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Customs - Case Laws
Showing 341 to 360 of 40545 Records
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2025 (5) TMI 1041
Imposition of penalty for improper importation of goods under section 112 - conscious attempt to evade customs duty - HELD THAT:- 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 Samit Guha cannot be sustained.
This apart, it has been pointed by the learned counsel appearing for CFO that CFO joined M/s. MMTC-Pamp India Pvt. Ltd. as Chief Financial and Technology Officer in July 2020. He was, therefore, not associated when the imports took place as all the Bills of Entry were filed before his joining.
Thus, penalty under section 112(a)(ii) of the Customs Act could not have been imposed upon CFO.
The order dated 31.12.2022 passed by the Principal Commissioner to the extent it imposes penalty upon CFO 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 1040
Benefit of SAFTA exemption notification - Demand under Section 28(8) along with interest and penalty - jointly and severally on two partners of the importing firm - confiscation of 200 metric tonnes of Fortified Refined Palm Olien - COO certificates furnished not give the value of non-originating material - evasion of basic customs duty - Ignorantia Juris Non Excusat - HELD THAT:- We find that the said two certificates of Country of Origin read along with their supporting invoices, do satisfy the percentage of value addition as required in terms of the Rules of Origin. The fact of non-indication of the percentage on the body of the certificate cannot be held against the appellant, as they are not the certificate issuing authorities. As long as the importer-assessee/appellant is able to justify and meet the satisfaction of the norms, along with the cost sheets that have been furnished, which indeed are issued by the overseas suppliers in the country of export viz. Megha Edible Oil Refinery Limited, Dhaka and Shabnam Vegetable Oil Industries., Dhaka, we are of the view that the appellant has satisfied the norms pertaining to value addition. They are therefore eligible to avail of duty concession in terms of Notification No. 99/2011-CUS dated 9 11. 2011.
No doubt the appellant has admitted to their lapse in the matter and it is common knowledge that ignorance of law is no excuse, at the same time we find that the department has no explanation for having continued to hold on to the good in custody, well after the duty payment was done without assigning any reason or intimating the importer to the said effect. Not having given out of charge for nearly two months, quietly putting the blame on the appellant/importer for removal of said goods from the specified area (private parking space), is indeed quite bizarre and unjustified. In the least, the importer ought to have been intimated in writing, for the hold up of clearance with reasons thereto. No such action was taken by the department.
We are of the view that benefit of SAFTA exemption notification is rightly admissible to the imported goods. Therefore, under the circumstances, no question of confiscation of the goods and their release upon redemption and payment of differential duty, is called for . The violation of removal of goods, without Out of Charge (OOC) order however remains. However, considering the fact of their being first time importers and no revenue loss was caused to the Revenue as a result of the aforesaid action of the appellants and that the Revenue had failed to either give Out of Charge or communicate to the importer about the reasons for hold up of clearance or detention etc. of duty paid goods, for almost two months, we refrain from imposing any penalties in the matter on the appellants.
The order of the lower authority is therefore set aside and the appeals, allowed with consequential relief, if any as per law.
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2025 (5) TMI 1039
Imposition of penalty under Section 112 - statements recorded under Section 108 - corroborative piece of evidence - under-valuation of spares of Heavy Earth Moving Machinery imported by Indian importers - differential duty - legal presumption under Section 139 of the Customs Act, 1962 - HELD THAT:- We find that there is nothing to even remotely suggest of an attempt towards the same. While some sundry details are established from the statement of the appellant, there is nothing to establish as to how much of the undervalued imports were actually carried out and how the present appellant was concerned therewith.
In so far as the details as worked out for levy of differential duty is concerned, we note that the order passed by the Co-ordinate Bench of the Tribunal has already discussed and dismissed the same for want of being simply based on un-signed and unattested photocopies, which can lead to no legal presumption under Section 139 of the Customs Act, 1962.
The Co-ordinate Bench vide the detailed order, has already dismissed the enhancement of declared value as lacking in legal validity, in respect of four computers generated print outs/ invoices, that were not proved to be actual transactional invoices and were in a series of negotiating pre-purchase transactions. We also note that the overseas supplier, Mr.Lim Eng Bee, in his Bail Application before the Additional Chief Metropolitan Magistrate, Egmore, had submitted that the impugned invoices were neither “parallel invoices” or “actual invoices”.
Moreover, Mr.Lim Eng Bee at the first opportunity before the Additional Chief Metropolitan Magistrate, Egmore, had pointed out that his statements were neither voluntary nor of his own free will. Thus, the said documents relied upon by DRI have no evidentiary substance.
We also note certain inconsistencies and loose ends in the statements so recorded relied upon by the Revenue which, therefore, render them vague and hollow. This piece of evidence cannot, therefore, be weaved to churn out facts that are reliable, relevant and corroborative piece of evidence to make out the case.
Further, there is nothing on record against the appellant and when the main case has not stood test of judicial scrutiny, we are at our wits end to uphold the order of the lower authority qua the present appellant, and the same is set aside to the said extent.
The appeal filed is allowed.
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2025 (5) TMI 1038
Entitlement for refund claim of Special Additional Duty (SAD) - import goods - no evidence that duty paid on account - goods sold in the market and the same goods suffered levy of VAT - HELD THAT:- A sample copy of TR-6 challan was submitted by learned counsel for the appellant where it is stated to have been issued in the name of the present importer. The appeal paper book is having copies of such TR-6 challans at page No.12, 16, 21 and 25 of the appeal paper book which indicate that the customs duty including SAD was paid by the appellant.
The only contention on the basis of which refund was rejected is that the appellant has not established that the appellant had borne the incidence of customs duty. With the said copies of TR-6 challans, it is established that the appellant had borne the burden of SAD. Therefore, set aside the impugned order and direct the original authority to pay the refund of SAD of Rs.2,87,801/-.
Appeal is allowed.
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2025 (5) TMI 1037
Demand of duty with interest and imposition of a penalty under section 112(a) - non fulfilment of the export obligation and issued show cause notice - default in export obligation under the Amnesty Scheme issued by the Directorate General of Foreign Trade (DGFT) - HELD THAT:- The sole submission advanced by Shri Anurag Kapur, learned counsel for the appellant assisted by Ms. Anisha Arya is that once the regularization has been granted under the Amnesty Scheme, penalty cannot be imposed upon the appellant under section 112(a) of the Customs Act.
In view of the judgment of the Kerala High Court in Saji Sukumaran Nair [2025 (3) TMI 748 - KERALA HIGH COURT] and the decision of the Tribunal in Keshava Medi Devices [2025 (4) TMI 73 - CESTAT CHENNAI], the imposition of penalty under section 112(a) of the Customs Act cannot be sustained as the matter had been regularized under the Amensty Scheme.
