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2025 (5) TMI 1462
Imposition a penalty under section 112(a)(ii), on the former Managing Director of the company (MMTC-Pamp) - confiscation - evasion of customs duty - improper importation of goods - HELD THAT:- Section 112(a)(ii) of the Customs Act stipulates imposition of penalty on the customs duty sought to be evaded and, therefore, pre-supposes a conscious exercise on the part of the person alleged to have committed evasion.
In view of the judgment of the Kerala High Court in O.T. Enasu [2007 (11) TMI 431 - KERALA HIGH COURT], the imposition of penalty upon Former MD cannot be sustained.
Thus, for all the reasons stated, penalty under section 112(a)(ii) of the Customs Act could not have been imposed upon Former MD
The order dated 31.12.2022 passed by the Principal Commissioner to the extent it imposes penalty upon Former MD under section 112(a)(ii) of the Customs Act, therefore, deserves to be set aside and is set aside. The appeal is, accordingly, allowed.
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2025 (5) TMI 1461
Clearance of goods without payment of applicable duties - procurement of ‘raw materials’ - both imported and domestic - benefit of duty exemption under Notification No.52/2003-Customs and Notification No.22/2003-C.E. - SFIS scrips - excise duty payable on finished goods manufactured by 100% EOU - demand of duty on inputs - reversal of CENVAT credit - HELD THAT:- From plain reading of the legal provisions, it transpires that clearance of goods to Domestic Tariff Area (DTA) by a 100% EOU, would require payment of an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962, on like goods produced or manufactured outside India if imported into India. From the facts of the case it is found that the final product – Carpets manufactured by the appellants are being cleared to DTA, and since the buyers are holders of SFIS scrip issued by the DGFT, the applicable duty is being paid by debiting the scrips, instead of being paid in cash, in terms of paragraph 3.6.4.10 of the Foreign Trade Policy (FTP), which state that “utilisation of Duty Credit Scrip shall be permitted for payment of excise duty in terms of DoR notification issued in this behalf, for procurement from domestic sources of items permitted under Para 3.6.4.5.”.
From combined reading of the legal provisions of the Central Excise Act, 1944 and the relevant notifications issued therein along with FTP, it is found that payment of duty by utilising SFIS scrips, by debiting the same for an amount equal to such duty, has been treated as fulfilment of the obligation of an assessee/ the appellants 100% EOU, for payment of applicable duty.
Thus, we are of the considered view that the impugned order dated 30.04.2012 does not stand the scrutiny of law.
In the result, by setting aside the impugned order dated 30.04.2012, we allow the appeals filed by the appellants in their favour.
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2025 (5) TMI 1460
Revocation of customs broker licence - forfeiture of security deposit - imposition of penalty - Overvaluation of export goods - breach of regulation 10(d) and regulation 10(m) of Customs Broker Licensing Regulations, 2018 - imputation of misconduct - HELD THAT:- The imputation of misconduct, insofar as regulation 10(d) of Customs Broker Licensing Regulations, 2018 is concerned, revolves around the abetment of alleged illegal activities of the exporter rather than about the advise rendered by ‘customs broker’ in relation to export goods. There is no specifics in that finding that the nature and content of the advice offered to the client was appropriate or that the manner in which the declaration of incorrect value, that came to be revised by reference to valuation rules, was attributable to any incorrect advice. The enquiry authority found no cause to uphold the charge of abetment which, in the context of the obligation in regulation 10(d), is superfluous. The finding of the licensing authority is bereft of any justification for the repeated narratives conforming certain facts and the relationship of those facts offering evidence of incorrect advice afforded to the client by the customs broker. The findings, therefore, has no basis in the obligation devolving in regulation 10(d) of Customs Broker Licensing Regulations, 2018 on the customs broker.
Nonetheless, we find that the alleged misdemeanour on the part of the exporter was limited to the claim for ‘integrated tax’ as refund. Breach of provisions of Customs Act, 1962 has been alleged against customs broker solely on re-assessed value of goods already exported. We are unable to ascertain from the records as to the manner in which refund of ‘integrated tax’ would be subject to assessment under section 17 of Customs Act, 1962 inasmuch as the refund would be just as much as had been discharged on the goods. There is nothing on record to indicate that the said ‘integrated tax’ had not been discharged by the exporter or that the customs broker had anything to do with either insufficient payment of integrated tax or was cognizant of such deficiency on the part of the exporter.
Revoking of licence and forfeiture of security deposit under regulation 14 of Customs Broker Licensing Regulations, 2018 is disproportionately severe. Consequently, the ends of justice would be met by not interfering with the penalty imposed on the appellant herein which, in any case, is beyond the scope of appeal before the Tribunal.
Accordingly, we set side the revocation of licence and forfeiture of security deposit to modify the impugned order to such extend.
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2025 (5) TMI 1459
Duty demand - undervaluation of the transaction value and retail sale prices - collection of actual direct evidence and corroborative evidence - photocopies without signatures - Confiscation of goods - No opportunity for hearing - Principles of Natural Justice - HELD THAT:- This is one of the rare cases in which the Department has made efforts to collect actual direct evidence of under valuation. The appellants obtained two types of invoices for the same goods. The basic Customs Duty was payable on the disputed goods on the transaction value. In order to evade payment of basic Customs Duty, the appellants had requested the overseas supplier to send invoices for fraction of the actual transaction value “for customs purposes” and submitted those documents along with the Bills of entry. Thus, they evaded payment of basic Customs Duty. The officers of DRI along with their overseas network of officers obtained the invoices of actual value and accordingly the demands were made in the show cause notice and confirmed in the impugned order.
