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2003 (4) TMI 131
Issues:
Quashing of proceedings in a complaint under sections 132 and 135(1)(a) of the Customs Act, 1962 against the petitioner.
Analysis:
1. Vicarious Liability under Section 140 of the Customs Act:
The petitioner sought quashing of proceedings based on the contention that she cannot be held vicariously liable under Section 140 of the Act for the company's offense, especially after being exonerated in the adjudication proceedings by the Commissioner of Customs. The department argued that the findings of the adjudication proceedings do not bar criminal prosecution, citing the case law precedent that departmental findings do not prevent prosecution. However, various legal precedents were cited to support the petitioner's argument that when a person has been exonerated in departmental proceedings, continuing the prosecution on the same allegations may not be justified. The court analyzed the specific averments against the petitioner and concluded that she was merely a Director without active participation in the business, as admitted by the department itself. The court emphasized that vicarious liability requires active involvement in the conduct of business, which was lacking in the petitioner's case.
2. Exoneration in Departmental Proceedings:
The court extensively referred to legal precedents where exoneration in departmental inquiries led to the quashing of criminal proceedings. It highlighted the principle that if a person has been exonerated in departmental proceedings, continuing prosecution on the same allegations would be unjust. The court emphasized that the obligation to prove lack of knowledge or due diligence arises only when it is established that the accused was actively involved in the business. In this case, the court noted the lack of specific averments indicating the petitioner's active participation in the company's affairs, leading to the conclusion that she should not be held liable for the company's offenses.
3. Director's Role and Liability:
The court delved into the petitioner's role as a Director and the distinction between being a sleeping Director and actively participating in the business. It highlighted that the petitioner's husband, as the Managing Director, had a more significant role in the company's operations. The court noted the department's admission that the petitioner started looking after the company's affairs only in 1996, after the alleged offenses took place. Citing legal precedents, the court emphasized that mere directorship does not automatically imply liability for the company's offenses, especially when there is no evidence of active involvement in the business.
In conclusion, the court found that the petitioner's lack of active participation in the company's affairs, coupled with her exoneration in the departmental adjudication, warranted the quashing of criminal proceedings against her. The court exercised inherent powers under Section 482 of the Criminal Procedure Code to quash the proceedings initiated under sections 132 and 135(1)(a) of the Customs Act against the petitioner.
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2003 (4) TMI 130
Burnt Dolamite - Whether the assessee was entitled to the benefit of the Notification No. 217/86-C.E. for burnt Dolamite used in steel making furnace for fettling banks and bottoms or not - Held that:- It has been pointed out that manufacturing steel, acidic oxides are formed. This acid is required to be neutralized, otherwise it affects the banks and bottoms of the furnace. For neutralizing the acid oxides which are formed, burnt Dolamite is used. This burnt Dolamite is used within the factory of production in relation to the manufacture of final product namely, steel. Therefore, the Tribunal rightly arrived at the conclusion that the respondent is entitled to get the benefit of exemption Notification No. 217/86(C).
It is true that acidic oxide, if not neutralized would affect the banks and bottoms of the furnace, but that would not mean that burnt Dolamite is used only for protecting the damage to the furnace. It is required to be used so as to neutralise the acid oxides formed while manufacturing steel and, therefore, burnt Dolamite is used in relation to manufacturing process for which the respondent is entitled to have benefit of exemption notification. Hence, the judgment and order passed by the Tribunal cannot be said to be in any way illegal or erroneous - Decided against Revenue.
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2003 (4) TMI 129
Issues Involved:
1. Quashing of criminal complaint under Section 135(1)(b)(i) of the Customs Act and Section 85(i) and (ii) of the Gold Control Act.
2. Delay in trial and violation of the right to a speedy trial under Article 21 of the Constitution of India.
Issue-wise Detailed Analysis:
1. Quashing of Criminal Complaint:
The petitioner sought to quash the criminal complaint filed against him for offenses under Section 135(1)(b)(i) of the Customs Act and Section 85(i) and (ii) of the Gold Control Act. The complaint was based on the recovery of Indian currency worth Rs. 1.80 lacs and 50 gold biscuits with foreign markings from the petitioner's car. The petitioner was apprehended on 7-11-1986, and the complaint was filed on 2-1-1987 after obtaining the necessary sanction from the Collector of Customs. Despite being released on bail, the petitioner faced prolonged pre-charge evidence proceedings, with only two out of twelve witnesses examined over 15 years.
