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Customs - Case Laws
Showing 261 to 280 of 40545 Records
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2025 (5) TMI 1934
Misdeclaration and undervaluation of imported goods - goods declared as “China Glass Imitation Stone” - No opportunity of cross-examination during the adjudication process - differential - confiscation - appropriateness of the valuation method - imposition of penalty under Section 112 (b) read with Section 114AA of the Act ibid - HELD THAT:- Apart from the grounds urged, the first appellant has also contended that the impugned order deserves to be set aside since he was not given any opportunity of cross examining the persons despite his repeated requests. He has also contended that the order has been passed based on assumption that this appellant was involved in declaration and undervaluation of the imported goods, however, there is no direct evidence linking him to the alleged acts. In the prayer, he has requested for setting aside the impugned order and the demands therein.
In so far as the primary contention of Shri S.Iqbal, the first appellant before us is concerned, we find from the impugned order that the Proprietor of M/s.Royal traders has revealed the name of Iqbal as the main person at whose instance, even the business entity namely M/s.Royal traders came into existence; even the IEC was obtained at his instance; various other entities that were named in the impugned order at paragraph 10 of the OIO also opened at the very instance of Shri Iqbal. Further, to a query as to who made the payments like port charges, etc., Shri James appears to have indicated that all the payments were made by Shri Iqbal. In his statement recorded on 18.10.2010, the said Iqbal has nowhere denied his involvement in the whole saga of importing by misdeclaring the consignment and also declaring very less transaction value.
We have recorded elsewhere in the earlier paragraph of this order the modus operandi and the involvement of many persons as explained by Shri Iqbal himself, but strangely we do not find any retraction to his own statement, rather he has chosen to request for cross-examining the other persons. Had there been any inconsistency from the statements of other persons vis-a-vis his own statement, then perhaps cross examination would have brought the truth on record, but it is not the case here. Hence, we are of the view that denial of cross examination is of no consequence.
From the record, we find that the Original Authority has chosen to go by a contemporaneous import rather than NIDB data and hence, the determination of transaction value by rejecting the declared value cannot be found fault with. With regard to penalty, even if we ignore the statement of Shri G James indicting Iqbal; but however, his own statement explaining the modus operandi is glaringly against him to which, there has been no denial either during investigation after recording his statement or at least during the course of adjudication proceedings. In that view of the matter, we do not find any reasons to interfere with the demands made in the impugned order and hence, we reject the appeals.
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2025 (5) TMI 1933
Demand of differential - Treatment of ex-works price, FOB value, and the addition of transportation and insurance costs - Determination of the assessable value - reckoned for delivery at the place of importation - extended period of limitation under section 28 - non-payment or short payment by reason collusion or willful statement or suppression of facts - HELD THAT:- There is no dispute regarding the legal position – that the duty must be levied on CIF value and for this purposes cost of freight, if the goods are transported by air should be restricted to 20% of the FOB value. In all these Bills of Entry, the ex-works price was given as the FOB value and the cost of local freight up to the place of export was also added to the cost of transport. As a result, the amount which has been reckoned as the cost of air transport has been reduced from 20% of FOB to 20% to the ex-works price. Hence, the demand of differential duty.
There is no doubt that there was a mis-statement on the part of the appellants because they declared the ex-works price as FOB value. The question is if it was willful or it was a genuine oversight. According to the appellants that was genuine oversight. According to the Revenue, the mis-statement was willful to evade payment of duty. In this context, we note that all the Bills of Entry were assessed by the officers and they had all the documents which the appellant had. They could have also called for any additional documents. However, the officers also assessed the Bills of Entry considering the ex-works price as the FOB value. We do not find any allegation in the show cause notice that the officers had somehow colluded in the short payment of duty. Therefore, there is no evidence of any collusion. It was evidently an honest mistake on the part of the officers who assessed the Bills of Entry as well as on the part of the appellants.
Hence, we find that extended period of limitation could not have been invoked in the facts of these cases. For the same reason, we find that the imposition of penalties also cannot be sustained. As entire period of demand falls within the extended period of limitation, the entire demand needs to be set aside.
Thus, all appeals are allowed and the impugned orders are set aside with consequential relief to the appellants.
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2025 (5) TMI 1932
Miscellaneous applications under Rule 41 of the CESTAT Procedure Rules, 1985 - jurisdiction of the officer issuing the SCN - HELD THAT:- We have considered the entire history of adjournments including the two warnings of last opportunity given and the assurance given by the learned counsel on 14.1.2025 that the matter would be argued on 3.3.2025.
We do not find any error or mistake on our part in hearing the matter on 3.3.2025 per order dated 14.01.2025 and reserving the matter for orders. It is especially so, since we had given two weeks time to both sides to give any written submissions. This was done with the intention that nothing which either side may submit should miss our consideration when passing the final order. In our considered view, that would meet the ends of justice.