The impugned order dated 28.11.20219 insofar as it imposes penalty upon the appellant, therefore, deserves to be set aside and is set aside. The appeal is, accordingly, allowed.
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2025 (5) TMI 1036
Exemption notification permits the use of the imported aircraft exclusively for either Non-Scheduled (Passenger) Services or Non-Scheduled (Charter) Services - violation of the conditions of the exemption notification - customs duty along with penalty under section 112 read with section 140 -HELD THAT:- This issue was examined by a Division Bench of this Tribunal in Escorts Limited vs. Commissioner of Customs (Preventive)- [2024 (6) TMI 169 - CESTAT NEW DELHI]. The observations made by a larger bench of the Tribunal M/s. V.R.L. Logistics vs. Commissioner of Customs-[2022 (8) TMI 720 - CESTAT AHMEDABAD (LB)] that exemption is available to both Non-Scheduled (Passenger) Services and Non-Scheduled (Charter) Services was relied upon to hold
The Directorate General of Civil Aviation had issued a permit dated 24.08.2007 to the appellant to operate Non-Scheduled Air Transport Services (Passenger/Cargo/ Charter). In terms of Condition no. 104 of the Notification, the appellant gave an undertaking to the Deputy Commissioner of Customs that the Aircraft would be used only for providing Non-Scheduled (Passenger) Service, Non-Scheduled (Charter) Service, as the case may be.
The finding recorded by the Commissioner on this issue, therefore, cannot be sustained and is set aside.
The Commissioner has also recorded a finding that though the Aircraft was imported by the appellant for operating it, but the appellant did not operate the Aircraft and gave it on dry lease to M/s. Trans Bharat Aviation Pvt Ltd. and M/s. Prabhatam Aviation Pvt. Ltd.
This finding recorded by the Commissioner is also not borne out from the Notification dated 03.05.2007. The said notification does not provide that it is the importer alone who has to use the Aircraft for Non-Scheduled (Passenger) Services or (Charter) Services and that it cannot be given on lease.
Such being the position it cannot be urged by the department that the appellant failed to ensure compliance of Condition no. 104 of the Notification dated 03.05.2007.
The impugned order dated 19.05.2010 passed by the Commissioner, therefore, cannot be sustained.
Thus, the imposition of penalty upon the Director of the appellant and the Chief Executive of the appellant under section 112 read with section 140 of the Customs Act cannot be sustained.
The impugned order dated 19.05.2010 passed by the Commissioner is, accordingly, set aside. Customs Appeal No. 419 of 2010, Customs Appeal No. 420 of 2010 and Customs Appeal No. 421 of 2010 are, accordingly, allowed.
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2025 (5) TMI 1035
Confiscation of gold biscuits, gold jewellery and Indian Currency - Smuggling - seeking to release the seized Indian currency - imposition of penalties - no documents in support of possession of gold ornaments and foreign origin gold biscuits - term "reasonable belief"- difference in cash in hand at head office and cash in hand as per books of account - applicability of Section 123 of Customs Act, 1962 - HELD THAT:- From perusal of the record, we pass the following order: -
(i) We hold that the officers of DRI had 'reason to believe' that the gold biscuits/bars were smuggled in nature and the gold ornaments were made from smuggled gold. However, the appellants have discharged their liability cast under Section 123 of the Act in respect of the gold ornaments. Accordingly, we hold that the gold ornaments seized are not liable for confiscation.
(ii) The appellants have discharged their burden of proof cast upon them regarding licit purchase of the gold as required under Section 123 of the Customs Act in respect of the 1 kg. gold bar and hence we hold that the same is not liable for confiscation.
(iii) We hold that the 26 pieces of gold have been rightly confiscated by the ld. adjudicating authority in the impugned order as no documents were produced for its licit purchase. Accordingly, confiscation of the 26 pieces of gold biscuits is upheld.
(iv) The Indian Currency of Rs.1,88,00,800/- seized in this case are not liable for confiscation. Accordingly, we order for the release of the same.
(v) The penalties imposed on Shri Naresh Kumar Agarwalla and Shri Atu Dutta, under Section 112 of the Customs Act, 1962, stand reduced to Rs.5,00,000/- and Rs.2,00,000/- respectively. The penalty imposed on Shri Pran Gopal Saha under Section 112 of the Act is set aside.
In these terms, the appeals are disposed of.
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2025 (5) TMI 1034
Classification of the imported goods - hydrocarbon solvent can be treated as 'Mixed Xylene Isomers' - invoking extended period of limitation under Section 28 - demands of differential customs duty along with interest and penalties - misdeclaration and suppression - HELD THAT:- From the test report submitted by the appellants we observe that the test report clearly indicates that the solvent imported by the appellants contains isomers of Xylene as well as 'Ethyl Benzene'. The Ld. adjudicating authority has not considered 'Ethyl Benzene' as an Isomer of Xylene and excluded its weight for the purpose of weight of Isomers in the solvent imported. Accordingly, he has concluded in the impugned order that the impugned goods contained less than 95% by weight of Isomers of Xylene. In view of the HSN Explanatory Notes reproduced supra, the Ld. adjudicating authority accordingly concluded that the imported goods are not classifiable as Mixure of Xylene Isomers under the CTH 29024400.
We find that the molecular formula of Ethyl Benzene is C8H10. It has the only two atoms C and H common to Xylene and molecular formula is same as that of Xylene i.e. C8H10. We find that the molecular formula of all other Isomers of Xylene classified under the CTH2902 are C8H10. The molecular formula of 'Ethyl benzene is also C8H10. We also find that the structure of o-Xylene, m-xylene and p-xylene and Ethyl Benzene are all different from each other. Thus, as per the definition of 'Isomers' mentioned above, we observe that o-Xylene, m-xylene and p-xylene and Ethyl Benzene all are Isomers of Xylene. From the test report submitted by the appellants, we observe that the imported goods is a mixture of Xylene Isomers, and has more than 95% of weight of all Isomers of Xylene. Hence, we observe that as per the HSN Explanatory Notes the goods imported are appropriately classifiable under the CTH 29024400. Thus, we hold that the reclassification of the imported goods under the CTH 27073000 in the impugned order is legally not sustainable. Accordingly, we hold that the differential customs duty along with interest confirmed in the impugned order is not sustainable and hence we set aside the same.
