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Customs - Case Laws
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2024 (3) TMI 1297 - CESTAT BANGALORE
Revocation of Licenced Customs Broker Licence - violation of Regulations 10(d), 10(e) and 10(i) - forfeiture of security deposit - Penalty - Appraiser at the CFS Chennai demanding and accepting undue advantage from the Custom House Agents (CHA) for issuing Let Export Order / out of charge order on the consignments and registration of bills pertaining to import/export - HELD THAT:- The entire proceedings are based on CBI report, which in turn is based on the slips and vouchers recovered from the customs officials, the appellant and various statements of the employees. These are only allegations/charges arrived at a preliminary stage which is yet to be corroborated with the evidences and to be finalised by the CBI. Moreover, based on the same set of facts, the Customs Brokers are penalised differently either by imposing only penalty or by revocation of license along with imposition of penalty as is the case of the present appellant.
Based on the facts and allegations levelled against the appellant and the facts placed on record do not in any way prove the contravention of clause 10(d) and (e) of the Regulations and to invoke clause 10(i), the allegations/charges are yet to be proved by the competent court. Moreover, the decisions relied upon by the appellant clearly observed that the appellant cannot be penalised for the actions of the employee when there is no proof on record to establish that the conduct of the employee was authorised by the appellant.
Thus, the entire proceedings being based on CBI report which is pending adjudication are pre-mature and without any basis. We set aside the impugned order and allow the appeal.
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2024 (3) TMI 1296 - CESTAT HYDERABAD
Valuation - export duty - Whether the Appellant/Assessee is liable to pay customs duty on the FOB value, on export of iron ore fines considering the same as cum-duty value or otherwise - HELD THAT:- We find 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 at the value for levy of export duty. In the following rulings of this Tribunal, this view has been taken in Sesa Goa Ltd vs CCE,C & ST,[2014 (4) TMI 658 - CESTAT KOLKATA] and Essel Mining & Industries Vs CCE, [2017 (4) TMI 87 - CESTAT KOLKATA].
Thus, we dismiss the Appeals and uphold the Impugned Orders.
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2024 (3) TMI 1295 - CESTAT HYDERABAD
Value addition - Duty-free import of gold - Replenishment of gold under the ‘replenishment scheme’ from DIL against export of gold jewellery - Not fulfilled the mandatory requirements - balance quantity of gold supplied - duty demand - confiscation - Penalty u/s 114A - limitation for adjudication - Violation of the conditions of Notification No. 57/2000-Cus.
i) Whether or not the subject ‘kadas’ were manufactured by a ‘fully mechanized’ process as declared by BL/JR in the shipping bills.
ii) Whether or not the claim made by BL/JR that the value addition was “2.05%” of the export FOB value, is correct?
HELD THAT:- Gold has been supplied by DIL by way of replenishment and there is no allegation that matching quantum of gold has not been exported as required under Notification No. 57/2000-Cus. In the said Notification, in the second proviso, it clearly provides that Nominated Agency supplying gold to the exporter is liable only for difference (shortage) between the quantity issued and that contained in the exported jewellery or articles. We further find that the value addition norm was required to be checked by the proper officer of customs on presentation of goods with the export documents. Admittedly, all the shipping bills along with the export invoices were approved by the proper officer of customs on being satisfied as to the declarations and requirements. Thus, we find that no case of violation of the conditions of Notification No. 57/2000-Cus is made out in the facts and circumstances. Thus, we hold that the Appellant – DIL has not violated the provisions of Customs Act read with Notification No. 57/2000-Cus.
From the facts on record and the evidence recorded, it is evident that the jewellery in question which have been exported, was manufactured by the said job worker by fully mechanised process. The Govt. approved jewellery valuers, who are experts, have also certified so. Further, the said valuers have not stood by their statements recorded during investigation. The Chartered Engineer has also certified the process as fully mechanized. Therefore, the value addition here would be 2% and not 3.5% as held in OIO.
Value addition - It is obvious that the interpretation of DGFT Authority would prevail over Customs Authority, which has also been admitted by DGEP in their circular (quoted supra). Therefore, if that norm is followed instead of the calculation method adopted by the Revenue, the requirement of Notification No. 57/2000 is met, in as much as, the conditions for duty-free imports stand fulfilled and therefore, there is no short levy.
Evidential value of email clarification - It is also noticed that this mail has come in response to DIL’s letter dt.09.10.2020. Since it is an official mail, it cannot be held as having no authority to clarify as indicated in the said mail. If Revenue had any doubt about genuineness of this mail, they could have cross-checked from the DGFT as regard bonafide of this mail. It is obvious that the original Circular dt.27.09.2019 also, in Para 3, has clarified that for the purpose of value addition, inputs in ‘B’ in Para 4.38 means ‘the duty-free’ (either on advance or replenishment basis). Therefore, it would be obvious that the term ‘dutyfree’ used here in conjunction with either on advance or replenishment basis, would obviously mean imported inputs or in other words, what has been clarified in email is inputs imported duty free. Therefore, the objection taken by the Revenue on this ground does not hold any substance.
Further, we have held that the process of manufacture is fully mechanised, we find that the wastage allowable was 0.9%. Further, the required value addition is 2% as per the table in Para 4.61 & 4.62 in the Handbook of procedures. Thus, we find that the whole allegation by revenue of not achieving minimum value addition is misconceived and bad.
There is no allegation in the SCN that the customs authorities – proper officer did not perform their duty diligently or have abetted with the exporter. Further, all duly endorsed documents were submitted by DIL to jurisdictional Customs officer for final assessment and closure of the bond and the said bonds were closed without raising any doubt or query based on endorsement of proper officer of customs, at the time of export of gold jewellery. Thus, the whole allegation is not substantiated and has got no legs to stand.
We further find that there is also no allegation that the Appellant have exported gold jewellery using less quantum of gold, than declared or made by some other metal other than gold. Also, there is no allegation regarding purity of gold as declared. Thus, we hold that the provisions of section 113(i) for confiscation are not attracted, there being no case of any misdeclaration.