2. Delay in Trial and Violation of Article 21:
The petitioner argued that the delay in trial violated his fundamental right to a speedy trial under Article 21 of the Constitution. He cited several judgments to support his plea, emphasizing that out of 49 hearing dates, the prosecution sought adjournments on 37 occasions. The petitioner contended that such delays were attributable to the prosecution and not him. The court referred to various Supreme Court judgments to analyze the right to a speedy trial, including P. Ramachandra Rao v. State of Karnataka, which reaffirmed the principles laid down in A.R. Antulay v. R.S. Nayak.
Analysis of Delay and Attribution:
The court examined the summary of order sheets and found that the delay was not solely attributable to the prosecution. Factors such as the presiding Magistrate's leave, lawyer strikes, and the petitioner's requests for adjournments contributed to the delay. The court noted that systemic delays, including the workload of the ACMM, also played a role. The Supreme Court's observations in P. Ramachandra Rao's case emphasized that each case must be assessed on its facts and that systemic delays must be considered.
Conclusion and Directions:
The court concluded that quashing the criminal proceedings solely based on the delay would be unjust, given the nature of the offense and the reasons for the delay. Instead, the court directed the ACMM to expedite the hearing on the framing of charges and conclude the trial by 31st December 2003. If the trial could not be concluded by the specified date, the ACMM was required to submit a report explaining the reasons for the delay.
Final Order:
The petition was dismissed, but the trial court was directed to expedite the proceedings and conclude the trial within a specified timeframe, ensuring that justice was served without further unnecessary delays.
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2003 (4) TMI 128
Penalty - Held that:- penalty imposed by the Authority is in violation of Section 114 of the Customs Act, 1962 because it is imposed both on the appellant-Company which attempted to export the goods as well as on the Company which had supplied the same. As no such contention was raised before the Tribunal, in our view, this contention is not required to be entertained at this stage in these appeals. We, however, note that it is the submission of the learned counsel for the respondent that Directors/Partners of both the companies, namely, which attempted to export and which supplied the goods are same - Decided against assessee.
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2003 (4) TMI 127
Issues:
- Challenge to the order of confiscation and penalty by the Respondents before CEGAT
- Jurisdiction of High Court under Section 130(3) of the Customs Act, 1962
- Question of law regarding the confiscation of Indian currency not belonging to the Respondents
- Whether the Tribunal was justified in quashing the order of confiscation
Analysis:
The Commissioner of Customs filed an application under Section 130(3) of the Customs Act, 1962 against the Order of CEGAT, Bombay dismissing the Reference Application filed by the Commissioner under Section 130(1) of the Customs Act. The key issue raised was whether the Respondents had the right to challenge the confiscation of Indian currency and penalty imposed, considering the currency did not belong to them and was suspected to be proceeds of smuggled goods.
The Respondents, a company involved in the business of Angadia, had their premises searched by Customs officers, leading to the seizure of a significant amount of currency. Statements recorded under Section 108 of the Customs Act indicated that the currency did not belong to the Respondents but to certain Bankers dealing in smuggled goods. Despite show cause notices, the alleged owners of the currency did not participate in the adjudication proceedings.
The Collector of Customs confiscated the currency and imposed penalties on the Respondents. CEGAT later allowed the appeal by the Respondents, leading to the Revenue filing a Reference Application under Section 130(1) of the Customs Act. The Commissioner contended that the Respondents, not being the owners of the currency, had no standing to challenge the confiscation. The Tribunal, however, set aside the confiscation order based on the Respondents' admission and lack of evidence regarding ownership.
The High Court analyzed the Tribunal's order and reframed the question of law to focus on whether the Tribunal was justified in quashing the confiscation order despite the currency not belonging to the Respondents and the alleged owners not claiming it. The Court directed the Tribunal to raise the reframed question for its opinion, allowing the Reference Application in favor of the Commissioner.
In conclusion, the judgment delves into the intricacies of jurisdiction under the Customs Act, the rights of aggrieved parties to challenge confiscation orders, and the evidentiary weight of statements recorded under Section 108. The High Court's decision to reframe the question of law showcases a meticulous approach to ensure a comprehensive analysis of the issues involved.
