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2024 (4) TMI 643
Maintainability of petition - availability of alternative remedy of appeal - compounding of offence - CESTAT has jurisdiction to entertain an application vis-a-vis compounding of an offence under Section 137 of the Customs Act, 1962, or not - HELD THAT:- Bearing in mind the submissions of learned senior counsel and also the fact that the CESTAT has now remanded the matter to the Chief Commissioner to reconsider the application filed for compounding of the offence under Section 137 of the Customs Act, 1962, the matter needs no interference.
The Chief Commissioner is now to re-consider the said application in accordance with law. The Chief Commissioner to dispose of the said application filed under Section 137 of the Customs Act as expeditiously as possible.
SLP disposed off.
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2024 (4) TMI 642
Revocation of Customs Broker Licence - forfeiture of security deposit - levy of penalty - mis-declaration of quantity of imported goods - violation of the provisions of Regulation 11(n) of CBLR, 2013 - HELD THAT:- From the facts of the present case, it is evident that the manner in which Shri Bansal was dealing with the appellant in relation to the imports for all practical purposes, he was the actual importer and Shri Praveen Singh Patwal was merely a dummy IEC holder. He categorically stated that whenever the consignment arrived, the documents were sent to him by Shri Rajesh Bansal or else his field boy used to go to the office of Shri Rajesh Bansal at Tip Top Market, Karol Bagh to collect the documents. More important was that after customs clearance, the goods used to go to the premises of Shri Rajesh Bansal at Karol Bagh is a pertinent factor which could not have been ignored by the appellant. Similarly, the payments used to be made by Shri Rajesh Bansal or Sunil Badlani. The entire working was within the knowledge of the appellant and the fact that this modus-operandi was followed in the past clearances of around 60-70 consignments clearly reflects connivance on the part of the appellant.
Also on same set of facts that Narendra Narula, Proprietor of GND Cargo Movers (CHA) was well aware of the fact that Shri Praveen Singh Patwal was the proprietor of M/s. Royal International and Shri Rajesh Bansal was actually importing the goods in the name of M/s Royal International, although Shri Bansal was not the proprietor of the said firm, show cause notice dated 29.11.2013 was issued under the Customs Act, 1962 and on adjudication, order-in-original dated 30.03.2018 was passed whereby penalty of Rs.10 lakhs was imposed on Shri Narendra Narula under Section 112 (a) of the Act. The findings given on the same facts in the collateral proceedings on adjudication are binding.
Customs broker is expected to act with great sense of responsibility and take care of the interest of both the client and the revenue. Violations even without intent are sufficient to take action against the appellant.
Proportionality of punishment - HELD THAT:- The adjudicating authority had taken a balanced view that CB cannot escape his duty of KYC verification just by obtaining photo copies of two identity and interest proof documents and therefore having violated regulation 11 (n) rightly revoked the CB license and forfeited the security deposit amount but refrained from imposing separate penalty on the appellant. In M/S FALCON INDIA (CUSTOMS BROKER) VERSUS COMMISSIONER OF CUSTOMS (AIRPORT & GENERAL) NEW DELHI [2022 (3) TMI 1268 - CESTAT NEW DELHI], the Tribunal was of the view that there is no reason to show any leniency once violation is noticed and it is not for the Tribunal to interfere with the punishment meted out by the disciplinary authority, i.e. the Commissioner, unless it shocks the conscience.
Referring to the provisions of Regulation 11(n) and the judicial pronouncements, Mr. Rakesh Kumar, learned Authorised Representative submitted that Shri Narula (CB) in his statement recorded under Section 108 of the Act accepted that he has not verified the antecedents of the importer as the documents were handed over by Shri Badlani, an Associate of Shri Rajesh Bansal, who is not the IEC holder and he also admitted that the imports were made through a dummy IEC holder - there are no infirmity or perversity in the conclusion arrived at in imposing the punishment by the impugned order.
The impugned order upheld - appeal dismissed.
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2024 (4) TMI 641
Valuation of imported goods - rejection of value - enhancement of value, on the basis of a price quote appearing on the internet website - Confiscation on account of mis-match colour, batch number and batch quantity, which occurred on account of mistake on the part of the foreign supplier - confiscation also on the ground that one batch number being omitted to be mentioned by mistake in the Test Certificate of the Testing Laboratory.
Enhancement of value - HELD THAT:- Merely on the basis of the quote available on particular website it is not sufficient to enhance the value of the imported goods. at the same time the value appearing on website is abnormally high i.e. 0.36 per piece therefore the matter needs to be reconsidered on the basis of other material, if any. It is also observed that for applying the value of contemporaneous import it will also be important to see various factor such as similar goods, same quality, country of the export and the time of import. Therefore, merely on the basis of the quote available on the website value cannot be enhanced.
Confiscation of the goods on the basis mis-match of colour, batch number and batch quantity - appellant submitted that the mistake has occurred in the part of the supplier which has subsequently been clarified by the supplier - HELD THAT:- It is prima facie found that because of this error it does not conclusively lead to any mala fide on the part of the appellant. The Adjudicating authority must reconsider the clarification given by the supplier and also to see that whether there is any intention to evade/ short paid the custom duty. It is also the submission of the appellant that even though this mistake has occurred the total quantity of the goods is matching. This aspect also needs to be re-looked into by the adjudicating authority.