DIL as the Nominated agency - We hold that there is no case of any violation against DIL under the Customs act, read with the notification. We further take notice of the fact that the bonds given by the Nominated agency – DIL to the customs, have been duly discharged or closed by the proper officer after due verification of relevant documents under the scheme.
Jewellery valuer - We find that, the allegation against him would also not stand. It is evident that this Appellant has valued the gold jewellery under export, in the export shed in presence of the Customs officials. He has certified certain other parameters including weight and purity but that does not make him accomplice. No case of any suppression or collusion in the valuation report is made out. In this view of the matter, we allow the appeals of the jewellery valuer and set aside the penalties imposed on him.
Consequently, we hold that no penalties are imposable on any of the parties/Appellants. Accordingly, all the penalties imposed on all the Appellants are set aside.
Limitation for adjudication - The Revenue has however put on record an Order dt.21.08.2019, whereby, in the case of SCN dt.31.08.2018, the approval for extension of one year as per first proviso to Sec 28(9) of Customs Act was recorded by the competent authority. Further produced a notification viz., 06/2019-CUS dt.27.02.2019, under sub-sec (8) of Sec 28 of Customs Act, whereby in respect of SCN dt.26.09.2018 of DIL was extended by further period of one year. The Appellants have relied on the judgment of Gautam Spinners vs CC (Import) [2023 (386) ELT 62 (Del)] to substantiate their claim that regardless of causative factors, the notice needs to be adjudicated within the statutory period. Be the case as may be, since the entire issue has been decided on merit itself, we keep the issue of limitation open without expressing any view on this aspect.
Further, as we have allowed the appeals on merits, we also leave the question of limitation open.
All appeals are allowed with consequential benefits, including entitlement to receive the balance quantity of gold, which has not been released by the Nominated agency – DIL to the Appellant/exporter M/s BL/JR under the replenishment scheme.
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2024 (3) TMI 1253 - BOMBAY HIGH COURT
Levy of stamp duty on ‘Bill of Entry’ (BoE) and on Delivery Orders (DO) - goods imported in Maharashtra - seek refund paid on stamp duty - Whether the State of Maharashtra has the legislative competence to levy, impose and collect stamp duty on a Delivery Order, an ‘instrument’ defined in Section 2(l) of the Maharashtra Stamp Act, 1958, chargeable with duty as mentioned in Article 29 of the First Schedule in the Maharashtra Stamp Act, 1958? - Entries 41 and 83 of List I of Schedule VII of the Constitution of India - ultra vires Article 246(1), 286(1)(b) and 286(2) - HELD THAT:- A plain reading of the taxing provision of the MSA suggests that a DO mentioned in Article 29 is indeed an instrument. It is not excluded from the definition of instrument. It creates an entitlement in the consignee, i.e., the Petitioners herein or any person named by them in the DO, to take delivery of the goods lying in any dock or port, in any warehouse in which the goods are stored, or deposited on rent or hire or upon any wharf etc.
The definition of ‘instrument’ includes every document by which any right or liability is, or purports to be created, transferred, limited, extended, extinguished, or recorded. Certain documents have been specifically excluded from the definition. A DO is not one of them.
Once the goods reach the destination port, they are unloaded and stored in a warehouse or storage as directed by transacting parties. In the meantime, the consignee or his agent presents a document called the BoE also containing a description of the goods matching that contained in the BoL and other details to the customs authorities. It is on the basis of the BoE that customs duty payable is computed and paid by the consignee. Upon evidence of payment of customs duty, and also its own charges, the shipper then issues the DO saying that the custodian of the goods may hand the goods over to the consignee (as there is no pending duty, claim or demand). Stamp duty is then paid on the DO and upon verification of payment of the same, the custodian releases the custody of the goods.
Whether the DO is an integral part of the chain of events in the course of import of goods or is independent of the import albeit incidental thereto - If it is the latter, and not an integral part of the import, the State is well within its powers to levy stamp duty on it as per the pith and substance rule since the primary object and the essential purpose of Article 29 read with Section 2(l) of the MSA is then identified as distinct and not an integral part of an import but more as consequence of import.
The BoE is presented for computation of the customs duty. Once the customs duty is paid, the import process so far as the customs authorities and the Customs Act is concerned ends. The DO is then issued by the shipper upon proof of payment of customs duty and its own charges. The DO does not form part of the chain of the import process and the taxing event occurs beyond the course of import. As Dr Saraf puts it, if a consignee can take delivery without a DO, there would be no question of a stamp duty impost. There is thus, no overlap in the legislative field and, the State and the Centre are both well within their own occupied area of Legislation.
The DO in question in this group of cases only springs into being when that frontier has ended, i.e., after the process of assessment and recovery of customs duty is complete. The BoL, a document of title, originates when goods are laden on the vessel. It is the first in point of time. The BoE, as the Gujarat High Court judgments point out, is for the purposes of customs duty assessment. This is second in point of time. The DO comes into existence third in time sequence, after the customs duty, dues, freight, etc., are paid and the goods are lien-free, i.e., available for delivery. The ‘customs barrier’ is, therefore, not a physical ‘barrier’ per se, but speaks of a point in time after the role of customs has ended.
Thus, a parallel can be drawn between the taxing power of the State in respect of levy of entry tax in the aforesaid decision and levy of stamp duty on a DO in the present case. Article 286(1)(b) of the Constitution restricts the power of the State to impose tax on the supply of goods imported into the country. The imposition of stamp duty on a DO in no manner encroaches upon the parliamentary legislature in Entry 83 of List I of the VIIth Schedule.
Shipper’s lien on the goods - The DO in the present circumstances has nothing to do with the customs duty nor the clearance by the customs authority for domestic consumption. Dr Saraf candidly says that if the Petitioners are able to bye-pass the requirement of a DO, the State will not have any claim of stamp in such a situation. But the moment there is a DO, the same will not be valid or accepted by the custodian without proof of payment of the stamp duty.