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2003 (4) TMI 126
Issues:
Challenge to the allowance of Modvat credit based on incomplete invoice particulars.
Analysis:
The case involved a dispute regarding the Modvat credit availed by a manufacturer under Rule 57A of the Central Excise Rules, 1944. The Department contended that the invoices used for claiming credit did not contain essential particulars as required by Notification No. 33/94-C.E., dated 4-7-94. The Department sought to recover the Modvat credit amount of Rs. 4,02,324/- on this basis.
The Respondent, engaged in the manufacture of PVC rigid pipes, justified the credit availed by stating that the invoices from registered dealers contained all necessary particulars as per relevant notifications and provisions of the Act. The Additional Commissioner, however, rejected this explanation, emphasizing the absence of assessable value and duty payment particulars on certain invoices, rendering them invalid for claiming Modvat credit.
The dispute escalated to the Tribunal, which overturned the decisions of the lower authorities. The Tribunal found merit in the contention that the invoices did show assessable value after trade discount and duty payment, making them eligible for Modvat credit. It also noted that the invoices indicating the unit responsible for duty payment were valid for credit.
Upon review, the High Court concurred with the Tribunal's findings. It held that the absence of time and issue particulars on the invoices was inconsequential, as essential details like assessable value and duty payment were present. The Court dismissed the petition, affirming the legality of the Modvat credit reinstated by the Tribunal.
In conclusion, the case centered on the interpretation of invoice requirements for claiming Modvat credit under the Central Excise Rules. The courts upheld the validity of the invoices used by the manufacturer, emphasizing the presence of crucial particulars over minor omissions like time and issue details.
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2003 (4) TMI 125
Issues:
Challenge to circulars impugned by petitioner regarding destuffing of imported consignments; Allegation of unnecessary demurrage charges due to circulars limiting destuffing to two consignments at a time; Non-remission of demurrage charges leading to filing of present petition; Interpretation of circulars under Major Port Trusts Act, 1963; Legal effect of circulars and requirement of publication under Section 132 of the Act; Application for exemption or remission of rates under Section 53 of the Act; Judicial review of policy on destuffing consignments and demurrage charges.
Analysis:
1. The petitioner challenged circulars issued by Respondent No. 1 limiting destuffing of imported consignments to two at a time, leading to unnecessary demurrage charges. The petitioner claimed to be an actual user of raw material for manufacturing shoddy yarn and faced delays in destuffing due to circulars, resulting in demurrage charges.
2. The petitioner filed a petition against non-remission of demurrage charges, leading to directions for destuffing within seven days and payment of charges. The appellate court modified the order, requiring a bank guarantee and payment. The destuffing and clearance of goods were specified in a schedule.
3. Counsel for the petitioner argued that circulars lacked legal force as they were not published under the Major Port Trusts Act, citing legal precedents. He contended that circulars restricting destuffing were invalid and that remission should be granted for detained goods without available destuffing space.
4. Respondent No. 1's counsel argued that circulars were guidelines for implementing port policy and did not require publication. He suggested the petitioner could seek exemption or remission under Section 53 of the Act for demurrage charges.
5. The court found the circulars to be internal memos to manage dock congestion, with no illegality or procedural impropriety. Referring to legal precedents, the court held that judicial review was limited to illegality, irrationality, and procedural impropriety, which were not established by the petitioner.
6. The petitioner's claim based on circulars granting remission to specific consignments was rejected as they did not apply to the petitioner's case. The court found no basis for remission and rejected the writ petition, advising the petitioner to seek remission under Section 53 of the Act.
7. The writ petition was rejected, but the petitioner was allowed to apply for remission under Section 53, to be processed promptly by Respondent No. 1.
8. A stay of the order was requested for eight weeks, during which the bank guarantee was not to be encashed. The petitioner was instructed to maintain the bank guarantee during this period.
