSTR-1 of the supplier - merely because the tax invoice was reported on 31.01.2023, the same would not dilute the fact of issuance of tax invoice on 26.01.2023 and the objection now taken by the revenue clearly appears to be misconceived.
On perusing the records, it is found that neither the said report forms part of SCN nor the said report was part of the adjudication order. The revenue also failed to bring the said report on record before the Appellate Authority. In these circumstances, once this report has been brought on record for the very first time in this appeal, the revenue cannot be allowed to raise this new plea at this stage. Needless to say, this Tribunal cannot sustain the case of the revenue on a ground which was not there in the SCN or in the adjudication order and therefore there are no fruitful purpose to consider the same at this stage.
Conclusion - i) The seizure was not based on reasonable belief as required under Section 110 of the Customs Act, 1962. ii) The presumption under Section 123 cannot be invoked in the absence of reasonable belief. iii) The confiscation and penalties imposed were rightly set aside by the Commissioner (Appeals). iii) The confiscation and penalties imposed are rightly set aside by the Commissioner (Appeals).
There are no reasons to interfere with the impugned order and accordingly, the same is sustained - appeal of revenue dismissed.
-
2025 (6) TMI 207
Seeking a direction to the Customs Department to release the goods being two gold bangles weighing about 58 grams belonging to the Petitioner - detention without issuing a show cause notice (SCN) or granting a personal hearing to the Petitioner - violation of principles of natural justice - HELD THAT:- It is noted that no SCN has been issued in this case as the Customs Department is relying on the standard pre-printed waiver that was obtained from the Petitioner. The validity of such pre-printed waiver of show cause notices and personal hearing has been considered by this Court in various matters, including in Amit Kumar v. The Commissioner of Customs, [2025 (2) TMI 385 - DELHI HIGH COURT] and Mr Makhinder Chopra vs Commissioner of Customs New Delhi [2025 (3) TMI 19 - DELHI HIGH COURT] where it was held that 'This Court is of the opinion that the printed waiver of SCN and the printed statement made in the request for release of goods cannot be considered or deemed to be an oral SCN, in compliance with Section 124. The SCN in the present case is accordingly deemed to have not been issued and thus the detention itself would be contrary to law. The order passed in original without issuance of SCN and without hearing the Petitioner, is not sustainable in law.'
Thus, the law is well settled, that the Customs Department cannot rely on pre-printed waiver of show cause notice as the same would be contrary to the requirement of Section 124 of the Act. In light of the above discussions, it is clear that the continued detention or seizure of goods by the Customs Department would be untenable in law, where the show cause notice or the personal hearing have been waived via a pre-printed waiver.
Conclusion - In the facts of this case, since no show cause notice has been issued to the Petitioner due to a pre-printed waiver, the detention is set aside. The detained articles would be liable to be released to the Petitioner.
Petition disposed off.
-
2025 (6) TMI 206
Failure of Customs Broker to fulfil obligations as required under CBLR, 2018 - appellants CB firm had played the role of facilitating fraudulent exports by mis-use of Factory Stuffing permission, forgery of customs documents with the intention of availing undue drawback and other export incentives in a fraudulent manner.
Violation of Regulation 10(a) - allegation is that appellants CB was neither in contact with the exporter nor verified whether the exporter had issued such authorisation to the intermediary - HELD THAT:- The impugned exports involving alleged fake Factory Stuffing Permission were exported through two Shipping Bills No. 2014912 and 2014929 both dated 02.11.2016, which had been duly processed at the port of export by the Customs authorities. Thereafter, voluntary statement from Shri Tarun Jain, proprietor of the export firm M/s Abhinandan Industries was recorded. Subsequently, Shri Lalit Krishna Kotian, Director of the appellants CB firm was called for participating in the investigation only on 05.12.2016 for recording his statements under Section 108 of the Customs Act, 1962. However, the action under CBLR was taken only after passage of long time on 15.12.2022. Further, the allegation against the exporter is that they attempted to avail ineligible export incentives such as Drawback, export incentives upon export of goods and that the appellants CB firm had played active role. However, it is also seen from the submission made by the appellants that they have not been imposed with any penalty on account of such export violations. Thus, it is seen that alleged ineligible availment of export benefits is solely on account of the action taken by the exporter such as filing wrong declaration for claiming ineligible export incentives or the failure on the exporter to obtain export proceeds within a reasonable time frame. There is no role of Customs Broker in the above activities of the exporter.