DO is not a document of title under Article 29 of the MSA and hence, it is not an ‘instrument’ - It is a DO which entitles the person named therein to take delivery of the goods after discharging the dues of a shipper. It is only after the shipper’s charges are cleared that his lien on the goods is extinguished. A right to possession of the goods is distinct from ownership of the goods. Although title to goods includes ownership and possession, the former may exist without the latter. Ownership denotes de jure possession, but another person may be in de facto possession of the goods. The distinction between title and possession is self-evident. A BoL may, for instance, be transacted in a sale in the high sea. Title would pass. But the new/substituted consignee would not get physical possession of the goods sold, the high seas’ sale notwithstanding, until the goods were cleared through customs on arrival at the destination port. That possession may happen with or without a DO; and it is for each state government to decide whether or not to levy stamp duty on the DO.
Consequently, the DO is not a BoL, nor a BoE, and it is not covered by any exclusion of the BoL or the BoE. As in the present case, even if we were to accept the contention of the Petitioners that the BoL constitutes title to the goods, without a DO, the owner or the consignee may not have possession of the goods without payment of the carrier’s charges. Only upon release of the shipper’s lien is the consignee entitled to delivery/possession of the goods. Thus, it is not necessary for the DO to be a document of title to fall within the purview of the definition of ‘instrument’.
Once we have held that the State has not encroached upon the legislative field of the Union, merely because the amount of stamp duty is computed on the valuation of the goods does not preclude a DO from being an ‘instrument’ chargeable to stamp duty by the State.
Thus, we hold that the action of the State of Maharashtra in levying stamp duty on ‘DO’ as provided in Article 29 of Schedule I of the MSA is well within the legislative competence of the State and does not intrude upon the legislative domain of the Parliament as reserved in Entries 41 and 83 of List I of Schedule VII of the Constitution of India and is not ultra vires Article 246(1), 286(1)(b) and 286(2) of the Constitution of India.
The alternative prayer of the Petitioners to read down Article 29 of Schedule I of the Stamp Act of 1958 to not apply to a DO issued in respect of goods imported in Maharashtra is untenable. As held by the apex court in the matter of The Authorised officer, Central Bank of India vs Shanmugavelu [2024 (2) TMI 291 - SUPREME COURT], the rule of reading down is to be used for a limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. It is to be used keeping in view the scheme of the statute and to fulfil its purpose. We have already held that the DO is not an extension of a BoL and both are mutually exclusive documents. Thus, there is no statutory conflict and the requirement of reading down the provision does not arise.
Since we hold as such, the further question of granting refund of payments made by the Petitioners towards stamp duty is redundant.
All interim applications pending therein also stand disposed.
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2024 (3) TMI 1252 - DELHI HIGH COURT
Seeking direction to sanction and grant refund of excess duty - imports networking equipment - Non speaking order - HELD THAT:- Learned counsel for petitioner submits that the order in appeal was passed on 31.10.2022 and till date the adjudicating authority has not disposed of the proceedings. He further submits that the impugned order which records that the Notification dated 10.12.2019 was made effective from 01.01.2020 seems to suggest that the bill of entry lodged by the petitioner was filed after the Notification came into force. He submits that bill of entry was filed on 16.11.2019 before the Notification admittedly came into force on 01.01.2020.
Thus, the petition is disposed of directing the adjudicating authority to dispose of the proceedings expeditiously within a period of six weeks from today after giving an opportunity of personal hearing to the petitioner.
The petition is disposed of.
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2024 (3) TMI 1251 - MADRAS HIGH COURT
EPCG Scheme - Benefit of an EXIM scheme - Non fulfilment of the export obligations - Scope and terms of the Bond executed - Duty demand - differential duty - confiscation of the goods imported - fine - penalty - manufacture and export of air purifiers - Import of machinery at concessional rate of customs duty - HELD THAT:- Rule 6 deals with the conditions of licence, Sub Rule (2)(b) of the Rules mandates that an applicant for a licence should execute a bond for complying with the terms and conditions of the licence. The said Rule in clear terms mandates that an applicant for licence should execute a bond for complying with the terms and conditions of the licence. In compliance with the said Rule, the bond had to necessarily be executed by the appellant herein. It is axiomatic that when a person claims certain benefits on certain conditions and if that benefit is extended to a particular individual, he would have to fulfill his obligations on which basis the licence had been granted, or otherwise the executor can be penalised.
In this case he had been granted a benefit of reduced customs duty on the promise of bringing in foreign exchange into the country. Since, it had not full filled its part of obligations, definitely it is liable to be penalised. The condition which the appellant counsel seek to be void on the basis of not being supported by any substantive provision would have to fall, since an execution of bond is contemplated under Rule 6 (2) (b) of Foreign Trade (Regulation) Rules 1993 and the reason for the execution of the bond is for the appellant to fulfill its obligation under the licence. Therefore, it is too farfetched for the appellant to content that the said condition would be a void condition.
Thus, we are not inclined to interfere with the order passed by the learned Single Judge. In fine, this Writ Appeal fails and is accordingly, dismissed.
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2024 (3) TMI 1250 - MADRAS HIGH COURT
Validity of order of CESTAT - Redemption for home consumption allowed, despite admitting the fact that the condition of para 2.31 of the Foreign Trade Policy are not satisfied - CRO itself is formulated under the provisions of Bureau of Indian Standards Act - whether CESTAT is right in overlooking the CRO, 2012, which covers Multifunctional and Printers/ Devices (MFDs) along with printers and plotters? - HELD THAT:- It is submitted by both the counsel that the goods have already been released on payment of duty and other dues, as per the order of the Tribunal.
This Civil Miscellaneous Appeal stands dismissed, keeping the substantial questions of law involved herein open to be adjudicated in appropriate proceedings.