9. A certified copy of the judgment was expedited for the parties involved.
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2003 (4) TMI 124
Issues Involved:
1. Violation of Export-Import Policy of the Government of India.
2. Violation of the provisions of the Wild Life (Protection) Act, 1972.
3. Violation of CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora).
Detailed Analysis:
Violation of Export-Import Policy:
The Respondent No. 4's rejection of the petitioner's application on the grounds of violating the Export-Import Policy is without merit. Firstly, Respondent No. 4 is not an authority constituted under the Export-Import Policy. Secondly, the appropriate authority under the Export-Import Policy has granted the requisite license to the petitioner. The Respondent No. 4 does not have the authority to enforce the provisions of the Export-Import Policy, and thus, it is not within their jurisdiction to reject the application on these grounds. The Licensing Authority has already held that the taxidermy item of Panthera Pardus can be imported under the Export-Import Policy and granted a license accordingly. Therefore, the rejection on this ground is unsustainable.
Violation of the Wild Life (Protection) Act, 1972:
The rejection of the application on the grounds of violating the Wild Life (Protection) Act, 1972, is also without merit. Respondent No. 4 is not an authority constituted under the Wild Life (Protection) Act, 1972. In this case, specific approval has been granted by the authorities under the Wild Life (Protection) Act, 1972, namely the Deputy Inspector General (Wild Life) of the Union Ministry of Environment and Forests, New Delhi, and the Chief Conservator of Forest, Maharashtra State, Nagpur. Therefore, it is not within the jurisdiction of Respondent No. 4 to hold that there is a violation of the Wild Life (Protection) Act, 1972, and the rejection on this ground cannot be sustained.
Violation of CITES:
The application for approval under CITES was made by the petitioner on 27th April 2002, well before the import in September 2002. Respondent No. 4 had informed the petitioner by a letter dated 16th May 2002 that unless clearance is obtained from the Director General of Foreign Trade and the authorities under the Wild Life (Protection) Act, 1972, permission under CITES cannot be granted. After obtaining the necessary permissions, the petitioner approached Respondent No. 4, who took no action. The goods in question arrived in the meantime. Thus, the petitioner had complied with all the requirements and applied for an advance permit from the CITES authority in India. The rejection on the grounds of not obtaining prior permission is unsustainable as the application was made well in advance, and all requirements were met before the import. The only jurisdiction of the CITES Management authority is to ensure that the imported specimen is not used for commercial purposes, which the petitioner has assured. The rejection on the grounds of violation of CITES, Export-Import Policy, and Wild Life (Protection) Act, 1972, is therefore unsustainable.
Conclusion:
The petitioner has complied with all requirements under CITES, the Export-Import Policy, and the Wild Life (Protection) Act, 1972. The order of Respondent No. 4 dated 17th January 2003 is quashed and set aside. The Customs Authorities are directed to adjudicate the show cause notice under Section 124 of the Customs Act, 1962, on its own merits and in accordance with the law within four weeks. The customs authorities shall not withhold clearance of the items on the grounds that a permit under CITES is not obtained by the petitioner. The petition is disposed of with no order as to costs.
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2003 (4) TMI 123
The High Court of Punjab & Haryana at Chandigarh dismissed a Revenue petition under Section 35H(1) of the Central Excise Act, 1944, seeking a mandamus to refer questions of law to the Tribunal. The Court found the petition not maintainable and stated the Department's only remedy is to file an appeal before the Supreme Court under Clause (b) of Section 35L of the Act.
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2003 (4) TMI 122
Issues:
Violation under Rule 57R(8) of the Central Excise Rules, 1944 leading to penalty under Rule 57U(6).
Entitlement to Modvat credit and penalty imposition based on revised return filed.
Challenge of order requiring deposit of Modvat credit amount as a condition for appeal.
Consideration of financial position for waiver under Section 35F of the Central Excise Act.
Analysis:
1. The primary issue in this case revolves around the alleged violation under Rule 57R(8) of the Central Excise Rules, 1944, which could make the petitioner liable for penalty under Rule 57U(6). The petitioner had imported capital goods and initially claimed depreciation under the Income-tax Act but later withdrew the claim in a revised return. The Commissioner of Central Excise contended that this withdrawal disentitled the petitioner from Modvat credit, leading to a penalty imposition of Rs. 27,47,003. The matter was appealed before the CEGAT, which granted relief on the penalty but required the petitioner to deposit the entire Modvat credit amount for appeal consideration.
