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Showing 201 to 220 of 1564 Records
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2024 (8) TMI 1364
Rejection of registration u/s 80G(5)/12AA of existing trust - instead of applying under clause (i) of the proviso to section 80G, it applied u/clause (iii) as a new trust - assessee did not file the form no- 10AB within the stipulated time limit - requirement for seeking any provisional approval
HELD THAT:- As the assessee was an existing trust and had been granted approval u/s 12AA of the Act as well as under section 80G of the Act earlier but instead of applying under clause (i) of the proviso to section 80G, it applied under clause (iii) as a new trust. If it had applied under clause (i), there was no need of issuing any provisional certificate and as per the second proviso to section 80G, the Principal Commissioner or Commissioner would have passed an order in writing granting it approval for a period of five years and there was no requirement for seeking any provisional approval which is required only for a new trust.
The whole controversy arose due to incorrect mention of the clause under which the application was required to be filed, which was mentioned as clause (iv) of the first proviso to sub-section (5) of section 80G in column 6 of Form No. 10AC whereas the same should have been mentioned as clause (i) of the first proviso to sub-section (5) of section 80G and AR also admitted this fact in the course of the hearing.
Since, Form No. 10AC was filed in time, the error on the part of the assessee for mentioning the wrong clause is deemed to be a curable defect and the application on Form No. 10AC is deemed to be filed under clause (i) of the first proviso to sub-section (5) of section 80G. The order of the Ld. CIT(Exemption) is hereby set aside and he is required to consider the application as filed under clause (i) of the first proviso to section 80G(5) of the Act and consider the same for grant of approval. Appeal of the assessee is allowed for statistical purposes.
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2024 (8) TMI 1363
Reopening of assessment - valid sanction accorded u/s 151 or not? - HELD THAT:- As the assessment was reopened beyond three years, sanction is required from Pr. CCIT whereas in the case of assessee, sanction has been obtained from Pr. CIT. this issue has been considered in the case of Siemens Financial Services (P.) Ltd. [2023 (9) TMI 552 - BOMBAY HIGH COURT] as held that as the notice under section 148 of the Act is issued on 31 July 2022 and, hence, is issued beyond period of three years from the end of the relevant assessment year and, accordingly, the approval of the specified authority under section 151(ii) of the Act should be taken.
Time limit for reopening under the new regime - HELD THAT:- As on perusal of the reasons recorded for re-opening the assessment, the escapement of income is only Rs. 9,00,000/- and for which alleged escapement is less than Rs. 50,00,000/-, notice issued u/s 148 of the Act is barred by limitation considering Section 149(1)(b) of the Act. This issue has been duly considered in the case of Ganesh Dass Khanna [2023 (11) TMI 763 - DELHI HIGH COURT] as decided that new regime for reopening assessments was enacted is that where escapement of income was below Rs. 50 lakhs, the normal period of limitation, i.e., three (03) years was to apply. In comparison, the extended period of ten (10) years would apply in serious tax evasion cases where there was evidence of concealment of income of Rs. 50 lakhs or more in the given period.
Thus we are of the considered view that the impugned notice issued u/s 148 of the Act is without jurisdiction and hence set aside making the resultant re-assessment order null and void - Decided in favour of assessee.
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2024 (8) TMI 1362
Unexplained cash credit u/s 68 - AO has established that the assessee had used Gold purchaser as conduct of unaccounted money bring into Bank account as He/Gold purchaser never deal with trading in gold in his life time before demonetization - CIT(A) deleted addition - HELD THAT:- Apart from the first two payments which were made on the same date as the said transaction, the third payment was received by the assessee in advance.
In the present case, the Revenue has only raised doubts about the sales bills and did not dispute the aforesaid receipt of money through the banking channel. Even though stock statements were also furnished by the assessee, in response to notice issued u/s 131 there is no dispute or doubt on the same by the Revenue. Such being the facts, when the sale transaction has been declared as revenue receipt by the assessee, we find no infirmity in the impugned order in deleting the addition made u/s 68.
Addition on account of cash deposit - In the present case, it is undisputed that the assessee has submitted a copy of the sales register, purchase register, stock statement, cash book, bank book and bank statements. There is no material available on record to show that the AO has pointed out any mistake in the availability of stock as of 08/11/2016.
Just because only on the one-day out of 365 days in a year, the assessee has shown cash sales AO proceeded to make the addition u/s 68, without appreciating the fact that on the date, i.e. 08/11/2016, the Government had announced demonetisation of old notes and it was an exceptional day and various people anxiously converted the old currency notes into other form and some purchased gold or other jewellery. In the absence of any material to doubt the availability of stock of gold with the assessee, we are of the considered view that the learned CIT(A) has rightly deleted the addition made by the AO on account of cash deposits. Revenue’s appeal is dismissed.
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2024 (8) TMI 1361
Cash deposit during demonetization period as taxed u/s 69A r.w.s. 115BBE - source of cash deposit is treated to be out unaccounted sales made by the assessee.
HELD THAT:- Admittedly, assessee has been making sales in cash from his small retail outlet for lades lower garments that the price of such garment is less than Rs. 2,000/- per piece. Thus, it would be better to apply net profit rate of 8% on these unaccounted sales of Rs. 32,00,000/- which works out to Rs. 2,56,000/-. Thus, the addition is restricted to Rs. 2,56,000/- as against addition of Rs. 32,00,000/- made by the AO.
The reason for adopting the net profit rate of cash deposit is that assessee does not have any source of income nor has made any investment and is only involved in petty retail business. Thus, it cannot be held that assessee had some other unexplained cash from some other sources.
Accordingly, the addition is sustained on the basis of application of net profit of 8% on cash deposits as the same is treated as income from business and profession and not to be taxed u/s. 69A r.w.s. 115BBE. Accordingly, the appeal of the assessee is partly allowed.