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2024 (3) TMI 1249 - MADRAS HIGH COURT
Recovery of duty drawback which was granted earlier with interest - Non-realisation of export proceeds - 100% Export Oriented Unit - exporter of cotton woven powerloom bed covers, pillow covers, cushion covers and bags to France - HELD THAT:- The learned counsel for the petitioner has relied on the web portal of the Directorate General of Foreign Trade and submits that the consignment dated 19.03.2014 was realised in the petitioner's account on 12.05.2014 and he is also having the certificate to that effect. However, the petitioner claims that it could have been verified by the respondent in their portal before passing the impugned order. On the other side, the respondents claim that the certificate ought to have been produced by the petitioner at the relevant point of time. This Court, in order to provide one more opportunity to the petitioner, is inclined to remand this matter back to the authorities to consider the matter afresh.
Thus, this writ petition is allowed. The order impugned in this writ petition is hereby set aside and the matter is remanded back to the respondents. The petitioner shall appear before the respondents on 15.02.2024, with the Bank Realization Certificate issued by the Directorate General of Foreign Trade and on such appearance, the respondents shall take a decision afresh after affording opportunity to this petitioner. No costs. Consequently, connected Miscellaneous Petitions are closed.
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2024 (3) TMI 1248 - CESTAT CHANDIGARH
Valuation - Validity of Re-determination of Value - Goods have already been cleared from the port of import after examination and enhancement of value - Valuation based on Chartered Engineer Certificate - Import of second-hand printing machines - No opportunity to cross-examine the Chartered Engineer - seizure - provisionally released on execution of Bond and Bank Guarantee - confiscation - differential duty - penalty - HELD THAT:- We are of the considered opinion that the Department cannot re-assess the impugned goods for the second time. We find that the investigating officers did not question the Chartered Engineer, who issued the certificate on import and have also not questioned the proper officers, who allowed the clearance of Bill of Entry after the initial re-assessment. Department has not brought forth any omission or commission on the part of the Chartered Engineer or the proper officer so as to necessitate the revision of the assessment order passed in respect of the impugned goods. The assessment orders, which have attained finality, have also not been challenged; the same were neither stayed nor set aside by a competent higher forum or authority. Thus, we find that the Department is not within their right to subject same machines to another examination and assessment.
We find that Department has seriously erred in re-determining the value of the impugned goods; the value of which is already enhanced at the time of import. We find that CVR 2007 does not give any scope for such re-assessment particularly when there was no challenge to the assessment made at the time of import by way of filing any appeal. Moreover, we find that whatever is construed as evidence in the impugned case pertains to import of some other machine albeit by the same importer. We find that evidence in one case cannot be a basis for confirmation of offence in some other case; such a confirmation defies all established principles of law.
The impugned order passed without giving an opportunity to the appellants to cross-examine the Chartered Engineer is a serious violation of principles of natural justice. An order passed in this manner cannot be held to be legal, proper and justified. We find that the Revenue has not made out any case for redetermination of the declared value which was already enhanced at the time of import. Therefore, there is no violation of any of the provisions of the Customs Act by the appellant-importer and thus, the goods are not liable for confiscation and no differential duty is payable by the appellant importer. Consequentially, no penalty is imposable either on the appellant-importer or their directors.
Thus, the impugned order is set aside and the all the appeals are allowed, with consequential relief, if any, as per law.
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2024 (3) TMI 1247 - CESTAT CHANDIGARH
Misdeclaration of the transaction value - Confiscation of goods - Recovery of the differential duty - interest and penalty - Import of Copper Cathodes - Acceptance of loaded value of the consignments earlier - HELD THAT:- We find that learned Commissioner finds that the date of invoice is later than the date of bill of lading; the appellants did not submit the original copy of the contract and therefore, there are reasons to believe that the transaction value is liable for rejection. On the other hand, learned Counsel for the appellants submits that, their business model was informed to the Commissioner and have produced the original contract along with bank payment remittance advice on 06/09/2012 and this being so rejection of the transaction value was incorrect; He further submits that none of the conditions illustrated under Rule 12 exist in the instant case and therefore, the rejection was not proper and legal. We find that Learned Commissioner finds that the importer was accepting the loaded value of the consignments cleared earlier and for that reason the importer does not have any reason for not accepting the loading of the value in the instant case.
It is also not explained as to how the situations illustrated under Rule 12 are existing and no case of payment of differential amounts through non-banking channels is alleged. Thus, we find that Revenue has not made any case for rejection of the transaction value i.e, the value declared by the importer.
Thus, we find that no case has been made for rejection of the declared value in the impugned case and therefore, the consequential redetermination of value, confiscation of the impugned goods and imposition of penalty are not proper and legal. Hence, the impugned order is set aside and the appeal is allowed.
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2024 (3) TMI 1246 - CESTAT CHENNAI
Misdeclaration and undervaluation of the goods - redemption fine and penalty - Imports Pile Fabrics declaring the same as ‘Stock Lot Polyester Knitted Fabrics’ - whether the enhancement of value as well as the allegation that the goods have been mis-declared is legal and proper - HELD THAT:- It can be seen that the textile expert who reported that the goods have brushing on one side does not have knowledge about what is brushing and how it is carried out. The allegation that the goods have been mis-declared is without any factual basis. Further, in para-2 of the SCN dt. 12.3.2008 it has been categorically stated by the department that docks officers have examined and reported that the goods are Stock Lot of Polyester Knitted Fabrics in different colours. We therefore hold that the finding of the department that goods have been mis-declared is without any factual basis and requires to be set aside.