From the Invoice extracted, we find that the same goods are domestically classified under the CTH 29024400, which has been accepted by the Central Excise/GST authorities. Accordingly, we hold that the goods imported by the appellant are appropriately classifiable under the CTH 2902400. Thus, we hold that the differential custom duty along with interest confirmed in the impugned order by re-classifying the imported goods under the CTH 27073000 is not sustainable and accordingly, we set aside the same.
It is seen that the appellant M/s. Kunjal Synergies have been importing the same goods since 2011 and cleared said goods by declaring the same as Mixed Xylene Isomers under the CTH 29024400 and no questions have been raised. In the present case also, we observe that no classification issue was raised when the importer M/s. Kunjal Synergies have filed the warehousing Bills of Entry and warehoused the goods. Thus, we find that the appellants have not suppressed any information from the Department. Hence, we hold that the Show cause Notice issued on 04.04.2016, demanding differential customs duty for the clearances effected from 2011 onwards, by invoking extended period of limitation as provided under Section 28(4) of the Customs Act, 1962, is not sustainable. Thus, the demands confirmed in the impugned order by invoking extended period of limitation is liable to be set aside on the ground of limitation also.
Regarding the penalties imposed on the appellants, we observe that the allegation of mis-declaration raised against the appellants is not sustained. We also find that suppression of facts with intention to evade the payment of customs duty has not been established in this case. Accordingly, we hold that the penalties imposed on the appellant companies as well as its Directors under section 114A and 114AA of the Customs Act, 1962 are not sustainable and accordingly, we set aside all the penalties imposed on the appellants in the impugned order.
Thus, we set aside the impugned order and allow the appeals filed by the appellants, with consequential relief, if any, as per law.
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2025 (5) TMI 1033
Misdeclaration of old car as new car - Confiscation of the imported second-hand car - seeking release of the car - re-determination of its Value and Customs Duty - fraudulent importers of high-end cars - Willingness to pay the differential duty along with interest - term “liable” and its meaningful expression as made use of in Section 125(2) - HELD THAT:- It is on record that the vehicle was declared as “new” at the time of import, while during investigations it was found to be “old and used” having been registered with DLA in UK. Also, the investigations conducted led the authorities to realise, that the value of the imported vehicle was also misdeclared and the appellants along with Rajesh Jethani (operating out of Dubai, UAE) had arranged for finance for the payment of customs duty as well as other incidental expenses besides the remunerations of the CHA firm.
The appellant in proceedings before us has also held himself out to be, a bonafide purchaser of the said imported vehicle and hence the owner thereof. The vehicle is registered in the appellant’s name with the RTO, Surat. The appellant by virtue of himself holding out to be a bonafide purchaser of the imported vehicle has thereby admitted and ascribed to himself the ownership rights of the vehicle. The adjudicating authority in para 8.8 of the order-in-original has held that the present appellant is a ‘bonafide purchaser.’ However, the same is alluded to be based as per the appellant’s contentions and in the context of the show cause notice not attributing to the appellant’s role. A clear look at the entire context would reveal that such an observation was the initial prologue to the evaluation of evidence and was certainly not made as a categorical assertion/finding, going by the initial statements and submissions as made by the appellant. But, were it to be so, the automatic liability for payment of differential duty on the appellant under Section 125(2) of the Act ibid is inescapable and a foregone conclusion, both on account of his claim to be the owner of the said vehicle as well as the redemenor thereof.
In nutshell the ownership rights can be construed upon a person who has the right to possess, use and enjoy the thing owned, and a right to consume, destroy or alienate it, which may be indeterminate in duration and residuary in character.
Viewed within the perimeter of the term “owner”/”ownership” of the imported vehicle, and the factual assertions as presented in the matter, there is no doubt that the appellant is the owner of the said vehicle both de jure as well as de facto, amply demonstrated among others by the fact of registration of the vehicle in his name with RTO, Surat.
A reading of sub-sections (1) and (2) of Section 125 together makes it clear that liability to pay duty arises under sub-section (2) in addition to the fine under sub-section (1). Therefore, where an order is passed for imposition of fine in lieu of confiscation of goods, the payment of Customs duty shall only be referable to sub-section (2) of Section 125 of the Customs Act. It would not attract Section 28(1) of the Customs Act which covers the cases of duty not levied, short levied or erroneously refunded etc. The requirement for payment of duty under Section 125(2) would be an integral part of proceedings, relating to confiscation and consequential orders thereon.
In view of what is thus stated, it is obvious that law on this issue is well settled, if the option to redeem the goods is not exercised, the duty in addition to the fine so payable as per provisions of Section 125 cannot be demanded since on confiscation the property in the goods, if not redeemed, would continue to vest with the Government. However, having exercised the option of Section 125, there obviously is no excape from payment of duty and charges, as applicable.
It thus clearly flows that there is no discretion vested with the “owner”, having availed redemption, for not to pay duty and charges as due in terms of section 125 (2) in itself. Payment of duty, under the circumstances has no bearing with the provisions of Section 28 of the Customs Act, that would ordinarily seek to recover duties not levied/not paid/short levied or short paid etc. It also be noted that the word used in the statute is “shall”, making the factum of need to pay duty evidently binding and leaving no scope to read shall as “may” and thereby derive a leeway for the owner/redemnor of goods.
The apex court in the case of Union of India vs. Umesh Dhaimode [1997 (2) TMI 140 - SC ORDER] had categorically held that the appellate authority was vested with powers of remand, as remand necessarily entailed annulling the decision under appeal.
Therefore, we hold no legal infirmity in the impugned order passed by Commissioner(Appeals), which remands the case back to the original authority for a de novo adjudication in the matter. The order of Commissioner(Appeals) is therefore required to be upheld and maintained. We thus disallow and dismiss the appeal filed by the appellant.
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2025 (5) TMI 945
Benefits pertaining to the Special Additional Duty of Customs (SAD) and the Additional Duty of Customs - it was held by High Court that 'Bearing in mind the findings of fact which have come to be recorded in both the final order of the Tribunal as well as the order-in-original passed by the Commissioner, it is found that the appeal fails to raise any substantial question of law which would warrant consideration.'
HELD THAT:- As, prima facie, it appears that the High Court has not gone into the questions raised by the petitioner, notice issued returnable after six weeks.
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2025 (5) TMI 944
Rejection of the Petitioners' application for Advance Authorisation (AA) for import of Raw Petroleum Coke (RPC) intended for manufacture and supply of Calcined Petroleum Coke (CPC) to Special Economic Zone (SEZ) units - deemed exports or not - entitlement to Advance Authorisation under the Foreign Trade Policy, 2023 - applicability of DGFT Notification No.68/2023 dt.07.03.02024, the revised policy condition 06(b)(iii) import of RPC by on Actual use basis or not - HELD THAT:- The Hon’ble Supreme Court in the case of M.C. Mehta Vs. Union of India and Others [2018 (11) TMI 1352 - SUPREME COURT] while hearing interlocutory applications, wherein the Union of India through the Ministry of Environment, Forests and Climate Change filed and affidavit on 08th October, 2018 regarding use of calcined pet coke (CPC) in Aluminium Industry, held that the calcined pet coke (CPC) (domestic as well as imported) can be used as raw-material for anode making in the Aluminium Industry with the revised BIS specifications.