Confiscation on allegation that in test certificate one batch number is mentioned wrongly - HELD THAT:- It is found that it was a typographical error and the testing laboratory has rectified the error. Once the typographical error has been rectified, the mistake dose not remains and after rectification only for the mere typographical error goods cannot be confiscated. Therefore the adjudicating authority has to reconsider this matter accepting the rectification of the error done by the concerned laboratory.
The entire matter needs to be reconsidered therefore the impugned order is set aside. The appeals are allowed by way of remand to the adjudicating authority for passing a fresh order.
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2024 (4) TMI 640
Valuation of imported goods - inclusion of royalty in the invoice value - Rule 10(1)(c) of the Customs Valuation Rules, 2007 - HELD THAT:- Impliedly, the direction of the first appellate authority is not relatable to goods under import or under proceedings for recovery of duty short-paid on import. A proceedings which does not pertain to goods under import or already imported and cleared is not a proceedings acknowledgeable under Customs Act, 1962. Neither Learned Counsel nor Learned Authorised Representative were able to evince notice under section 28 of Customs Act, 1962 for recovery of duty arising from proposed addition to declared value by recourse to rule 10(1)(c) of Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 or for finalization of assessment under section 18 of Customs Ac, 1962 which, other than section 124 of Customs Act, 1962, should be the requisite framework for adjudication and appellate disposal.
The order impugned before the first appellate authority has its origins in a peculiar institution of customs administration, viz., Special Valuation Branch (SVB) or GATT Valuation Cell (GVC), found in some of the older customs houses with specific remit to investigate acceptability of price declared for assessment of goods transacted between related persons. This arises from provisioning in section 14 of Customs Act, 1962 for assessable value to factor in relationship affecting price arrangement in transactions which frailty of human expression could but, in the nascent stage of harmonized approach to valuation, inadequately articulate as the norm or the deviation, and as remedies appurtenant thereto, to justify institutionalized support to assessment hierarchy.
Furthermore, from the absence of show cause notice, as well as response by or on behalf of appellant about fiscal detriment in proceedings, we may not be wrong in speculating that such imports as may be subject to oversight of Special Valuation Branch (SVB) are, invariably, assessed provisionally for finalization to be undertaken upon completion of ascertainment by Special Valuation Branch (SVB) - As appeal has not been directed before first appellate authority against order of such ‘proper officer’, it transgresses the remand jurisdiction of such appellate authority to issue directions to a ‘proper officer’ who has yet to undertake finalization. Direction to the ostensible ‘original authority’ is nothing but an exercise in futility and direction to the ‘proper officer’, and the statutorily empowered potential ‘original authority’, is beyond appellate jurisdiction of Commissioner of Customs (Appeals) before whom assessment was not under challenge.
There was no cause for grievance to initiate appellate remedies. Such opportunity would have presented itself after finalization. Implicit in acknowledgement of appellate remedy against ‘advisory’ of Special Valuation Branch (SVB) is another round of appeal through the first appellate authority on the same goods and on the same facts which does not sit well with the principle of comity of courts. The appeal before the first appellate authority was, thus, premature. This aspect of disposal of the appeal within the scheme of Customs Act, 1962, and the role of Deputy Commissioner, Special Valuation Branch (SVB) within it, had not been evaluated by the Commissioner of Customs (Appeals).
The impugned order set aside - appeal restored to first appellate authority to dispose off the pleas of the appellant-Assistant Commissioner in accordance with the scheme of Customs Act, 1962 - appeal allowed by way of remand.
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2024 (4) TMI 639
Penalties u/s 112 and section 114AA of Customs Act, 1962 - classification of goods imported under duty exemption entitlement certificate (DEEC) scheme of the Foreign Trade Policy (FTP) and corresponding N/N. 93/2004-Cus dated 10th September 2004 - HELD THAT:- The adjudicating authority appeared not have given credence to the revision accorded by Norms Committee; moreover, the adjudicating authority appeared to have misconstrued the purpose of section 12 of Customs Act, 1962, which has the sole reference to the First Schedule to Customs Tariff Act, 1975, and ‘scope for determining eligibility for exemption in a notification issued under section 25 of Customs Act, 1962 intended to operationalise a scheme in the Foreign Trade Policy (FTP) with objectives of its own by visiting the declared classification intended for ascertaining rate of duty. Supplanting of the one by recourse to unconnected jurisdiction of the other deprives the impugned order of legal validity. Compounding this glaring lacunae in an adjudication exercise, already compromised in the manner set out, are the developments since its culmination.
The amending of the licence by the competent authority and the issuing of ‘export obligation discharge certificate (EODC)’ by the licencing authority may have given the adjudicating authority cause for pause had these been available then.
In view of these several foundational lacunae, the adjudicatory process, found wanting as model of legality and propriety, warrants appropriate rectification. To enable that, the impugned order is set aside and the matter remanded to be heard afresh for disposal after affording opportunity to the notices to make oral and written submissions.
Appeal allowed by way of remand.
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2024 (4) TMI 638
Non-compliance with the remand order of the Tribunal in the earlier round of litigation - import of rough marble blocks - Revenue submitted that, notwithstanding grant of licence subsequent to import, the appellant was not entitled to clear the goods in the absence of licence at the time of import - HELD THAT:- The jurisdictional Commissioner of Customs was bent upon demonstrating statutory superiority over other agencies of the State as the final arbiter of national interest. This is evident from the refusal to await outcome of application pending before the Directorate General of Foreign Trade (DGFT) and proceeding to penalise the import and importer. Even after the altered factual situation had been highlighted by the Tribunal in remand order and necessity of considering this as relevant to the outcome implicit in the remand order, the adjudicating authority remained obdurate. The authority has even gone to the extent of denigrating superior appellate authority by insisting on restoration of the order discarded by the Tribunal.