Undervaluation of the goods - The appellant has declared the value of the goods as USD 1/kg. However, the department has re-determined the value as Rs.112.18/ kg and Rs.137.47/kg in the de novo orders. In the show cause notice, the enhancement of value has been proposed on the basis of market enquiry. This evidence with regard to the market enquiry was supplied to the appellant along with show cause notice. The appellant then cross examined these traders in the de novo proceedings. None of the traders supported the case of the department. Thereafter, in the de novo proceedings the original authority has completely rejected the evidence of the traders and relied upon the National Import Data Base (NIDB). The details of the NIDB data of which the adjudicating authority has relied for enhancing the value has not been supplied to the appellant. The SCN does not draw any reference of NIDB data and the enhancement was proposed in the SCN on the basis of market enquiry only. The department ought not to have relied on the NIDB data without providing copies to appellant. We therefore find that the enhancement of value is without any legal or factual basis. The same requires to be set aside which we hereby do.
Thus, we are of the considered opinion that the demand, interest, redemption fine and penalty imposed cannot sustain.
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2024 (3) TMI 1245 - CESTAT NEW DELHI
Monetary Limit - Filing of Appeal by the Revenue / Department - threshold limit for filing appeals as per Central Board of Indirect Customs (CBIC) circulars - Instruction are binding effect Or not - Valuation of imported goods - Aluminum Scrap - rejection of declared value - enhancement of assessable value - HELD THAT:- On Persual of the provisions, it is clear that the Instruction/Circulars are mandatory/binding vis-a-vis the Departmental Officers are concerned. However, vis-a-vis the Superior Courts including Tribunals, the objective is different. The Tribunal as well as Superior Courts have to prioritize the interest of justice. It is the mandate for the Courts to see that none shall be condemned un-heard and that none shall be pre-judicially affected. The Courts/Adjudicating Authorities have to see whether any Circular/Instruction of the department is sufficient enough to fulfil the requisite interest of justice in the given set of circumstances.
The order of Commissioner (Appeals) under challenge before us is held to have been passed in violation of statutory mandate. Hence it cannot be allowed to attain finality due to Departmental Instructions or Clarifications which have to be within the four corners of parent legislation. The circular was for department to follow and not for the assessee to rely upon, especially when the self assessment of assessee is under shadow of doubt, more so when the department is being denied the proper opportunity to defend its stance. Above all, there cannot be any intention of the Department to issue any instruction which is detrimental to its own interest. As observed above, the only intention of the impugned instruction for fixing monetary limit is to reduce the Department litigation.
The instruction cannot be enforced at the cost of prejudice to the issuing authority itself. Rule of law requires a fair opportunity of being heard even to Government Authorities/Department herein. Commissioner (Appeals) has wrongly relied upon the decision of Sanjivani Non-ferros Trading Pvt. Ltd. Vs. Commissioner of Customs, [2018 (12) TMI 738 - SUPREME COURT] as in that case, the enhancement has not under Section 17 of the Customs Act, 1962.
Instead of counting each Bill of Entry for the purpose of calculating threshold monetary limit for filing appeal, it may be seen that all the 30 Bills of Entry pertain to one importer, namely Century Metal Recycling Private Limited for the same commodity i.e. aluminium scrap imported during more or less same period/time. Further, the Commissioner (Appeals) has passed one Order -in -Appeal for all the 57 Bills of Entry though numbered as 59-115/2019. Against the said OIA, this appeal is filed before this Tribunal (CESTAT).
In view of said Rule 6A of CESTAT Procedure Rule, 1982, we hold that the present case to be a fit case for this bench to exercise its power to not accept the CBIC instructions in this particular appeal and hold that CBIC Instruction F. No. 90 dated 17.08.2011 prescribing monetary limit for filing appeals before this Tribunal is not mandatory. Consequently, we hold that the Departmental Appeals shall be heard on merits. List for final hearing on 13th May, 2024.
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2024 (3) TMI 1244 - CESTAT KOLKATA
Valuation - import of Old and used Digital Multifunction Printer - enhancement of value - restricted items - Without license - Confiscation - HELD THAT:- We hold that the date of importation in this case is from 19.10.2012 to 22.01.2013, which are prior to issuance of DGFT Notification No.35(RE-2012)/2009-2014 dated 28.02.2013. Therefore, following the decisions in the case of Bhawani Enterprises [2017 (11) TMI 974 - CESTAT KOLKATA], we hold that as the import has been affected prior to 28.02.2013, there is no restriction of import of the subject goods. Hence, no specific license is required for import of the impugned goods.
In that circumstances, we hold that for enhancement of value, the Chartered Accountant’s Certificate cannot be relied upon unless and until there is corroborative evidence. Therefore, we hold that that the goods are not liable for confiscation. No redemption fine can be imposed and no penalty on the respondent.
In the result, the Revenue’s appeal is dismissed.
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2024 (3) TMI 1194 - PATNA HIGH COURT
Smuggling - two kilograms of gold, with Swiss markings - Contraband item - number of material facts as well as the judgments cited were overlooked while arriving at conclusions - reliability of statements - burden to prove -HELD THAT:- It is from the statement under Section 108 itself that the identity of the person intercepted was revealed, which was found to be verified and correct by the Assistant Commissioner (Preventive) - The identity of the owner of the gold seized from the intercepted person also was revealed from the statement. The statement also admitted the person having boarded Howrah-Mumbai Mail Express, and that he was travelling to Raipur; in the course of which, some persons in civil dress woke him up and introduced themselves as officers of DRI, Patna. They searched his body and during the course of search, the smuggled gold kept hidden and covered inside the pants, was detected. So much of the statement has not been retracted from.
The person intercepted had also disclosed the name of the person from whom he had received the gold bars at Kolkata, who had directed him to hand over the same to the respondent, who was his employer. The statement indicated the intercepted person having confessed to his knowledge, that the gold was smuggled from Bangladesh, as told to him by one Sonu, who handed over the gold bars for onward transmission to his employer, the respondent - The retraction admits the possession of the gold bars at the time of interception. The description of which, as is found with the DRI, is also admitted to be that which was seized.