The second under valuation was mis-declaration of the Retail Sale Prices. The Additional Duty of Customs is payable on certain goods based on the Retail Sale Price of the goods with abatement. The appellant had declared a lower Retail Sale Price in its Bill of Entry and documents and evaded additional duty of customs, but actually sold the goods at much higher price. Records of this undervaluation were found during investigation and were confirmed in the statements of the Proprietors of the appellants recorded during investigation.
Thuds, we find that confirmed demand of duty evaded by the appellants is correct. Confiscation of goods under section 111 of the Customs Act for the mis-declaration and imposition of redemption fine in lieu thereof were also correct and proper for the reason. The penalties imposed under section 114A and 112 also call for no interference.
Hence, the impugned order is upheld and all appeals are dismissed.
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2025 (5) TMI 1378
Eligibility for duty free credit entitlement scheme vide N/N. 53/2003-Cus. dated 01.04.2003 - import of crude degummed soyabean oil - Agricultural product or not - administrative circular No. 10/2004-Cus. dated 30.01.2004 could legally expand the exclusionary clause of the statutory notification No. 53/2003-Cus. dated 01.04.2003 by including all products derived from agricultural or dairy origin, thereby curtailing the benefits under the duty free credit entitlement scheme or not - HELD THAT:- Since the genesis of the present lis is the show- cause notice dated 30.08.2006 issued by the Assistant Commissioner, Kandla, it would be appropriate to initiate the analysis therefrom. The show-cause notice referred to the factum of importation of crude degummed soyabean oil falling under CTH 15071000 chargeable to appropriate tariff duty by the appellant. However, the appellant filed two Bills of Entry dated 26.07.2006 and 27.07.2006 claiming benefit of the notification bearing No.53/2003-Cus. dated 01.04.2003 i.e. exemption from payment of various customs duties on the basis of the license issued by the DGFT for duty free import of goods specified in the license - appellant was called upon to show-cause as to why the duties chargeable/leviable for imported goods should not be charged under Section 28 of the Customs Act, 1962 (‘the Customs Act’ hereinafter) on the goods imported duty free and hit by the exclusion clause of the notification bearing No.53/2003. Appellant was also called upon to show cause as to why interest at appropriate rate on the aforesaid duties should not be charged under Section 28AB of the Customs Act.
High Court did not non-suit the appellant on the ground of alternative remedy but proceeded to hear the challenge on merit. By the impugned judgment and order dated 05.08.2019, High Court held that the basic ingredient of crude degummed soyabean oil is soyabean which is admittedly an agricultural product - According to the test report, unless the crude degummed soyabean oil is refined, it cannot be used for human consumption. Therefore, the High Court rejected the contention that in view of the process undertaken soyabean acquires a distinct marketable identity is without any merit. Finding of the Assistant Commissioner that crude degummed soyabean oil is an agricultural product cannot be faulted.
A two-Judge Bench of this Court in Union of India Vs. Inter Continental [2008 (4) TMI 23 - SUPREME COURT] was considering the question as to whether the end-use verification of the products is necessary for availing the benefit of concessional rate of duty. In that case, the statutory notification bearing No.17/2001-Cus. dated 01.03.2001 provided for concessional rate of duty on crude palmolin oil. However, as per Board’s circular No.40/2001-Cus. dated 13.07.2001, end-use certificate was required to be produced for allowing such benefit. This came to be challenged by the assessee by filing a writ petition in the High Court questioning the direction to produce the end-use certificate which was stated to be a new condition to the statutory notification by way of a circular. Contention of the petitioner was that the circular sought to impose a limitation on the exemption notification or tried to whittle it down by adding a new condition beyond the notification. High Court accepted the writ petition by holding that the Board by issuing a circular subsequent to the notification could not have added a new condition thereby restricting the scope of the exemption notification. Imposing such a condition would tantamount to re-writing the notification or in other words legislating by circular, which is not permissible in law. High Court held that the circular being contrary to the notification could not be sustained as it could not override the notification. This Court agreed with the view of the High Court.
Whether crude degummed soyabean oil imported by the appellant is an agricultural product? - HELD THAT:- On an analysis of the diagram describing the manufacturing process of the appellant, High Court observed that the basic ingredient/root of the product is soyabean. It is not disputed even by the appellant that soyabean is an agricultural product. After referring to the contention of the appellant that after undergoing the process of manufacture, the crude degummed soyabean oil becomes a distinct commodity, High Court observed that though the process undertaken by the appellant may be termed as a manufacturing process but what is to be seen is that soyabean as an agricultural product is a primary product which undergoes a simple operation so as to make it more usable or saleable; it can in no way be said to acquire a distinct identity. Unlike eucalyptus oil, soyabean on extraction of oil does not lose its identity. High Court relied on the test report placed on record to hold that unless the crude degummed soyabean oil is refined, it cannot be used for human consumption. High Court, therefore, rejected the contention of the appellant that after going through the process as explained, soyabean acquires a distinct marketable identity is without any merit and upheld the finding of the assessing authority that crude degummed soyabean oil is an agricultural product.
In Union of India Vs. Delhi Cloth and General Mills Co. Ltd. [1962 (10) TMI 1 - SUPREME COURT], a Constitution Bench of this Court held that the verb ‘manufacture’ used as a word is generally understood to mean as ‘bringing into existence a new substance’, howsoever minor in consequence the change may be. ‘Manufacture’ implies a change but every change is not manufacture. Every change of an article is the result of treatment, labour and manipulation. But something more is necessary to make it ‘manufacture’. There must be transformation; a new and different article must emerge having a distinctive name, character or use.