2. The second issue pertains to the entitlement to Modvat credit and penalty imposition based on the revised return filed by the petitioner. The petitioner argued that the Tribunal had previously set aside similar orders by the Commissioner when revised returns were filed withdrawing depreciation claims. The petitioner's financial position, reflecting continuous losses, was also highlighted to support the request for waiving the pre-deposit requirement of Rs. 27,47,003. The petitioner relied on a Division Bench judgment to emphasize the importance of considering the financial position for waiver under Section 35F of the Central Excise Act.
3. The third issue involves the challenge against the order mandating the deposit of the Modvat credit amount as a condition for entertaining the appeal. The petitioner contended that if the appeal could proceed without such deposit, they would benefit from the Tribunal's acceptance of the revised return filed before the Income-tax authorities. The petitioner's financial difficulties and sustained losses further supported the argument for waiving the pre-deposit requirement, as per the cited Division Bench judgment.
4. Lastly, the consideration of the financial position for waiver under Section 35F of the Central Excise Act was a crucial aspect of the judgment. The Court analyzed the petitioner's financial losses from 1996-97 to 1999-2000, amounting to significant sums, to determine the undue hardship caused by the pre-deposit requirement. The Court found that the petitioner had made out a prima facie case in their favor, considering both the legal aspects and the financial constraints faced by the petitioner.
In conclusion, the High Court set aside the order requiring the deposit of the Modvat credit amount and directed the Tribunal to take up the appeal, emphasizing the importance of considering the financial position of the petitioner in such matters.
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2003 (4) TMI 121
Issues:
Challenge to customs duty assessment based on London Metal Exchange Price, Refund of customs duty, Doctrine of unjust enrichment, Burden of proof regarding passing on the duty burden.
Analysis:
1. The petitioner challenged the assessment made by Customs Authorities, where duty was calculated based on London Metal Exchange Price instead of the invoice price. The Court initially directed clearance of five containers on payment of duty on the invoice value, subject to providing security. For the remaining 21 containers, the petitioner paid duty under protest.
2. The respondent cited judgments of the Supreme Court regarding the doctrine of unjust enrichment. Refund claims under the Customs Act can only succeed if the burden of duty was not passed on to another person. The Court emphasized that the power of the Court should not unjustly enrich a person, and the doctrine of unjust enrichment does not apply to the State.
3. Referring to the Mafatlal Industries Ltd. case, the Supreme Court held that a refund claim can only be allowed if the burden of duty was not passed on. The Court reiterated that the real loss is suffered by the person who ultimately bore the burden of duty. The Union of India v. Solar Pesticides Pvt. Ltd. case further clarified that even if goods were sold with the tax burden passed on, the principle of unjust enrichment applies. The burden of proof lies with the importer to show that duty incidence was not passed on.
4. The Court concluded that even if the petitioner succeeds in the writ petition, they may not be entitled to a refund if the duty burden was passed on. The petitioner must prove before the authorities whether the duty incidence was passed on. The judgment granted the petitioner liberty to make a claim before Customs Authorities for a refund if duty incidence was not passed on, within a specified timeframe, emphasizing expeditious decision-making without being influenced by the Court's observations.
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2003 (4) TMI 120
Issues Involved:
1. Whether the respondent-Corporation could refuse to deliver the second consignment due to non-payment of warehousing charges for the first consignment.
2. Whether the Corporation is entitled to claim warehousing charges for the second consignment stored without the petitioner's consent.
3. Whether the respondent-Corporation could detain subsequent consignments for non-payment of warehousing charges of the first consignment.
4. Whether the warehousing corporation is entitled to claim warehousing and insurance charges for the third consignment detained without the petitioner's consent.
Detailed Analysis:
Issue 1: Refusal to Deliver the Second Consignment
The petitioner imported acrylic scrap (First Consignment) and another consignment (Second Consignment). Despite paying the customs duty for the second consignment and the customs department's endorsement that the goods had "passed out of customs charge," the respondent-CWC refused to deliver the second consignment. The refusal was based on the petitioner's non-payment of warehousing and insurance charges for the first consignment. The court observed that the petitioner was not liable to pay storage charges to the Warehousing Corporation and directed the respondents to release the goods without further charges.
