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2009 (6) TMI 850
Cenvat/Modvat - Deemed credit - Held that: - The fact is that the assessee was entitled to the deemed credit in any manner either by way of refund or by way of credit. Otherwise also the credit having been earned lawfully and there being no Notification laying down reversal or lapsing of the credit, the assessee get vested right to utilize the same subsequently. During the intervening period from 16-12-98 to 1-4-2000, the said credit could not be utilized on account of introduction compounded levy scheme. When the reversal of the earlier position regarding deemed credit, the credit so earned by the appellant, would become available for utilization - appeal dismissed - decided against Revenue.
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2009 (6) TMI 849
Issues Involved:
1. Allegation of undervaluation of imported tyres.
2. Evidence supporting undervaluation.
3. Methodology for determining the correct assessable value.
4. Imposition of differential customs duty.
5. Confiscation of goods.
6. Imposition of penalties and interest.
Issue-Wise Detailed Analysis:
1. Allegation of Undervaluation of Imported Tyres:
The appellant-firm was accused of undervaluing tyres imported from China to pay less customs duty. The Directorate of Revenue Intelligence (DRI) initiated an investigation based on specific information, revealing that the appellant declared lower values to customs compared to actual prices negotiated with Chinese suppliers.
2. Evidence Supporting Undervaluation:
The evidence included:
- Invoices showing lesser values than actual prices.
- Emails from Chinese suppliers indicating actual prices.
- Handwritten invoices by the appellant's representative.
- Telegraphic transfers (TTs) arranged from Dubai to pay the differential amounts.
- Systematic accounts maintained by the appellant, indicating payments made through formal banking channels and actual values of consignments.
- Statements from the appellant's representatives admitting undervaluation.
3. Methodology for Determining the Correct Assessable Value:
The appellant suggested three alternative methods for valuation:
(i) Accepting the value declared for the first consignment at Nhava Sheva Port as the correct value.
(ii) Using the total amount of TTs made to Chinese suppliers as the differential value.
(iii) Applying a method where the declared value was 60-70% of the actual value, as stated by the appellant's representatives.
The adjudicating authority, however, did not consider these methods and based the valuation on documents like the GEQD report and register 13/R, which were deemed credible.
4. Imposition of Differential Customs Duty:
The adjudicating authority ordered the revaluation of the consignments, rejecting the declared assessable values and adopting revised values. Consequently, a differential customs duty amounting to Rs. 2,61,89,711/- was demanded from the appellant.
5. Confiscation of Goods:
The tyres imported under Bill of Entry No. 397 were confiscated, with an option for redemption upon payment of Rs. 8,50,000/-. The 38 other consignments, although liable for confiscation, were not confiscated as they had not been released under a bond.
6. Imposition of Penalties and Interest:
Penalties were imposed on the appellant and its representatives under Sections 112(a) and 114A of the Customs Act. Interest was also demanded under Section 28AB of the Customs Act.
Conclusion:
The Tribunal upheld the finding of undervaluation but remanded the matter back to the adjudicating authority for re-quantification of the differential duty. The authority was directed to consider any one of the alternative methods suggested by the appellant for valuation. The adjudicating authority was also instructed to reconsider the imposition of penalties and interest based on the revised quantification. The appeals were disposed of accordingly.
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2009 (6) TMI 847
Issues involved: Appeal against Commissioner (Appeals) order granting SSI exemption benefit and setting aside demand for clandestine removal of goods along with penalty.
Clandestine removal of goods issue: The department alleged clandestine removal of dutiable cotton cone yarn as cotton hank yarn, leading to demand confirmation and penalty imposition. Commissioner (Appeals) considered specific dealer confirmations and upheld SSI exemption benefit claim for the first time before the adjudicating authority, citing relevant case laws and Circular No. 387/90/98-JC to set aside penalty under Section 11AC.
SSI exemption eligibility: Revenue contended that SSI exemption should not have been granted based on clearances for 1994-95, arguing that the manufacturer was aware of the exemption at the time of clearance. Tribunal upheld the exemption, emphasizing that even in cases of alleged clandestine removal, if SSI exemption criteria are met, the benefit must be allowed. Reference was made to a Punjab and Haryana High Court judgment supporting this stance.
Decision: Tribunal found no legal infirmity in the Commissioner (Appeals) order, upholding the SSI exemption benefit and rejecting the appeal. Cross-objections were dismissed as comments to the Revenue's appeal.