In the absence of any document to prove the claim of mis-declaration of export goods, the findings given by the learned Principal Commissioner of Customs in the impugned order that the appellants has aided and abetted the exporter in availing ineligible export incentives, is difficult to be proved for fastening such liability on the appellants CB for holding them responsible for violation of Regulation 10(a) ibid.
Violation of Regulation 10(d) - HELD THAT:- In the instant case, the ineligible claim for export incentives was found by the department only on the basis of specific investigation conducted by the CIU of JNCH customs authorities, and hence the appellants CB cannot be found fault for the reason that they did not advise their client exporter to comply with the provisions of the Act - when the customs authorities were not aware of the non-genuineness of the documents, there is no possibility for the appellants CB to be aware of the same, and to bring it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) about the mis-declaration of exported goods. Thus, the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable.
Violation of provision of Regulation 10(n) ibid - HELD THAT:- CBIC had issued instructions in implementing the KYC norms for verification of identity, existence of the importer/exporter by Customs Broker in Circular No. 9/2010-Customs dated 08.04.2010, and verification of any two documents among specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. It is found that in the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, there are no legal basis for upholding of the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order on the above issue.
Hon’ble High Court of Delhi has held in the case of Kunal Travels (Cargo) Vs. Principal Commissioner of Customs (I&G), IGI Airport, New Delhi [2017 (3) TMI 1494 - DELHI HIGH COURT], the appellants CB is not an officer of Customs who would have an expertise to identify mis- declaration of goods.
Conclusion - There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revocation of the CB license of the appellants; for forfeiture of security deposit and for imposition of penalty, inasmuch as there is no violation of regulations 10(a), 10(d) and 10(n) ibid, and the findings in the impugned order is contrary to the facts on record.
The impugned order is set aside - Appeal allowed.
-
2025 (6) TMI 205
Seeking amendment of Bills of Entry under section 149 of the Customs Act - import of different varieties of fabric - claim CVD exemption in terms of Notification No.30/2004-CX - correction of clerical errors - HELD THAT:- We note, from records that the orders of the adjudicating authority, as discussed in appeal order is well reasoned, coherently amplifying the grounds on which basis, provisions of Section 149 and Section 154 of the Customs Act cannot be resorted to and made applicable to the issue herein. The appellant had themselves filed the import bills in the manner as aforestated. It is apparent that there is no arithmetical or clerical mistake in the assessments so done. The assessment without the claim for exemption benefit, is indeed a consequence of the conscious action taken, at the time of import. Irrespective of the fact of whether it being the right or wrong course of action, it cannot be considered as an error arising from an accidental slip or omission in the decision or order of the assessing authority, hence the question of invoking the provisions of Section 154 for correction of clerical/arithmetical error cannot be applied to in the present matter.
Amendment is no substitute to assessment/re-assessment and cannot replace it, as the two terms apply in different context, have distinct overtones and outcomes in law. Amendment alone of import/export documents may not be sufficient in seeking the desired results. The two terms are not interchangeable. To derive the intended objective, the amended document, if any, would be required to be re-assessed in the light of such an amendment which alone can be done, once the assessment order is set aside by a direction from the superior authority.
Suo moto of one’s own accord, the authority cannot in itself undertake any re-assessment, having been rendered as functus officio. This logic and discourse also seeks to not only bring about the assigned objective and give a meaning to the different provisions of the statute like Section 17 (Assessment/Reassessment related), Section 128/Section 129 (Appeal related, Section 149 (Amendment related) and Section 154 (Correction of clerical errors related), it also defines the individuality and relevance of each of the provisions without reducing any of such a provision to dead wood. Also any interpretation outsmarting one provision against the other is bound to create chaos and confusion.
In view of our findings above, we are of the view that the route sought to be adopted by the Ld. Counsel by seeking amendment in terms of Section 149, that too after a prolonged period of several years for an omission made by them cannot be justified. As discussed above amendment and assessment/re-assessment signify two clearly distinct connotations importing distinct and separate meanings and encompassing different areas of action. We are thus not able to appreciate any merit in the view as canvassed by the Ld. Counsel.
An amendment simplicitor cannot lead to the consequence of demand of duty or a claim for refund, for which the original assessment done is required to be reversed by a process as known to law, as also held by the hon’ble apex court in the ITC Ltd. case, we also would like to put it on record, that the ld. Commissioner has thus completely erred in directing the lower authority to “consider the amendment of the Bill of Entries”.