Issue 2: Claiming Warehousing Charges for the Second Consignment
The petitioner argued that the second consignment was warehoused without their consent, and thus, the Corporation could not claim warehousing charges. The court noted that there was no provision in the Customs Act, Warehousing Corporation Act, or Contract Act permitting the Warehousing Corporation to have a lien over goods not warehoused with the owner's consent. Consequently, the respondent-CWC was not entitled to claim warehousing charges for the second consignment.
Issue 3: Detaining Subsequent Consignments
The petitioner imported a third consignment, which was also detained by the respondent-CWC on the same grounds of non-payment of warehousing charges for the first consignment. The court highlighted that under Sections 48 and 63 of the Customs Act, the lien of the warehouse keeper can only be on goods warehoused with the owner's consent. The court rejected the respondent's argument that they could detain subsequent goods to recover charges for the first consignment, concluding that the respondent had no authority to detain goods not warehoused or stored with them.
Issue 4: Claiming Warehousing Charges for the Third Consignment
The court referred to the Supreme Court judgment in Shipping Corporation of India Limited v. C.L. Jain Woollen Mills and Others, which held that in the absence of any provision in the Customs Act absolving the Customs Authorities from liability, they would be bound to pay demurrage charges if the goods were illegally detained. Applying this principle, the court concluded that the detention of the third consignment was illegal, and thus, the respondent-CWC could not claim warehousing and insurance charges for the period of illegal detention.
Conclusion:
The court ruled that the respondent-CWC's actions of detaining the second and third consignments for non-payment of warehousing charges of the first consignment were illegal. The respondent-CWC was directed to release the third consignment forthwith without claiming any warehousing or insurance charges. The court left the parties to bear their own costs.
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2003 (4) TMI 119
Issues involved: Challenge to Customs Authorities' denial of duty free clearance of imported goods under duty free advance licence.
Summary:
The petitioner, a Small Scale Industrial unit, applied for an advance licence to import die steel for manufacturing Autohead lamps and Tail lamps. Customs Authorities denied duty free clearance under Notification No. 116/1988, stating die steel was for manufacturing moulds, not export goods. The Collector of Customs (Appeals) upheld this decision. The High Court granted interim relief allowing clearance on a bank guarantee and deposit. The petitioner argued that once an advance licence is granted, Customs cannot deny duty free clearance. They cited Oblum Electrical Industries Pvt. Ltd. v. Collector of Customs, Bombay to support their claim that materials for resultant products are covered under Notification No. 116/1988.
The Respondents contended that die steel was used for making moulds, not directly in manufacturing export goods, thus not eligible for duty free clearance under the Notification. The High Court held that Customs Authorities were unjustified in denying duty free clearance based on the nature of the imported goods. The Court emphasized that if the Licensing Authority approved die steel as a material for manufacturing export products, Customs cannot refuse duty free clearance. Referring to Titan Medical Systems Pvt. Ltd. v. Collector of Customs, the Court stated that as long as the licence is valid, Customs cannot deny duty free clearance based on alleged misrepresentations by the licensing authorities.
The Court quashed the impugned orders, ruling in favor of the petitioner. The petitioner was directed to provide evidence of fulfilling export obligations to claim a refund of the amount paid. The Respondents were instructed to adjudicate the refund application within 12 weeks. The bank guarantee was to be returned within 8 weeks if the export obligations were met. The petition was disposed of with no costs awarded.
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2003 (4) TMI 118
Issues Involved:
1. Jurisdiction of the second respondent to issue notice under Section 108 of the Customs Act.
2. Whether the second respondent, a Senior Intelligence Officer, is a gazetted officer of customs.
3. Parallel jurisdiction of the first and second respondents under the Foreign Trade Act and the Customs Act.
4. Definition and scope of "smuggling" under the Customs Act.
Detailed Analysis:
1. Jurisdiction of the second respondent to issue notice under Section 108 of the Customs Act:
The petitioner contended that the second respondent lacked jurisdiction to issue the notice under Section 108 of the Customs Act, 1962, asserting that such jurisdiction lies with the first respondent under the Foreign Trade Act. The court emphasized that the High Court can intervene at the notice stage if an authority acts without jurisdiction, as supported by precedents (AIR 1999 SC 22 and 1985 (2) SCC 412). The court concluded that the second respondent had the authority to issue the notice, thus rejecting the petitioner's claim.