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2024 (8) TMI 1360
Unexplained cash - addition u/s 69A in respect of the cash found during the search - Assessee produced cash book to explain cash - DR submitted that the cash book produced by the assessee is an afterthought and maintaining of cash book is not mandatory for the individual, therefore, the assessee cannot rely on such document - as argued Assessee’s name along with Subhash Chand Aggarwal and other family member’s name written but the addition has been made only in the name of the assessee.
HELD THAT:- CIT(A) has disbelieved the cash book only on the ground that ‘generally individuals do not maintain cash book and it is not mandatory to maintain cash book for the individual’.
CIT(A) without any basis observed that the cash book was created to explain the unaccounted cash found and seized during the course of the search.
CIT(A) treated that the amount as explained on the estimated basis and confirmed the rest of the addition - In our considered opinion, the findings given by the CIT(A) on the cash book is baseless and perverse.
Assessee having been produced the cash book and explained the cash found during the search and seizure operation contending that the cash found during the search are belongs to family members and considering the fact that even the Panchnama drawn during the search proceedings containing the names of the Assessee and other family members and the A.O. who has examined the cash book has not found fault on the same on the merit of it, in our considered opinion, the authorities have committed error in making/sustaining the addition. - Assessee appeal allowed.
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2024 (8) TMI 1359
Denial of benefit of section 11 & 12 - assessee failed to file the return of income and form no. 10B before the due date of filling the return of income - HELD THAT:- This issue is decided in the case of Sarvodaya Charitable Trust [2021 (1) TMI 214 - GUJARAT HIGH COURT] where assessee, a public charitable trust registered u/s 12A, had substantially satisfied condition for availing benefit of exemption as a trust, it could not be denied exemption merely on bar of limitation in furnishing audit report in Form No.10B especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned.
The similar issue is also dealt in the case of ITO(E) Vs. Shri Laxmanarayan Dev Shrishan Seva Khendra [2023 (7) TMI 293 - ITAT AHMEDABAD] and Sh. Rajkot Vishashrimali Jain Samaj [2023 (3) TMI 765 - ITAT RAJKOT]. On being consistent view in the matter we direct the ld. Jurisdiction Assessing Officer (JAO) to consider the Form no. 10B and allow the claim of exemption u/s. 11 of the Act to the assessee.
The bench in fact noted that the assessee filed the form no. 10 B within the extended due date and thus the denial of section 11 benefit was on account incorrect appreciation of the fact. Thus, based on this observation ground raised by the assessee is allowed.
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2024 (8) TMI 1358
Accrual of income in India - Existence of PE in India - case of assessee is that Adobe Systems Software Ireland Limited is a company incorporated under the laws of Ireland and is a tax resident of Ireland in accordance with the DTAA or tax treaty between India and Ireland - HELD THAT:- Issue of existence of PE is fully and squarely covered by the order of the Co-ordinate Bench where vide a common order [2022 (7) TMI 1365 - ITAT DELHI], the coordinate Bench has deleted the additions made by the Ld. AO. It has been held that no addition had been proposed by the Ld. Transfer Pricing Officer in the case of Adobe India with respect to marketing support services. In such circumstances, further attribution of profits to the alleged PE i.e. Adobe India will be contrary to the settled position of law as laid down by the Hon’ble Apex Court in the case of Morgan Stanley [2007 (7) TMI 201 - SUPREME COURT] and E-Funds [2017 (10) TMI 1011 - SUPREME COURT]
On the issue of existence of a PE, it was held that the finding itself of existence of a PE is without any cogent reasons.
Tribunal has rejected the reasons and conclusions on which the findings of the AO and Hon’ble DRP were premised. Accordingly, the additions made by the Ld. AO in the impugned case deserve to be deleted on the merit for the year under consideration. Thus, the grounds raised are allowed and appeal of asseessee is allowed.
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2024 (8) TMI 1357
Violation of the principles of natural justice - contravention of provisions of Section 28AAA of the Customs Act, 1962 - Adjudicating Authority did not consider any of the submissions of petitioner or deal with any submissions made by petitioner during the personal hearing but passed a non speaking order simply saying that recovery has been made from petitioner and, therefore, nothing further has to be done - HELD THAT:- One thing is certain that petitioner has nowhere admitted its liability and petitioner had paid the amounts only in view of the tremendous pressure that was on petitioner to fulfill its export order and because an alert was put against IEC in system. It is also clear that no investigation has been conducted and SIIB(X), JNCH has only adopted a shortcut approach without investigating to trace the full truth. This method is unacceptable and has to be deprecated. Respondent no. 3 has also accepted that in view of incomplete investigation and lack of proper evidence it is not justified to confirm charges against petitioner.
Jurisdiction is exercised and the impugned order dated 17th August 2021 passed by respondent no. 3 set aside.
Respondent no. 2 is directed to investigate how a forged scrip was registered at JNCH and how re-registered license was used by two importers in ICD Tughlakabad. Respondent no. 2 shall also investigate why none of those parties were neither summoned nor any verification at Tughlakabad end has been done and ascertain the truth - petition disposed off.
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2024 (8) TMI 1356
Smuggling into the NSEZ - violation of the Special Economic Zones Act, 2005, Special Economic Zones Rules, 2006 and the Customs Act - Officer of customs is a Proper Officer for the purposes of SEZ Act or not - HELD THAT:- The Ld. Commissioner (Appeals) has not discussed as to how the provisions under the SEZ Act read with the SEZ Rules have been violated in the instant case and have failed to establish as to how the Appellant contravened Section 111(m), Section 112(a), 112(b) and Section 114AA of the Customs Act.
Section 110 of the Customs Act is not a notified offence for the purposes of the SEZ Act vide Notification No. S.O. 2665(E) dated 05.08.2016 and therefore, even if by virtue of Notification No.110/2003, the Preventive Officer, NSEZ has been designated as an officer of Customs for the purposes of Customs Act, however by virtue of the Notification SO 2665(E), such officer had no power to detain the subject goods in terms of Section 110 of the Customs Act as the same is not a notified offence under the SEZ Act.