There is no escape from the fact that the contraband was imported as revealed from a mere visual inspection, which discloses the markings on the gold bars. Now, the question arises as to whether the alleged owner of the goods referred to as Noticee No. 2, the respondent herein, had obtained valid possession through a legal import made by him - The First Appellate Authority found that the entire case of the Department spins around the confessional statement of the intercepted person. The First Appellate Authority found that the statement recorded under Section 108 was specifically stated to be under duress and there was a finding by the Original Authority that he had not retracted the statement; while, in fact, the statement was specifically retracted. It was found that Section 108 of the Act, though is substantive evidence, some corroboration has to be available before acting upon it, which can be the slightest corroboration.
The First Appellate Authority and the Tribunal had entirely relied on the invoice dated 21.07.2017 produced by Noticee No.2 to hold that the seized gold bars were purchased from Saheli Gems and Jewellers Pvt. Ltd. It cannot but held that the reliance placed is wholly irrelevant since the two sets of bill books produced requires further evidence to establish the transactions between Saheli Gems and Jewellers and Adinath Jewellers having occurred on the day it is said to have occurred; prior to the interception and seizure, especially since no payment was made for the purchase - If Saheli Gems and Jewellers had imported it by a proper bill of entry filed and the same received from a notified entry point for the purpose of home consumption, then and only then would the burden of proof under Section 123 be discharged and the goods seized from Noticee No.1 be absolved of the confiscation proceedings under the Customs Act. The falsity of the story projected by the owner of the gold bars, is one another circumstance standing against the claim raised by the owner and in favour of the confiscation proceedings.
Whoever be the owner, the gold being one manufactured outside the country, if it is seized in the same form, the owner who raises a claim for release of the said gold should establish unequivocally before the Authority that it had been brought into India duly in accordance with the provisions of the Customs Act. This is the rigor placed on the person possessing or the owner of the seized goods, by Section 123, which puts the burden of proof squarely on the person from whose possession or the owner who has entrusted the said gold to the person possessing it, to establish the source from which it has been received.
The appellate authorities have found the findings of the original authority, regarding the absence of proof of the transaction, including the movement of the goods to be bad, only by reason of the invoice produced - the invoice is not a document on which any reliance can be placed. Even if such reliance can be placed, in the present case, the gold bars; which demonstrably were manufactured and sourced from outside the country, should be proved to have been brought into the country in accordance with the provisions of the Customs Act.
The orders of the Appellate Authorities set aside - the orders of the original authority restored - appeal allowed with costs computed at Rs. 5,000/- which can be recovered from the respondent by the Revenue.
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2024 (3) TMI 1193 - TELANGANA HIGH COURT
Smuggling - Gold - baggage rules - petitioners have not given proper declaration in respect of the gold they were bringing in even if it was allegedly in the form of jewellery or bangles - existence of mens rea on the part of the petitioners to smuggle gold into India or not - HELD THAT:- The import and export of goods into and out of India are subject to the provisions of the Foreign Trade (Development and Regulation) Act, 1992. In exercise of the powers conferred by Section 3 read with Section 4 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), the Central Government has framed the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993. As per Rule 3(h) of this Order, a passenger of Indian Origin or having a valid Indian passport and who has a stay of more than six months abroad is allowed to import gold subject to certain conditions.
An international passenger is required to file International Customs Declaration Form (I.C.D.) with the Customs Department under Section 77 of the Customs Act, 1962. Merely wearing the bangles on body by the petitioners does not obviate the statutory requirement of filing an ICD form with the Customs Department. Further, the fact of non-filing this ICD Form and not submitting the same to the Customs Department has not been disputed by the petitioners.
The petitioners were permitted to redeem only on payment of redemption fine and appropriate customs duty so that the gold bangles would be cleared for domestic consumption. However, the option of re-export of gold bangles does not provide any right on the petitioner to get the gold bangles cleared for home consumption and it is under these circumstances that no duty is demanded on the option of re-export of gold bangles - there are no illegality or perversity on the part of the adjudicating authority at the first instance and then by the Commissioner of Appeals subsequently, while modifying the order, both of which subsequently stood affirmed by the CESTAT vide the impugned order under challenge in the present case.
In the instant case, the petitioner No. 1 was in possession of the gold bangles while passing through the Green Channel of the Customs at the Rajiv Gandhi International Airport, Shamshabad. Despite possessing the gold bangles which are dutiable goods, the petitioners neither adopted the Red Channel nor submitted the ICD Form to the Customs Department and thus tried to take the undue advantage of the Green Channel facility at the Customs violating the provisions of Section 77 of the Act - since the petitioners are not eligible passengers in terms of the provisions of the Foreign Trade (Development and Regulation) Act, 1992 read with the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993, the original authority was correct in finding the petitioners ineligible to import the gold bangles. Thus, the order of the original authority to confiscate the gold bangles in terms of Section 111(1) of the Act, cannot be found fault with.
Another reason why this Court is not inclined to entertain the Writ Petition is the fact that the petitioners have voluntarily availed the option that was floated by the adjudicating authority at the first instance. Having availed the option floated and having paid the redemption fine and customs duty while redeeming the gold bangles, the petitioners cannot now be permitted to turn around and challenge the order which he has voluntarily complied with.
Petition dismissed.
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2024 (3) TMI 1192 - GUJARAT HIGH COURT
Right of the Purchaser of confiscated vessel in an action - Vires of of Art. 14 and 19 of the Constitution of India - direction to issue No Due Certificate (NDC) in relation to subject vessel MSV Safina Al-Miraz to the Petitioner and permit the Petitioner to shift the Vessel from Salaya Port to Okha Port forthwith - seeking refund the amount paid by the Petitioner towards e-auction of MSV Safina Al-Miraz alongwith amount incurred by the Petitioner towards repairing of the Vessel, with interest - confiscation of vessel u/s 115 of the Customs Act, 1962 - HELD THAT:- It is not in dispute that the subject vessel was confiscated by the respondent Nos. 1 and 3 as per the provisions of the Customs Act and therefore in accordance with the provisions of Section 126 of the Act, the subject vessel would vest in the Central Government. Once such subject vessel vests in the Central Government, the mortgage of the respondent No. 4-GMB would come to an end and therefore the respondent No. 4-GMB is required to issue the ‘No Due Certificate’ qua the subject vessel which was auctioned to the petitioner by the Customs Authority in accordance with law.