It is patent lack of refresher episodes in the course of upward mobility of officers that encourages megalomaniac disregard for horizontal and vertical components of governance. Such defiance of appellate directions suffices to invalidate the impugned order.
Quantitative restrictions, implemented through special licence regime, is the exclusive remit of the licencing authority. By its very nature, the date of issue of licence is not to material to quantitative restriction; its relevance to the impugned goods alone is. On that there has been no controverting either in the impugned order or in submissions of Learned Authorised Representative.
It has not been unknown for the Department of Revenue to issue ad hoc exemption, in exercise of empowerment under section 25 of Customs Act, 1962 and long after goods have been imported and cleared, to regularise such imports in public interest. Sauce for the goose is sauce for the gander too. The findings in the impugned order are not in consonance with the statutes as legislated and law as judicially determined. The exercise of authority by the Directorate General of Foreign Trade (DGFT) is beyond the oversight afforded to officers of customs under Customs Act, 1962.
There are no reason for such illegality, as articulated in the impugned order, to survive - the impugned order is set aside - appeal allowed.
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2024 (4) TMI 637
Confiscation of imported goods - Black pepper - advance authorisation scheme - fulfilment of export obligation or not - reliability of statements - cross-examination of persons whose testimony is relied upon - HELD THAT:- Owing to non-adherence to section 138B of Customs Act, 1962, the findings of the lower authorities cannot be validated, that have relied upon statements to conclude that the appellants were aware of the diversion that M/s Bruno Exports were engaged in which has bearing on recourse to section 112 of Customs Act, 1962.
The findings of the lower authorities suffer from infirmities arising from having fastened condition while ordering redemption and from the statements relied upon not having crossed the bar of relevancy prescribed by section 138B of Customs Act, 1962 - the appeals cannot be taken to its logical conclusion in the absence of validity of the impugned order on both counts.
The impugned order is set aside - matter remanded back to the adjudicating authority for a fresh decision after permitting cross-examination of the witnesses sought for and to set right the terms of redemption - appeal allowed by way of remand.
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2024 (4) TMI 636
Valuation of imported goods - aluminium scrap - enhancement of value - Fulfilment of requirements of Section 14 of the Customs Act or not - scope of the Section 17 (5) of the Customs Act, 1962 - Primary dispute regarding the consent of the appellant - mandatory to pass an speaking order within prescribed period by the concerned authorities in case of any changes made to self-assessment made by the importer while filing the bill of entry - HELD THAT:- When there is a serious dispute as to whether the appellant had given consent in writing to the reassessed value or not, this issue has to be first decided by the Division Bench because it is only in such circumstances that the decision of the Tribunal in COMMISSIONER OF CUSTOMS DELHI VERSUS M/S HANUMAN PRASAD & SONS [2020 (12) TMI 1092 - CESTAT NEW DELHI] would apply.
The matter is, therefore, sent back to the Division Bench so that a decision on this core issue is taken because only then reliance can be placed by the revenue on the decision of the Tribunal in Hanuman Prasad.
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2024 (4) TMI 578
Jurisdiction - power to adjudicate SCN - Seeking direction to expeditiously adjudicate SCN u/s 124 of the Customs Act, 1962 - seeking provisional release of the seized goods u/s 110A of the Act - only argument raised by the petitioner is that the case of the petitioner is peculiar and as such an officer now below the rank of Commissioner of Customs should adjudicate the same.
HELD THAT:- The only factor to show peculiarity is that the petitioner was arrested at the Airport and the arrest was authorized by Commissioner of Customs. Further, it is contended that in the litigation that enured prior to the issuance of the Show Cause Notice, an affidavit was filed by Commissioner of Customs - there are no so-called facts as contended by the petitioner amount of any peculiar facts and circumstances warranting any transfer of jurisdiction.
Section 104 of the Act dealing with power of arrest, empowers Principal Commissioner of Customs or Commissioner of Customs, by a general or special order, to arrest any person whom he has reason to believe has committed an offence punishable under Section 132, 133, 135, 135A or Section 136 of the Act. Petitioner was alleged to have committed an offence under Section 132 and 135 and the arrest of the petitioner was done under the order of Commissioner of Customs.
Since the Commissioner of Customs was impleaded, in terms of the said Circular, it was the Commissioner of Customs, who was authorized to file an affidavit. Accordingly, mere fact that Commissioner of Customs has filed an affidavit would not denude an officer, otherwise empowered under the Act and the Rules and Notifications, to issue and adjudicate a Show Cause Notice even though the officer may be below the rank of the Commissioner of Customs - it is noticed that the case of the petitioner is far from peculiar/unique as there are several cases where arrests are made for infraction of the provisions under orders issued by Commissioner of Customs, which are challenged and proceedings initiated prior and post issuance of Show Cause Notices.
There are no peculiar facts and circumstances in the case of the petitioner to hold that an officer below the rank of Commissioner of Customs is denuded of the power or authority to adjudicate the Show Cause Notice - In the instant case subject Show Cause Notice issued on 31.03.2023 has been issued by a competent and authorized officer whose competence and authority is not under challenge by the petitioner.
There are no merit in the petition - The petition is consequently dismissed.