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2009 (6) TMI 846
Issues involved: Availment of Modvat credit on raw materials used in the manufacture of exempted products, demand of 8% amount of the value of exempted final product u/s Rule 6 of Cenvat Credit Rules.
Summary:
Availment of Modvat credit on raw materials:
The appellant, a manufacturer of P&P medicines, availed Modvat credit of duty paid on raw materials used in manufacturing dutiable and exempted products. An audit objection was raised regarding the credit on raw materials used in exempted products. The appellant reversed the Modvat credit along with interest, amounting to Rs. 23,22,633/- and Rs. 4,94,031/- respectively.
Demand of 8% amount under Rule 6:
The Revenue initiated proceedings against the appellant, demanding 8% of the value of the exempted final product u/s Rule 6 of Cenvat Credit Rules. The CCE Ahmedabad confirmed the demand of Rs. 70,80,591/- along with a penalty of the same amount. The appellant contended that by reversing the credit, it was as if no credit was availed, citing various judgments including the case of M/s. Chandrapur Magnet Wires Ltd. and M/s. Maize Products v. CCE II, Ahmedabad.
Judgment:
The Tribunal found that the Commissioner chose to follow Board's circulars over Tribunal decisions, citing the case of M/s. Dhiren Chemical Industries. However, the Tribunal held that when Board's instructions conflict with higher forum decisions, judicial discipline requires following the orders of the higher appellate forum. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant.
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2009 (6) TMI 845
Issues: Department's appeal against small-scale exemption granted to respondents, validity of review order-cum-authorization, maintainability of the appeal.
Analysis:
1. The Department filed an appeal against the lower appellate authority's decision granting small-scale exemption to the respondents. The Department argued that the brand name was not registered in the respondents' name, and the owner of the brand name received royalty from the respondents. The respondents claimed that the brand name was assigned to them by the owner, justifying the exemption.
2. The respondents' consultant highlighted that the original authority had previously granted the small-scale exemption to the respondents for another period, which was accepted by the Department after review. The Department confirmed this fact. Moreover, a preliminary objection was raised regarding the appeal filed by the Department based on a review order-cum-authorization signed by only one Commissioner, which was deemed invalid by citing relevant legal precedents.
3. The Tribunal examined the case records and found that the appeal was indeed based on an invalid review order-cum-authorization signed by a Commissioner who had retired, not by the required Committee of two Commissioners. Citing legal provisions and precedents, the Tribunal emphasized the necessity for a valid authorization by a Committee of two Commissioners to file an appeal. As the Department couldn't rectify the error, the appeal was dismissed as not maintainable. The respondents' cross objection was also disposed of accordingly.
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2009 (6) TMI 844
Issues:
1. Recovery of amount demanded under Rule 57CC(2) of the Central Excise Rules, 1944.
2. Imposition of penalties under various provisions of the Central Excise Rules.
Issue 1 - Recovery of amount demanded under Rule 57CC(2):
The original authority demanded Rs. 1,33,700 from the assessee for the period December 1997 to March 1998 under Rule 57CC(2) of the Central Excise Rules, 1944. The department sought to recover this amount under Rule 57-I of the said Rules and imposed interest under Section 11AB of the Central Excise Act, 1944. The Commissioner (Appeals) allowed the appeals by holding that the amount demanded under Rule 57CC(2) could not be recovered from the assessee as there was no statutory machinery for it. The department argued that 8% of the price of exempted final product cleared by the assessee could be recovered under Rule 57-I, citing Board circulars. The Tribunal found that Rule 12 of the Cenvat Credit Rules, 2002 did not provide for recovery of amounts under Rule 57CC(2) and dismissed the appeals.
Issue 2 - Imposition of penalties:
The original authority imposed a penalty on the assessee under Rule 57-I(4) and Rule 173Q of the Central Excise Rules, 1944, along with a separate penalty on the Chief Executive under Rule 209A. The department sought to recover the penalties in the appeals. The Tribunal, after considering the arguments, dismissed the appeals, stating that there was no provision in the rules for the recovery of penalties under the circumstances presented.
In conclusion, the Tribunal dismissed the appeals concerning the recovery of demanded amounts under Rule 57CC(2) and the imposition of penalties under various provisions of the Central Excise Rules. The decision was based on the lack of statutory provisions for such recoveries and penalties under the relevant rules, as clarified by previous legal interpretations and circulars.