We find Rule 41 empowers the Tribunal to issue orders and directions to give effect to or in relation to its orders. Our order on 3.3.2025 gives effect to the orders dated 19.11.2024 and 14.1.2025. It would prevent abuse of the process. Giving further time to give any written submissions also secured the ends of justice.
We, therefore, find no reason to recall our order dated 3.3.2025. We, however, modify it by giving two weeks time to both sides from today to give any written submissions.
The Miscellaneous applications are rejected.
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2025 (5) TMI 1931
Demand of differential customs duty - fake invoices to the department at the time of import - Statement made under section 108 of the Customs Act - relevant piece of evidence in terms of section 138B of the Customs Act - undervaluation of the imported goods - invocation of the proviso to section 28(1) of the Customs Act - imposition of penalty under section 112 and 114AA - HELD THAT:- It is not clear that as to whether the printouts were taken on 26.10.2009 or 04.11.2009 and in any case there is nothing on record to indicate whether the print outs were taken from the same portable hard disk which was recovered from the premises on 26.10.2009 or from some other hard disk and by whom and in whose presence.
A Division Bench of the Tribunal in M/s Trikoot Iron & Steel Casting Ltd. versus Additional Director General (Adjn.) Directorate General of GST Intelligence (Adjudication Cell) [2024 (10) TMI 672 - CESTAT NEW DELHI] examined the provisions of section 36B of the Central Excise Act, 1944 which are pari materia to section 138C of Customs Act.
Thus, no reliance could have been placed by the Additional Commissioner or the Commissioner (Appeals) on the statement made by Ashutosh Goenka under section 108 of the Customs Act.
Regarding the invocation of the extended period of limitation under the proviso to section 28 (1) of the Customs Act, the show cause notice invokes the proviso by only stating that Orion International had contravened the provisions of Customs Act by way of suppression of fact and willful statement of facts during the relevant period. The Additional Commissioner has not dealt with this issue at all, nor the Commissioner (Appeals) has dealt with this issue at all.
We are not inclined to consider the submissions made by the learned authorised representative for the department that the matter may be remitted to the Commissioner (Appeals) to examine it afresh for the reason that it is an old matter arising out of an appeal filed in the year 2014 and against an order of the Commissioner (Appeals) passed in 2014.
Thus, for all the reasons stated above, the demand of differential duty could not have been confirmed. Such being the position, the imposition of penalty under section 112 and 114AA upon Ashutosh Goenka is not justified and cannot sustain.
The impugned order dated 31.03.2014 passed by the Commissioner (Appeals) deserves to be set aside and is set aside. The two appeals are, accordingly, allowed.
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2025 (5) TMI 1930
Smuggling - Violation of the Cigarettes and Other Tobacco Products Act, 2003 (COPTA) - consignments of foreign brand cigarettes from North-East to Mumbai - Confiscation of the Imported foreign origin cigarettes illegally brought into India under Section 111(d) and 111(i) of the Customs Act, 1962 - HELD THAT:- On combined reading of the ITC-HS policy conditions for cigarettes and the provisions of COPTA, it is very clear that imports of cigarettes are subject to the regulations framed under COPTA inter alia for display of pictorial warnings and other statutory information to be mentioned in the package containing cigarettes. These provision shall also apply to the licit of import of cigarettes.
It is a fact on record that in respect of the imported cigarettes, these have been imported in violation of COPTA and import policy, inasmuch as the packages of the cigarettes do not contain or display the requisite mandatory details. Therefore, in my considered opinion there is clear violation of the provision of Section 111(d) of the Customs Act, 1962 in the present case.
The facts on record clearly provide that the consignment was booked for delivery to the consignor i.e., Shri Sarup Singh, on the advice of Shri Manish Naobatram Gupta as evidenced in Air way bill relating to the impugned consignment. No other record or evidence has been produced to state that the appellants are the ‘passengers’ arriving in India, who had brought the imported cigarettes in an illegal manner and forwarded the same from Kolkata to Mumbai in the said consignment. Therefore, it is clear that the imported goods in the present case though having contravened the provisions of Section 111(d) ibid and Section 111(i) ibid, it cannot be said that the appellants are the ‘passengers’ to saddle with the penalty for having done any act or omission to do any act under Section 112(a) ibid. On the other hand, since the appellants have received the foreign origin cigarettes in the past cases and in the present case, were about to receive the same for distribution or sale in an illegal manner, they are rightly liable for imposition of penalty under Section 112(b) ibid. To the above extent, I find that the impugned order confirming the adjudged demands of penalty under Section 112(a) ibid on the appellants is legally not sustainable.
Thus, I am of the considered view that the penalty imposed on the appellants in the original order dated 13.03.2018 and confirmed in the impugned order dated 29.03.2019, is reduced to the extent of Rs.1,75,000/- on Shri Sunil Subrammanian, and Rs.75,000/- on Shri Suneesh A.K., being the penalty imposable under Section 112(b) of the Customs Act, 1962 for their role played in relation to the illegal import of foreign origin cigarettes.