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2024 (4) TMI 577
Maintainability of petition - Chemical Examiner’s report is correct or not - Classification of imported goods - Technical Grade Urea - to be classified under tariff item 31021090 of the First Schedule to the Customs Tariff Act, 1975 or not - Petitioner seeks to command the respondents to forthwith complete all procedures and formalities and clear the goods imported by the Bill of Entry in Ext. P4 as Technical Grade Urea - HELD THAT:- Whether the petitioner’s product is Technical Grade Urea, or the Fertilizer Grade Urea is a question of fact which can be determined on the basis of the relevant parameters as determined by the Laboratory on examination of the samples drawn from the imported goods. This Court absolutely has no expertise to hold that the Chemical Examiner’s report is incorrect. This question has to be decided by the authorities themselves.
The writ petition is not maintainable and is dismissed.
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2024 (4) TMI 576
Seeking amendment of shipping bills - inadvertent error in the Shipping bills - seeking to credit ROSCTL benefit amounts to the petitioner’s Customs E-Scrip Ledger - HELD THAT:- The issue / question whether an inadvertent error in the Shipping bills by affixing ‘No’ instead of ‘Yes’ under the RoSCTL Scheme can be amended came up for consideration before the Madras High Court in PARAMOUNT TEXTILES MILLS PRIVATE LIMITED VERSUS THE DEPUTY DIRECTOR GENERAL OF FOREIGN TRADE, THE DGFT POLICY RELAXATION COMMITTEE, THE ASSISTANT COMMISSIONER OF CUSTOMS [2022 (4) TMI 1260 - MADRAS HIGH COURT] where the Madras High Court allowed the petition and granted the benefit of the RoSCTL Scheme in favour of the writ petitioner by permitting amendment of the Shipping bills.
In the instant case, the material on record discloses that except for the inadvertent error that had crept into the Shipping bills, wherein the petitioner had declared ‘N’ in the RoDTEP column instead of ‘Yes’, its intention to claim benefits under the RoSCTL Scheme is evident from the other material on record including the Shipping bills. Under these circumstances, in the light of the judgment of the Madras High Court in Paramount’s case, the petitioner would be entitled to amend the subject 28 Shipping bills and necessary directions are to be issued to the respondents in this regard by quashing the Communication at Annexure – N dated 24.11.2022 issued by the 1st respondent.
The concerned respondents are directed to permit / allow the petitioner to amend the 28 Shipping bills vide Annexure – H of the petitioner for the period from January 2021 to September 2021 and to grant the RoSCTL Scheme benefits to the petitioner and credit the said benefits to his Customs E-Scrip Ledger as expeditiously as possible - Petition allowed.
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2024 (4) TMI 575
Refund of Excess Customs Duty paid - principles of unjust enrichment - refund claimed transferred to consumer welfare fund alleging that the amount has been passed on to others and not borne by the appellant - HELD THAT:- The entire amount of duty and interest has been paid by the appellant after receiving certain amounts from M/s. Microsoft Corporation to meet the requirement of payment of duty. During the settlement proceedings, the Hon’ble Settlement Commission recorded the amount required to be paid and the amount deposited and also held that the excess amount, if any, be refunded to the assessee after adjusting the penalty amount. The authorities below transferred the refund amount to the Consumer Welfare Fund observing that the appellant has not borne the burden of the duty themselves but passed on to Microsoft Corporation; also the amount has not been shown as ‘receivable’ soon after payment of duty.
Reading the agreement in its entirety, it is found that after the proceedings were initiated against the appellant, they have received certain amounts from the overseas suppliers of M/s. Microsoft Corporation to meet the requirement of payment of duty and interest, who advanced certain amounts with a condition that the excess amount, if any, after adjusting the duty and interest be refunded to M/s. Microsoft Corporation. The appellant, thus, cannot retain the excess amount with them in accordance with the said agreement. Consequently, the refund amount cannot be retained by the Appellant but has to be repaid to M/s. Microsoft as per the said Agreement. Also, it is found that the appellant could not reflect the excess amount refundable in their books of accounts before the order of the Settlement Commission but could reflect only after the Settlement Commission has recorded a finding to this effect, quantifying the settlement amount.
There are no discrepancy of not showing the excess amount as receivables before the Settlement Commission’s order in their books of accounts which has been successively every year thereafter has been shown including for the financial year ending 31.3.2023.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 574
Levy of Anti-dumping duty - reflective glass during the period 04/01/2009 to 22/05/2009 - scope of N/N. 51/2009-Cus. dt. 22/05/2009 - HELD THAT:- During the intervening period i.e. 06.01.2009 to 22.05.2009, green reflective glass was not mentioned under the exclusion category of the N/N. 4/2009-Cus dt. 06/01/2009 but mentioned in the amending N/N. 51/2009-Cus. dt. 22/05/2009.
It is found that recently, Bangalore Bench of this Tribunal interpreting the said notifications in the light of the principle of law laid down by the Hon’ble Supreme Court in the case of Dilip Kumar and Company [2018 (7) TMI 1826 - SUPREME COURT] and in the case of State of Gujarat Vs. Arcelor Mittal Nippon Steel India Ltd. [2022 (1) TMI 1013 - SUPREME COURT], in the case of Glass House Vs. CC(Appeals) [2023 (11) TMI 915 - CESTAT BANGALORE], observed In the present case, since Reflective Glass is not found in the Notification No.4/2009-Cus. dated 06.01.2009 for exempting them from anti-dumping duty, question of extending the benefit does not arise. The Commissioner (Appeals) has rightly held that no attempt can be made to infer the motive or meaning of the Notification other than what is emanating from the plain language of the Notification. Therefore, we uphold the order of the Commissioner (Appeals) and dismiss the Appeal.