With regard to the reliance placed by the learned advocate for the respondent No. 4-GMB in the decision of the Supreme Court in case of O. Konavalov [2006 (3) TMI 145 - SUPREME COURT] is concerned, the said decision is rendered under the Maritime Laws under the provisions of the Merchant Shipping Act, 1958 in relation to the pre-existing right of the crewmen vis-a-vis Section 115 read with Section 126 of the Customs Act. The Hon’ble Apex Court in the facts of the said case applied the principles enshrined in Article 21 to a foreigner for holding that confiscation by the Government of Vessel cannot extinguish the pre-existing rights of the crewmen as India has become signatory to various international conventions honouring the social, political, civil and economic rights of human beings. It was further held that India has travelled very far from 1950 and the Courts have given way to dynamic constructive approach in the aspect of social justice while referring to international conventions, etc. - The reliance placed on the provisions of the Admiralty (Jurisdiction and Settlement Maritime Claims) Act, 2017 to submit that maritime claim means mortgage or charge of the same nature on a vessel with regard to exercise of jurisdiction by the High Court under said Act to hear and determine such question on maritime claim against the vessel. Therefore, the judgment rendered by the Apex Court vis-a-vis the pre-existing rights of the crewmen of the vessel would not apply to the facts of the present case.
The respondent No. 4-GMB is directed to issue No Due Certificate to the petitioner so as to enable the petitioner to shift the vessel from Salaya Port to Okha Port - Petition allowed.
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2024 (3) TMI 1191 - MADRAS HIGH COURT
Seeking review of order - error apparent on the face of record or not - petitioner submits that while concluding that the applications filed by the petitioner for revalidating the Advance Authorizations were belated, the Court has not taken note of the amendments to the Foreign Trade Policy for the period 2009-2014 with effect from 27.08.2009 - HELD THAT:- The revalidation of the Advance Authorization can be made only for a period of six (6) months from the date expiry of the Original Authorization.
The application could be made in time before the expiry of the period. However, revalidation can be made only for a period of six (6) months from the date of expiry of the Original Authorization. The six (6) months period expired long before - as per paragraph 4.23 of the Hand book of Procedure as in force from 27.08.2009, the petitioner had to satisfy with the requirements of 4.23(b) as in Column II to the above table.
It cannot be said that there is an error apparent on the face of the record. The order is detailed. Therefore, a review of the order is impermissible. A review cannot be an appeal in disguise.
This Review Application is liable to be dismissed and is accordingly dismissed.
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2024 (3) TMI 1190 - CESTAT HYDERABAD
Absolute confiscation of 211.07 gms of gold - imposition of penalty u/s 112 (a) and (b) of CA - domestic transportation of foreign marked Gold Bars without proper documents - onus to prove - HELD THAT:- The appellant have led cogent evidence that they are jewellers dealing in gold and gold jewellery having their shop under the name of M/s Padmavati Jewellers at Vijayawada. Appellant have also led evidence that in the ordinary use of business they regularly purchase gold from the reputed sellers like M/s DP Gold Pvt Ltd., and M/s SVBC Gold etc. In support of their contentions, the appellant have led evidence being extract of their stock register, summary of gold dealings showing quantum and value for the financial year 2020-21 and also a copy of ledger account of M/s DP Gold and M/s SVBC Gold for the financial year 2020-21 wherein appellant have got regular purchases from these concerns and they have been making payments through the banking channel - Appellant have also led evidences being screen shots of summary of the invoice of the purchase by them which are reflected on GSTN portal for few months in support of their regular business transactions wherein they purchase gold upon proper GST invoices.
The cogent evidences led by the appellant have not been found untrue. Thus the appellant have discharged the onus under Section 123 of the Customs Act. Further, the Court below have rejected the cogent explanation given, arbitrarily based on assumptions and presumptions, having no legs to stand.
The appellant shall be entitled to return of the seized gold and if the same have been disposed of, shall be entitled for refund of the auction proceeds along with interest as per rules - the impugned order set aside - appeal allowed.
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2024 (3) TMI 1189 - CESTAT CHENNAI
Short payment of Countervailing Duty (CVD) - evasion of Customs Duty - import of Motor Spirit falling under CTFI 2710, by not declaring that a substantial portion of such imported Motor Spirit was not ‘intended for sale without a brand name’ - benefit of Sl.No. 70(i) of N/N. 12/2012-CE dated 17.03.2012 (as amended) - HELD THAT:- The Hon’ble High Court of Bombay in the case of COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI VERSUS MAHESH INDIA [2006 (7) TMI 306 - BOMBAY HIGH COURT] while considering the main issue as to whether the Show Cause Notice dated 22.03.1993 issued by DRI under Section 28 read with Section 124 of the Customs Act, 1962 is valid and proper had observed that the assessment being only provisional, the Show Cause Notice is not maintainable. It was held that the Show Cause Notice issued under Section 28 when the goods have not been finally assessed is bad in law and not maintainable.
The Hon’ble High Court of Calcutta in the case of JAJU PETRO CHEMICAL PVT. LTD. & ANOTHER VERSUS THE COMMISSIONER OF CUSTOMS (PORT) & OTHERS [2017 (7) TMI 633 - CALCUTTA HIGH COURT], considered the issue with regard to the demand raised under Section 28 of the Customs Act, 1962 when the assessment was only provisional. It was observed that when the duty to be paid is yet to be finalised the importer cannot be saddled with the guilt of not paying the duty or short paying the duty.