In the absence of any notification issued by the Board authorizing the NSEZ officers below the rank of the jurisdictional Commissioner to seize the subject goods, the seizure of the subject goods was legally unsustainable and therefore, confiscation under Section 111(m) of the Customs Act pursuant to such seizure is also bad in law and therefore, is liable to be set aside - the subject vehicles which were made liable for confiscation under Section 115(2) of the Customs Act, and are in appeal is unwarranted for, since the subject vehicles were used for carrying the goods out of and into the NSEZ without the knowledge of the owner or person-in-charge of the subject vehicles which is a mandate as per the bare reading of Section 115 (2) of the Act.
The confiscation of the goods and seizure of vehicles cannot sustain and it is hereby set aside - the penalty imposed on the Appellant is unwarranted - the impugned orders in both the appeals are set aside - appeal allowed.
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2024 (8) TMI 1355
Misdeclaration of imported goods - Rejection of declared value - redetermination of assessable value - Valuation Rules are to be followed sequentially through rules 4 to 9 or not - Confiscation - penalties.
Mis-declaration of description or value of the goods or not - HELD THAT:- It is a matter of record that the goods were examined under Panchnama and the quantity was found to be more than what was declared. When questioned, Ajay Garg said that he had declared less quantity so as to save shipping charges. It is also a mater of record that instead of mutilated articles what were found was old and worn cloths whose import was prohibited - the submissions made by the learned counsel for the appellant are false and can be verified from the statements of Ajay Garg and from the orders of the lower authorities.
Rejection of transaction value - HELD THAT:- When the appellant himself has produced “true invoices” showing the correct transaction value and also tendered his statement to this effect, the proper course for the officer is to re-assess the Bills of Entry as per the correct transaction value declared by the appellant - If the officer had rejected the declared assessable value of 0.95 US dollars per kg submitted by the appellant as the correct transaction value, then he would have had to go through the Valuation Rules 4 to 9. The officer simply accepted the assessable value declared by the appellant as correct assessable value. There is no infirmity in re-determining the assessable value and calculating the differential duty on the basis of declared “true invoices”.
Confiscation - redemption fine - penalties - HELD THAT:- Since the mis-declaration of the nature of the goods, quanitity and value and import of the goods which were restricted without the required licence are not in dispute, the confiscation of the goods, the redemption fine and penalties need to be upheld.
The impugned order needs to be sustained - appeal dismissed.
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2024 (8) TMI 1354
Granting of provisional release of the seized goods wherein the appellant was directed to furnish their bond equal to the value of goods and to furnish a bank guarantee equal to the duty - seized imported areca nuts - non-submission of legitimate documents regarding the source of said seized goods - HELD THAT:- The goods were seized after primary investigation. There is no evidence that even though it is assumed that the goods were diverted from SEZ but as per the documents submitted by the appellant the goods were procured by the appellant from domestic supplier. It is also fact that transaction also suffered the GST and E-way bill and invoices were raised.
It is also found that the detail investigation is yet to be carried out and only thereafter it can be established whether the goods under seizure is clandestinely form KASEZ or otherwise. In this position, the condition of bank guarantee of Rs. 6,20,26,403/- appears to be very harsh. Therefore, the amount of bank guarantee needs to be reduced, in the facts and circumstances of the case. Accordingly, the goods may be provisionally released on execution of bond for Rs. 3,65,78,838/- with a bank guarantee of Rs. 3 crores.
The impugned order is modified - Appeal disposed off.
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2024 (8) TMI 1353
Classification of imported goods - Aluminium Scrap Tassel - to be classified under CTH 76020010 or under 76051100 - enhancement of value of the goods on the basis of NIDB data - entire case was made out on the basis of the examination report of Assistant Commissioner (Docks) - HELD THAT:- From the above Chartered Engineer Certificate, it is crystal clear that goods are not in the primarily form of ‘Coils of Aluminium Wire of Uniform Diameter of 10MM’. Therefore, the goods cannot be considered as the fresh coils of Aluminium wire but as per the nature of the goods described by the Chartered Engineer, it is clearly Aluminium Scrap Tassel as per ISRI. Therefore, the same is correctly classified under the classification RITC 76020010, by no stretch of imagination, the same can be classified under 76051100.
The Tassel under the ISRI specification for Aluminium scrap includes old, unalloyed Aluminium wire and cable. Therefore, even the Aluminium scrap if it is in rejected wire form having various defects as described by the Chartered Engineer. Even from the look of the product, it may appear as Aluminium Wire but the same carries various defect, cut, etc., hence it will clearly falls under Aluminium scrap - Therefore, in the facts of the present case, the appellant have correctly classified the goods as Aluminium Scrap under RITC 76020010 and since, the nature of goods is clearly as per the descriptions declared in the bill of entry, the enhancement of the value being consequently to the claim of the Revenue, the enhancement of value will also not be sustainable.
The impugned order is not sustainable and is set aside - appeal allowed.
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2024 (8) TMI 1352
Payment of anti-subsidy/ Countervailing Duty (CVD) imposed on the import of stainless steel coils and plates from China under Section 9 of the Customs Tariff Act, 1975 - amendment of the shipping bills under Section 149 of the Customs Act, 1962 - permission for procedural relaxation under Drawback Rules, 2007.