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2009 (6) TMI 843
Issues:
1. Lack of personal hearing before passing adjudication order.
2. Demand of duty based on deductions claimed by the appellants.
3. Requirement of pre-deposit for hearing the appeal.
4. Delay in finalization of assessment.
5. Admittance of dues by the appellants.
6. Consideration of natural justice and merit in deciding the appeal.
Analysis:
1. The appellants contended that the adjudication order was issued without providing them with a personal hearing, emphasizing the importance of natural justice. The Commissioner (Appeals) had directed a pre-deposit of Rs. 32 lakhs under section 35F of the Central Excise Act, 1944, for hearing the appeal, raising concerns about due process.
2. The demand of duty was primarily based on various deductions claimed by the appellants, including bank interest on finished stock, distribution charges, difference in sales price, and freight charges. The original authority confirmed the duty demand, leading to the appeal before the Commissioner (Appeals) along with a stay application.
3. The Commissioner (Appeals) required the appellants to pre-deposit a substantial amount for hearing the appeal, which was contested by the appellants. The issue of pre-deposit was a significant aspect of the case, impacting the progression of the appeal process.
4. A notable issue raised was the significant delay in finalizing the assessment, spanning over a decade since the order of the High Court in 2001. The delay in concluding the assessment process was highlighted as a concern affecting the overall proceedings.
5. The appellants' admission of the dues before the Commissioner (Appeals) and in submissions to the High Court was a crucial point of contention. The admission of dues was argued by the Departmental Representative as a basis for the pre-deposit requirement, adding complexity to the case.
6. The Tribunal, after considering the arguments from both sides, concluded that the matter required a fresh examination on merit without insisting on any pre-deposit. Emphasizing the importance of natural justice and considering the factual background, the Tribunal set aside the impugned order and remanded the matter to the Commissioner (Appeals) for a decision on merit without pre-deposit requirements, ultimately allowing the appeal by way of remand.
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2009 (6) TMI 842
Demand and penalty - Clandestine removal - Held that: - the assessee failed to furnish reasons for shortage. There is no material available of clandestine removal of the goods. So, imposition of penalty under Section 11AC of the Act is not justified - demand set aside - appeal allowed - decided in favor of appellant.
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2009 (6) TMI 841
Issues:
- Interpretation of Notification No. 214/86-C.E.
- Allegation of being the real manufacturers of intermediate goods.
- Liability to pay Central Excise duty on intermediate goods.
- Applicability of Notification No. 10/96-C.E.
- Duty demand and penalty on the Appellants.
Interpretation of Notification No. 214/86-C.E.:
The Appellants sent raw materials to job-workers without taking Modvat/CENVAT Credit, receiving intermediate goods back for manufacturing exempted footwear. The Department demanded duty under Notification No. 214/86-C.E., alleging the Appellants' status as real manufacturers. The Appellants argued they did not need to follow the Notification's procedure as they did not take credit and the finished goods were not dutiable. The Tribunal found the Notification inapplicable as the finished goods were exempted footwear, setting aside the demand and penalty.
Allegation of being the real manufacturers of intermediate goods:
The Department claimed the Appellants were actual manufacturers of intermediates, contrary to the Notification's premise that job-workers are the manufacturers. The Tribunal noted the absence of such an allegation in the show cause notice, denying the Appellants a chance to defend. Without proof of an undertaking by the Appellants to pay duty for job-workers, the Tribunal dismissed the claim that the Appellants were real manufacturers, as the Notification shifts duty payment to principals for dutiable goods.
Liability to pay Central Excise duty on intermediate goods:
The Department argued the Appellants supervised job-workers closely, specifying production, making them liable for duty on intermediates. However, the Tribunal found no evidence of an undertaking by the Appellants to pay duty on behalf of job-workers. As the intermediates were used for exempted footwear and no duty demand was made on job-workers, the Tribunal ruled the duty demand and penalty on the Appellants unsustainable, following precedent decisions.
Applicability of Notification No. 10/96-C.E.:
The Appellants contended that the intermediates used by job-workers for exempted footwear were exempt under Notification No. 10/96-C.E. The Tribunal acknowledged this argument but refrained from delving into it, as there was no duty demand on job-workers. The Tribunal held that since the Appellants did not undertake duty liability for job-workers, they could not be held responsible for duty on intermediates.