In the facts of that case, this Court observed that appellants used to bring transformer oil and by removing impurities, it was again made useable as transformer oil. Before and after the process, the product was only transformer oil. That being so, this Court held that it could not be said that a new and distinct commodity had come into existence consequent to the process undertaken by the appellant.
It is unable to concur with the view expressed by the High Court that crude degummed soyabean oil is an agricultural product.
Conclusion - i) The circular bearing No.10/2004 dated 30.01.2004 insofar it expands the exclusionary clause in the statutory notification No.53/2003 dated 01.04.2003 would have no legal consequence. ii) Crude degummed soyabean oil is a product different and distinct in character and identity from soyabean. iii) The process carried out by the appellant using soyabean as raw material and ending in the product crude degummed soyabean oil is manufacturing. iv) Crude degummed soyabean oil is not an agricultural product. v) The appellant would be entitled to the benefits under notification No.53/2003 dated 01.04.2003.
Appeal allowed.
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2025 (5) TMI 1377
Imposition of redemption fine and penalties under sections 112(a) and 114AA of the under section 125 of the Customs Act, 1962 (the Act) - recovery of differential duty - confiscation of goods - HELD THAT:- As far as the redemption fine is concerned, this Tribunal had not altered it or passed any order regarding it in the Final Order while remanding the matter. The appellant’s appeal against the Final Order has been dismissed by the Supreme Court and thus the Final Order attained finality. The redemption fine was Rs. 10,00,000/- in the first OIO and it is the same in the impugned order. We find no reason to interfere with it.
As far as the penalty under section 112(a) is concerned, we find that the Commissioner has, in the impugned order, reduced it to Rs. 10,00,000/- considering the reduced duty. Taking a liberal view, we reduce it further to Rs. 5,00,000/-
Section 114AA was introduced effective from 13.7.2006. Evidently, if any person knowingly made or used any false material in any document after this date, it would attract this section. The Bill of Entry and all the documents with it were filed on 26.6.2003 when this section was not in the statute. There is nothing in this section which suggests that it has retrospective effect. Unless otherwise indicated, all laws will only apply prospectively. Therefore, Section 114AA would not apply to this case. Although this plea was not taken before at any stage, this being a legal ground, must be allowed.
Therefore, penalty imposed under section 114AA is set aside;
Thus, we partly allow the appeal and modify the impugned order.
Rest of the impugned order is upheld.
The appeal is allowed.
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2025 (5) TMI 1376
Seeking to re-determining the FOB value of the export goods - export 598 cartons of readymade garments - export incentives - goods overvalued in order to claim excess Drawback and rebate of State Levies (ROSL) - confiscation - redemption of fine under section 125 and imposition of penalty - Meaning of “FOB value of the goods” and the power to re-determine it - HELD THAT:- The decision of M/s JBN Apparels Pvt LTD, [2025 (3) TMI 514 - CESTAT NEW DELHI], was followed by this Tribunal in some other appeals. We have no reason to take a different view in this appeal. Accordingly, we hold that the Additional Commissioner was wrong in re-determining the FOB value invoking section 14 and the Valuation Rules. This section and the rules do not empower the Customs Officer to determine the FOB value but only empower him to determine the assessable value. Assessable value can be determined as per the transaction value or through some other method.
The two export incentives in this case- Drawback and ROSL are to be paid the percentage of FOB value should be paid so. They have no correlation with the assessable value of the goods. The Additional Commissioner had no authority to order that instead of paying the drawback on the FOB value (as notified by the Government), it should be paid on a value determined by him treating it as FOB value. Similarly, he had no authority to order that instead of the ROSL being paid on the FOB value as laid down in the Foreign Trade Policy, it should be paid on a value determined by him treating it as FOB value.
To sum up:
a. The Additional Commissioner is a stranger to the contract between the exporter and the overseas buyer and has no locus standi to change the FOB value of the goods;
b. The Additional Commissioner has no authority to order that the drawback should be paid on a value determined by him instead of on the FOB value as notified by the Government of India;
c. The Additional Commissioner also has no authority to order that the ROSL should be paid on a value determined by him instead of on the FOB value as per the Foreign Trade policy;
d. The order of confiscation of goods, imposition of redemption fine and penalties are based on the change of the FOB value by the Additional Commissioner, therefore, also cannot be sustained;
e. The impugned order of the Commissioner (Appeals) upholding the above order of the Additional Commissioner cannot be sustained and needs to be set aside;
10. Thus, the appeal is allowed and the impugned order is set aside with consequential relief to the appellant.
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2025 (5) TMI 1375
Violation by a Customs Broker under Regulation 10(d), 10(e), and 10(n) under the Customs Brokers Licensing Regulations (CBLR), 2018 - facilitated customs clearance of the overvalued export of goods - exporter of these consignments was non-functional/non-existent at the declared address - purchase invoices issued by non-existent/fake/suppliers - revocation of the CB licences along with forfeiture in terms of Regulation 10 read with Regulation 17 of CBLR, 2018 - GST Registrations were either suspended or cancelled - HELD THAT:- The proceedings originated from Show Cause Notice (SCN) No. 11/2024 dated 22.02.2024, issued by the Additional Commissioner of Customs, SIIB, ICD Tughlakabad (Export), following an alert from the NCTC regarding three shipping bills dated 15.07.2023.