2. Whether the second respondent, a Senior Intelligence Officer, is a gazetted officer of customs:
The petitioner argued that the second respondent, being a Senior Intelligence Officer in the Directorate of Revenue Intelligence (DRI), is not a gazetted officer of customs and thus cannot issue notices under Section 108. The court examined notifications, particularly Notification No. 31/97-Customs (N.T.), dated 7-7-1997, which appointed all DRI officers as customs officers under Section 4(1) of the Customs Act. The court affirmed that the Senior Intelligence Officer is indeed a gazetted officer of customs, dismissing the petitioner's contention.
3. Parallel jurisdiction of the first and second respondents under the Foreign Trade Act and the Customs Act:
The petitioner contended that the first respondent, under the Foreign Trade Act, should exclusively handle matters related to import and export under the duty-free scheme, arguing against the second respondent's parallel jurisdiction. The court found that the Foreign Trade Act and the Customs Act are complementary, not mutually exclusive. The court referenced precedents (AIR 1966 SC 197 and 1996 (88) E.L.T. 626 (S.C.)) to support the view that both authorities can operate concurrently without conflict, rejecting the petitioner's argument.
4. Definition and scope of "smuggling" under the Customs Act:
The petitioner argued that Section 108 of the Customs Act pertains only to smuggling, which they claimed did not apply to their case of improper import or export under the Foreign Trade Act. The court clarified that "smuggling" under Section 2(39) of the Customs Act includes any act or omission rendering goods liable to confiscation under Section 111 or 113. The court noted that Section 111(o) covers goods brought into India under unobserved conditions, supporting the issuance of the notice by the second respondent.
Conclusion:
The court dismissed the writ petitions, affirming the jurisdiction and authority of the second respondent to issue the notice under Section 108 of the Customs Act. The court emphasized that issues related to the merits of the case should be addressed by the appropriate authority in accordance with the law. Consequently, the connected miscellaneous petitions were also closed.
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2003 (4) TMI 117
Issues Involved:
1. Liability of countervailing duty (CVD) on plastic granules/agglomerates manufactured in an Export Processing Zone (EPZ) and sold in the Domestic Tariff Area (DTA).
2. Validity and applicability of Notification No. 48/2001-Central Excise, dated 10th October, 2001.
3. Interpretation of Section 3 of the Customs Tariff Act, 1975 concerning CVD.
4. Relevance of previous judgments and notifications on the issue of CVD.
Detailed Analysis:
1. Liability of Countervailing Duty (CVD):
The petitioners sought a declaration that no CVD is payable on plastic granules/agglomerates manufactured in their EPZ unit at Falta and sold in the DTA, based on Notification No. 48/2001-Central Excise. They also requested a refund of Rs. 155.64 lacs collected as CVD. The petitioners argued that their products, being reprocessed plastic granules, are exempt from excise duty under previous notifications (No. 5/98-C.E., 5/99-C.E., and 6/2000-C.E.), and thus, CVD should not be applicable.
2. Validity and Applicability of Notification No. 48/2001-Central Excise:
The respondents argued that the notification dated 10th October 2001 clarified that exemptions do not apply to plastic materials reprocessed in a free trade zone and brought to any other place in India. The petitioners contended that this notification could not override the earlier court decision which held that no CVD was payable. However, the court found that the notification was a valid exercise of power under Section 5A of the Central Excise Act, 1944, and clarified the exemption's scope.
3. Interpretation of Section 3 of the Customs Tariff Act, 1975:
The court examined the decision in Hyderabad Industries Limited v. Union of India, which clarified that additional duty under Section 3(1) of the Customs Tariff Act is independent of customs duty and is levied to counterbalance excise duty. The court concluded that since the plastic granules/agglomerates undergo manufacturing in the EPZ, they are liable for CVD when sold in the DTA, as the exemption does not apply to goods reprocessed in a free trade zone.
4. Relevance of Previous Judgments and Notifications:
The petitioners relied on previous judgments, including those from the Delhi High Court and Gujarat High Court, which quashed similar demands for CVD based on an earlier circular dated 10th May 2000. However, the court noted that these judgments did not consider the subsequent notification dated 10th October 2001, which explicitly clarified the non-applicability of exemptions to goods reprocessed in a free trade zone. The court upheld the validity of the notification and dismissed the petitioners' reliance on prior decisions.