The impugned order upheld - appeal dismissed.
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2024 (4) TMI 541
Authority under the Customs Act to proceed against the property of a third party - Prohibition of Benami Property Transactions - petition under Article 226 of the Constitution assails a communication issued by respondent No. 2/Deputy Commissioner of Customs (Preventive), M&P Wing, Mumbai, to the Secretary, Pushpa Niketan Co-op. Housing Society informing the society not to permit the petitioner to transfer the flat owned by her without prior ‘No Objection’ (NOC) from the office of respondent No. 2. as respondent No. 2 had initiated certain investigation against the petitioner’s husband
Whether respondent No. 2 would have any authority under the Customs Act to proceed against the property of a third party namely of the wife of a person who is being investigated?
Whether de hors the Customs Act, there is any provision in law permitting respondent No. 2 to issue such communication?
HELD THAT:- Both the questions are required to be answered in the negative. We have not been pointed out any provision which can be resorted by the Customs officials to attach the property of a third party like the petitioner who cannot be connected to any recovery under the Customs Act, much less to issue the impugned communication. Even the provisions of Section 142 of the Customs Act which provides for recovery of sum due to Government could not have been resorted by respondent No. 2 to issue the impugned communication. Thus, respondent No. 2 has acted in patent lack of jurisdiction.
Even assuming that a statement is stated to be made by the petitioner's husband in relation to the flat in question being purchased by him or actually being his property and ostensibly owned by the petitioner, however, considering the clear provision of Section 3 of the Prohibition of Benami Property Transactions Act, 1988, respondent No. 2 cannot have any jurisdiction to question the petitioner’s ownership of the flat. The only person who can question the petitioner’s ownership, would be the husband of the petitioner.
Thus, in issuing communication of the nature as impugned, the respondent had, in fact, taken upon himself an obligation of concluding that the flat belongs to the husband of the petitioner, when in law such declaration can only be granted by a Civil Court. For such reason, even otherwise, respondent No. 2 would not have any jurisdiction to issue the impugned communication.
As respondent No. 2 did not wield any authority to issue the impugned communication. It was issued in patent lack of jurisdiction. The petition, accordingly, needs to succeed.
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2024 (4) TMI 540
Seeking provisional release of the goods - release of various models of second hand Highly Specialised Equipment digital Multifunction Print, Copying & Scanning Machines, imported by the petitioner - authorization for importing multi-functional device - HELD THAT:- Keeping in view of the foreign trade policy of the Government, the Order of 2012 which stood replaced by the Order of 2021 and subsequent amendments brought to Order 2021 by inserting clauses 6, 7 and 8, what is apparently evident is that in Order, 2012 the product multi-functional device was not a notified item. What was notified so far the writ petitions are concerned was only printers and plotters and the Order, 2012 was also preceded by a decision of the Government exempting highly specialized equipment from the coverage of Order, 2012. The Order, 2012 stood preceded by subsequent Order, 2021 which was issued and brought into force w.e.f 18.03.2021 and the schedule attached to Order, 2021 stood modified to the extent that in addition to printers and plotters the Government also notified multi-functional devices as an item so far as the foreign trade policy is concerned. This change in Order, 2021 so far as adding multi-functional devices in the schedule makes it amply clear that prior to Order, 2021 MFDs were not a notified item and since 18.03.2021 when the Order, 2021 was notified, MFDs became restricted goods under the foreign trade policy.
Though the learned Senior Standing Counsel for CBIC tried to give various interpretations to this clause, but on its plain reading, has its literal meaning and with the literal interpretation of the contents of clause 8, there does not seem to be any restrictions put by the Government so far as the classifications of highly specialized equipment is concerned. There also does not seem to be any mention of the said exemption not being applicable upon a second hand product as is envisaged under clause 2.31 of the foreign trade policy.
Thus, we are in agreement to the submissions made by the learned counsel for the petitioner so far as the import made by the petitioner of MFDs being a highly specialized equipment and the same being one which falls within the purview of an exempted category as per clause 8 of Order, 2021. Thus, we are of the considered opinion that it is a fit case where the petitioner can be permitted for provisional release of the goods seized by the respondent authorities.
Thus, it is ordered that let the respondent authorities pass an order on the application filed by the petitioners for provisional release of the goods subject to the conditions.
In addition, the petitioners are also directed to provide a bank guarantee worth 10 percent of the total price of the goods imported by them. Further, it is also ordered that in the event if the petitioners upon release of the goods provisionally make and sell the supply to their customers, details of the customers that of relevant price and details of the respective transactions shall be maintained and made available to the respondent authorities from time to time.
The present writ petitions accordingly stands allowed.
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2024 (4) TMI 485
Validity of Show Cause Notices issued for revision of the assessable value and customs duty - Undervaluation and Mis-declaration of the goods imported - bypass the normal Customs Channels and clear the imported goods into domestic area by resorting to gross undervaluation and thereby defrauding the government exchequer by evading the payment of higher customs duty - demand for differential Customs Duty - confiscation - reasons to believe - Penalty under the provisions of Section 112(a) & (b)/114A and 114AA - No independent inquiry / investigation with respect to goods imported - No opportunity of Personal Hearing - HELD THAT:- The SCNs i.e. SCN dated 09.02.2022 read with Corrigendum dated 11.02.2022 and SCN 14.02.2022 have been adjudicated by the Ld. Commissioner ex parte vide the impugned OIO MUN-CUSTOM- 000- COM-14-23-24 dated 20.09.2023 without affording any opportunity of Personal Hearing to the Appellant by applying the said value as proposed in the SCN dated 08.09.2021 i.e. the first S.C.N to the subject Bills of Entry and accordingly, have confirmed the entire demand along with interest and has also imposed penalty equal to the confirmed duty. In addition, penalty u/s 114AA has also been imposed.