Duty demand and penalty on the Appellants:
Ultimately, the Tribunal ruled in favor of the Appellants, setting aside the impugned order and allowing the appeal. The Tribunal emphasized that without an undertaking by the Appellants to discharge duty liability for job-workers, and considering they were not the manufacturers of intermediate goods, the duty demand and penalty on the Appellants could not be upheld. The decision was based on previous Tribunal rulings and the specific circumstances of the case.
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2009 (6) TMI 840
Penalty and redemption fine - Misdeclaration - imported second-hand used photocopiers - Held that: - the ld. Commissioner (Appeals) has come to a conclusion that the imposition of fine and penalty would depend on the nature of the offence and recurrence of the same. In other words, he is holding that the appellants are habitual offenders and hence he has reduced the redemption fine to 35% while upholding the entire amount of penalty. To my mind this approach is not in consonance with the settled law, as original adjudicating authority has not come to such conclusion. At the first appeal stage, this cannot be considered as a reason for imposition of fine and penalty if the appellant is not put to notice.
The appellants are required to pay redemption fine of 10% and penalty of 5% of the value of goods as arrived by the adjudicating authority - appeal dismissed - decided against appellant.
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2009 (6) TMI 839
The Appellate Tribunal CESTAT, Kolkata waived the pre-deposit of penalty for the appeal as there was no finding of willful suppression of facts with intent to evade duty. Duty and interest were already paid. The order was pronounced in open court.
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2009 (6) TMI 838
Issues:
1. Failure to furnish necessary documents for finalizing assessment under Project Import Regulations.
2. Demand of differential duty under Section 28(2) of the Customs Act.
3. Admissibility of installation certificate as evidence.
4. Finalization of assessment under Regulation 7 of Project Import Regulations.
Issue 1 - Failure to furnish necessary documents for finalizing assessment under Project Import Regulations:
The case involved an importer who failed to provide the required documents to establish the installation of imported goods under Project Import Regulations. Despite multiple reminders from authorities between 1995 and 2001, the importer did not comply. This led to a proposal by the Deputy Commissioner of Customs to demand an amount for the benefit availed under the regulations. The original authority confirmed the demand of differential duty due to the importer's failure to satisfy eligibility by producing necessary documents. The Commissioner (Appeals) found the assessment to be provisional and remanded the matter to finalize the assessment as per Regulation 7 of the Project Import Regulations.
Issue 2 - Demand of differential duty under Section 28(2) of the Customs Act:
The notice proposing to demand the differential amount invoked Section 28(2) of the Customs Act. However, the Commissioner (Appeals) deemed this demand inappropriate and remanded the matter for finalization of assessment under Regulation 7. The Tribunal upheld this decision, stating that the denial of project import benefit and demand under Section 28 was not proper since the initial assessment had not been finalized.
Issue 3 - Admissibility of installation certificate as evidence:
The appellants attempted to substantiate their claim by producing an installation certificate before the Commissioner (Appeals). However, the certificate was not accepted as relevant evidence due to Rule 5 of the Customs (Appeal) Rules, 1982, which barred the acceptance of new documents during the appeal process. The Tribunal found that the consideration of the installation certificate was not material as the focus should be on finalizing the assessment with necessary documents as per Regulation 7.
Issue 4 - Finalization of assessment under Regulation 7 of Project Import Regulations:
Regulation 7 required the importer to submit necessary documents within a specified period for finalization of the assessment. The Tribunal emphasized that the authorities should not examine the eligibility for project import benefit based on the impugned import, as it would be inconsistent with the regulations. The appeal was disposed of with the direction for the appellants to produce the required documents for assessment by the proper officer of Customs.
In conclusion, the Tribunal upheld the remand for finalizing the assessment under Regulation 7, rejected the demand of differential duty under Section 28, and emphasized the importance of complying with the regulations for project imports.