We observe that the show cause notice further alleges that the CB have facilitated filing of shipping bills on behalf of the exporter M/s SS Enterprises by mis-declaring the value of the goods. Nothing in the Customs Act or the Customs Valuation Rules or the CBLR gives the Customs Broker any power to examine the goods or assess their value. The value of goods has to be self-assessed by the exporter or re-assessed by the officer. The role of Customs Broker is confined to filing the Shipping Bills correctly as per the documents provided to him. We also observe that the show cause notice is too vague to allege violation of Regulations 10(d) and 10(e). There is no evidence in the show cause notice and the suspension order, about the duties which has not been fully complied with by the appellant. The confirmation of proposal of such show cause notice cannot sustain.
We draw our support from the decision of Hon’ble Delhi High Court in the case of Kunal Travels (Cargo) [2017 (3) TMI 1494 - DELHI HIGH COURT], wherein it is held that clause 10(e) of the CB Regulation, 2018 requires exercise of due diligence by the CHA regarding such information which he may give to his client with reference to any work related to clearance of cargo. In the present show cause notice there is no mention of any such information which was to be parted with the exporter. Clause (d) requires that all documents submitted, such as bills of entry and shipping bills delivered etc. reflect the name of the importer/exporter and the name of the CHA prominently at the top of such documents. The aforesaid clauses do not obligate the CHA to look into such information which may be made available to it from the exporter/importer. The CHA is not an inspector to weigh the genuineness of the transaction. It is a processing agent of documents with respect to clearance of goods through customs house and in that process only such authorized personnel of the CHA can enter the customs house area. That the allegations made against the Appellant / Customs Broker that the CB have facilitated the Shipping Bills on behalf of the exporter M/s SS Enterprises by mis declaring the value of the goods, did not bring the non-compliance of the provisions of the CBLR, 2018 and therefore, the same does not attract violation of Regulation 10(d) and 10(e) of CBLR, 2018.
The appellant had verified the necessary KYC documents viz. IEC of the importer, bank signed authorization and their GSTIN certificate. All the said certificates were found to be valid and existing. From the above discussion, it is clear that there is no such evidence on record which may prove prior knowledge with the appellant about the declarations in the documents provided by the exporter and that those were mis-declarations. As such from the facts on record, it is concluded that the appellant M/s United Cargo Services (PAN ACYPC7426N) has followed the provisions of Regulation 10(d) and 10(e) of CBLR, 2018 and no contravention of the provision of this regulation is established.
We have also perused the inquiry report in reference to impugned show cause notice dated 21.05.2024 that inquiry officer in the detailed report dated 16.08.2024 has meticulously considered the entire factual matrix has concluded that the CB, M/s United Cargo Services has not violated Regulations 10(d), 10(n) and 10(q) of the Customs Brokers Licensing Regulations, 2018. The adjudicating authority has not cited any plausible reason while concluding contrary to said inquiry report. We do not see any reason to differ from the findings of the enquiry officer.
Hence we hereby set aside the order under challenge. Consequent thereto, the appeal is allowed.
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2025 (5) TMI 1374
Transaction value - Polyester Knitted Fabric - Duty on the enhancement of value solely based on the DRI - denial of benefit of exemption of Notification No. 30/2004-CE - Entitlement to exemption from CVD - violation of Section 14 of the Customs Act, 1962, read with Rule 3 of Custom Valuation Rules, 2007 (“CVR, 2007”) - HELD THAT:- Regarding enhancement of transaction value on the DRI alert, is concerned, we find that this issue has been considered by various benches of the Tribunal and it has been consistently held that the declared value cannot be enhanced simply on the basis of DRI alert which was sought to be done in the present cases.
Further, we also find that in the appellants’ own case reported as M/s Sedna Impex India Pvt Ltd & Garg Impex - [2016 (10) TMI 517 - CESTAT CHANDIGARH], the Tribunal has held that declared value cannot be enhanced on the basis of DRI alert.
regarding benefit of exemption from payment of CVD in terms of Notification No. 30/2004-CE dated 09.07.2004, is concerned, we find that this issue has also been considered by the Tribunal in number of cases as relied upon by the appellants cited supra. In this connection, we may again refer to decision of the Tribunal in the case of M/s Artex Textile Private Limited [2017 (9) TMI 1011 - CESTAT CHANDIGARH].
Subsequently, the above ratio has been followed by the Tribunal in the case M/s Artex Textile Private Limited [2017 (9) TMI 1210 - CESTAT CHANDIGARH], wherein the Tribunal has again considered this issue and held in favour of the importer- assessee.
As regards the appellants’ entitlement to benefit of Notification No. 072/2005 dated 22.07.2005, we find that the appellants were allowed the benefit of said notification by the Commissioner (Appeals) vide Order-in-Appeal No. CC(A)/CUS/D-II/ICD PPG & OTHER ICDs/1517-1519/2017 dated 28.12.2017 and similarly, with regard the benefit of Notification No. 151-Cus dated 14.05.1982, we find that Commissioner (Appeals) allowed the benefit of said notification vide Order-in-Appeal No. CC(A)/CUS/D-II/ICD/325- 332/2016 dated 28.03.2016.
Thus, we are of the considered opinion that the impugned orders are not sustainable in law; accordingly, we set aside the same and allow all the appeals of the appellants.
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2025 (5) TMI 1292
Maintainability of the petition - patent error is apparent on the face of the record - Confiscation and non-release of the counterfeit goods bearing the respondent’s/ plaintiff’s trademark/ label under consignment - learned Trial Court erred in moving ahead with suo moto commencing with the proceedings without having jurisdiction to do so - HELD THAT:- As per the settled position of law, a Court which does not statutorily, or otherwise, have jurisdiction to try and entertain a proceeding cannot suo moto confer/ assume jurisdiction upon itself in any manner and/ or any reason whatsoever.