Whether import of stainless steel coils and plates from China in eight impugned B/Es all dated 12.10.2017 are liable for payment of Countervailing Duty (CVD) imposed under Section 9 of the Customs Tariff Act, 1975 or whether such imports under Advance Authorization Licenses are eligible for CVD exemption vide Notification No.18/2015-Customs dated 01.04.2015, as amended, vide Notification No.79/2017-Customs dated 13.10.2017? - HELD THAT:- Section 9 of the Customs Tariff Act, 1975, clearly demonstrate that the Central Government has power to impose a specific Countervailing duty (CVD) not exceeding the amount of subsidy bestowed upon the manufacture or production therein or the exportation therefrom of any article including any subsidy on transportation of such article, when such subsidized article is imported into India. Accordingly, Notification No. 01/2017-Customs (CVD) dated 07.09.2017issued by the Central Government had imposed CVD on import of ‘Flat rolled products of stainless steel, whether hot rolled or cold rolled of all grades/series; whether or not in plates, sheets, or in coil form or in any shape, of any width, of thickness 1.2 mm to 10.5 mm in case of hot rolled coils; 3 mm to 105 mm in case of hot rolled plates & sheets; and up to 6.75 mm in case of cold rolled flat products’ falling under CTH 7219 or 7220. Therefore, it could be concluded that there was a levy of CVD in force in terms of the said notification dated 07.09.2017. However, such levy was exempted only after the issuance of Notification No.79/2017-Customs dated 13.10.2017.
In terms of Section 159A ibid which provide that the effect of amendment do not revive anything that was not in force or existing at the time at which the amendment takes effect, we are of the considered view that import of stainless steel coils and plates from China in eight impugned B/Es all dated 12.10.2017 are liable for payment of Countervailing Duty (CVD) imposed under Section 9 of the Customs Tariff Act, 1975. To this extent the impugned order dated 01.11.2019, passed by learned Commissioner of Customs in confirmation of the demand of CVD duty is legally sustainable.
Whether confiscation of imported goods covered in eight impugned B/Es under Section 111(d) of the Customs Act, 1962 and imposition of penalty on the appellant company under Section 114A ibid; penalties on S/Shri Hemant Bohra and Vimal Bohra, Directors of the appellant company under Sections 112(a) and 114AA ibid in the impugned order dated 01.11.2019 is sustainable? - HELD THAT:- From plain reading of the legal provisions under Section 112(a) of the Customs Act, 1962, it is clear that a penalty is imposed, if it established that in relation to ‘goods’ which are liable to confiscation under Section 111 ibid, and that such penalty is liable to be imposed on ‘any person’. It is not the case that in the factual matrix of the present case, that the impugned imported goods were imported by the appellants involving any prohibition imposed under Customs Act, 1962 or any other Act. In fact, the appellants importer have given the specific Advance Licenses on which they had claimed exemption from the levy of CVD, and the departmental authorities at the Customs port of importation had also permitted such impugned imported goods to be cleared without payment of such CVD approving of such act by the appellants - it is clearly proved that there is no trace of any element of violation of Section 111(d) ibid and hence the imposition of penalty under Section 112(a) ibid is without any evidence or grounds and hence to this extent the impugned order is not legally sustainable.
In respect of penalty imposable under Section 114AA ibid is concerned, the legal provisions clearly provide that such penalty is imposed if a person is knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular - The penalty provision introduced by the Government under Section 114AA has been proposed considering the serious frauds being committed as that no goods are being exported, but papers are being created for availing the number of benefits under various export promotion schemes as has been held in the case of SURESH KUMAR AGGARWAL VERSUS COMMISSIONER OF CUSTOMS -III, RAIGAD, MAHARASHTRA [2024 (6) TMI 779 - CESTAT MUMBAI]. Therefore, the imposition of penalty under Section 114AA ibid is without any evidence or grounds and hence the impugned order is not legally sustainable in this aspect also.
Duty drawback claim - HELD THAT:- The case of the appellants for claim of drawback in respect of the CVD suffered cannot be rejected as was decided in the case of appellants by the Commissioner of Customs, Nhava Sheva-II in the impugned letter dated 19.04.2022. Further, the aforesaid instructions issued by CBEC and DGFT specifically provide for accepting the claim for drawback and allowing the exporters/importers to file the documents with the jurisdictional customs authorities. As the appellants have submitted complete details with respect to the B/Es and Shipping Bills relevant to their claims for drawback along with supporting documents, there is no ground for denying the same under Rule 13 (1) (a) of the Customs and Central Excise Duties Drawback Rules, 2017 - the application for claim of drawback submitted by the appellants is eligible to be considered under Customs and Central Excise Duties Drawback Rules, 2017.
Rejection of the request for amendment of shipping bills under Section 149 of the Customs Act, 1962, on the ground that there is delay of more than five months in filing the application - HELD THAT:- The legal provisions do not prescribe any specific time limit and the time limit prescribed under Circular No.36/2010-Customs dated 23.09.2010 has been struck down by a number of judgements of Hon’ble High Courts and Hon’ble Supreme Court - The Hon’ble High Court of Madras has held in the case of M/S. ANGEL OVERSEAS CORPORATION VERSUS UNION OF INDIA, DEPUTY COMMISSIONER OF CUSTOMS [2018 (7) TMI 1019 - MADRAS HIGH COURT] that the object being that the exporter should be entitled to drawback, the delay in filing claim filed for drawback should be entertained by condoning the delay.
The Hon’ble High Court of Ahmedabad has held in the case of MESSRS MAHALAXMI RUBTECH LTD. VERSUS UNION OF INDIA [2021 (3) TMI 240 - GUJARAT HIGH COURT] that the time limit of the submission of the request for conversion of shipping bills from one scheme to another within three months form the date of Let Export Order is held as ultra vires to Section 149 of the Customs Act, 1962.
The impugned order dated 01.11.2019 passed by learned Commissioner of Customs, NS-III, JNCH, Nhava Sheva to the extent it has confirmed the confiscation of impugned goods under Section 111(d) of the Customs Act, 1962 and imposed penalty on the appellant company under Section 114A ibid and also imposed penalties on S/Shri Hemant Bohra and Vimal Bohra, Directors of the appellant company under Sections 112(a) and 114AA ibid is not legally sustainable and the same is set aside. However, there are no reason to interfere with the confirmation of Countervailing Duty (CVD) imposed under Section 9 of the Customs Tariff Act, 1975 in the impugned order and the same is upheld.