In the said order, the Hon’ble Supreme Court, based on the report given by the Central Pollution Control Board (CPCB) dated 04.10.2018 observed that as per the BIS guidelines, calciners are permitted to use high sulphur containing raw petroleum coke for making CPC having sulphur content less than 3.5%. While recording the statement of the learned Amicus Curiae the view expressed by the CPCB are also acceptable to EPCA and accordingly disposed of the applications observing that the raw pet coke (domestic and imported) can be used as a feedstock for producing calcined pet coke. In the said order, the applications filed by the petitioner herein seeking certain directions, while considering the affidavit dated 23.08.2018 stating that 11 contracts have been entered into on or before 26.07.2018 for the import of Anode grade raw pet coke.
It is pertinent to note that in the Notification No.68/2023, dated 07.03.2024 the authorisation for restricted imports, condition No.3 that “Import of RPC by Calciners shall be on Actual User basis and shall not be transferred to any other unit(s) including SEZ unit(s). Export of CPC by Calciners shall not be permitted” is contrary to the orders passed by the CAQM, dated 15.02.2024 and also to Clause VI of the Notification dated 07.03.2024 and the Minutes of the Meeting held on 27.03.2024 for allocation for import of raw petroleum coke for CPC manufacturing and Calcined Petroleum Coke for Aluminium Industry for the Financial Year 2024-25.
In view of the facts that the respondents earlier permitted the petitioner to export the CPC manufactured by it to SEZ Units and granted advance authorisations to the petitioners on 14.05.2024, 13.08.2024 and 28.10.2024, and in view of the preceding analysis there is no justification in issuing DGFT Notification No.68/2023 dated 07.03.2024 to the extent of revising the policy conditions i.e. 06(b)(iii) import of RPC by calciners and the said revised policy is not in consonance to the CAQM order dated 15.02.2024 passed in pursuance to the Hon’ble Supreme Court order in M.C. Mehta and the Minutes of the Meeting held on 27.03.2024, which is again in consonance to interpretation of policy under Chapter-II of General Provisions Regarding Imports and Exports of Foreign Trade Policy, 2023.
In the light of the orders passed by the CAQM dated 15.02.2024, pursuant to the order dated 10.10.2023 passed by the Hon’ble Supreme Court in the case of M.C. Mehta in W.P. (Civil) No.13029 of 1985 and the Minutes of the Meeting held on 27.03.2024 the Deficiency Letter dated 15.02.2024 is contrary to the CAQM Order and the DGFT Notification which implements the CAQM Order. The petitioner has efficacious remedy of review under Section 16 of the Foreign Trade (Development and Regulation Act), 1992.
The impugned rejection letter dated 05.02.2025 bearing File No.09AX04000927AM25 and the Deficiency Letter dated 15.01.2024 bearing File No.09AX04000927AM25 are hereby set aside and the matter is remitted to the respondents authority for fresh consideration with respect to the petitioner’s case to the extent of granting entitlement to advance authorisation under Foreign Trade Policy, 2023. The DGFT shall give personal hearing for petitioners’ grievance.
Conclusion - The rejection letter dated 05.02.2025 is not a reasoned order as it fails to consider the explanation given by the Petitioners and the express provisions of the Commission for Air Quality Management (CAQM) Order dated 15.02.2024 which permits deemed exports to SEZ units. The Petitioners are entitled to a fresh consideration of their application for Advance Authorisation with a personal hearing, and pending such consideration, they are permitted to supply CPC to the Vedanta SEZ unit.
Petition disposed off.
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2025 (5) TMI 847
Valuation of imported Christmas light - enhancement of value based on NIDB data - HELD THAT:- The similar issue has been dealt by this Tribunal in the case of Commissioner of Customs (Port), Kolkata Vs. M/s Bajaj Writing Aid [2023 (10) TMI 1522 - CESTAT KOLKATA] wherein this Tribunal has held that 'the Department has not made any attempt to follow the procedure given under the Valuation (Determination of Value of Importers Goods) Rules 2007 and has simply adopted the NIDB data and selectively enhanced value. As discussed above, the Commissioner (Appeals), has given a detailed finding along with reasons while setting aside the Order-in-Original. We do not find any reason to interfere with the same. Accordingly, we dismiss the Appeal filed by the Revenue.'
The enhancement of values in the present case is not sustainable in the eyes of law - the appeal filed by the Revenue is dismissed.
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2025 (5) TMI 846
Actual importer - importer (who filed the bills of entry and cleared the goods) of goods or subsequent purchaser - appellant, who purchased the imported vehicle after customs clearance, can be treated as the actual importer liable for payment of differential customs duty or not - mis-declaration of CIF value of the car - Confiscation - redemption fine - Penalties.
Actaul importer - HELD THAT:- The vehicle was imported by Mr. Arshad Vayal Peedika by availing the benefit of ‘Transfer of Residence’. The vehicle was cleared at concessional rate of duty as applicable to cases of transfer of residence by using the passport no. E2603762 of Mr. Arshad Vayal Peedika. Thus, it is observed that it is a case of baggage/transfer of residence and not a regular import. Mr. Arshad Vayal Peedika is the person who has availed the transfer of residence and hence, as per records, he is the actual importer in whose name the vehicle had been cleared by the Customs Authorities. The investigation found that the Customs duty had been paid by the appellant viz. Mr. Sachin Joshi and that the vehicle had also been subsequently registered and used by him for many years. However, the person who purchased the vehicle from the importer, in whose possession the vehicle was seized cannot be considered as the actual ‘importer’ of the vehicle.
Mr. Arshad Vayal Peedika, who filed the Bill of Entry and in whose name the vehicle was cleared, is to be considered as the actual importer of the vehicle in question. Hence, the differential duty, if any, was required to be demanded from the actual importer Mr. Arshad Vayal Peedika. However, it is observed that the demand of differential Customs duty has not been raised against Mr. Arshad Vayal Peedika in the present case. Accordingly, the differential duty demanded from Mr. Sachin Joshi is not sustainable and thus the same is set aside.