Admittedly, even though the petitioners have participated in MISC DJ/3623/2024 before the learned Trial Court and had given up their challenge to all the orders barring that of 17.01.2025 passed therein before this Court on 02.05.2025, the same would not and in fact cannot preclude this Court to take into account the cumulative facts that the learned Trial Court is acting without any jurisdiction to try and/ or entertain the proceedings not before it and accordingly proceed for adjudication of the present petition under Article 227 of the Constitution of India which empowers the High Courts to exercise “…superintendence over all Courts and Tribunals throughout the territories in relation to which it exercises jurisdiction”.
Even though the law qua exercising the rights under Article 227 of the Constitution of India is well settled that the High Courts should not exercise its power of superintendence at the drop of a hat, however, at the same time, it is also a settled position of law that on coming across any patent perversity in the orders of any Court and/ or Tribunal which is glaringly visible, the High Courts applying the equitable principles, should exercise its power to keep strict overall administrative and judicial control over any Court and/ or Tribunal under its jurisdiction. The High Courts are required to step in, if called for, when such a situation, as above, is brought to the notice.
The present case is such wherein, the patent error is apparent on the face of the record, which if permitted to stand, shall lead to traversity of justice. The learned Trial Court cannot be allowed to proceed against the Statute and this Court has to stand by the principles of equity, justice and good conscience, more particularly, when the suit itself stood decreed on 19.10.2024 by the very same learned Trial Court.
As a result, upon a wholistical consideration of the factual matrix involved coupled with the provisions of Statute, as also the existing position of law, in the considered opinion of this Court, the present petition under Article 227 of the Constitution of India is maintainable in the present form before this Court.
Thus, the present petition is allowed and the order dated 17.01.2025 passed by the learned Trial Court in MISC DJ/3623/2024 is set aside. Resultantly, the proceedings initiated by the learned Trial Court in MISC DJ/3623/2024 and the orders passed therein are also set aside.
The present petition alongwith the pending applications stands disposed of.
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2025 (5) TMI 1291
Seeking directions to pass a consolidated or separate speaking order(s) under Section 17 (5) of the Customs Act, 1962 - liability of goods to be charged to Customs Duty under Customs Tariff Heading - classification of identical goods - No opportunity of personal hearing - HELD THAT:- In view of the fact that the Show Cause Notice with regard to the classification of identical goods has already been issued, this Court is of the opinion that the proceedings need not be multiplied. In respect of the earlier bills of entry, provisional release has already been undertaken. In respect of the above bills of entry, as per the Petitioner, the customs duty has been paid in terms of the classification given by the Department, under protest.
Accordingly, let the proceedings in the Show Cause Notice dated 15th January, 2025 continue. Considering the fact that the issue raised in both the proceedings are same and the goods involved are also identical, the adjudication of the Show Cause Notice dated 15th January, 2025 shall bind the earlier bills of entry as also the set of present bills of entry.
An opportunity of personal hearing shall also be given to the Petitioner.
After hearing the Petitioner, the Adjudicating Authority shall take a decision in respect of the classification of the goods as to whether they would fall under CTH 85168000 and CTH 85169000.
The writ petition is disposed of in these terms.
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2025 (5) TMI 1290
Seeking grant of Bail - Smuggling - seizure of gold - evasion of Customs Duty - HELD THAT:- In view of recovery of 3 kg of gold, the learned Metropolitan Magistrate has rightly observed that it comes under the category of bailable offence and has rightly granted bail to the Respondents. It is submitted that there is no infirmity in the Bail Order and the present Petition is liable to be dismissed.
The allegation of remaining 8 kg of gold is concerned, there is no recovery affected from the Respondents but was mentioned by the Respondents in their statements.
The learned Metropolitan Magistrate vide impugned Order dated 09.06.2018 has considered the facts and has granted Bail. It is only incidentally mentioned that the offence disclosed is ‘bailable’, whereas the Bail has been granted considering the entire facts of the present case.
There is no infirmity in the impugned Order dated 09.06.2018. The present Petition and pending Application are accordingly dismissed.
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2025 (5) TMI 1289
Suspension of the Customs Broker licence - mis-declaration of description and values of the goods - exporter found to be non-existent - Show Cause Notice [SCN] issued - HELD THAT:- Nothing in the Customs Act or the CBLR authorizes the Customs Broker to examine the goods. The Customs Broker has to file Shipping Bills as per the documents and the goods are then brought into the Customs area such as the ICD (this process is called carting) and handed over to the custodian of the ICD. The custodian has to present the goods to the Customs officers if they wish to examine them. The Customs broker often assists in the process but neither the Customs Broker has any authority nor responsibility to examine the goods or verify them. Therefore, if the goods are found to be different than what is declared in the shipping bill, the Customs Broker cannot be held responsible.
The goods were declared to be of a certain FOB value in the Shipping Bills and other documents but when the customs officers conducted market enquiries, the goods were found to be of a fraction of the value in the market. We find that the Customs Broker has no authority or responsibility to verify the FOB value of the goods (which is the transaction value decided between the buyer and seller) or check the market value of the goods (i.e., the value at which such goods are sold in Indian market). Therefore, suspension of the appellant’s Custom Broker licence on this ground is also not correct.
The case of the department is that Customs officers went to the registered premises of the exporter and found the exporter firm to be non-existent. Evidently, either the officer who verified the premises is not correct or all the other authorities who issued Aadhar, PAN, IEC and GST registration are not correct. Either way, it cannot be said that the appellant had not verified the existence of the exporter. We therefore, find that confirmation of suspension on this count is also not correct.