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2009 (6) TMI 837
In the case of Appellate Tribunal CESTAT, NEW DELHI, the issue at hand was the failure of the Appellant to comply with a pre-deposit order granted by the Tribunal. The Hon'ble High Court of Allahabad observed that the Appellant had not complied with the Tribunal's direction to deposit Rs. 25 lakhs by a specified date, leading to dismissal of the writ petition. The Tribunal later considered a modification application reducing the pre-deposit amount to Rs. 40 lakhs, with specific instructions for compliance. Despite being granted additional time, the Appellant failed to comply with the Tribunal's orders. The Tribunal, after leniently considering the Appellant's case, dismissed the Appeals due to the Appellant's dilatory tactics and abuse of the legal process. The decision was based on the need to protect the interests of Revenue and the failure of the Appellant to cooperate with the Tribunal's directives. The dismissal was deemed necessary to uphold the end of justice. The entire judgment was dictated and pronounced in open court by the tribunal members.
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2009 (6) TMI 836
Clandestine removal - Proof - Confiscation - Raw material in excess - Held that: - the charge of clandestine clearance in the case relating to the Unit I is found solely on the basis of the assessee’s input output norms. This calculation is subject to various limitations such as quality of the raw material used and other process parameters. Moreover, the production norm, as claimed by the appellants, is determined after watching the performance of the production machinery over a period of time. This ratio cannot be reliably applied to determine the output of a given quantity of raw material issued in three days.
Finding of clandestine production and clearance in the instant case was made solely on the basis of a formula applied to the operation of the assessee’s production and feeding of raw material in a couple of days. No statement of any worker or any buyer had been obtained to support the charges. There is no evidence of sale to any buyer of the quantity found to have been clandestinely cleared. There is no evidence of receipt of any sale proceeds. In the circumstances, considering , the ratio of various decisions relied on by the appellants, the impugned demand towards clandestine clearance is held to be not sustainable.
Appeal allowed - decided in favor of appellant.
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2009 (6) TMI 835
Issues:
1. Whether the application filed under Section 149 of the Customs Act, 1962 for amending shipping bills was rightly rejected by the lower authorities.
Analysis:
1. The appellant imported raw materials under a Quantity Based Advance Licence and exported the final product under eight Shipping Bills. The issue arose when the DGFT objected to the discrepancy in the chemical name of the export goods mentioned in the shipping bills. The appellant sought to amend the shipping bills under Section 149 of the Customs Act, 1962.
2. The original authority disallowed the amendment citing that the goods were already exported. The appellate authority upheld this decision, noting the difference in chemical names between the manufacturer's literature and the proposed amendment. The present appeal challenges the Appellate Commissioner's order.
3. Section 149 of the Customs Act allows for the amendment of documents under certain conditions. The proviso states that amendments to shipping bills after export are generally not allowed unless supported by documentary evidence existing at the time of export. The appellant claimed to have applied for amendment based on documents like ARE-ls, central excise invoices, export invoices, packing lists, and purchase orders. However, the chemical name in these documents did not match the proposed amendment.
4. The judge found no fault with the lower authorities' decisions based on the evidence presented. However, due to the absence of a limitation period under Section 149 and the absence of disputes regarding the export product's identity, the judge directed a remand to the original authority. The judge advised obtaining the opinion of the Director, Central Revenue Control Laboratory, to confirm the equivalence of the chemical names, potentially supporting the appellant's case under Section 149.
5. Consequently, the judge set aside the lower authorities' orders, allowing the appeal by remanding the case for a fresh decision after seeking the Director, CRCL's opinion and providing the appellant with a fair opportunity to present their case.
This detailed analysis of the judgment highlights the key issues, legal provisions, arguments presented, and the judge's decision, ensuring a comprehensive understanding of the case.
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2009 (6) TMI 834
Issues involved: Assessment of abnormal packing charges and financial charges in relation to assessable value.
Assessment of abnormal packing charges:
The appellant argued that abnormal packing charges not normal in nature should not be included in the assessable value. They highlighted that repacking was done to remove unusable goods from usable goods, known to the department from consignment agent agreements. The appellant contended that such repacking charges, being separate and not relatable to the price fixed, should not contribute to the assessable value. The Tribunal found that the revenue failed to provide specific instances or allegations regarding the nature of repacking, leading to the conclusion that the charges for repacking were not sustainable and should not form part of the assessable value. The Tribunal emphasized the importance of specific allegations in the show cause notice (SCN) to grant the appellant an opportunity to defend against charges.