Confiscation - redemption fine - HELD THAT:- It is observed that the appellant is not the importer of the car and did not have any role in its import or clearance thereof. The Department has failed to bring in any corroborative evidence on record to substantiate their allegation that the appellant was the actual importer of the vehicle in question and not Mr. Arshad Vayal Peedika. In these circumstances, the confiscation of the vehicle from the appellant, who is not the importer of the car and who had only purchased the said vehicle, is not sustainable and accordingly, the order of confiscation made vide the impugned order set aside. Accordingly, the demand of redemption fine in lieu of confiscation from the appellant is not sustainable.
Penalties imposed on the appellant under Section 114A and Section 114AA of the Customs Act, 1962 - HELD THAT:- As per Section 114A, penalty is imposable on the person who short paid or not paid the duty due to wilful misstatement or suppression of facts. It is imposable on the person who is liable to pay the duty. As the appellant is not the person who is liable to pay the duty in this case, the penalty under section 114A cannot be imposed on him. Penalty under section 114AA is imposable for using false and incorrect material in the transaction of business. In this case, the appellant has not filed any document for clearance of the car. Hence, it is clear that he has not made any false declaration for clearance of the car. Accordingly, penalty u/s 114AA cannot be imposed on him. Accordingly, the penalties imposed under sections 114A and 114AA of the Customs Act, 1962 set aside.
Conclusion - i) The liability to pay customs duty and differential duty lies with the actual importer who files the Bill of Entry and clears the goods, not with subsequent purchasers. ii) Confiscation and redemption fine under Section 125 apply only to the importer or person from whom goods were seized who opts to redeem the goods; bona fide purchasers who do not exercise this option cannot be held liable. iii) Penalties for misdeclaration or suppression under Sections 114A and 114AA cannot be imposed on persons who did not participate in import clearance or make false declarations. iv) Goods cleared for home consumption cease to be imported goods, and confiscation post-clearance requires proper revision or cancellation orders.
Appeal disposed off.
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2025 (5) TMI 801
EOU - Seeking revocation of the alert dated 13th February 2020 and the release of the pending duty drawbacks - HELD THAT:- The order of CESTAT came to be challenged before this Court in Commissioner of Customs, Air Cargo Export v. M/s Sans Frontiers [2023 (12) TMI 695 - DELHI HIGH COURT] and M/s Sans Frontiers v. Commissioner of Customs (Exports). The said two proceedings were decided finally on 12th December 2023 in which the Court has observed that the demand was made within a reasonable period when the Department came to know of the wrong availment of the said duty drawbacks. In respect of the belated issuance of the Show Cause Notice, the Court deemed it appropriate to refrain from adjudicating on the said issue.
The said judgement was challenged before the Supreme Court by the Petitioner in M/s. Sans Frontiers vs. Commissioner of Customs, Air Cargo, Export wherein a stay has been granted by the Court.
In view of the fact that the judgment dated 12th December 2023 has been stayed, there can be no justification for holding back of duty drawbacks - Let the duty drawbacks be now released to the Petitioner within a period of 30 days in accordance with law.
Petition disposed off.
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2025 (5) TMI 779
Maintainability of this writ petition against the impugned preliminary findings dated 30.10.2024 and Addendum Notification dated 16.12.2024 - Prayer to prohibit the respondent authorities from issuing notification levying provisional duty under Rule 13 of the Custom Tariff (Identification, Assessment and Collection of Anti-Dumping Duty) Rules, 1995 - inclusion of specialty grades of PVC Suspension Resins (SPVC) imported by the petitioners for manufacturing Chlorinated Polyvinyl Chloride Resin (CPVC) within the scope of the Product Under Consideration (PUC) in the anti-dumping investigation.
Maintainability of this writ petition against the impugned preliminary findings dated 30.10.2024 and Addendum Notification dated 16.12.2024 - HELD THAT:- Against the preliminary findings arrived at by Designated Authority, it cannot be said that there is effective remedy available as per section 9C of the Act, more particularly, when power of imposing anti-dumping duty on dumped articles emanates from section 9A of the Act which contemplates that any article is exported by an exporter or producer to India from any country at less than its normal value on such importation in India, the Government of India is entitled to notification to impose anti-dumping duty not exceeding the margin of dumping in relation to article. While section 9B of the Act contemplates certain circumstances wherein no such anti-dumping duty can be imposed and section 9C of the Act provides an appeal to the Customs Excise and Service Tax Tribunal against the order of determination or review regarding the existence, degree and effect of any substitute or dumping in relation to import.
On plain reading of above rule 4 of the Anti-Dumping Rules, the Designated Authority is empowered to investigate, identify and submit its findings provisionally or otherwise to the Central Government as to normal value and injury, apart from recommending to the Central Government about the amount of anti-dumping duty and the date of commencement of the duty - On basis of such preliminary findings, the Central Government is to impose levy of provisional duty and on further investigation, Designated Authority as per Rule 16 of the Anti-Dumping Rules is to arrive at final findings and determination is to be made as per Rule 17 in the form of recommendation and thereafter Central Government issues levy within the period of three months of the date of publication of final findings by Designated Authority as per Rule 18 of the Anti-Dumping Rules.
Therefore, considering the scheme of the Act and on perusal of section 9C of the Act, it is clear that an appeal lies only after the determination which comes only after final findings given by the Designated Authority under Rule 17 of the Anti-Dumping Rules and levy of duty by the Central Government under Rule 18 of the Anti-Dumping Rules and therefore, it cannot be said that there is alternative remedy of appeal available to challenge the preliminary findings which is impugned in this petition.
Exclusion of specialized grades - HELD THAT:- Designated Authority has come to the conclusion that DCW Limited has used domestically produced subject goods for manufacturing CPVC. However, on perusal of the above data it is clear that during investigation period i.e. upto 30.09.2023, DCW has consumed SPVC Resins of 76 tons out of 1498 metric tons of DCW Pipe Grade and only 10 Metric tons out of 742 metric tons of DCW Fitting Grade whereas it has consumed imported SPVC Resin of other manufacturers in large quantity. Hence, findings arrived at by the Designated Authority that domestic industry has demonstrated that PVC Resins manufactured by it is like article to the product imported in India which is used for manufacturing of CPVC is contrary to the definition of like article as such domestic industry has failed to point out the manufacturing of SPVC Resin of the grade which is required to be used by the petitioners for production of CPVC Resin used for manufacture of pipes of water for human consumption. It appears that Designated Authority has failed to consider the basic contention of the petitioners that the specialty grade SPVC Resins imported by the petitioners for the purpose of CPVC resin is used only for manufacture of water pipes for human consumption and has gone on tangent that there is no exclusive group of PVC Suspension Resin that is commonly used for the purpose of making CPVC Resin, more particularly, when no specialty grade SPVC as claimed by the petitioners is available in India or manufactured by any domestic industry - Designated Authority therefore, has failed to take into consideration the basic standard of proof to be applied for arriving at conclusion that the articles which are imported by the petitioners being specialty grade SPVC cannot be considered as “like article” manufactured by the domestic industry.