Denial of grant of permission for giving exemption from compliance of Rule 13(1)(a) ibid in terms of the proviso appended to such Rule - denial of amendment of shipping bills sought by the appellants under Section 149 ibid read with earlier letter dated 21.02.2022 - HELD THAT:- The impugned letter dated 19.04.2022 is set aside and the jurisdictional Commissioner of Customs is directed to examine the application filed by the appellants and provide necessary relief in grant of drawback benefits as per law.
The impugned order is set aside - appeal allowed.
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2024 (8) TMI 1351
Classification of the imported goods - HDPE Regrind - classifiable under Customs Tariff Item (CTH) 3901 2000 or not - permissible for importation into the country, in terms of Foreign Trade Policy - whether the impugned order, in upholding the confirmation of confiscation of imported goods, imposition of redemption fine for re-export and imposing of penalty on the appellants by the original authority is legally sustainable or not?
HELD THAT:- The imported goods have been tested by three laboratories viz., (i) CRCL JNCH laboratory, which is also known as DYCC, JNCH laboratory, is an in-house customs testing facility; (ii) Government laboratory of CIPET, Aurangabad, and (iii) Envirocare Labs Pvt. Limited, which is a NABL accredited laboratory. As regards CRCL JNCH laboratory, we find that the Commissioner of Customs, NS-V, JNCH had issued Public Notice No.56/2021 dated 16.06.2021 informing the importers, exporters and the EXIM trade that the said laboratory cannot analyse/test certain 20 specified goods due to non-availability of facility in that laboratory - on perusal of the test report given by CRCL, JNCH laboratory, it transpires that it is given mainly on the basis of visual examination and the nature of constituent material could not be ascertained by them. Hence, such test reports of CRCL, JNCH laboratory cannot be relied upon as it does not have any legal basis.
It is seen that the BIS standard in IS 14534:1998 inter alia prescribe only post-consumer waste, in-house scrap for the purpose of monitoring the quality and for facilitating identification of the basic raw material. In such context, there is a mention of ‘visible contamination’ with respect to post-consumer plastics which have been elaborated in Annexure-A to such Standard, as goods covering trash/carry bags, Carry bags, non-food containers, office supplies, municipal supplies, building products, pipe and fittings of PP, PE, nylon etc., Thus, it is clear that in terms of BIS standard, the imported product do not quality as plastic waste/scrap.
The impugned order upholding confiscation of goods on the basis of violation of DGFT’s Public Notice requiring an import license in respect of the imported goods, is not proper and justified.
The impugned order dated 07.12.2022passed by the Commissioner of Customs (Appeals), JNCH, Mumbai-IIis not legally sustainable and the therefore the same is set aside - appeal allowed in favour of the appellants.
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2024 (8) TMI 1350
Suspension of CB license - Violation of Regulations 10(d) and 10(e) of Customs Brokers Licensing Regulations (CBLR), 2018 - gross mis-declaration of the quantity, description and nature of the goods with an intent to evade the applicable customs duty - Delay in issue of SCN, submission of inquiry report - initiation of inquiry proceedings under Regulation 14 ibid read with 17 and 18 ibid, against violations of CBLR - levy of penalty.
Vioaltion of Regulation 10(d) ibid - HELD THAT:- The appellants have failed to file the bills of entry as per the correct documents given by the importers and available in their possession. They have also failed to inform the importers about the correct requirement of customs statute to properly declare the details of imported goods and for payment of applicable customs duty thereon, and hence the appellants CB is liable for their failure to advise their client importers to comply with the provisions of the Customs law. Further, if there was any doubt about the imported goods during the relevant point of time, from the time of its import to its storage in FTWZ under customs bond, then the appellants CB could have brought it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC), but they failed to do so. Thus, the violation of Regulation 10(d) ibid, as concluded in the impugned order is sustainable.
Violation of the Regulation 10(e) ibid - HELD THAT:- The charges framed under the SCN dated 09.03.2023 are an independent proceeding under CBLR, 2018 for which the adjudicating authority is required to give specific findings on the basis of inquiry proceedings conducted as per Regulation 17 and 18 ibid. Further, with respect of the packing lists containing the correct description, quantity etc., the appellants CB did not impart any specific information to the importers, rather it is the case that such information was provided by the importers to the appellants. Thus, it is not feasible to sustain this charge on the appellants CB, that they did not exercise due diligence to impart correct information to their clients on the basis of an adjudication done in different proceedings - the conclusion arrived at by the Principal Commissioner of Customs (General) is without any basis of documents or facts, and the impugned order with respect to Regulation 10(e) ibid, and therefore it is not sustainable.
Delay in issue of SCN, submission of inquiry report - HELD THAT:- There is slight delay in issue of SCN, submission of inquiry report; however, the adjudication of the case and passing of the impugned order by the learned Principal Commissioner was completed within prescribed time from the submission of inquiry report - it is not found that the argument made by the learned Advocate by referring to various case laws for compliance with the time limits prescribed under the CBLR, 2018 was not followed as in the present case it cannot be said that there was inordinate delay and there was reasonable grounds in terms of the test laid down by the Hon’ble High Court of Bombay in the case of Principal Commissioner of Customs (General), Mumbai Vs. Unison Clearing P Ltd. [2018 (4) TMI 1053 - BOMBAY HIGH COURT] and there was no undue delay.
Levy of penalty - HELD THAT:- Tthe appellants could have been proactive in fulfilling their obligation as Customs Broker for exercising due diligence, when the correct packing list providing detailed and correct description, quantity of imported exports goods were available with the appellants CB and the same was not brought to the notice of the Customs department. Thus, to this extent the imposition of penalty for failure in not being proactive for fulfilling of regulation 10(d) of CBLR, 2018 is appropriate and justifiable.