In the present case, the Show Cause Notice is issued under Section 18 read with Section 124 of the Customs Act, 1962. There is no invocation of Section 28 for recovery of short paid duty. However there is proposal for recovery of differential CVD. There is no requirement for issuing a Show Cause Notice under Section 18 for finalisation of assessment. At the time of finalisation, the Department is free to look into all factors and finalise the Bills of Entry. The Show Cause Notice has been issued invoking Section 18 and 124 proposing to confiscate the goods, proposing to recover the differential duty and for imposing redemption fine and penalties.
The appellant has added the additives to make the Petrol branded after filing the ex-bond Bill of Entry. During such process of branding by adding additives, the goods are not in shore tanks and are outside the Customs area. Taking all these aspects in to consideration, it is not found that the appellant had any malafide intention to evade Customs duty by availing concessional rate of duty. It is not established by the Department that the appellant had estimated the quantity that is to be sold as branded at the time of import itself - the order of confiscation of the goods and the imposition of redemption fine and penalties set aside, without disturbing the finalisation of the assessment and confirmation of higher CVD as paid along with interest by the appellant and appropriate by Department.
The impugned order is modified to the extent of setting aside the confiscation of goods and imposition of redemption fine and penalties imposed under Section 112 (a) of the Customs Act, 1962 - appeal allowed in part.
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2024 (3) TMI 1188 - CESTAT CHENNAI
Classification of imported goods - Agricultural Reaper - Spare parts of Reaper - classifiable under CTH 84672900 and 84679900 respectively (Revenue) or under CTH 84331190 and 84339000 respectively? - Levy of penalty under Section 114A of the Customs Act - HELD THAT:- Being a matter of classification of goods the burden of proof is on Revenue to show that the particular case or item in question is taxable in the manner claimed by them. The correct manner of classifying imported goods under the Customs Tariff, is by interpreting the headings and notes etc. as per the Rules for the Interpretation of the Schedule to the Customs Tariff Act, 1985 - It is not dispute that the Schedule to the Customs Tariff in itself does not contain a specific heading for “Agricultural Reaper” and its parts. There is also no dispute that though different models of goods have been imported all are sought to be classified under one heading. Finally, it is also not disputed that the impugned goods are marketed and known in the trade as “brush cutters” as also seen from the product literature and the tender notices etc. enclosed with the appeal.
In INDO-INTERNATIONAL INDUSTRIES VERSUS COMMISSIONER OF SALES TAX, UP. [1981 (3) TMI 77 - SUPREME COURT], it has been held by the Apex Court that "if any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted".
The Appellant has stated that as per Note 4 to Section XVI, which covers chapter 84, for machines with a clearly defined function by one of the headings in Chapter 84 or 85, the whole falls to be classified in the heading appropriate to that function. It is found that both the disputed heading fall under chapter 84 and as per the discussions have been found to have a clearly defined function covered by CTH 8467. Revenue has thus been able to discharge its burden and the impugned orders merit to be upheld - Since the classification of the goods is found to be falling under CTH 8467, hence in terms of Note 2(b) of Section XVI, parts of ‘brush cutter’ will be classifiable under CTH 84679900.
Levy of penalty under Section 114A of the Customs Act - HELD THAT:- As far as the description of the goods, quantity, classification etc. are concerned, the importer is bound to state the truth in the Bill of Entry. As per section 46(4) of the Customs Act, 1962, the importer while presenting the Bill of Entry shall make and subscribe to a declaration as to the truth of such Bill of Entry. Further, Section 114A does not incorporate ‘intention to evade payment of duty’. This is because while mens rea is an essential or sine qua non for criminal offence it is not an essential element for imposing penalty for breach of civil obligations or liabilities, unless specifically stated so in the statute. Similarly, the importer is required to make a true declaration of the description and quantity of goods etc which have actually been imported and not just the goods as declared in the import documents. Thus, if the goods actually imported are more in number or the actual description or CTH as determined by an order under the Act is different from what is declared in the Bill of Entry, the importer would have made a mis-declaration. If this is done knowingly it’s a willful misstatement.
Even if a matter is under appeal it does not mean that the legal stand of the importer which has been defeated in quasi-judicial proceeding can continue to be recognized as legitimate and duty short paid. A valid order determining the CTH of the imported goods and a statutory document filed for the same goods knowingly misstating the CTH cannot coexist legally and be recognised in law to be valid. It cannot be said that ordinary prudence has been exercised by the importer-appellant according to the standards of a compliant tax payer or even a reasonable person - The undertaking is meant to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed and thus cannot be brushed off as being merely procedural.
Hence if an order or judgment has been passed on a lis between the department and an assessee, he is bound to follow that order, until it is upset in appeal by a higher judicial forum. The responsibility is more when the tax is self-assessed. This is not a mere failure to pay duty. It is something more. The Appellant has deliberately sought to defeat the provisions of law. Thereby contravening the provisions of Section 46(4) ibid. Further there is nothing in the section to mean that because there is knowledge by the Department of the earlier mis-classification of the goods by the Appellant the willful misstatement in the Bill of Entry subsequently which stands established disappears.
The Hon’ble High Court of Madras in M/S. KING BELL APPARELS VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2018 (10) TMI 267 - MADRAS HIGH COURT] held that the contention that once knowledge has been acquired by the department, there is no suppression and the ordinary statutory period of limitation would be applicable was rejected as a fallacious argument inasmuch as once the suppression is established, merely because the department acquires knowledge of the irregularity, the suppression would not be obliterated. A statutory penalty flows from a disregard of statutory provisions. With relaxation in procedure in the clearance of goods comes greater responsibility on the part of importers. This responsibility has not been discharged and the impugned order hence merits to be upheld on this score.
Further it is seen that interest is necessarily linked to the duty payable, such liability arises automatically by operation of law. As per the Hon’ble Supreme Court's judgment in COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. [2009 (7) TMI 6 - SUPREME COURT] interest is leviable on delayed or deferred payment of duty for whatever reasons.
The impugned order upheld - appeal disposed off.
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