It is further found that DRI has been stated to have developed an intelligence to the effect that one M/s Zip Zap Exim Pvt. Limited ("M/s ZZEPL"), a trading unit in Special Economic Zone, Kandla (Gujarat) ("KASEZ" ) was importing Knitted Polyester Fabrics and various other Electrical goods and subsequently, clearing the same into DTA to various DTA importers including the Appellant by resorting to gross undervaluation. On the basis of said purported intelligence, an investigation was conducted and after completion of the same, a show cause notice dated 08.09.2021 was issued to M/s ZZEPL & other DTA buyers including the Appellant proposing rejection of value declared by said SEZ Unit and demanding differential duty along with interest from DTA buyers (including the appellant) with respect to respective imported goods. Said show cause notice dated 08.09.2021 is yet to be adjudicated as per verification got done through Authorized Representative, which has revealed that matter was still to be adjudicated in that show cause notice.
However, the learned Adjudicating Authority, has adopted the value proposed to be re-determined in the said SCN and confirmed the demand accordingly. Thus, determination of value proposed in the SCN is done u/s 28 (8) by depending on a show cause notice which has yet to be adjudicated. This is erroneous as value proposed in SCN dated 08.09.2021 the first S.C.N cannot be made basis to raise and confirm the demand in the present case without adjudication. Thus, entire demand confirmed in the present case vide impugned show cause notices on the basis of alleged value proposed in another show cause notice dated 08.09.2021, is bad in law. It is nothing but putting the cart before the horse. Perhaps it is a fit case, where common adjudicating authority for two jurisdictions should have been appointed by the C.B.I.C. An allegation which is yet to be decided in a show cause notice cannot be made evidentiary basis to sustain demand in another.
A weak foundation of allegation alone in one matter cannot lead to strong edifice of sustainable evidence in another matter. “Debile fundamentum fallit opus” applies in the present case. An allegation which has not faced judicial scrutiny does not merit to be treated as authoritative evidence. We therefore, find that order cannot be sustained, same is set aside. Matter is remanded to be heard along with or after decision in show cause notice dated 08.09.2021 i.e. first S.C.N acquires sufficient evidentiary value and after due observance of natural justice in the impugned S.C.Ns and providing various relied upon materials to the appellant and after considering on submissions including made on the point of limitation vis-a-vis of corrigendum by the appellant.
Impugned order is set aside and appeals are allowed by way of remand in above terms. Appeals allowed by remand.
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2024 (4) TMI 484
Validity Of Order-in-Appeal - Seeking amendment in the bills of entry u/s 149 of the Customs Act, 1962 (CA ’62) - refund of excess duty paid - Re-classifying the goods by changing the CTH - Import of ‘Electronic Parts of Lighting Equipment’ - erroneously declared under a wrong CTH 85122010/20 - same parts were imported earlier under the correct CTH 85129000 - HELD THAT:- In the instant case the request for amending the CTH declared in the Bill of Entry would finally result in a refund. This would make it necessary to calculate the duties payable afresh. The redetermination of duty as a principle, would include determining the import permissibility of the revised CTH in terms of the EXIM policy and any other laws regulating imports/exports, determining duties now leviable on the goods on import – (Basic, Additional, Anti-dumping, Safeguards etc.). Permissibility of various benefits under different schemes or applicability of any exemption notification benefits etc. The goods may require the value to be re-fixed based on the Tariff Values fixed for the changed CTH or to be scrutinized for the basis of duty calculation changing from specific duty to ad-valorem duty etc. Its only after this process is complete that the duty liability, which is required to be paid by the importer as per the revised CTH can be determined and the refund claim examined along with unjust enrichment etc.
Hence the administrative action of amending the CTH in the BE would virtually amount to an order of reassessment by the same proper officer after the original assessment done had concluded the determination of the liability of the importer to pay duty and the goods have been cleared from Customs controls. Once assessment is concluded it should not be administratively tinkered with either at the behest of the importer or of the department, without it being challenged in appeal.
It is also to be mentioned that although rectification of mistakes or clerical errors are permissible u/s 154 of the Customs Act, the Appellant has not used that provision to alter / rectify the BE. Hence the Appellant himself acknowledges that the change sought to be made in the BE is not merely an error or mistake. Rightly so as the amendment request is not for only one Bill of Entry but for Bills of Entry filed over a period of time. Even a bonafide error made over a period of time would be in the nature of negligence which in common parlance means and implies a failure to exercise due care, expected of a reasonable prudent person.
If the goods are not available for verification or examination or testing as embodied in Section 17(4), the reassessment cannot be permitted.
However, once a decision is taken by the proper officer to verify / examine or test goods, then, as per the rule of prudence in law, appellate power is not to be exercised by an Authority for the purpose of substituting one’s subjective satisfaction with another, without there being any specific reason for such substitution.
There are 3 methods provided in the Customs Act, for any modification or amendment to be made in any Bill of Entry. Hence an amendment application u/s 149 of Customs Act, 1962 can be filed to revise the classification in the Bill of Entry.