In the result, by partially modifying the impugned order dated 29.03.2019, I partly allow the appeals filed by the appellants in their favour, as above.
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2025 (5) TMI 1929
Seeking grant of interest towards the delayed payment of refund - mistake committed by the appellant while filing the Shipping Bill - implications of the subsequent amendment under Section 149 of the Customs Act, 1962 - HELD THAT:- Since the amendment was carried out on 12th January 2019 and it is within the knowledge of the customs officials on that day itself, I find that the interest should have been granted from that day onwards.
Coming to the impugned order, I find that the Commissioner (Appeals) is in error in holding that the appellant has approached a wrong authority after the order was passed by the High Court. Since the OIO granting the refund was already passed by the adjudicating authority, the appellant could not have filed any letter asking him to release the interest thereon as he has become functus officio. Therefore, the appellants have correctly followed the procedure and filed their appeal before the Commissioner (appeals). He is in error in rejecting their appeal.
Thus, I find that the appellant would be eligible for interest on the drawback from 12th January 2019. Therefore, I remand the matter to the adjudicating authority and direct him to grant the interest on the refunded amount with effect from 12th January 2019 till 16th January 2024, the date on which the refund was already granted.
The appeal stands disposed of thus.
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2025 (5) TMI 1928
Re-classification of ‘CISCO UC/IP’ phones of different models - absence of ‘video camera’ in the ‘phones’ as disqualification for use in ‘video conferencing’ - fitment within one or another description of goods in the First Schedule to Customs Tariff Act, 1975 - HELD THAT:- Doubtlessly, and by stretching of the expressions upon ignoring ‘images’ and ‘other data’, which are placed together with ‘voice’ and with ‘and’ as conjunction, this could encompass ‘telephones’ but it is not the case of the lower authorities that such discard of conjunctive expression is possible.
Consequently, with ‘telephone sets’ clearly segregated as a sub-classification of the heading, all and any type of ‘phone’ finds fitment only against tariff item within the sub-headings below the sub-classification. On both these counts, the tariff item proposed by the ‘proper officer’ fails the test of the General Rules for Interpretation of the Tariff appended to Customs Tariff Act, 1975 and has to be discarded.
Admittedly, goods that were not ‘phones’ with discussion about ‘phones’ merely in the light of benefit of exemption notification claimed and in which suggestion that intent of exclusions thereto, enumerating, inter alia, ‘VoIP phones’ did not extend to other equipment using ‘VoIP’ was repelled by the Tribunal. The Tribunal was adjudging eligibility of claim that ‘video conference equipment’ was exempted and not exclusions of ‘phones’ from tariff item 8517 1810 of First Schedule to Customs Tariff Act, 1975. It was patently erroneous for the lower authorities to be guided by the said decision as binding legal precedent.
In the light of the above errors in the findings, the impugned orders are set aside to allow the appeals.
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2025 (5) TMI 1927
Preliminary objection with regard to the jurisdiction of the officer issuing the Show Cause Notice - Demand Notice under Section -28 of Customs Act, 1962 - HELD THAT:- We find that the Show Cause Notice issuing authority has assumed the role of the Adjudicating Authority by directing the assessee to pay the demanded amount or else file the defence reply before him (the Show Cause Notice issuing authority). Hence, for all practical purposes, it has to be taken that the Show Cause Notice issuing authority is wielding the power of the Adjudicating Authority.
Therefore, we find force in the arguments of the appellants. Without going into the merits of the appeal, we take the view that the Revenue was in error in issuing the Show Cause Notice through the Dy. Commissioner who was not authorized to adjudicate the matter. Therefore, on this ground itself, we set aside the impugned order and allow the appeal filed by the appellant.
The appellant would be eligible for consequential relief, if any, as per law.
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2025 (5) TMI 1926
Refund claim - export duty charged on the basis of Wet Metric Tonne (WMT) instead of Dry Metric Tonne (DMT) - failure of the proper officer to pass a speaking order under Section 17(5) of the Customs Act, 1962 - HELD THAT:- We find that it is a fact on record that the appellant filed shipping bills at the time of export of goods and duty was to be paid on the basis of DMT instead of WMT. The Adjudicating Authority without assigning any reason, demanded duty on the basis of WMT in terms of Section 17 (4) of the Customs Act, 1962.
As per the said provisions, where on verification or otherwise, it is found that the self assessment is not done correctly, the proper officer may, without prejudice to any other action, which may be taken under this Act, reassess the duty leviable on such goods. Further, Section 17 (5) of the Customs Act, 1962, mandates that if any order passed by the proper officer under Section 17 (4) of the Act, he shall pass a speaking order on the re-assessment within 15 days from the date of reassessment of shipping bill.
Ongoing through the above provisions, we find that in this case, the assessments of shipping bills have been done under Section 17 (4) of the Act and further Section 17 (5) mandates that if any order is passed under Section 17 (4) of the Act, the proper officer is duty bound to pass a speaking order of re-assessment within 15 days of the order passed under Section 17 (4) of the Act.