There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the license of the appellants and for forfeiture of security deposit, inasmuch as there is no violation of regulation 10(e) ibid and the findings in the impugned order is contrary to the facts on record. However, in view of the failure of the appellants to have acted in a proactive manner in fulfillment of the obligation under regulation 10(d), we find that it is justifiable to impose a penalty of Rs.10,000/- against the appellants, which would be reasonable.
The appeal allowed in favour of the appellants.
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2024 (8) TMI 1349
Classification of imported goods - Float Glass - to be classified under CTH 7005 1090 or under CTH 7005 2990? - it was alleged that the CFG imported from Malaysia was wilfully mis-classified under CTH 70051090 for the purpose of availing undue FTA benefit of the said Notification, resulting in short levy of applicable Customs duty - eligibility for FTA benefit under Sl. No. 934 of Notification No. 46/2011-Cus dated 01.06.2011 - invocation of extended period of limitation.
Classification of imported goods - HELD THAT:- The issue of classification of CFG is no more res integra since the issue and identical arguments submitted by litigants were already elaborately dealt with in the Orders of the Kolkata Tribunal in the case of M/s. Bagrecha Enterprises Ltd. Vs. Commissioner of Custom, Chennai [2024 (5) TMI 943 - CESTAT CHENNAI] wherein it was held that the Clear Float Glass is more appropriately classifiable under CTH 7005 1090 of the Customs Tariff Act, 1975 - the issue of classification of Clear Float Glass is decided in favour of the appellant. Thus, the appellant succeeds on merits.
Invocation of extended period of limitation - penalties - HELD THAT:- After finalisation of assessments relying on the Test Report, it is not open for the Department to invoke the larger period of limitation as these assessments have undergone the rigours of provisional assessment and subsequent finalisation for the same product and for the same reason, the appellant has not suppressed or mis-declared any fact and the proposal to reclassify was only on the basis of interpretation made in the CRA objection and not on account of any shortcoming on the part of the appellant - Therefore, invoking extended period in these proceedings, either for demand of duty or for imposition of mandatory penalty is not at all sustainable. So, the issue of limitation is decided in favour of the appellant and consequently the order of confiscation and imposition of fine and penalties are set aside.
The imported Clear Float Glass is more appropriately classifiable under Customs Tariff Heading 7005 1090 of the Customs Tariff Act, 1975 and thus is eligible for exemption of the benefit of the Notification No. 46/2011-Cus dated 01.06.2011 (Sl.No. 934) and the impugned Order-in-Original No. 102220/2023 dated 09.06.2023 is set aside.
Appeal allowed.
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2024 (8) TMI 1348
Revocation of Customs Broker (CB) license - Forfeiture of security deposit and levy of penalty - violation of Regulations 10(e), 10(n), 10(q), 13(3), 13(4), 13(7)and 13(12) of CBLR, 2018 - Procedural compliance with Regulation 17 of CBLR, 2018 or not - mis-declaration and under valuation in respect of post imports - inquiry officer though appointed on 08.07.2022 had taken about 13 months to submit his report on 07.08.2023, whereas the Regulations provide for 90 days period from the date of issue of notice.
Violation of Regulation 10(e) ibid - HELD THAT:- In the absence of any document to prove the claim of mis-declaration and under valuation of import goods on the part of the appellants, the findings given by the learned Principal Commissioner of Customs in the impugned order that the appellants has failed to exercise due diligence to ascertain the correctness of information is difficult to prove for fastening such liability on the appellants CB for holding them responsible for violation of Regulation 10(e) ibid.
Violation of Regulation 10(n) ibid - HELD THAT:- The appellants CB had obtained the KYC documents from the importers and verified the existence of the importers through digital mode viz., Certificate of Importer-Exporter Code issued by the Additional Director General of Foreign Trade, Ministry of Commerce and Industry, Government of India; signature and account verification from bank. The inquiry authority had also accepted the same and dropped the charges against this violation in his inquiry report - CBIC had issued instructions in implementing the KYC norms for verification of identity, existence of the importer/exporter by Customs Broker in Circular No. 9/2010-Customs dated 08.04.2010, and verification of any two documents among specified documents is sufficient for fulfilling the obligation prescribed under Regulation 10(n) of CBLR, 2018. Thus, there are no legal basis for upholding the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order.
Violation of Regulation 10(q) - HELD THAT:- It is interesting to note that learned Principal Commissioner had examined the issue and had held that the appellants had not violated the said Regulation 10(q) ibid, though inadvertently he has mentioned the regulation as ‘10(n)’ instead of ‘10(q)’. However, in the order he has simply confirmed the violation by stating that the appellants CB had failed to discharge his duties cast upon him inter alia Regulation 10(q) ibid. Further, both sides have not brought to our knowledge of any corrigendum issued in this respect or in general of the impugned order.
Procedural compliance with Regulation 17 of CBLR, 2018 - HELD THAT:- In terms of Regulation 17 ibid, the learned Principal Commissioner could have waited for the entire inquiry proceedings to be completed involving two separate proceedings and then pass necessary orders as provided in the CBLR. However, it is seen that despite the CB license already under suspension as on date of passing the impugned order, again one another deemed suspension to take effect from a future event and date was prescribed and even here neither the prescribed time lines for completion of inquiry proceedings were followed nor reasonable explanation offered for the delay in conclusion of CBLR proceedings - there is no legal provision under CBLR for taking such action by the licensing authority. The above casual manner of handling the customs broking license matters by the authorities below do not instill confidence with us to state that CBLR is properly implemented for the purpose for which it has been framed for carrying out the provisions of Section 146 of the Customs Act, 1962. Hence, on this account too, the impugned order is not legally sustainable.