On 1.2.2024, the GST Commissionerate replied that the exporter was found to be non-existent and that its registration was concealed suo moto with effect from 7.2.2023. It is only after verification by the GST officers, pursuant to the letter dated 3.1.2024, it appears that the GST Registration was cancelled with effect from 7.2.2023. The impugned order does not say when the GST Registration was cancelled (although it was cancelled effective from 7.2.2023). Until the cancellation, not only the appellant but even the department was operating under the assumption that the appellant existed.
Thus, we find that confirmation of suspension of the Customs Broker licence of the appellant in the impugned order cannot be sustained and needs to be set aside. Nothing in this order would affect the proceedings under the SCN for revocation of licence. It shall be decided by the inquiry officer and the Commissioner un-influenced by any observation made in this Order.
The appeal is allowed and the impugned order is set aside. The suspension of the Custom Broker licence of the appellant is set aside with immediate effect. The original licence and all the F/G/H cards, if already surrendered to the Customs, shall be returned to the appellant.
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2025 (5) TMI 1288
Denial of transaction value of the goods - confiscation - payment of redemption fine - Admissibility of the computer printouts in the absence of any certificate issued under section 138C of the Customs Act - imports iron screws/ self-drilling screws from China - issuance of SCN - e-mail correspondence between another supplier and other receiver of goods - statement made under section 108 - HELD THAT:- Regarding the printout of the e-mails it needs to be noted that the two panchnamas recorded on 29.03.2017 do not refer to any printout of the e-mails having been taken. In fact, the only reference to the printouts of the e-mails having been taken is contained in the statement of Mahesh Sabharwal recorded under section 108 of the Customs Act on 14.09.2017.
The said statement does not indicate from which electronic device the printout was taken. It was absolutely necessary for the department to have taken the printouts during the process of recording of the panchnama or in the presence of witnesses. It appears that the printouts were taken on 14.09.2017, as is clear from the statement of Mahesh Sabharwal recorded under section 108 of the Customs Act.
This apart, the printouts of the emails contain quotations of different suppliers and not to the supplier of the appellant and they are not the final prices. The printouts also relate to another importer of M/s Sagar Impex and it is stated that Khusagar Aggarwal of Sagar Impex had admitted the prices in his statement made under section 108 of the Customs Act. It was necessary for the department to have not only substantiated that screws that were imported by M/s Sagar Impex and that by the appellant were of the same quality and were made at about the same time but to have also examined Khusagar Aggarwal in the present proceedings for his statement made under section 108 of the Customs Act in some other proceedings could not have been relied upon in the present proceedings.
If the emails and the statement of Mahesh Sabharwal are discarded, then there is absolutely no evidence for rejection of the transaction value declared by the appellant.
Thus, the impugned order rejecting the transaction value under rule 12 of the 2007 Valuation Rules cannot be sustained. The re-determination of the transaction value, therefore, would not arise.
Such being the position, the order for payment of redemption fine and for imposition of penalty upon the appellant and Mahesh Sabharwal cannot be sustained.
The impugned order dated 31.08.2020 passed by the Principal Commissioner is, accordingly, set aside and both the appeals are allowed.
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2025 (5) TMI 1287
Undervaluation of goods - Rejection of transaction value declared by the importer for the imported motorcycle inner tubes - discharge of burden of proving undervaluation by adducing cogent reasons and evidence justifying the rejection of the declared transaction value - to be valued as per section 4 of CEA or section 4A.
Admission and acceptance by the appellant the charge of undervaluation - HELD THAT:- It cannot be ignored that the appellant had filed B/E dated 17.02.2011 for clearance of motorcycle tubes and pursuant to an intelligence the statement of Shri Kulvinder Pal Singh was recorded on 11.03.2011 and 18.03.2011 where he admitted the price to be at Rs. 32 per piece and also paid the duty on enhanced assessable value on the date of the statement itself. Further, they also waived the requirement of show cause notice and personal hearing so as to avail early clearance of the consignment. Merely because the appellant has accepted the higher value and also made the payment of differential duty does not absolve the department from discharging their responsibility under the provisions of section 14 read with Valuation Rules.
In the present case, it is not found that the department has discharged its burden of carrying out the requisite exercise and conducting enquiry with reference to the nature of the imported goods, being ‘unbranded’ along with other factors like quality, quantity, time and country of origin etc. The goods imported by the appellant were ‘unbranded’ and it was therefore, relevant that the comparable goods should be of the same category ‘unbranded’ as there is bound to be marked difference in the valuation of ‘branded’ and ‘unbranded’ goods which is not forthcoming from the records. No such evidence has been led by the department to ascertain the price for such re-assessment.
Considering the fact of the present case, the decision of the Ahmedabad Bench of the Tribunal in CMR Nikkei India (P) Ltd. Vs. Commr. of Customs [2022 (8) TMI 114 - CESTAT AHMEDABAD] referred, where the dispute was regarding the valuation of the goods imported by the appellant and the assessing authority reassessed the imported goods at values higher than what was declared in the Bills of Entry and the importer had accepted the enhanced value by submitting the consent letter. The Tribunal was pleased to observed that 'in spite of the admission on behalf of the importer, the Revenue is required to satisfy the requirements prescribed under Section 14 of the Customs Act read with Customs Valuation Rules before any enhancement of valuation.'