Admittedly, in the case in hand, no order under Section 17 (5) of the Act has been passed.
Thus, the appellant has no reason to challenge the assessment of the shipping bills. Therefore, the reasons for denying the refund to the appellant are not sustainable.
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2025 (5) TMI 1847
Wrongly availed the exemption from Special Additional Duty (SAD) on import of the 'Raw Jute' - terms of clause 2 of Notification 21/12-Cus - payment of VAT as per section 21 read with item no. 30, Schedule A of the West Bengal VAT Act, 2003 - liable to pay the SAD along with appropriate interest and penalty under 114A of the Customs Act, 1962 - HELD THAT:- From the conditions of Notification 21/2012 reproduced above, we observe that if the appellant-importer has availed the exemption of BCD on the strength of SAFTA (Certificate of Origin) issued by the Export Promotion Bureau of Exporting Country, then the exemption of SAD (4% CVD) is not admissible on such import in terms of clause 2 Notification 21/12-Cus dated 17.03.2012. However, we observe that the said conditions does not deal with a situation where the SAD leviable itself is 'NIL'. We are of the view that the above said condition is applicable only in case of a situation where there is SAD payable by the appellant under the VAT Act.
We observe that as per Section 3(5) of the said Act, the Central Government levies additional duty to counter-balance the sales tax, value added tax, local tax payable on the said goods. Thus, we observe that SAD is payable at the time of importation, if VAT is payable on the said goods domestically as it is levied to counter-balance the VAT payable on such goods. However, when there is no Sales Tax, Value Added Tax, Local Tax on the domestic sales on such goods, there can be no SAD payable on such items when imported, as there is no need to counterbalance the VAT payable on such goods. In the present case, we observe that the item "Raw Jute" imported by the appellant has no VAT payable on it. Thus, we hold that no Additional Duty of Customs is leviable on the said goods as there was no VAT payable on the 'Raw Jute' as per section 21 read with item no. 30, Schedule A of the West Bengal VAT Act, 2003.
Thus, by following the principle laid down by the Hon'ble Apex Court in Re: Hyderabad Industries [1999 (5) TMI 29 - SUPREME COURT], we hold that the appellant is not liable to pay SAD, as there was no VAT payable on the 'Raw Jute' as per section 21 read with item no. 30, Schedule A of the West Bengal VAT Act, 2003.
Accordingly, we set aside the demand of SAD confirmed in the impugned order. As the demand itself is not sustainable, the question of demanding interest or imposing penalty does not arise.
Hence, we set aside the impugned order and allow the appeal filed by the appellant.
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2025 (5) TMI 1769
Condonation of delay in filing and re-filing the appeal - Seeking release of Seized Gold - confiscation - payment of excess custom duty - HELD THAT:- Cause shown is sufficient. Accordingly, the applications are allowed. Delay of 3 days and 7 days in filing and re-filing the appeal is condoned.
The applications stand disposed of.
It is clear that the grievances of the appellant were properly appreciated and after applying the provisions of the Instruction no.22/2022-Customs, findings were rendered which we find satisfactory. Thus, on account of the first grievance of the appellant, we find no reasons to differ with the findings rendered by the learned Single Judge and the submission of the appellant are rejected.
So far as the argument or grievance in respect of the inquiry or investigation as directed vide order dated 24.02.2023 having not been complied with or the investigations initiated not having concluded is concerned, neither the learned Single Judge nor this Court in appellate proceeding can monitor or pass any directions in respect of investigations being conducted by the CBI. Clearly, that is not the scope or jurisdiction of the writ Court or the appellate Court exercising extraordinary civil jurisdiction. Thus, the same is untenable and rejected.
In fact, a perusal of the impugned judgment clearly indicates that both the prayers as sought by the appellant in the underlying writ petition stand satisfied. We also find that the learned Single Judge has also granted liberty to the appellant to take appropriate steps in accordance with law for recovery of the additional amount due to him, if any. In view of such liberty too, no interference is warranted by this Court.
The appeal being absolutely bereft of merits is dismissed with pending applications.
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2025 (5) TMI 1768
Legality and validity of the mode of service of the order-in-original (OIO) - interpretation of Section 153 of the Customs Act, 1962 - barred by limitation - HELD THAT:- The only mode of service was by registered post. The service of order, decision and etc., by speed post was not provided prior to 2018. In the present case, the order was not communicated by registered post. Therefore, the date of communication of OIO must be taken as 27.10.2017. The appeal was filed well in time i.e., on 07.11.2017. Hence, the rejection of the appeal as time barred is unsustainable in law. Therefore, this Court deems it proper to quash the orders passed by the Additional Commissioner of Customs and the Commissioner of Customs (Appeals).