Allegation against Regulations 13(3), 13(4), 13(7) and 13(12) ibid - HELD THAT:- As the AC/DC of Customs in-charge of the Customs Broker Section, New Customs House themselves have approved the persons nominated by the appellants as authorised signatory for transacting business with customs in the above Public notices confirming that those two persons are duly authorised to transact with customs, and in the absence of any proof for such allegation, we are unable to accept the findings arrived at by the learned Principal Commissioner in the impugned order that the documents were handled in unauthorized manner.
There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in deemed revocation of the CB license of the appellants; for forfeiture of security deposit second time and for imposition of penalty, inasmuch as there is no violation of regulations 10(e), 10(n), 10(q) and 13(3), 13(4), 13(7) and 13(12) ibid, and the findings in the impugned order is contrary to the facts on record. Further, the impugned order is not sustainable as it has been issued in violation of Regulation 17(7) ibid.
The impugned order is set aside - appeal allowed in favor of appellant.
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2024 (8) TMI 1347
Eligibility for benefit of customs duty exemption under Notification No.26/2000-Customs dated 01.03.2000 in terms of India Sri Lanka Free Trade Agreement - imported goods classified under CTI 0802 8090 and declared as ‘Sri Lanka Areca Nuts’ with value of USD 351000 for 90 MTs - imported goods fulfill the requirement of DGFT Notification No. 35/2015-2020 dated 17.01.2017, in order to claim the import of impugned goods as ‘Free’ or not - Country of origin - HELD THAT:- Neither the jurisdictional Customs authorities have drawn the samples of the impugned goods for testing by the Departmental Central Revenue Control Laboratory (CRCL) or the laboratories certified/approved by the Port Health Officer (PHO)/ Food Safety and Standards Authority of India (FSSAI). Further, when the test results were not acceptable to the appellants, facility for re-testing have not been conducted to provide a reasonable evidence on the test results, as per the guidelines prescribed by CBEC. However, the appellants have got the impugned goods tested in RCA Laboratories, Mumbai, which is approved by the FSSAI and the rest result in report dated 02.07.2018 provides the results of chemical testing, microbiological identification, tracing of residues and other trace metals, to conclude that it cannot recognize the country of origin of the tested samples on the basis of above factors. In the above factual matrix, it is opined that the test results obtained either by the Department or by the appellants do not provide any concrete evidence for determination of the origin of the imported goods. Hence it is not feasible to take the same for arriving at the conclusion of the disputed issue.
From the documents/evidences produced to support the fact about the country of origin of the impugned goods is of Sri Lanka, it is opined that country of origin (COO) as stated by the appellants is correct, and there are no independent evidence adduced by the Department to prove against such fact.
Thus, the impugned goods are eligible for the customs duty exemption under Notification No.26/2000-Customs dated 01.03.2000.
Value of imported goods - whether it is in compliance with MIP notification of the DGFT or not - HELD THAT:- The declared value of goods was amended from USD 43,200 to USD 70,200 in CUSDEC documents No. E 60934, No. E 60269, No. E 60935 in respect of 18 MTs of areca nuts each (altogether 54 MTs); and another CUSDEC document No. E 60271 was also amended from USD 86,400 to USD 140,400 for 36 MTS of areca nuts by Sri Lanka customs authorities on 12.12.2018. On the above basis, and as per the declared value in the B/E, the average value of imported goods per Kg. works out to Rs.252/- which is in compliance with the MIP of Rs.251/- notified by the DGFT, Ministry of Commerce & Industry in Notification No.35/2015-2020 dated 17.01.2017. Thus, we are of the considered view that the areca nuts imported by the appellants from Sri Lanka can be allowed for import as “Free”. Therefore, the conclusion arrived at by the authorities below, that the imported goods have violated the legal provisions under Section 111(d) and 111(m) of the Customs Act, 1962, is not sustainable - In the absence of any evidence produced by the department to prove the violations in respect of imported goods as per Section 111(d) and 111(m) ibid, the proposal for confiscation of the impugned goods and imposition of redemption fine by the authorities below are not legally sustainable.
The impugned goods classifiable under CTI 0802 8090 are eligible for availing the benefit of customs duty exemption under Notification No.26/2000-Customs dated 01.03.2000 in terms of India Sri Lanka Free Trade Agreement read with Notification No. 19/2000-Customs (N.T), dated 01.03.2000 and DGFT Notification No. 35/2015-2020 dated 17.01.2017 - the impugned order upholding confirmation of adjudged demands in the original order does not stand the scrutiny of law and therefore is not legally sustainable.
Appeal allowed.
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2024 (8) TMI 1346
Classification of imported goods - Clear Float Glass (CFG) - to be classified under CTH 70051090 adopted by the Appellant or under CTH 70052990? - denial of the benefit of Notification No. 46/2011-Cus dated 01.06.2011 - demand of differential Customs duties in respect of imports of CFG during the period from 13.09.2017 to 01.04.2022, arising on account of short levy, under Section 28(4) of the Customs Act, 1962 along with applicable interest under Section 28AA of Customs Act, 1962 - confiscation of subject import goods u/s 111(m) of the Act - penalty u/s 114A/112(a) of Customs Act, 1962.
Whether the imported Clear Float Glass, is classifiable under CTH 70051090 as declared/self- assessed by the Appellant or under CTH 7005 2990 as re-classified/re-assessed by the Department in terms of Chapter Note 2(c) to Chapter 70 of Customs Tariff Act, 1975? - HELD THAT:- The issue of classification of CFG is no more res integra since the issue and identical arguments submitted by litigants were already elaborately dealt with in the Orders of the Kolkata Tribunal in the case of M/s. Bagrecha Enterprises Ltd. Vs. Commissioner of Custom, Chennai [2024 (5) TMI 943 - CESTAT CHENNAI] wherein it was held that the Clear Float Glass is more appropriately classifiable under CTH 7005 1090 of the Customs Tariff Act, 1975.