There is nothing for consideration of the amendment, as merely carrying out the amendment is of no consequence unless the Bills of Entry are re-assessed. None of the earlier assessments have been appealed at all; the outcome of such an amendment continues to hold fort, till such time it is set aside by the appropriate authority and a fresh assessment done revisiting the earlier assessment.
Thus, we are of the view that the order of the ld. Commissioner(Appeals) is not in accordance with law and is therefore set aside.
The appeals filed by the department are allowed.
-
2025 (6) TMI 204
Time limitation for issuing SCN - SCN issued after a period exceeding five years from the date of export is barred by limitation under the Customs Act, 1962 - submission of false and fabricated documents - Levy of penalty u/s 114(iii) of the Customs Act, 1962 for excess claim of duty drawback - HELD THAT:- The main allegation against the appellants is that they were involved in submission of false and fabricated documents and filing of false declarations with regard to quantity and value of stainless-steel articles exported in order to claim excess duty drawback. In the case of Mr. R.V. Shanmugam, Proprietor of M/s. Ayyappan Industries and others, it was alleged that with an intention to defraud the Government exchequer, these exports have contravened the provisions of Sec. 50(2) of Customs Act, 1962 read with Rule 12(1) of Drawback Rules and thus becoming liable for penal action under Section 114(iii) of the Customs Act, 1962. However, investigations conducted indicated that no drawback was sanctioned. Post export there was an attempt to reconstruct the Shipping Bills.
These cases can be decided on limitation itself without going into the merits as the fundamental questions raised by the appellants are whether the entire proceedings are barred by limitation and whether the delay caused in adjudication would render the entire proceedings void.
Even on invocation of larger period, the maximum time limit prescribed by the Customs Act is only 5 years for issuance of any Show Cause Notice proposing demand of duty or confiscation or imposition of fine and penalties. Any proceedings initiated under the Customs Act beyond the time limit have to be held invalid and void. In the case of Usha Stud & Agricultural Farms Pvt. Ltd. & Others Vs. Commissioner of Customs, New Delhi [2011 (5) TMI 604 - CESTAT, NEW DELHI], it was held that as the Show Cause Notice was served after expiry of 5 years, the entire proceedings proposing confiscation on the allegation of undervaluation and imposition of penalty held as not legal and proper. Though Section 124 of the Customs Act does not specify time limit, the same cannot exceed the maximum time of limit for 5 years prescribed under Section 28 of the Customs Act, 1962.
Further, it is also seen that in these appeals, the Adjudication has got completed after lapse of 8 years after issuance of the Show Cause Notice which is now a well settled legal position by various Courts that such huge latches would render the entire proceedings void - In the case of Shri Balaji Enterprises Versus Additional Director General New Delhi & Ors. [2024 (12) TMI 1208 - DELHI HIGH COURT] dated 19.12.2024 it has been held that there existed no reason for non-adjudication of the Show Cause Notice and ordered to set aside the same.
In the present appeals, the details of the Shipping Bills are (i) M/s. Ayyappan Industries, Shipping Bill Nos. 806 to 816 dated 18.06.2005 (ii) Shri J.S. Babu Inc. Nos. 743 to 752 dated 14.06.2005 and Nos. 796 to 805 dated 18.06.2005 and (iii) M/s. Samy Metal Industries Nos. 687 to 694 dated 10.06.2005 whereas the Show Cause Notice was issued in 29.09.2011 for the exports effected in June 2005 which is after more than 6 years and whereas the adjudication has happened after lapsing of more than 8 years on 25.03.2019. As such, the Show Cause Notice issued is time barred and the delay caused in adjudication that Show Cause Notice is not reasonable and cannot be justified.
As there are huge latches by unduly delaying the adjudication, and as the Show Cause Notice was issued after elapsing of more than six years period from the time of exports, the impugned Order-in-Original passed by Commissioner of Customs (Preventive), Tiruchirappalli cannot be sustained insofar as the imposition of penalty on the appellants is concerned. And so, penalties imposed on the Appellants in these appeals are ordered to be set aside.