The Writ of Certiorari is ordered. The order dated:23.09.2016 passed by the Additional Commissioner of Customs (Import-I) in No. 40/ADC/KV/Gr-V/2016-17 vide Annexure-C and the order dated:22.02.2018 passed by the Commissioner of Customs (Appeals) in OIA No. MUM-CUSTMSMP-298/2017-18 vide Annexure-E are quashed. This Court has held that the appeal filed by the petitioner is well in time hence, A direction is issued to the Authority to dispose of the appeal on the merits of the case.
Resultantly, the Writ Petition is allowed. Because of the disposal of the Writ Petition, all pending interlocutory applications, if any are disposed of, and the interim order, if any granted by this Court, stands discharged.
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2025 (5) TMI 1767
Demand of differential duty along with interest and penalty - Classification of imported subject goods (Ink jet Printers) under CTSH 844332 or CTSH 844339 - Misdeclaration - intention to evade payment of customs duty - Applicability of Circular No. 11/2008-Cus dated 01.07.2008 - HELD THAT:- It is not in dispute, as evident from the product literature, investigation findings, and statements recorded under Section 108, that the impugned machines are intended for industrial printing applications on hard substrates such as ceramic tiles, possess in-built processing units, and execute printing operations without the necessity of an external ADP machine. By applying Rule 3(a), the specific description of 'Inkjet Printing Machines' under CTI 8443 3910 must necessarily be preferred over the more generic category of 'Inkjet Printers' under CTI 8443 3250. Even if, there remained any ambiguity in classification between the two headings, Rule 3(c) enjoins that classification be made under the heading which occurs last in numerical order among those which equally merit consideration. Thus, by both application of specificity and sequential preference, the impugned goods correctly fall under CTI 8443 3910.
At this juncture, we also take note of the fact that the appellant had, prior to these consignments, imported similar machines under Bill of Entry No. 2409364 dated 08.12.2010 and classified them under CTI 8443 3990 as 'Digital Printing Machine for Ceramic Industry'. We are of the opinion that this earlier classification under an eight-digit tariff heading covering 'Other' printing machinery is a tacit admission by the appellant of the character of the impugned goods as printing machinery, distinct from conventional ADP-connected printers. The appellant's subsequent attempt to classify functionally identical machines as 'Inkjet Printers' under CTI 8443 3250 was motivated in order to avail of the ITA exemption.
In the instant case, as demonstrated by the product manuals, technical literature, and investigation findings, both the 'Creta Compat 700 x 4 Inkjet Printer' and 'Durst Gamma 75 HDS 2-5 C Inkjet Printer' possess advanced internal computer systems, touchscreen interfaces, and in-built proprietary print management software systems enabling autonomous operation. The presence of USB ports or LAN interfaces does not, by itself, satisfy the requirements of CTI 8443 3250, since these are ancillary provisions for optional data transfer and not primary conduits for operational command from an external ADP machine. The critical determinant is whether the machine requires such an external device for its essential operation, which in the present case, it does not.
The extended period of limitation invoked under Section 28(4) is also fully justified. The suppression of material facts, deliberate misdeclaration of classification despite prior knowledge from past import experience, and conscious omission of product literature disclosing true functionality all evidence intent to evade duty. The statements of Shri Gyan Prakash Nirmal and Shri Lalit Chandra Sharma, recorded under Section 108 which have not been retracted, corroborate that the impugned machines were described in invoices as 'printers' for the avowed purpose of classifying them under a duty-exempt heading. The plea of bona fide error is untenable in light of such clear evidence of knowledge and intent.
Accordingly, the confiscation of the impugned goods under Section 111(m) is legally sustainable. The option for redemption on payment of fine in lieu of confiscation granted by the adjudicating authority is a reasonable exercise of discretion and not subject to interference.
Having regard to the material on record, including the product literature, inspection reports, statements recorded, and the applicable interpretative rules under the Customs Tariff Act, we have no hesitation in affirming the finding of the Commissioner that the impugned goods are correctly classifiable under CTI 8443 3910 as 'Inkjet Printing Machines' and not under CTI 8443 3250/3290 as claimed by the appellant.
Similarly, the penalty imposed under Section 114A being statutorily equal to the duty evaded is mandated by law upon establishment of deliberate misdeclaration with intent to evade duty, which is undeniably present in this case. The discharge of 25% of the penalty within the prescribed period, as noted by the adjudicating authority, entitles the appellant to the reduced penalty benefit to that extent alone, with the balance remaining payable.
We note that the penalty has been imposed upon Shri Gyan Prakash Nirmal under Section 112(a). Thus, we are of the opinion that the penalty is liable to be reduced.
Thus, we hold as follows:
(i) The classification of the impugned consignments under CTI 8443 3910 is upheld.
(ii) The demand of differential customs duty along with interest under Section 28AA of the Customs Act, 1962 stands confirmed.
(iii) The penalty imposed under Section 114A on the appellant company is upheld.
(iv) The penalty under Section 112(a) of the Customs Act, 1962 is reduced to Rs.2,50,000/-.