Whether Extended Period is invokable or not considering the evidence and facts in this appeal? - HELD THAT:-After finalisation of assessments for over 5 years, it is not open for the Department to invoke the larger period of limitation as these assessments have undergone the rigours of provisional assessment and subsequent finalisation for the same product and for the same reason, the appellant has not suppressed or mis-declared any fact and the proposal to reclassify was only on the basis of interpretation made in the CRA objection and not on account of any shortcoming on the part of the appellant. Therefore, invoking extended period in these proceedings, either for demand of duty or for imposition of mandatory penalty is not at all sustainable.
So, the issue of limitation is decided in favour of the appellant and consequently the order of confiscation and imposition of fine and penalties are set aside.
The imported Clear Float Glass is more appropriately classifiable under Customs Tariff Heading 7005 1090 of the Customs Tariff Act, 1975 and thus is eligible for exemption of the benefit of the N/N. 46/2011-Cus dated 01.06.2011 (Sl.No. 934) and the impugned Order-in-Original No. 102161/2023 dated 05.06.2023 is ordered to be set aside.
Appeal allowed.
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2024 (8) TMI 1345
Routing of funds to the Indian Securities Market by Noticee/Mr. Vijay Mallya -Violation of SEBI Act and PFUTP Regulations - financial route i.e. the FII route was used by the Noticee to trade in the Indian Securities market by concealing his identity - layering the transactions in the names of various overseas registered entities and opening accounts in their names in UBS-UK Bank, even though the Noticee himself was the actual beneficial owner of each of these front entities
HELD THAT:- Noticee in abusing the framework of the FII Regulations and dealing in securities of listed companies of his group of companies in India, indirectly, in a fraudulent manner and by employing a manipulative and deceptive artifice, thereby, indulging in purchase and sale of securities of Herbertsons / USL clearly was detrimental to the investors at large and was with an intention to deceit the market players in violation of the provisions of Regulation 3(a), (b) and (d) of the PFUTP Regulations, 2003 and Section 12A(a) and 12A(c) of SEBI Act, 1992.
The shareholding pattern of Herbertson available on the BSE website for the quarter ending December 31, 2005 that Phipson, McDowell and UBHL were shown as Indian Promoters of Herbertsons holding 53,49,775 shares (56.18%), 4,59,809 shares (4.83%) and 22,46,756 (23.59%), respectively.
As Phipson was wholly owned subsidiary of McDowell and Herbertsons was subsidiary of Phipson. Thus, find that all the said companies were belonging to the same group i.e. UB group of which the Noticee was the Chairman. These shares of Herbertsons were partially transferred to Matterhorn through block deals dated February 28, 2006 and March 03, 2006. Post such transfer of shares, Matterhorn Ventures was shown as a Non-Promoter Public Shareholder under sub-section of ‘FIIs’ in Shareholding Pattern of Herbertsons as on March 31, 2006.
As already found entire transaction in the shares of Herbertsons and USL was funded by the Noticee, indirectly, through VNHL by routing funds through overseas bank accounts and therefore, the shareholding of Matterhorn Ventures of 9.98% shares of Herbertsons actually belonged to the promoter category being totally funded by the Noticee.
Noticee/Mr. Vijay Mallya indeed had misrepresented the truth and concealed a material fact known to him that the shareholding shown in the name of Matterhorn actually belonged to the promoter category as the same was totally funded by the Noticee thereby, violating the provisions of Regulation 4(2)(f) of the PFUTP Regulations, 2003.
Section 11 of the SEBI Act, 1992 confers a duty on the Board to protect the interests of investors in securities and to promote the development of and to regulate the securities market. The said objectives are all interlinked.
Noticee, in the instant case, has devised a scheme to indirectly trade in the shares of his own group companies through layered transactions / fund flow using his overseas related companies through FII route in order to keep his identity masked and trade in the Indian Securities market in defiance of the regulatory norms. Such acts of the Noticee are not only fraudulent and deceptive but are a threat to the integrity of the securities market.
Earlier, also WTM, SEBI had debarred the Noticee from accessing the securities market and prohibited him from buying, selling or otherwise dealing in the securities in any manner for a period of 3 years from the date of the said order (i.e. from June 01, 2018 till May 31, 2021) for manipulative activities such as diversion of funds and / or improper transactions in the scrip of USL in violation of the PFUTP Regulations, 2003 read with the SEBI Act,1992. SEBI had also restrained the Noticee from holding a position as Director or Key Managerial Person of a listed Company for a period of 5 years from the date of the said order (i.e. from June 01, 2018 till March 31, 2023).
The said order was challenged before the Hon’ble SAT, which later was dismissed due to want of prosecution which ultimately resulted in attainment of finality of the directions issued by the WTM, SEBI in the order dated June 01, 2018. Thus, I find that the Noticee has been indulging in manipulative and fraudulent activities and indulging in unfair trade practices while dealing in the securities market in violation of the securities laws.
Thus, find that appropriate directions under Section 11B read with Section 11(1) of the SEBI Act, 1992 in order to protect the market integrity and deter such activities from the markets would meet the ends of justice.
ORDER:-
The Noticee is hereby restrained from accessing the securities market and further prohibited from buying, selling or otherwise dealing in securities, directly or indirectly, or being associated with the securities market in any manner, for a period of three (3) years from the date of this order.
The Noticee is further restrained from associating himself with any listed company or proposed to be listed company, in any capacity, directly or indirectly, for a period of three (3) year from the date of this order.
As during the period of restraint, the existing holding of securities including the holding of units of mutual funds of the Noticee shall remain frozen.
The obligation of the debarred Noticee, in respect of settlement of securities, if any, purchased or sold in the cash segment of the recognized stock exchange(s), as existing on the date of this Order, can take place irrespective of the restraint /prohibition imposed by this Order only, in respect of pending unsettled transactions, if any. All open positions, if any, of the Noticee debarred in the present Order, in the F&O segment of the stock exchanges, are permitted to be squared off, irrespective of the restraint/prohibition imposed by this Order.
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