Conclusion - i) Even though Section 124 does not specify a time-limit, the same cannot exceed the maximum time-limit of five years prescribed under Section 28 of the Customs Act. ii) Where the Show Cause Notice is issued beyond the prescribed limitation period and adjudication is delayed unreasonably, the entire proceedings become void ab initio. iii) No penalty can be imposed under Section 114(iii) without establishing that the goods are liable for confiscation under Section 113.
Appeal allowed.
-
2025 (6) TMI 203
Levy of customs duty - FOB value on export of iron ore fines considering the same as cum-duty value - HELD THAT:- The issue is no longer res integra as has been decided in catena of rulings against the Appellant/Assessee holding that Cum Duty Value cannot be used for arriving the value for levy of export duty.
Reliance can be placed in SESA GOA LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, GOA [2018 (3) TMI 1884 - CESTAT MUMBAI] and M/S ESSEL MINING & INDUSTRIES LTD. VERSUS COMMISSIONER OF C. EX., CUSTOMS &SERVICE TAX, BBSR-I [2017 (4) TMI 87 - CESTAT KOLKATA].
The impugned order upheld - appeal dismissed.
-
2025 (6) TMI 130
Seeking release of the four gold bangles of the Petitioner, weighing a total of 173 grams - SCN was indeed not issued to the Petitioner upon detention and the Petitioner also did not appear for the appraisement of the detained articles - violation of principles of natural justice - HELD THAT:- This Court, while deciding the issue pertaining to non-issuance of the Show Cause Notice within the prescribed period under the Customs Act, 1962, has held that once the goods are detained, it is mandatory to issue a Show Cause Notice and afford a personal hearing to the Petitioner. The time prescribed under Section 110 of Act, is a period of six months. However, subject to complying with the requirements therein, a further extension for a period of six months can be taken by the Customs Department for issuing the show cause notice. In this case, the one year period itself has elapsed, yet no show cause notice has been issued. Accordingly, since the detention in this case is of 05th February, 2024, and no SCN has been issued till date, further detention is impermissible.
The issue whether gold jewellery worn by a passenger would fall within the ambit of personal effects under the Rules, has now been settled by various decisions of the Supreme Court as also this Court. The Supreme Court in the Directorate of Revenue Intelligence and Ors. v. Pushpa Lekhumal Tolani, [2017 (8) TMI 684 - SUPREME COURT], while considering the relevant provisions of the Customs Act, 1962 (hereinafter, the ‘Act’) read with the Baggage Rules, 1998, that were in force during the relevant period, held that it is not permissible to completely exclude jewellery from the ambit of ‘personal effects’.
Thus, it is now settled that the used jewellery worn by the passenger would fall within the ambit of personal effects in terms of the Rules, which would be exempt from detention by the Customs Department.
Conclusion - Once the goods are detained, it is mandatory to issue a Show Cause Notice and afford a personal hearing to the Petitioner. The time prescribed under Section 110 of the Customs Act, 1962, is a period of six months, with a possible extension of another six months subject to compliance. In this case, since one year has elapsed without issuance of the SCN, further detention is impermissible.
Petition disposed off.
-
2025 (6) TMI 129
Entitlement to duty drawback - export of mobile phones, which have been unlocked - Confiscation - penalty - HELD THAT:- The question that arises in these cases, is whether unlocking of mobile phones would result in withdrawal of duty drawback benefits to the Petitioner. This issue is no longer res integra and has been decided in a batch of cases, with the lead petition being, M/s AIMS Retail Services Private Limited v. Union of India & Ors., [2025 (2) TMI 596 - DELHI HIGH COURT], the Court has held that 'In the opinion of this Court, the unlocking/activating of the mobile phones as per the procedures adopted by the Petitioners herein is mere ‘Configuration’ of the product to make it usable and does not constitute “taken into use” under proviso to Rule 3 of the Duty Drawback Rules. The Clarifications go beyond Section 75 of the Act and the Duty Drawback Rules since the interpretation sought to be given by CBIC is that unlocking/activation of mobile phones constitutes “taken into use”. The said interpretation which is contained in the Clarifications is not sustainable. Accordingly, the Clarifications issued by the CBIC are quashed.'
This Court in M/s IConnect India v. Union of India and Others [2025 (3) TMI 1406 - DELHI HIGH COURT] while deciding on similar facts, observed that 'this Court has held that duty drawback may be claimed in respect of unlocked mobile phones being exported, as the mere act of unlocking does not constitute the phones being “taken into use” within the meaning of the applicable provisions. Given that a mobile phone is capable of being utilized in several ways, the mere unlocking thereof cannot be deemed as the Petitioners having “taken it into use.”'