Conclusion:
The court dismissed the writ applications, holding that the petitioners are liable to pay CVD on the sale of plastic granules/agglomerates manufactured in their EPZ unit and sold in the DTA. The notification dated 10th October 2001 was found to be a valid exercise of power, clarifying that exemptions do not apply to goods reprocessed in a free trade zone and brought to other parts of India. The petitioners failed to demonstrate any infringement of their legal or fundamental rights.
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2003 (4) TMI 116
Writ jurisdiction - Maintainability of appeal - Held that:- suppression on the basis whereof the writ petition was dismissed was only technical in the sense that wrong statement attributed to the petitioner was in fact originally made but realising the mistake, it seems, a supplementary affidavit was prepared the very next day after filing of the writ petition and a day later that affidavit was filed placing on record of the High Court the fact of writ petition having been filed in this Court under Article 32 of the Constitution of India. That petition was dismissed on counsel stating that manufacturers do not challenge the validity of Section 3A. - matter remitted back - Decided in favour of assessee.
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2003 (4) TMI 115
The Supreme Court clarified that matters will be referred back to CEGAT for proper calculation of duty only when duty is payable but calculation is needed. This does not apply to cases where there is a dispute on duty liability. The I.A. was disposed of with this clarification.
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2003 (4) TMI 114
Issues:
1. Calculation of interest on seized currency notes.
2. Interpretation of appellate order regarding interest payment.
3. Amendment of prayer in the writ petition and impleadment of the proposed second respondent.
Analysis:
1. The petitioner sought a Writ of Certiorarified Mandamus to challenge the second respondent's order seizing Indian currency notes and imposing a penalty. The Appellate Tribunal directed the return of the currency notes but a dispute arose regarding the calculation of interest. The Tribunal initially refunded a sum with interest, which the petitioner contested, arguing that interest should be calculated from the date of seizure, not from the date of deposit by the Department. The Tribunal rejected this contention, leading to the writ petition.
2. The High Court analyzed the orders and found that while the initial direction was for a refund without specifying interest from the date of seizure, a subsequent application led to an order for payment with interest at 12% per annum. The Court held that interest should be calculated at least from the date of the appellate order, as the liability to pay the amount arose then or earlier. The Court referred to a precedent to support the decision that interest accrues from the date of the appellate order, not the date of deposit.
3. The Court allowed amendments to the prayer in the writ petition and the impleadment of the proposed second respondent. Ultimately, the Court partially allowed the writ petition, directing the respondents to calculate interest at 12% per annum on the refunded amount from the date of the appeal's disposal until the payment order date. Any additional amount due was to be paid within one month from the present order, with no costs awarded. The connected miscellaneous petitions were closed as a result of the judgment.
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2003 (4) TMI 113
Whether, on 14th July, 1995, there is an order of adjudication? - Held that:- The High Court, in the impugned judgment, has held that the demand made earlier is confirmed and therefore there is an adjudication. We are in agreement with the view expressed by the High Court. The order dated 14th July, 1995 makes it clear that a personal hearing was given on 22nd June, 1995. It sets out what has already been paid. Then it calls upon the appellants to pay the balance amount. Thus, there has been adjudication and there is a demand. It may be that this order is not in the format prescribed. It may also be that principles of natural justice were not followed but those are grounds on which the order could have been challenged. In fact, these grounds were taken in the writ petition. However, those grounds were not pressed. We have, therefore, not looked into these aspects and express no opinion thereon.
Whether the appellants are entitled to the benefit of the Kar Vivad Samadhan Scheme? - Held that:- Section 95 of the Scheme makes it clear that in cases where no appeal or reference or writ petition is admitted or pending before the Appellate Court or the High Court or the Supreme Court and where no application for revision is made before the Central Government, the Scheme is not to apply. In this case, admittedly, on the due date i.e. 31st March, 1998 there was no pending appeal, reference or writ petition or application. Under these circumstances, the declaration was correctly rejected. Appeal dismissed.
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2003 (4) TMI 112
Appeal by Power of attorney holder - Tribunal dismissed appeal as no locus standi to file appeal - Held that:- ground is wholly unjustified in view of Section 146A of the Customs Act, 1962. Therefore, these appeals are allowed and the impugned judgment and order passed by the Tribunal is set aside - Decided in favour of assessee.
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