Assessment of financial charges:
Regarding financial charges, the appellant argued that such charges, made for peculiar reasons and circumstances to cover financial losses, should not be attributable to the assessable value. The Tribunal noted that the SCN did not demonstrate how the financial charges were related to the removal of excisable goods or had any nexus to the assessable value. In the absence of a clear allegation establishing the nexus between financial charges and assessable value, the Tribunal held that the appellant should succeed in excluding the financial charges from the assessable value. Consequently, the appeal was allowed, and the impugned order was set aside based on the lack of evidence linking the financial charges to the assessable value.
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2009 (6) TMI 832
The appellate tribunal CESTAT, New Delhi, under the citation 2009 (6) TMI 832, ruled on a case where Central Excise officers detected a shortage of finished goods involving central excise duty at a factory. The partner of the respondent firm admitted to the shortage and stated that the goods were sold in the open market without an invoice. The respondents deposited the duty and a penalty. The original authority confirmed the duty demand and imposed penalties, which were later set aside by the Commissioner (Appeals). The tribunal disagreed with thelluminate the Commissioner's decision, stating that the partner's admission of clandestine removal of the goods was sufficient for penalty under Section 11AC of the Central Excise Act, 1944. The tribunal referred to a case law to determine the penalty amount and reduced the penalties on the respondents. The tribunal set aside the Commissioner's order, restored the original authority's decision, and reduced the penalties on the respondents to Rs. 40,414 and Rs. 10,000 respectively. The appeals filed by the Revenue were disposed of accordingly.
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2009 (6) TMI 831
Issues:
Appeal against penalty imposed under Section 11AC of the Central Excise Act, 1944.
Analysis:
The appeal was filed by the Revenue against the order of the Commissioner (Appeals) setting aside the penalty imposed under Section 11AC of the Central Excise Act, 1944. The case involved a situation where Central Excise Officers visited the respondent's factory and found a shortage of raw materials involving central excise duty. The Authorised Signatory explained that the shortage occurred during loading/unloading of drums. The respondent accepted the shortage, deposited the duty, and provided reasons for the shortage, which were not disputed by the department. The Original Authority confirmed the demand and imposed a penalty of an equal amount under Section 11AC. However, the Commissioner (Appeals) set aside the penalty.
Upon review, the Tribunal found that the shortage was detected during stock verification, the duty was paid promptly, and the reasons for the shortage were accepted. Referring to a judgment by the Hon'ble Punjab & Haryana High Court, it was noted that the mere payment of duty before the issuance of a show cause notice does not preclude the imposition of a penalty under Section 11AC, provided the elements of the section, including mens rea, are satisfied. However, in this case, there was no evidence of clandestine clearance of goods, leading the Tribunal to conclude that the imposition of a penalty under Section 11AC was not warranted. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and rejected the appeal filed by the Revenue.
The judgment was pronounced on 5-6-2009, and the appeal was dismissed by the Tribunal.
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2009 (6) TMI 830
Issues Involved:
1. Confiscation of goods under Section 111(d), (l), and (m) of the Customs Act, 1962.
2. Imposition of penalties under Section 112(a) and 112(b) of the Customs Act, 1962.
3. Validity of the seizure and subsequent proceedings.
4. Role and liability of various individuals involved in the alleged smuggling activities.
5. Department's appeal against the dropping of penal proceedings against Shri Vishnu Kumar.
Detailed Analysis:
1. Confiscation of Goods:
The primary issue was whether the goods seized from the speed post center were liable for confiscation under Section 111(d), (l), and (m) of the Customs Act, 1962. The seized parcels lacked a proper customs declaration, which is a requirement under Section 82 of the Customs Act and Notification No. 78-Cus., dated 2-4-1938. The Tribunal held that the absence of such a declaration rendered the goods liable for confiscation as they were imported contrary to prohibitions imposed under Section 11 of the Customs Act. The Tribunal rejected the argument that the goods were seized before being sorted by customs, affirming their confiscation.
2. Imposition of Penalties:
Penalties were imposed on various individuals under Section 112(a) and 112(b) of the Customs Act. The Tribunal upheld the penalties on Shri Sandeep Sehgal, Shri Rajesh Kumar, and Shri Kishori Lal, citing their active involvement in the illicit importation and clearance of dutiable goods without payment of duty. However, the penalty on Shri Joginder Gulati was set aside due to a lack of evidence showing his involvement beyond being a supplier.