In both these decisions, the Court has held that duty drawback may be claimed in respect of unlocked mobile phones being exported, as the mere act of unlocking does not constitute the phones being “taken into use” within the meaning of the applicable provisions. Given that a mobile phone is capable of being utilized in several ways, the mere unlocking thereof cannot be deemed as the Petitioners having “taken it into use.”
Furthermore, this Court has observed that with the expansion of mobile phone manufacturing and assembly in India, the volume of exports is expected to increase. The mere fact that the said products are configured for use in foreign jurisdictions cannot operate as a ground to deprive the Petitioners of their rightful claim to duty drawback under the prevailing legal framework. The present case also pertains to the Respondents’ rejection of the Petitioner’s request for duty drawback on unlocked mobile phones being exported.
Conclusion - The unlocking mobile phones before export does not amount to "use" that disqualifies duty drawback claims, and that administrative clarifications contrary to this interpretation are invalid.
Petition disposed off.
-
2025 (6) TMI 128
Failure to consider the submissions given by the Petitioners by the DGTR - grievance of petitioner is that the submissions made by them dated 20th March, 2025 were not considered by the DGTR and despite the Petitioner being similarly placed to Husky Molding Systems Shanghai Ltd. [2025 (3) TMI 1111 - DELHI HIGH COURT], a different treatment is meted out to the Petitioners herein - HELD THAT:- The manner in which the scheme of Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, (hereinafter ‘ADD Rules’) works is that once the final findings are rendered by the DGTR, a notification is to be issued by the Central Government, accepting the final findings.
The settled position in law therefore is that the final findings are not fully binding on the Central Government and, therefore, at this stage, the writ petition is pre-mature in the opinion of the Court. Hence, once the final findings issued by the designated authority are imposed in the form of notification by the Central Government, it is then that the Petitioners can have a grievance and at that stage, they are free to avail of their remedies in accordance with law.
Furthermore, in terms of Section 9C of the Customs Tariff Act, 1975, once a decision is taken by the Central Government, an appeal would lie before CESTAT against the imposition of the Anti-Dumping Duty. Thus, this Court is of the opinion that the present petition does not merit any interference of this Court at this stage.
Insofar as the allegation of non-consideration of the submissions made by the Petitioners dated 20th March, 2025 is concerned, ld. Sr. counsel submits that the Petitioners are willing to bring this to the notice of the DGTR by making a representation. The Petitioners are free to do so. In case, such a representation is made, the same shall be considered in accordance with law.
Conclusion - i) The Court declined to interfere with the final findings on the ground of non-consideration of submissions, leaving the Petitioners free to make representations. ii) The Court rejected the Petitioners' claim for parity with Husky Injection Molding Systems Shanghai Ltd. at this stage. iii) The writ petition challenging the final findings was dismissed as premature since no notification imposing anti-dumping duty has been issued. iv) The appellate remedies under Section 9C of the Customs Tariff Act are available post-notification before CESTAT.
Petition disposed off.
-
2025 (6) TMI 127
Delay in adjudication of the matter for a period - limitation on issuance of the SCN - Seeking to avail of the appellate remedy under Section 128 of the Customs Act, 1962 - scope and applicability of Rule 16 of the Duty Drawback Rules - violation of principles of natural justice - HELD THAT:- In Rajbir Singh [2025 (4) TMI 1122 - DELHI HIGH COURT] had considered the Rule 16 of the Duty Drawback Rules and the argument of limitation as raised by the Petitioner. The Court had held that there is no specific period of limitation prescribed under Rule 16 of the Duty Drawback Rules.
In Rajbir Singh (supra) the Court had followed the decision in Commissioner of Customs v. Sans Frontiers, [2023 (12) TMI 695 - DELHI HIGH COURT], where in a similar fact situation, the Court had relegated the party to seek the appellate remedy.
In view of the above, even in this case the documents placed on record by the Department would reveal that repeatedly, the Petitioner has merely sought documents or adjournments on one ground or the other. Thus, there is no violation of principles of natural justice.
The impugned order is an appealable order and therefore the Petitioner is permitted to avail of the appellate remedy under Section 128 of the Customs Act, 1962.