Accordingly, the impugned order is modified to the extent above. The Custom Appeal No.55672 of 2013 filed is allowed to the extent indicated above. The Customs Appeal No.55671 of 2013 stands dismissed.
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2025 (5) TMI 1766
Delay in inquiry proceedings against a customs broker - Revocation of the licence - forfeiture of security deposit under regulation 18 of Customs Broker Licensing Regulations, 2018 - Non-fulfilment of regulation 1(4), regulation 10(a), 10(b), 10(d), 10(e), 10(m), and 10(n) of Customs Broker Licensing Regulations, 2018 in connection with six shipping bills - shipment of ‘readymade garments’ were allegedly overvalued to avail ineligible drawback - imposition of penalty of ₹ 50,000 under regulation 14 Customs Broker Licensing Regulations, 2018 - HELD THAT:- It is seen that the enquiry report was submitted on the 11th July 2023 consequent upon the show cause notice dated 6th September 2021. The impugned order has drawn attention to the ‘midstream’ change in enquiry authority consequent upon transfer of the first enumerated officer which serves to justify the delay that occurred at the first stage. The enquiry report held the charges to be not proved and it took the licensing authority over nine months to conclude that he was not in agreement with the exoneration by the enquiry authority. Even thereafter, another six months elapsed before the impugned order concluded that the most severe of the detriments was deserving in the matter. It is on record that the appellant herein represented at the personal hearing on 14th September 2023, following submission of the written response to the disagreement memo, that there wass no elaboration of the events that occurred between date of disagreement memo and the date of personal hearing to justify the delay. At all events, the decision to disregard the enquiry report was made manifest only nine months after the enquiry report which is in breach of the stipulations prescribed in Customs Broker Licensing Regulations, 2018.
On perusal of the impugned order, there is no finding that the acts, omission or commission on the part of the customs broker was cause of one or more of the delays.
In addition to the circumstances of failure to suggest that delays were occasioned by dereliction on the part of the customs broker, there is no explanation whatsoever in the impugned order that delay was either from unavoidable circumstances or beyond human control. That is irresponsible discharge of responsibility fastened on the licencing authority in the Regulations and certainly not in accordance with the leeway afforded by the Hon’ble High Court of Bombay in re Unison Clearing Pvt Ltd. [2018 (4) TMI 1053 - BOMBAY HIGH COURT].
In the absence of any finding that the appellant herein was responsible for the delay in concluding the proceedings after submission of the enquiry report, the stipulations in the Customs Broker Licensing Regulations, 2018 are to be treated as mandatory as set out supra. The deadlines not having been adhered to, the findings and consequence in the impugned order stand invalidated.
Accordingly, the impugned order is set aside and appeal allowed.
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2025 (5) TMI 1765
Levy of interest on short paid duty under section 28AA of the Customs Act - error in the EDI system - Differential Countervailing Duty (CVD) - Show Cause Notice issued to demand interest - HELD THAT:-Following the decision of M/s. Titagarh Wagons Ltd.[2024 (2) TMI 876 - CESTAT KOLKATA] and considering the fact that the short payment of duty was due to the fault of the EDI system and as and when the same was pointed out to the appellant, the appellant paid the duty, we hold that no interest in payable by the appellant.
In these terms, we set aside the impugned order qua demand of interest and allow the appeal with consequential relief, if any, as per law.
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2025 (5) TMI 1736
Imposition of penalty under section 114A - lack of jurisdiction - redemption of goods - non-fulfilment of conditions of exemption notification - differential duty effected not under section 28 of Customs Act, 1962 but as obligation in bond executed at the time of import - HELD THAT:- There is also no evidence in the notice that any of the ingredients permitting resort to section 28(4) of Customs Act, 1962, and thereby to section 114A of Customs Act, 1962, was manifest at the time of assessment to duties, even if foregone then. And it does not appear to have impressed itself on the reviewing authority that the impugned order may have opted for that very lack to bypass resort to section 28 of Customs Act, 1962. The adjudication order has not drawn upon any evidence to suggest otherwise and appears merely to have relied upon the diversion of impugned goods had been diverted to suggest that this amounted to misrepresentation; misrepresentation is not a state of mind to be inferred but patent distortion of facts that must be established.
The factual matrix, incorrectly appreciated by the adjudicating authority insofar as penalty was concerned and inappropriately overlooked in submission of Learned Authorized Representative, offers no scope for imposition of penalty under section 114A of Customs Act, 1962 on M/s Hi-Tech Engineers. Indeed, the plea in appeal of Commissioner of Customs for enforcement of the bond does not sit well with the contention of Learned Authorized Representative that equal penalty was in order.