Reliance has been placed on the contemporaneous imports available in NIDB data which showed the value of the impugned goods and which has been relied on by the authorities below. In the case of M/s Sedna Impex Pvt Ltd. vs. Commissioner of Excise, Mundra [2023 (3) TMI 1080 - CESTAT AHMEDABAD], the Tribunal observed that the declared value cannot be enhanced merely on the basis of the NIDB data. From series of decisions we find that the Tribunal has taken a consistent view that the declared value cannot be enhanced solely on the basis of NIDB data or in other words NIDB data cannot be made the basis for enhancement of the declared import value.
The basic allegation of the department is that the declared value of the impugned goods were found different being on the lower side as the goods were required to be subjected to countervailing duty based on RSP under section 4A of CEA - Section 4A makes it clear that it applied only in those cases where there is an allegation to print RSP on the packages of the goods under the provisions of SWMA or the Rules made thereunder. In terms of section 4A, Central Government had issued Notification No. 49/2008-CE(NT) dated 27.02.2008 and Sl. No. 108 therein refers to as “parts, components and assemblies of automobiles”.
Since in the present case the inner tubes were imported by the appellant in the packing of 50 pieces per cartons and the said tubes were not in individual package, reliance has been placed on Circular No. 625 dated 28.02.2002 which provides that in case of bulk packing there is no requirement of declaring RSP on the packages under the provisions of SWMA or the Rules made thereunder. The findings in the impugned order is that since the appellant has not shown that the inner tubes were sold only in the packing of 50 pieces per cartons the benefit of said circular is not available.
The learned counsel for the appellant has referred to a decision of this Tribunal in Titan Industries Limited vs. Commissioner of Customs, Chennai [2007 (6) TMI 357 - CESTAT, CHENNAI], where the appellant as manufacturer of Titan brand watches had imported button cells declaring them as for own use and cleared on payment of duties based on the transaction value. The adjudicating authority concluded that the impugned imports attracted assessment of CVD on RSP as provided under section 3(2) of the Customs Tariff Act, 1975 and demanded differential duty. Reliance was placed on Circular No. 625 and it was urged that the impugned goods were imported packed in thermo formed trays, each tray holding 100 button cells with 10 such trays shrink wrapped and stacked in a carton and each shipment consisted of Rs.1,50,000/- thousand button cells so packed. It was, therefore, argued that the imports were in bulk packages and did not attract MRP based assessment. In view of the clarification given in the Circular it was held that imported goods do not attract section 4A for the purpose of assessment of CVD. Considering the facts of the present case, it is opined that the decisions in the case of Titan Industries is squarely applicable as the tubes were purchased in bulk and not in retail packaging and are, therefore, not covered for assessment under the provisions of Section 4A.
Conclusion - The declared value cannot be rejected, merely on the statement of the Proprietor. The department has failed to exercise its power in conformity with the provisions of section 14 read with the Valuation Rules so as to adduce cogent reasons to establish the charge of undervaluation. Further, to re-determine the valuation of the imported goods, there are no sufficient evidence satisfying the test of equivalence in comparison to the imported goods. In the absence of requisite exercise to collect cogent evidence to arrive at reassessment, the goods have to be assessed on the basis of the declared value/transaction value.
The impugned order is unsustainable and is hereby set aside. The appeal is, accordingly, allowed.
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2025 (5) TMI 1286
Seeking Rectification of Mistake in the Final Order - wrong comparison of features of various goods - Mistake apparent from the record - correct comparison between the products involved in the impugned Bill of Entries - Tribunal concluded that the goods covered in Table One are the goods which are covered under the previous Bill of Entry dated 16.02.2018 as dealt with in previous Final Order of the Tribunal which was upheld by the Hon'ble Supreme Court in Commissioner of Central Excise, Calcutta versus A.S.C.U. Ltd. [2002 (12) TMI 87 - SUPREME COURT] and Table Two is held to mention, the goods as different from the goods in Table One.
HELD THAT:- The perusal clarifies that the sole ground on which the Rectification of Mistake is allowed is that the error should be apparent form the record. This phrase for “mistake apparent from record” was earlier explained by Hon'ble Supreme Court in the case of T.S. Balaram, Income Tax Officer versus Volkart Brothers - [1971 (8) TMI 3 - SUPREME COURT], wherein it was held that a debatable action of law cannot constitute a mistake apparent from the record on it two opinions are considerable. Such point cannot be said to be error apparent on the face of record. It further clarified that a mistake apparent on record must be an obvious and patent mistake and should not be something which has to be established by a long drawn process of reasoning on the points on which there may conceivably be the two opinions.
The impugned Final Order No. 58770 of 2024 dated 03.10.2024 is in the appeal filed before this Tribunal assailing the said order-in-appeal dated 31.10.2019. Foremost the mistake pointed out i.e. the comparison of features of various goods cannot be appreciated without a long drawn process of reasoning and is a situation where two different views are possible. Consequently, the mistake pointed out is denied to be the error apparent in the present final order. As pointed out by learned authorized representative the Table One of Paragraph 14 is same as the one mentioned in the show cause notice.
Thus, we hold that the appellant through a new Counsel, than the one who made submissions at the time of passing of the impugned final order, is trying to seek re-hearing in the present appeal under the garb of seeking Rectification of Mistake in the final Order dated 03.10.2024. It has already been held that there is no such error as is apparent on face of the impugned final order. Consequently, the application is hereby dismissed. Be consigned to the records along with the appeal, already consigned.