On perusal of the BIS License issued to DCW Limited on 22.06.2024 though such standard came into force on 20.10.2022 such standard is not mandatory. Designated Authority has failed to consider the similar SPVC Resin carrying the same ‘K’ value imported by the petitioners and agents acting upon instructions of respondent No. 4 and without such thorough investigation to substantial extent accepting what is submitted by the respondent nos. 4 to 6, the Designated Authority has arrived at a conclusion that specialty grades of SPVC Resins imported by the petitioners are “like article” manufactured by domestic industry.
On perusal of the Standard Operating Practices for Trade Remedy Investigation, it appears that Designated Authority has not identified the PUC at the time of initiating investigation by dealing with the objections raised by the petitioners, more particularly, when the scope of product under consideration can be restricted during the course of investigation but cannot be enhanced or enlarged after such initiation. Therefore, Designated Authority was required to consider the submissions and objections raised by the petitioners during investigation only. It is true that different grades, forms, types, etc. may not be in different products in absence of specific definition of product but clause 3.1 where Article 2.1 of the Anti-Dumping Agreement refers to the “like product” whereas the Act and the Anti-Dumping Rules use the word “like article” to indicate product under consideration which is matter of investigation. There is no specific definition or description of th product under consideration under the Anti-Dumping Rules however, it is the single most important starting point of an investigation and section 2 (d) defines “like article” to mean a product which is “like article” or in absence of “like article” most similar in characteristics and uses to the article subject to investigation. Therefore, while considering the “like article”, PUC is required to be freezed at the time of initiation of investigation only. Therefore, determination of PUC as “like article” in Anti-Dumping investigation holds the key for establishing dumping and injury and the fallacies in the same could lead to the entire investigation being void.
Designated Authority ought to have made further investigation at this stage only to examine whether specialty grade SPVC Resin imported by the petitioners can be considered as “like article” to become part of the “product under consideration” imported from subject countries within the scope of section 2 (d) of the Act or not, more particularly when the Designated Authority has not considered the data available on record regarding captive consumption of specialty grade of SPVC Resins produced by the Domestic Industries during the period of investigation - Designated Authority has only relied upon the data placed on record by the respondent No. 6 which could not have been considered to arrive at a conclusion that there is no specialty grade SPVC and hence the question of excluding the same from PUC does not arise. Therefore, findings recorded in Addendum Notification dated 16.12.2024 arrived at by the Designated Authority are not tenable.
Conclusion - The Specialty Grade SPVC Resins imported by the petitioners for manufacture of CPVC to be used for manufacture of the safe and non-hazardous CPVC pipes and fittings for potable water supply are to be excluded from the “product under consideration” for the purpose of investigation initiated by the Designated Authority in absence of any classificatory investigation carried out while determining the “product under consideration” as there is clear procedural lapse on part of the Designated Authority as per Manual of Operating Practices for Trade Remedy Investigations to come to such preliminary findings. Respondent Designated Authority is therefore directed to exclude specialty grade SPVC Resins imported by the petitioners for manufacturing of CPVC from the scope of PUC in the further investigation as such specialty grade SPVC Resins are neither produced by the domestic industry nor were they technically or commercially substitutable and interchangeable with the grades commercially produced in the domestic industry.
Petition allowed in part.
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2025 (5) TMI 778
Appropriate forum - maintainability of appeal against the rejection of the special warehouse license application under Section 58A of the Customs Act, 1962 before the Tribunal under Section 129A of the Customs Act - correctness of rejection of the Appellant's special warehouse license application on account of a prior penalty under Section 112(a).
Maintainability of appeal against the rejection of the special warehouse license application under Section 58A of the Customs Act, 1962 before the Tribunal under Section 129A of the Customs Act - whether the impugned order (rejecting the license) can be considered a "decision or order" of the Principal Commissioner passed as an adjudicating authority? - HELD THAT:- Firstly, the term "adjudicating authority" is defined in Section 2(1) of the Customs Act to mean "any authority competent to pass any order or decision under this Act," with only a few specific exclusions (the Central Board of Indirect Taxes & Customs, the Commissioner (Appeals), and the Appellate Tribunal itself). The Principal Commissioner of Customs is certainly an authority competent to pass orders under the Act, indeed, Section 58A of the Customs Act itself confers upon that officer the power to decide on granting or refusing a license. Thus, on a plain reading, when the Principal Commissioner considers a license application and either grants or refuses it, he is acting as an adjudicating authority (since he is making a decision under the Customs Act). It is immaterial that this decision is not in a traditional revenue-demand context or that it is communicated by a letter; what matters is that a right or privilege conferred by the statute (to seek a license) has been finally decided by such competent authority. In this instant case, the Appellant's legal rights are affected i.e. it has been denied the opportunity to operate a special warehouse and there is no further departmental appeal available and hence, the appellant is an ‘aggrieved person’.
When the Principal Commissioner considers a license application and either grants or refuses it, he is acting as an adjudicating authority (since he is making a decision under the Customs Act). It is immaterial that this decision is not in a traditional revenue-demand context or that it is communicated by a letter; what matters is that a right or privilege conferred by the statute (to seek a license) has been finally decided by such competent authority. In this instant case, the Appellant's legal rights are affected i.e. it has been denied the opportunity to operate a special warehouse and there is no further departmental appeal available and hence, the appellant is an ‘aggrieved person - The department cannot be allowed to re-argue this point. In view of the above, the impugned order dated 08.07.2024, conveying the Principal Commissioner’s rejection of the Appellant’s license application, is an appealable decision under Section 129A (1) of the Customs Act. The appeal be held to be maintainable before the Tribunal.
Correctness of rejection of the Appellant's special warehouse license application on account of a prior penalty under Section 112(a) - HELD THAT:- Section 58A of the Customs Act provides for licensing of special warehouses wherein certain classes of imported goods (as notified by the Board) may be deposited without payment of duty. The power to grant the license is vested in the Principal Commissioner Commissioner of Customs. The section itself lays down no specific criteria or disqualifications except that the grant is "subject to such conditions as may be prescribed." The conditions and procedural requirements are prescribed in the Special Warehousing Licensing Regulations, 2016 (issued under the authority of Section 157 read with Section 58A of the Customs Act). Regulation 3 of the 2016 Regulations deals with eligibility. Regulation 3(2) enumerates certain conditions under which the license shall| not be issued to an applicant. Among "the these, (c) reads: the Principal Commissioner or Commissioner shall not issue a license if the applicant has been penalized for an offence under the Customs Act, 1962, the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994".