It only remains for us to examine the alleged impropriety in not quantifying fine under section 125 of Customs Act, 1962 as condition for redemption of goods. Goods are, admittedly, not available and not retainable, thereby, for transfer back to the title holder upon complying with payment of fine. Such is merely an option which does not present itself for exercise by importer in the absence of need for the goods. Non-exercise of option crystalizes the ownership in the hands of the Central Government and determination of fine for redemption of goods, that do not vest by confiscation and which cannot be made available by Central Government on compliance with fine, is nothing but a futile exercise bordering on farce. The Hon’ble High Court of Bombay, in Commissioner of Customs (Import) v. Finesse Creation Inc [2009 (8) TMI 115 - BOMBAY HIGH COURT] that was affirmed by the Hon’ble Supreme Court [2010 (5) TMI 804 - SC ORDER], held that goods already cleared and not available physically for confiscation cannot be burdened with fine under section 125 of Customs Act, 1962.
Thus, there is no merit in recourse to section 114A of Customs Act, 1962 owing to which the appeal of importer is allowed to set aside the penalty therein. For the reasons cited supra, we hold the appeal of Commissioner of Customs (Preventive), Mumbai to be without merit and liable to be dismissed.
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2025 (5) TMI 1735
Duty demand along with interest and penalty - Goods imported are ‘Capital goods imported earlier’ Or ‘Capital goods’ - imported goods are Crucible Pot, pot Ring, Abrasive Belt, PVA wheels, Bevelling Cone and Refractories - Validity of the provisions of the Customs Notification No. 104/2009-Cus read with para 3.16.3 of the FTP and para 3.10.6 of the Hand Book of Procedures - HELD THAT:- From the definition of 'capital goods', we observe that items required for replacement, modernization, technological upgradation or expansion of the plant have also been covered within the ambit of 'capital goods'.
A perusal of the functions of the above items imported by the appellant indicate that each of the said goods have specific functions, which are essential and they aid in the manufacture of glassware by the appellant. Thus, we observe that all these goods duly satisfy the requirement of being an “accessory” or “equipment” mentioned in the definition of 'capital goods'. We find that these goods are required for “manufacture or production, either directly or indirectly” of glassware by the appellant.
Accordingly, we find that the goods imported by the appellant are 'capital goods' themselves and hence the restriction of debiting duty from SHIS scripts in excess of the allowable limit of 10% of the total scrip value is not applicable to the goods imported by them. Consequently, we hold that the demand of Customs duty confirmed in the impugned order is not sustainable and hence we set aside the same.
Since the demand of Customs duty is not sustainable, the question of demanding interest or imposing penalty does not arise. Accordingly, the same are set aside.
Thus, we observe that the Ld. adjudicating authority has appropriated the amount of Rs. 40,29,822/- and Rs.3,17,210/- deposited by the appellant during the course of investigation against the confirmed demand of Rs.57,94,968/-. Since the demand confirmed is not sustained, we hold the amount of duty appropriated against this demand is not warranted.
Hence, we set aside the impugned order and allow the appeal filed by the appellant with consequential relief, if any, as per law.
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2025 (5) TMI 1734
Imposition of a penalty under Section 112(a)(ii) and 114AA of the Customs Act, 1962 - Validity and legality of the conversion of an export Bill of Export from the DFIA (Duty Free Import Authorization) scheme to the DEPB (Duty Entitlement Pass Book) scheme - issuance of Show Cause Notice (SCN) - violation of the principle of res judicata - HELD THAT:- It is evident from the record that the Ld. Commissioner of Customs (Preventive) has examined the application for conversion from DFIA scheme to DEPB scheme and concluded that the said conversion was proper since the benefit under the DFIA scheme was more than the benefit under the DEPB scheme availed later. Hence, it is evident that there was no violation committed by the appellant in the conversion of the Bill of Export from DFIA scheme to DEPB scheme. Thus, we observe that once the Ld. Commissioner of Customs (Preventive) has examined and concluded that the conversion from DFIA scheme to DEPB scheme is proper and no appeal has been filed against the same, then, no mala fide intention can be attributed to the appellant for such conversion. Hence, we find that the Show Cause Notice issued to the appellant proposing penalty on them alleging fraud and misrepresentation of fact is legally not sustainable.
We also observe that the order of conversion passed by the Assistant Commissioner of Customs has been accepted by the Commissioner of Customs (Preventive) as legal and proper and thus, it is binding on the DRI also. Thus, we observe that issue of Show Cause Notice (SCN) and contest of the conversion order passed by the Assistant Commissioner of Customs as approved by the Commissioner, is violation of the principle of res judicata.
We also find that in addition to demand of customs duties from the entities which has utilized the DEPB license for importation of goods without payment of customs duties, the Show Cause Notice dated 08.10.2012 has proposed imposition of penalties under Section 112(a)(ii) and Section 114AA of the Customs Act, 1962 on the appellant. The present appeal deals only with the penalties imposed on the appellant.