The impugned order is of 31st January, 2025. Accordingly, time is granted to the Petitioner to file the appeal by 15th July, 2025. If the same is filed by the said date, then the appeal shall be adjudicated on merits and shall not be dismissed on the ground of being barred by limitation.
Petition is disposed of in these terms.
-
2025 (6) TMI 103
Seeking for quashing of Summons issued by the Respondent No. 2 (DRI) under Section 108 of the Customs Act, 1962 - proper officer forthe purpose of issuance of SCN - DRI are proper officers or not - HELD THAT:- DRI Officers were the “Proper Officers” for the purpose of Section 28 Customs Act, 1962 and were competent to issue the Show Cause Notices thereunder. Therefore, the present Petitions are hereby disposed of with the directions that the Notices are restored for the purpose of adjudication by the Proper Officers under Section 28 Customs Act, 1962.
Further, the Orders passed by the Adjudicatory Authority under Section 28 Customs Act, 1962, may be challenged by way of Appeal before the Customs Excise and Services Tax Appellate Tribunal (for short “CESTAT”), which are under challenge before this Court on the ground of maintainability due to lack of jurisdiction of Proper Officer to issue Show Cause Notices. Eight weeks time is granted to the Petitioners, to prefer their appropriate Appeal before the CESTAT.
Petition disposed off.
-
2025 (6) TMI 34
Infringement of registered trademark u/s 29(6) of the Trade Marks Act, 1999 - importation of second-hand or refurbished goods bearing the plaintiffs' registered trademarks by the defendant - causing injury to the consumers in India who were led to believe that they were purchasing an authorized Samsung product in India, sold with the permission of Samsung - HELD THAT:- From a reading of the Division Bench judgment in Kapil Wadhwa [2012 (10) TMI 1246 - DELHI HIGH COURT], the position which emerges is that import and resale of goods bearing the trademark of the registered proprietor is permissible as long as the condition of said goods is not changed or impaired.
Kapil Wadhwa [2012 (10) TMI 1246 - DELHI HIGH COURT] was not a case where the defendants were refurbishing the imported goods. In the said case, the imported goods were sold on an ‘as is’ basis. In Daichi [2024 (5) TMI 1573 - DELHI HIGH COURT], the Coordinate Bench extended the reasoning and rationale adopted in Kapil Wadhwa to cases involving refurbishment of imported products (HDDs).
The legal position that emerges from reading of the judgment of the Division Bench in Kapil Wadhwa and the Coordinate Bench in Daichi is that there is no statutory bar against the import of ‘end-of-life’ goods in India. Any person in India has the right to legally import goods from abroad bearing the trademarks of an entity and sell the same in India. The principle of international exhaustion is duly recognized under Section 30 (3) and 30 (4) of the Trade Marks Act. The only caveat which the aforesaid judgments seek to place on such importers is that there should be a complete disclosure as to the facts that the goods are second hand goods and are not covered by the original manufacturer’s warranty. In terms of Daichi, even refurbished goods can be sold with proper disclosure.
Applying the aforesaid legal position in the facts of the present case, it is an undisputed position that the defendant herein was an importer of second-hand goods from abroad, purchased from OEMs of the plaintiffs. It is not the case of the plaintiffs that the goods imported by the defendant were not genuine goods. Before the imported goods could be released to the defendant, the present proceedings were initiated by the plaintiffs which resulted in the goods being seized at the customs clearance stage. The goods were taken into custody and have ever since been lying at the customs warehouse - Since the imported goods never reached the defendant, it cannot be ascertained as to whether the aforesaid imports were made by the defendant for the purposes of reselling directly or indirectly, or the intention of the defendant was to refurbish the goods and sell the same further. Therefore, it cannot be said that the defendant has made any misrepresentation to the public at large or the consumers with regard to the status of the goods.
Insofar as the goods already imported by defendant are concerned, it is an admitted position that they are still lying in a customs warehouse since the time of their import. This Court, while passing an ex-parte interim order dated 21st October, 2019, has specifically provided that the demurrage or other charges payable to Custom Authority, shall be paid by the defendant.
Conclusion - The goods seized by the Local Commissioner and now lying with the Custom Authority are permitted to be released to the defendant, subject to the defendant filing an undertaking that the said goods shall be sold only as scrap after removing all marks of the plaintiffs. The defendant shall be free to pursue his remedies that may be available in law with regard to demurrage charges payable to the customs.
Application disposed off.
............
|
9911796707