Admittedly, beyond the bear fact of penalty, the Principal Commissioner in the order has not pointed out to any other factor which would impugn the appellant’s ability/suitability to operate a Special Bonded Warehouse. There is also no whisper or doubt about insolvency or any pending criminal investigation; nor is there any finding with regard to technical shortcomings in the proposed facility. In fact, the appellant’s prior conduct insofar as complaint is concerned, was limited to a one-of incident, for which it was penalized. That incident, as discussed, was certainly not in the nature that would point to dishonesty, rather it was relating to a disputed exemption on imported goods. Hence, denying the license on this single criteria is not justified.
Conclusion - The impugned order is not sustainable, since it is based on an erroneous interpretation of Regulation 3(2)(c) and Section 58A of the Customs Act. Accordingly, the impugned order deserves to be set aside.
Appeal allowed.
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2025 (5) TMI 673
Right of appropriation of the gold and gold jewellery recovered and confiscated by the Customs Department - 45 kg. of gold was loaned by the MMTC to Mr. S S Kanda (NRI) who failed to export ornaments of about 19 kgs - S.S. Kanda in breach of the conditions imposed by the MMTC pledged the gold with Indian Bank & vanished - who has its first charge/lien over the hypothecated stocks of gold and jewellery? - it was held by High Court that 'As Sh.S.S. Kanda did not have ownership rights in the gold and did not create a valid pledge/hypothecation over the said gold in favour of the Indian Bank set aside the impugned order passed by the DRAT dated 04.02.2011 and restore the order of the DRT dated 22.02.2005 insofar as it holds that the MMTC has the first charge over the recovered gold.'
HELD THAT:- It is not in dispute that the Customs Duty along with penalty and interest to the tune of INR 2,27,85,293 came to be deposited by MMTC with the Department on 19.08.2005. In such circumstances, the confiscated gold must be restored to MMTC - The claim of the banks on the principle of first charge over the gold should fail on the simple ground that the entire consignment of gold stood confiscated way back on 20.06.2000 by the Department.
Appeal disposed off.
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2025 (5) TMI 672
Short-payment of customs duty - classification of imported goods - various types of fruit pulp or fruit juices or fruit juice-based drinks, including inter alia Lemoneez - to be classified under Tariff Item 2009 31 00 (juice of a single citrus fruit) or under residuary item 2106 90 19 as a soft drink concentrate? - levy of penalties - HELD THAT:- It is observed that initially the appellant had inadvertently classified the impugned goods under Tariff Item No. 2202 99 20, but during the course of hearing, have submitted that the impugned goods are appropriately classifiable under Tariff Item 2009 31 00, instead of the inadvertent classification made by them earlier while filing bills of entry for home consumption. In this regard, it is seen that although the appellant no. 1 had inadvertently mis-classified the goods under an incorrect Tariff Item, since the GST rates for both the classification are the same and thus, there is no revenue loss for such mistake committed by the appellant no. 1.
Classification under CTH 2009 and/or 2106 is determined on the basis the composition of the product and the methodology involved in preparing or extracting the same. The classification is not based on end usage of the products. Had the intention been to classify the goods on the basis of end use, then even lemons would have been classified under CTH 2106 as the same can also be used for preparation of salads, Indian curries, marinade chicken/ meat, etc.
It has also been alleged in the impugned order that the appellant no. 1 has wilfully mis-stated / suppressed the fact by way of misclassifying the goods so as to avoid payment of IGST @18% as applicable on the impugned goods and that the appellant no. 1, working under the regime of self- assessment, failed to place correct facts and figures before the assessing authority. It is observed in this regard that mere misclassification of goods cannot be held to be suppression more so when there is no allegation of incorrect description of goods and other material particulars in the Bills of Entry filed by the appellant no. 1.Merely because the appellant no. 1 operates under self-assessment regime, that does not automatically make the charges of suppression valid against the appellant no. 1 - the appellant no. 1 has rightly classified the impugned goods under CTH 2009 and hence, the demand confirmed vide the impugned order classifying the same under CTH 2106 is unsustainable and liable to be set aside.
Only those preparations which are used to make lemonade or other beverages, where the concentrated fruit juice is added with citric acid (to take its acidic content more than that of natural juice), essential oils of fruit, synthetic sweetening agents etc. would be classifiable under tariff heading 2106, unlike the instant case, where no citric acid or essential oils or synthetic sweetening agents, etc. are added - the classification adopted by the Ld. Commissioner under Tariff Item No. 2106 90 19 to confirm the demand in the instant case is not acceptable.
Since the demand itself does not survive, the question of demanding interest or imposing penalties on the appellant no. 1 does not arise.
Regarding the penalty imposed on the appellant no. 2, namely, Shri Ashok Kumar Sinha under Section 117 of the Act, we find that the said penalty has been imposed on the appellant no. 2/CHA on the allegation that he had not properly advised the client regarding classification of the product. Since there is no infirmity in the classification of the product, we do not find any merit any merit in the penalty imposed on the appellant no. 2. Accordingly, the penalty imposed on the appellant no. 2 is set aside.
Conclusion - i) The impugned goods are rightly classifiable under Tariff Item No. 2009 31 00 being the juice of a single citrus pulp as claimed by the appellant. Accordingly, the differential IGST demanded in the impugned order is set aside. Since the demand is held to be not sustainable, the question of demanding interest or imposing penalties on the appellant no. 1 does not arise. ii) The order of confiscation of the impugned goods, along with imposition of redemption fine, is set aside. iii) The penalty imposed on the appellant no. 2 is also dropped.
Appeal allowed.
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2025 (5) TMI 671
Mis-declaration of description of export goods - 81 MT and 135 MT of Muriate of Potash (MoP), which were declared as Sodium Nitrate in shipping documents - penalties under Sections 114 and 114AA of the Customs Act, 1962 - HELD THAT:- The Appellant Nos.(3) & (5) have expired as per the ld.Counsel for the Appellants, Shri K.K.Sanyal. As Shri Samir Bhattacharya [(Appellant No.(3)], partner of M/s Overland Agency and Shri Lakshman Kumar Mishra [Appellant No.(5)], proprietor of M/s Agrani International, have expired, therefore, both the appeals against these two appellants, get abated - it is furher noted that the goods were allowed to be redeemed to the owner of the goods in question, which is under challenge before us by the Revenue and the proprietor of M/s Agrani International, has already been expired, therefore, the appeal filed by the Revenue is also abated.