We find that the present issue arises with an aim of the Appellant getting a refund of excess duty perceived to have been paid. From the inception of the Customs Act the “assessment” of imported goods was done by the ‘proper officer’.
It is the Appellants contention that the Apex Court in ITC Ltd [2019 (9) TMI 802 - SUPREME COURT], has categorically observed that self-assessment could be modified either u/s 128 or under relevant provisions of the Act. According to them on a plain reading of the provisions of Section 149, it is clear that a Bill of Entry can be authorised to be amended even after the imported goods have been cleared for home consumption on the basis of documentary evidence that was in existence at the time the goods were cleared. The Appellant’s claim to amend a document under the said section is not disputed. The question is whether an amendment facility permitted u/s 49 is among the ‘relevant provisions of the Act’ that empowers and can be used as the route to review and undo the assessment already made, which assessment order as per the Hon’ble Supreme Court’s judgment in Flock India [2000 (8) TMI 88 - SUPREME COURT], ‘is in the nature of execution of a decree/order’.
From the discussions above regarding the impact of a change of CTH declared in the Bill of Entry on the assessment already made, it appear that as per the Hon’ble Supreme Court’s judgement discussed above the request for change in CTH and consequently of a final assessment could only be made before a superior authority in appeal.
In the light of the ratio of the judgments of the Hon’ble Madras High Court in the case of Stanley Engineered Fastening India Pvt Ltd v. CC [2023 (3) TMI 846 - MADRAS HIGH COURT] and Bharti Airtel v. UOI [2022 (2) TMI 154 - MADRAS HIGH COURT], the impugned order is set aside and the matter is remanded to the proper officer. He is directed to process the request of the appellant dated 13.9.2019 for amendment of the BE’s as per section 149 of CA ’62. On being satisfied he should re-assess the impugned goods to duty by passing a speaking order. After the re-assessment order is issued the appellant will be eligible to claim consequential refund, if any, as per law. The lower authority shall follow the principles of natural justice and afford a reasonable opportunity to the appellant to state their case both orally and in writing if they so wish, before finalizing the matter. The appellant should also co-operate with the adjudicating authority in completing the process expeditiously and in any case within ninety days of receipt of this order.
The appeal is disposed of accordingly.
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2024 (4) TMI 483
Jurisdiction of this Tribunal to entertain appeal - Jurisdiction u/s 129A of Customs Act, the proviso (a) to sub-clause 1 - Confiscation of goods - Indian currency/Goods - Baggage Rules - HELD THAT:- It is clear that the appellant was traveling back from Bali to India, however, had forgot his hand bag at Bali Airport along with INR 4,34,000/- therein. It is apparent that the Indian Currency of INR 4,34,000/- was handed over in India by the airlines staff to the appellant on 09.07.2019 in presence of the customs authorities. Since, the Currency was in excess of the permissible limit of Rs. 25,000/- per person as provided under FEMA vide Notification dated 29.12.2015, that amount over and above Rs. 25,000/- i.e. Rs. 4,09,000/- (INR) was proposed to be confiscated under Section 111 read with Section 113 of the Customs Act with the proposal of imposing penalty on the appellant under Section 112 (a) and 112 (b) (i) and 114AA of Customs Act, 1962.
The appellant had kept currency in his baggage which he was supposed to bring into India but forgot the baggage having Indian currency/Goods in said ‘Baggage’ at Bali airport. The said Baggage when was brought to India and was inspected it was found carrying INR of value more than permissible one. The order confiscating the same has been passed specifically under Section 111 (L), considering the recovered currency being beyond permissible limit (Prohibited) as ‘Goods’ imported in ‘Baggage’ without a declaration required under Section 77 of Customs Act.
The very perusal shows that the context of confiscation of Indian Currency in the present appeal, is one recovered from Baggage which the appellant has failed to declare under Section 77 of the Act. The penalty has also been imposed under Section 111D and 113D due to import being contrary to the prohibition imposed under FEMA is sufficient to hold that the context of the present appeal is ‘Baggage’. In terms of Section 129A, sub-clause (a) of the proviso therein, the appeal in such case has to be filed before the Revisional Authority and is not maintainable before this Tribunal.
The decision of Calcutta High Court in Vinod Kumar Shaw 2010 (12) TMI 1335 - CALCUTTA HIGH COURT] case is observed to not to be applicable to the given set of circumstances. The said decision has categorically held that question of jurisdiction is relatable to the question of fact. When the case proceeds on the basis of Baggage it has to be understood whether the subject matter is Baggage or not. The subject matter before Calcutta High court was held to be Indian currency simpliciter whereas in the present case the subject matter is the confiscation of Indian currency not only under Section 111D also under Section 111 (L) but that too beyond permissible limit currency being imported/exported in ‘Baggage’.
Thus, present is the appeal against an order which has been passed with respect to Currency i.e. goods improperly exported and improperly imported as Baggage. Hence, this Tribunal is held to have no jurisdiction to try the impugned appeal - appeal disposed off.
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2024 (4) TMI 482
Failure to re-export the goods after re-import - Benefit of exemption from customs duty - Change of Notification in the bill of entry - Recovery of Drawback - Exports leather shoes - goods returned for repair of the shoes - failed to comply with the condition of re-exporting the goods - Whether the appellant is eligible for the benefit of Notification No.94/96 although they have not claimed the said benefit at the time of import of goods - HELD THAT:- From the facts, it can be seen that that the appellant had intended to re-export the goods after repair of the shoes. However, they could not fulfil this requirement and thereafter sold the goods locally. They then requested the department to extend to them the benefit of Notification No.94/96. The department has not considered the same observing that the appellant has availed drawback and claimed benefit of Notification No.158/95 at the time of import of the goods.