3. Validity of Seizure and Proceedings:
The Tribunal addressed the argument that the goods were seized before being handed over to customs for examination. It was held that the seizure was valid as the goods were imported without the required customs declaration, making them liable for confiscation under Section 111(d) of the Customs Act. The Tribunal emphasized that the omission of the declaration was not innocent and facilitated the illicit clearance of the parcels.
4. Role and Liability of Individuals:
- Shri Sandeep Sehgal: As the proprietor of M/s. B.T., he was found liable for the illicit importation of goods and was penalized accordingly.
- Shri Rajesh Kumar: The Customs Inspector was found to have actively abetted the illicit clearance of goods and was penalized.
- Shri Kishori Lal: The Postal Clerk was also found to have played a central role in the illicit clearance and was penalized.
- Shri Vishnu Kumar: Initially exonerated by the Commissioner, the Tribunal found that he had abetted the illicit activities by informing Shri Kishori Lal about the arrival of parcels and imposed a penalty of Rs. 10,000 on him.
5. Department's Appeal Against Shri Vishnu Kumar:
The Department's appeal challenged the dropping of penal proceedings against Shri Vishnu Kumar. The Tribunal found that Shri Vishnu Kumar had indeed played a crucial role in the illicit clearance of parcels by informing Shri Kishori Lal about their arrival. Consequently, the Tribunal imposed a penalty of Rs. 10,000 on him, setting aside the Commissioner's order that had exonerated him.
Conclusion:
The Tribunal upheld the confiscation of the goods and penalties on Shri Sandeep Sehgal, Shri Rajesh Kumar, and Shri Kishori Lal. The penalty on Shri Joginder Gulati was set aside due to insufficient evidence of his involvement. The Tribunal also imposed a penalty on Shri Vishnu Kumar, reversing the Commissioner's decision to drop proceedings against him. The appeals of Shri Sandeep Sehgal, Shri Rajesh Kumar, and Shri Kishori Lal were dismissed, while the appeal of Shri Joginder Gulati was allowed. The Department's appeal against Shri Vishnu Kumar was also allowed.
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2009 (6) TMI 829
Issues:
1. Whether a refund claim for excess duty paid can be entertained without challenging the assessment order?
2. Whether the provisions of Section 154 of the Customs Act, 1962 apply to rectify clerical errors made by importers in the Bill of Entry?
3. Whether the importer is entitled to a refund of excess duty paid due to a clerical error even if the assessment order was not challenged through the appeal process?
Issue 1 - Refund Claim and Challenging Assessment Order:
The case involved an excess payment of duty by M/s. Symrise Pvt. Ltd. (SPL) due to an error in the invoice amount. The Deputy Commissioner informed SPL that a refund claim was not maintainable as the assessment order had become final and suggested filing an appeal. The Commissioner (Appeals) upheld this decision citing legal precedents. However, the Tribunal considered SPL's reliance on CBEC Circular and previous judgments to support the argument that without challenging the assessment order, a refund claim could be pursued. The Tribunal agreed with SPL, emphasizing that the absence of a challenge during assessment did not preclude the right to claim a refund.
Issue 2 - Section 154 of Customs Act for Clerical Errors:
The Tribunal analyzed the applicability of Section 154 of the Customs Act, 1962 in rectifying clerical errors. The Commissioner (Appeals) had held that Section 154 only applied to errors by departmental officers, not importers. However, the Tribunal referred to previous cases where importers could claim refunds due to clerical errors under Section 154 even without filing a refund claim under Section 27. The Tribunal clarified that importers could seek correction of errors through Section 154, irrespective of whether the assessment order was challenged or not.
Issue 3 - Entitlement to Refund for Clerical Error:
The Tribunal addressed whether the importer was entitled to a refund of excess duty paid due to a clerical error, even if the assessment order was not challenged. Relying on precedents and the provisions of Section 154, the Tribunal concluded that the importer had the right to claim a refund for excess duty paid as a consequence of a clerical error, regardless of the finality of the assessment order. The Tribunal allowed SPL's appeal, granting them the refund of excess duty paid, subject to scrutiny for unjust enrichment.
In summary, the Tribunal ruled in favor of M/s. Symrise Pvt. Ltd., allowing their appeal for a refund of excess duty paid due to a clerical error in the assessment, emphasizing the applicability of Section 154 of the Customs Act for rectifying such errors by importers, irrespective of challenging the assessment order.
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9911796707