Appellant Nos.(1),(2) & (4) are the Customs Broker and the Appellant No.(6) is involved in the import of the impugned goods and Appellant No.(7) is the exporter of goods.
It is found that in case, CHA and transporter are knowing about the goods in question, which is MoP as they are contradictory from its reports showing the goods MoP/Sodium Nitrate. Moreover, it is coming out in this case that the appellant has replaced the samples during the course of taking samples from the stock. In that circumstances, the actual charge against the said appellants, CHA & the transporter, remains unproved. Therefore, no penalties are imposable on the appellants, Shri Santosh Kumar Jha, M/s Overland Agency, Shri Probhat Kumar Ghosh & Shri Kanulal Sarkar, accordingly, the penalties imposed on them are set aside.
The goods supplied by Shri Kailash Khanna, was taken to Dock for the purposes of export and such consignments were intercepted and seized. He stated that he has procured the goods from M/s Maa Maa Traders, Delhi through an agent, namely, Shri Ankur Bhatia, but M/s Maa Maa Traders, Delhi, was found to be non-existent and Shri Kailash Khanna failed to prove from where he has procured the impugned goods - Shri Kailash Khanna, was having active role in mis-declaration of the goods. Accordingly, the penalty imposed on Shri Kailash Khanna, is confirmed.
Conclusion - i) Penalties imposed on Shri Santosh Kumar Jha, M/s Overland Agency, Shri Probhat Kumar Ghosh & Shri Kanulal Sarkar, are dropped. ii) Penalty imposed on Shri Kailash Khanna is confirmed. iii) Shri Samir Bhattacharya and Shri Lakshman Kumar Mishra, proprietor of M/s Agrani International, have expired, therefore, their appeals are abated. iv) As the proprietor of M/s Agrani International has expired, consequently, the appeal filed by the Revenue against M/s Agrani International, gets also abated.
Appeal disposed off.
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2025 (5) TMI 670
Correctness in entertaining the plea of the assessee and dropping further proceedings - power of Revenue to challenge the eligibility or otherwise of the assessee for the benefit of TPS which is the scheme launched by DGFT, which is the proper authority - exemption from Customs Duty on imported plastic granules under the Target Plus Scheme (TPS) when the imported goods did not have a direct nexus with the exported products (rice and spices).
Whether the Commissioner was correct in entertaining the plea of the assessee and dropping further proceedings? - HELD THAT:- Considering the reasoning adopted by the Third Member and, in effect, the majority opinion of this Tribunal in MMTC Ltd. [2016 (2) TMI 1008 - CESTAT BANGALORE], in the present case too, the exported goods are ‘rice and spices’ which belong to the food group. The imported goods are ‘plastic granules’, which certainly do not belong to the food group. It may be true that the plastic bags being produced from the granules are necessary to export the rice and spices. However, this does not render the plastic bags or packaging to be the ‘exported goods’. The ‘exported goods’ remain the rice and spices. Therefore, the first question framed is answered in the negative and against in favour of the Appellant-Revenue, that is to say that the exported goods are not the ‘plastic bags’ or ‘packaging’, but the ‘rice and spices’. Since it is held that the ‘exported goods’ are the rice and the spices, the second question of matching the product group of the plastic granules and the plastic bags does not arise for consideration.
Whether the Customs Department could challenge the eligibility of the respondent for TPS benefits, which is a scheme administered by the Directorate General of Foreign Trade (DGFT), or whether such authority exclusively rests with the DGFT? - HELD THAT:- The TPS is administered by DGFT and consequently, it is the DGFT alone which can say whether an importer or the exporter has satisfied the conditions of TPS or not. The revenue in the case on hand has sought the reference to Customs Notification No.32/2005, to say that the importer/assessee has not fulfilled the conditions under TPS but however, the scheme launched by the DGFT, the said Authority being satisfied has granted the license in terms of which import has been made by the importer/assessee. The benefit of TPS is sought to be denied since, according to the Customs, the conditions of the Notification remained not satisfied. The fact, however, remains that the goods are covered under valid authorization issued under the TPS; the benefit of the above notification cannot be denied so long as the authorization remains valid, which is beyond the scope of the notification/s. The option therefore, available to the Customs authorities was perhaps to take up the issue with the DGFT for cancellation of the authorization issued under the scheme in question. In fact, the lower authority has also observed these facts which are clearly undisputed and the same is also the correct position of law.
In the case on hand, the Adjudicating authority has specifically observed that there were no such violations, the assessee had imported plastic granules which was one of the inputs required for the manufacturer of PP bags which were used as inner packing material for export of Rice. Hence, it is held by the Original Authority that the plastic granules have direct nexus with Rice.
The Target Plus Scheme was formulated in Chapter 3 of the FTP for 2004-09; the Scheme came to be discontinued in 2006. Paragraph 3.7.1 of the same provides that the object of the scheme was to accelerate growth in exports by rewarding star export houses who have achieved a quantum growth in exports. Para 3.7.6 of the FTP permitted the utilization of the duty credit by effecting imports. The TPS is thus an additional incentive given to accelerate the growth of exports, FTP is referable to the provisions of Section 4 and 5 of the FTDR.
From a cumulative reading of both paras of FTP, the reference ‘product groups’ has been liberally interpreted by the constitutional courts in the case of in Union of India Vs Indian Exporters Grievance Forum [2013 (8) TMI 131 - DELHI HIGH COURT] and in Essel Mining & Industries Ltd. Vs Union of India [2012 (5) TMI 328 - BOMBAY HIGH COURT]. The same however, would cover a situation, like the present case on hand, is to be considered. PP granules were imported which were converted into plastic bags/inner layers of bags that were claimed to have been used as a ‘packing material’ for Rice that was exported. So, ‘a pound of flesh’ could never be without ‘a drop of blood’ and hence, there is a possibility that the PP granules would belong to the genus, if not the species.
Based on an overall analysis, the Original Authority has come to the conclusion that the twin conditions have been fulfilled by the assessee and that there was no material on record suggesting the violation of those twin conditions. Even in the present case, the Revenue has not placed any supporting evidence in this regard, other than trying to build their case on mere arguments.
Conclusion - i) The Commissioner is correct in dropping the proceedings against the respondent. ii) The imported plastic granules used for manufacturing packing materials have a broad nexus with the exported rice and spices. iii) The Customs Department cannot independently deny TPS benefits; the DGFT is the competent authority for eligibility and enforcement. iv) The 'actual user condition' includes use by job workers, and no violation of Customs notifications was established.
Appeal dismissed.
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