On similar set of facts, the Tribunal in the case of Olam Agro India Ltd.[2024 (2) TMI 317 - CESTAT AHMEDABAD] had considered the very same issue and held that the appellant would be eligible for alternate beneficial notification. The decision of the Hon’ble Supreme Court in the case of Share Medical Care [2007 (2) TMI 2 - SUPREME COURT] held that assessee cannot be denied the benefit of alternate notification when it is eligible at the time of import of the goods. Following the cited decisions (supra), we are of the view that the appellant is eligible for the benefit of Notification No.94/96. However, it is made clear that the appellant has to pay back the drawback claimed by them along with interest.
The impugned order is set aside. Appeal is allowed with consequential relief, if any, on the condition that appellant has to pay back drawback claimed.
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2024 (4) TMI 481
Classification - Imported goods from Korea - "gold coins (other than legal tenders)" - fall under CTH 7114 1910 as claimed by the appellant Or under CTH 7118 9000 as claimed by the department - exemption from payment of Customs duty - rejection of exemption under notification dated 31.12.2009, as amended by notification dated 31.12.2016 - recovery of differential duty with interest - Whether the imported gold coins can be called as the ‘Prohibited Goods’ merely for want of letter issued by Reserve Bank of India - HELD THAT:- The goods in question apparently and admittedly are gold coins. As the terms suggest these are the articles crafted out of precious metal hence appears to be subject matter of CTH 7114. Simultaneously these articles specifically are coins and coins are precisely mentioned under CTH 7118. Thus it becomes the point of interpretation as to which CTH entry suits the impugned goods more. Hon’ble Apex Court in the case of Commissioner of Central Excise, Shillong vs. Wood Craft Products Ltd.[1995 (3) TMI 93 - SUPREME COURT] and also in a later decision in the case of L.M.L Ltd. vs. Commissioner of Customs [2010 (9) TMI 12 - SUPREME COURT] has held that for resolving any dispute relating to tariff classification, a safe guide is the internationally accepted nomenclature emerging from HSN.
Entry at CTH 7114 covers all articles of Gold. The word article has also not been defined under any of the Notes to Chapter 71. Again the dictionary meaning has to be relied upon. As per Oxford Dictionary article is a particular item or object and include household articles. Cambridge Dictionary also define article to mean as an object, a particular thing specially one i.e. one of several things of a similar type or a thing similarly placed. As per Merriam Webster dictionary article is a thing or a person of a particular and distinctive kind of class. Thus, it becomes clear that goods in question, (gold coins) being an object/ a thing of particular kind, hence are nothing but the articles.
Keeping in view the entire discussion about Chapter Notes, explanatory notes, the General Rules of Interpretation and the description of respective entries under CTH 7114 and 7118, it becomes clear that gold coins are such articles of gold which are in the form of coin, but being the coins of non legal tender, these cannot be covered under CTH 7018. These being articles of precious metals are therefore held to be covered under CTH 7114.
This issue is otherwise no more res-integra as has been decided by this Tribunal’s Principle Bench in the case of Abans Jewels Pvt. Ltd. vs. Principal Commissioner of Customs, ACC (Import) [2022 (4) TMI 1370 - CESTAT NEW DELHI] and also by the Regional Bench of Hyderabad as well as of Bangalore in the case of Sri Exports [2019 (5) TMI 82 - CESTAT BANGALORE]. Accordingly, the above formulated question No. 1 stands decided in favour of the importer and against the Department.
As far as goods imported and classified under CTH 7114 1910 are concerned, in terms of the Schedule I of the ITC (HS), the same were freely importable without any restrictions prior to the issuance of the Notification No. 25/2017 dated 25.08.2017. Vide the said Import Policy, the Articles of gold were allowed to be imported free whereas coins of any metal other than gold, though were freely importable but were subject to RBI regulations. Thus Import Policy of 2017 clarifies that since the goods in question were though coins but of gold, no prohibition is at all applicable upon these coins which were merely articles of gold.
Both these documents are sufficient to hold that gold coins in question were not restricted. Only such coins as are classified under CTH 7118 were restricted. As already held above that impugned gold coins are classified under CTH 7114 the RBI can issue regulations u/s 58 of the Reserve Bank of India Act, 1934 or section 47 of the foreign Exchange Management Act, 1999.
The exemption as availed by the appellant under Notification No. 152/2009-Customs dated 31.12.2009 as amended by Notification No. 66/2016 Cus. dated 31.12.2016, is held to be very much available to the appellant. We are of the opinion that Commissioner (Appeals) has wrongly relied upon the decision of Hon’ble High Court of Delhi in the case of Khandwala Enterprises Pvt. Ltd. vs. Union of India [2019 (11) TMI 740 - DELHI HIGH COURT].
Accordingly we hold that Adjudicating Authority below has wrongly interpreted the said decision. In-fact has wrongly applied the same to the facts of the present case despite that the facts are not identical. Thus both these questions (No. 2 & 3) also stands decided in favour of appellant holding that the gold coins imported by appellant are not the restricted goods and that the appellant is entitled for the exemption from payment of customs duty in terms of Notification No.66/2016-Cus dated 31.12.2016.
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