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2025 (5) TMI 1285
Imposition of penalty under Section 112(b) of the Customs Act, 1962 - Allegation of undervaluation - scrap imported from various countries - Entitlement to the same reliefs - appellant, being a co-accused similarly placed as the main accused and other co-accused - HELD THAT:- This Court finds that issue is no more res Integra and has been decided after elaborate arguments and findings, in the in the matter of M/s. Agarwal Metal and Alloys, Vipul Agarwal, Samir Agarwal, Ramesh Kumar H. Jain Vs. C.C.-Kandla [2020 (2) TMI 644 - CESTAT AHMEDABAD], inter alia, absolved the main accused in any charge of under valuation. There can be no reason to uphold the penalty against present appellant on the basis of similarity of facts.
Thus, the appeal of the appellant on penalty is liable to succeed, the penalty of Rs. 2,00,000/- imposed on the appellant under Section 112(b) of the Customs Act, 1962 is liable to be set aside. Same is ordered, accordingly.
Appeal is allowed with consequential relief.
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2025 (5) TMI 1230
Valuation of imported goods - Motor Controller and Electric Tricycle Spare Parts - enhancement of CIF value - rejection of declared value - chang of classification of the item imported Motor Controller from CTH 8503 0090 to CTH 8708 9900 - HELD THAT:- Both sides agree that the same issue in respect of the same appellant came up to be decided by this Bench in COMMISSIONER OF CUSTOMS (PORT) VERSUS M/S. AAHANA COMMERCE PRIVATE LIMITED [2024 (9) TMI 543 - CESTAT KOLKATA]. The Bench has held that 'the correct classification of the goods in question is CTH 8503 0090. Therefore, hold that the Ld. Commissioner (Appeals) has rightly held the classification of the impugned goods under CTH 8503 0090.'
Conclusion - The declared transaction value must be accepted for customs assessment, and the classification under CTH 8503 0090 is correct.
Appeal of Revenue dismissed.
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2025 (5) TMI 1229
Levy of penalties u/s 112(a)(i), 112(b), and 114AA of the Customs Act, 1962 for improper importation of goods - appellant represented Lotus Impex (India) and Ambey Telecom in their alleged importation of the goods - using/signing false declaration - Reliability of statements ade against appellant - HELD THAT:- The appellant has not filed the Bills of Entry for the importation of the goods. The appellant had no role in the importation, filing of Bills of Entry, documentation, examination of the goods or any work whatsoever related to the import and clearance of any of the consignments of Lotus Impex (India) and Ambey Telecom. Thus, the Ld. Principal Commissioner has wrongfully observed in the impugned order that the appellant represented the said firms which is factually not correct.
The allegation against the appellant is that he has introduced the alleged Custom Broker Nasir Uddin to number of importers. The allegation in the Notice reveals that DC Shri. Navneet Kumar connived with various brokers to mis-declare and import the said goods. It is observed that there is no evidence brought on record to substantiate the allegation that the appellant has introduced the customs brokers to the DC Shri. Navneet Kumar. Even if it is accepted that the appellant has introduced some customs brokers to the DC, it cannot automatically lead to the allegation that the appellant has connived to mis declare the goods imported. Thus, the findings in the impugned order by the Ld. adjudicating authority is only on the basis of assumptions and presumptions without any evidence to support it.
The appellant has been implicated in the matter by selective reading of the alleged statements purportedly made by a few named persons under Section 108 of the Act. However, none of the observations in the said statements made against the appellant are corroborated by any other independent materials on record. The said persons have also not been allowed to be cross-examined in spite of specific request made by the appellant. As held by the Hon’ble Courts and this Tribunal, such statements are relevant and admissible only when examined by the adjudicating authority under Section 138B of the Customs Act, which has not been done in the instant case. Hence, such statements cannot be relied upon against the appellant - the said statements cannot be relied upon against the appellant, as there is no corroborative evidence to substantiate the allegations.
Penalty u/s 112(b) of the Act - HELD THAT:- There is no material evidence available on record to establish that the appellant is concerned with any of the acts mentioned in the said section, which make the imported goods liable to confiscation under Section 111 of the Act. The penalty under this section cannot be imposed on the basis of assumptions and presumptions. Accordingly, the appellant has not fulfilled any of the conditions required for imposition of penalty under Section 112(b) of the Customs Act. 1962 and hence, penalty imposed on the appellant under section 112(b) is not sustainable and hence the same is set aside.
Penalty u/s 114AA of the Act - HELD THAT:- The appellant had no role in the importation, filing of Bills of Entry, documentation, examination of the goods or any work whatsoever related to the import and clearance of any of the consignments of Lotus Impex (India) and Ambey Telecom. It is observed that there is no material evidence available on record to establish that the appellant is concerned with any of the acts mentioned in the said section. It is observed that the penalty under this section cannot be imposed on the basis of assumptions and presumptions. Accordingly, the appellant has not fulfilled any of the conditions required for imposition of penalty under Section 114AA of the Customs Act. 1962 and hence, penalty imposed on the appellant under section 114AA is not sustainable and hence the same is set aside.
Conclusion - The appellant had no direct or indirect role in the importation or clearance of the goods, was not involved in handling or dealing with confiscable goods, and did not make or use false declarations or documents. Therefore, the penalties imposed under the respective sections were quashed.
Appeal allowed.
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2025 (5) TMI 1155
Seizure of imported goods - issuance of summons to petitioner - import of over 9,86,000 pieces of tempered glass but the Bill of Entry filed for only 1,00,000 pieces - HELD THAT:- A perusal of the record would show that the adjudicating authority would need to reconsider the amounts to be imposed in this matter and rectify the impugned order.
Let the Petitioner, accordingly, appear before the adjudicating authority on 15th May, 2025 along with all the requisite documents. The adjudicating authority shall rectify the order accordingly and pass a fresh adjudication order within 30 days.
Petition disposed off.
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