We observe that Section 114AA of the Customs Act which deals with false statement in a document and fabricated documents. We observe that no such documents could be identified in this case. Thus, we observe that penalty u/s 114AA is not applicable in this case, since the appellant is not a party in the matter of import and no document was filed by them. We also observe that the order of conversion from DFIA scheme to DEPB has been accepted by the Commissioner (Preventive). Further it was held that the conversion of DFIA shipping bill to DEPB shipping bill was legal as it is evident from the letter dated 13th June, 2011 forwarded to the DRI. Thus, we hold that no penalty imposable on the appellant under Section 114AA of the Customs Act, 1962 and hence we set aside the same.
Regarding the penalty imposed on the appellant under section 112(a), we further take note of the fact that the conversion of the shipping bill has been investigated by the SIU wing of the Customs (Preventive) Commissionerate and they have recommended that the matter may be closed. Thus, we find that there is no suppression of fact or mis-statement on the part of the appellant. Thus, we hold that the penalty imposed on the appellant under Section 112(a)(ii) is not sustainable and hence we set aside the same.
Thus, we hold that the penalties imposed on the appellant in the impugned order under sections 114AA and 112(a)(ii) are not sustainable and accordingly, the same are set aside.
In the result, we set aside the impugned order qua imposition of the above penalties on the appellant.
The appeal is disposed of in the above manner.
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2025 (5) TMI 1695
Duty drawback - Merchant Exporter - CENVAT Credit Availed or not - Applicability and effect of the Customs Circular No. 35/2010-Cus.- retrospective or prospective - availability of AIR duty drawback - availing rebate of central excise duty under Rule 18 or Rule 19(2) of the Central Excise Rules, 2002 - HELD THAT:- Having regard to the concerned Circular dt. 17.09.2010 vis-à-vis the previous Notifications, no new right or benefit came to be created, but the actual scope of the benefit accruing to the Appellant and such similarly placed merchant exporters, was explained and settled once and for all. By virtue of the said Circular, it was merely clarified that the benefit of 1% customs duty drawback as indicated under the prior Notification was available to SBM merchants despite having availed CENVAT. Being explanatory in nature, the Circular in question cannot be construed as an adoption of a fresh fiscal regime for rebate of customs duty, intended to affect vested rights or impose new burdens upon the Department. It was passed to resolve the ambiguity qua the meaning & threshold of the previous Notifications. For the same reason, the operation of such a provision or instruction by the Department could only be retrospective in nature, so as to give effect to the objective of the Notifications issued by CBEC.
It also cannot be deduced that by virtue of the Circular, CBEC intended to deprive the Appellant and such similarly placed merchant exporters from the benefit of customs duty drawbacks prior to 20.09.2010. In our considered view, it is inconceivable that the previous Notifications would be in operation in any other manner except as specified and clarified in the manner indicated in the Circular dt. 17.09.2020, and it is not the case of the Department that before the issuance of the Circular dt. 17.09.2020 read with Notification No. 84/2010-Cus of even date, the Notifications for the years 2006 to 2009 were not in operation.
The substratum of a beneficial legislation is to ensure that the benefit is uniform and absolute, which may be prospective in nature, but when such benefit to one person does not inflict any undue burden on the other, the purposive construction can be considered to be given a retrospective effect CIT vs Vatika Township (P) Ltd. [2014 (9) TMI 576 - SUPREME COURT (LB)] It is therefore pertinent to clarify that except in cases where such enactments or issuance of Circulars are arbitrary, vexatious or constitute a parallel mechanism making its operation unfair, the Courts need not entertain objections to the operation of a clarificatory/declaratory provision which is only intended to assert & give effect to its parent provision/statute.
In the present case, the High Court adopted a cursory view by solely relying on the submission of the Respondents that because the subject Circular was to be made effective from 20.09.2010, it was prospective in nature. The High Court did not appreciate the rationale of the CBEC Circular nor the purport of the Notifications time and again issued by the Department and passed the Impugned Order dt. 17.11.2014 in undue haste. Subsequently, as well it refused to remedy the error apparent on record, by dismissing the Review Petition at its threshold.
Thus, for the reasons indicated hereinabove, the Impugned Judgment and Order dated 17.11.2014 passed by the High Court of Madhya Pradesh at Indore in Writ Petition No. 2576/2012 and Order dt. 01.04.2016 in R.P No. 1/2015 is set aside, and, the Appellant is entitled to the benefit of 1 % AIR Customs Duty Drawback on its export of SBM from the year 2008 as applicable, by according retrospective operation to the Circular No. 35/2010- Cus. dated 17.09.2010 issued by the Central Board of Excise & Customs, New Delhi, for the purposes of All Industry Rate (AIR) Duty Drawbacks.
The appeals stand disposed of.
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2025 (5) TMI 1633
Condonation of delay - Application seeking exemption from filing a certified copy of the impugned judgment - low tax - HELD THAT:- Delay condoned.
At the outset, Ms. Nisha Bagchi, the learned Senior counsel appearing for the appellant - Revenue submitted that this appeal may be disposed on the ground of low tax effect by keeping the question of law open.
Thus, the Civil Appeal is disposed of on the ground of low tax effect.
However, the question of law is kept open which would be decided in an appropriate case.
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