TMI Blog2019 (12) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... or commencement of action under the said proviso, and that nothing on record disclose a willful default on the part of the assessee, invoking the extended period of limitation under the said provision is held to be unjustifiable. It is the contention of the Revenue that during the period from January 2010 to July 2012, the petitioner has paid the duty on MRP value in respect of warranty replacements but for the period July 2012 to November 2012 customs duty was paid on Transaction Value and were clearing the warranty replacement goods on provisional assessment basis paying customs duty on MRP of the finished goods for the period December 2012 onwards - It is asserted by the petitioner that in respect of the said periods, the petitioner has erroneously valued the products imported for replacements at the maximum retail price at the products sold in retail. These are all vexed questions which requires to be examined by the authorities. The reference made to the circular instructions issued by the Central Board of Excise and Customs inasmuch as clauses 3.2 and 3.6 no doubt deals with the ingredients for extended period, but on the examination of the show cause notice impugned it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner to pay countervailing duty on all goods of Apple Care [warranty and out of warranty] as per Section 4A of the Act 1994. On further clarification sought by the petitioner, it was communicated that extension up to 30.04.2014 is granted for provisional assessment; there shall be no more extensions; the importer shall take all the steps to clear the warranty goods under Section 4A of the Act wherever the said provisions are applicable. On the request made by the petitioner seeking for final assessment of provisionally assessed goods, the Deputy Commissioner of Customs called for certain documents. 4. It is submitted that the petitioner was shocked to receive a show cause notice dated 27.06.2017 by the second respondent under Section 28 of the Act calling upon the petitioner to show cause as to why: [i] The goods imported as warranty replacement goods but a small portion of them subsequently sold for out of warranty valued at ₹ 8,65,68,087/- should not be confiscated under Section 111[m] of the Customs Act, 1962. [ii] The differential duty of ₹ 9,70,981/- should not be demanded and recovered from them under the provisions of Section 28[4] o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the damage is not covered under warranty, they support the customer with a replacement item for exchange price. Further to query No.6 it was answered that the petitioner sell their products which is not covered under warranty. These material facts were placed before the original Authority vide their letter 20.6.2017. Till 19.6.2017, in all the correspondence with the department, the petitioner has stated that apple care products have been imported for warranty replacements. The said fact was suppressed by the petitioner with an intent to evade payment of differential duty arising out of such sale and hence the department invoking the extended period has issued the show cause notice. 9. Adverting to the rival submissions made by the learned counsel appearing for the parties, it is evident that the petitioner has invoked the writ jurisdiction without appearing before the statutory Authority. It is well settled law that there is no bar to entertain the writ petition if the impugned notice issued is without jurisdiction. To examine this aspect, it is apt to refer to the judgments referred to by the learned Senior counsel. 10. In the case of Calcutta Discount Co. Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uations, viz. inadvertent non- payment and deliberate default. The former is canvassed in the main body of Section 28 of the Act and is met with a limitation period of six months, whereas the latter, finds abode in the proviso to the section and faces a limitation period of five years. For the operation of the proviso, the intention to deliberately default is a mandatory prerequisite. 20. This Court in Aban Loyd Chiles Offshore Limited and Ors. Vs. Commissioner of Customs, observed:- 20. The proviso to Section 28(1)can be invoked where the payment of duty has escaped by reason of collusion or any willful misstatement or suppression of facts. So far as misstatement or suppression of facts are concerned, they are qualified by the word wilful . The word wilful preceding the words misstatement or suppression of facts clearly spells out that there has to be an intention on the part of the assessee to evade the duty. 21. The Revenue contended that of the three categories, the conduct of the appellant falls under the case of willful misstatement and pointed to the use of the word misutilizing in the following statement found in the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the appellants had not brought anything on record to prove their claim of bona fide conduct, on the appellant. It is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. This Court observed in Union of India Vs. Ashok Kumar that: 21......it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility. 25. Moreover, this Court, through a catena of decisions, has held that the proviso to Section 28 of the Act finds application only when specific and explicit averments challenging the fides of the conduct of the assessee are made in the show cause notice, a requirement that the show cause notice in the present case fails to meet. In Aban Loyd Chiles Offshore Limited and Ors. (supra), this Court made the following observations: 21. This Court while interpreting Section 11-A of the Central Excise Act in Collector of Central Excise v. H.M.M. Ltd. (supra) has observed that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause unless the same inter alia appears to have been without jurisdiction as has been held by this Court in some decisions including State of Uttar Pradesh v. Brahm Datt Sharma and Anr. AIR 1987 SC 943, Special Director and Another v. Mohd. Ghulam Ghouse and Another, (2004) 3 SCC 440 and Union of India and Another v. Kunisetty Satyanarayana, 2006 (12) SCALE 262], but the question herein has to be considered from a different angle, viz, when a notice is issued with pre-meditation, a writ petition would be maintainable. In such an event, even if the courts directs the statutory authority to hear the matter afresh, ordinarily such hearing would not yield any fruitful purpose [See K.I. Shephard and Others v. Union of India and Others (1987) 4 SCC 431 : AIR 1988 SC 686]. It is evident in the instant case that the respondent has clearly made up its mind. It explicitly said so both in the counter affidavit as also in its purported show cause notice. In the said case, indeed a demand was made terming the same as a show-cause notice. The Hon'ble Apex Court has observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and another Vs. Union of India and others reported in 1993 SCC Online MP 66 the Hon'ble Madhya Pradesh High Court has observed that a mere mechanical repetition of the language of the provision in the show cause notice would not confer jurisdiction on the collector of the Central Excise to issue show cause notice under Section 11A of the Act beyond period of six months taking advantage of the proviso to that section. During the period of notice, no other material was shown to contend that there was any fraud played upon the department. The matter was relating to classification of the product. In the said case the impugned show cause notice was not the first of its kind to start a controversy. On the earlier show cause notice issued, an order has already been passed against the assessee and the Appellate Authority had confirmed the same. The order being passed on the earlier show cause notice and the assessee had approached the Appellate Authority, it was argued that appellate remedy under the Act is not an equally efficacious remedy. Thus, the aforesaid judgments are held in a different context as discussed above and are not applicable to the facts of the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking details of imports of Applecare products i.e., warranty replacement units of IPods, Ipads, Iphones for the period 01.07.2012 to 09.12.2012. As, the importer has not furnished the details even after repeated reminder letters, a summons dated 14.06.2017 was sent under Section 108 of the Customs Act, 1962. The statement of Shri Raghunath Lakshmanan, working as Manager-Trade Compliance with the importer and authorized by the importer appeared before the Superintendent to render statement, which was recorded on 20.06.2017 [enclosed as Annexure-C]. Shri Raghunath Lakshmanan, had inter alia stated that the goods imported in general [referred to as finished goods by him] were imported for retail sale and sold to their distributors for further distribution in the channel, while in the case of Apple Care products [i.e., i-phone, i-pod i-pad], they were imported to support their customers during the warranty period. However he stated that a very small percentage of cases if found for any reason that the damage is not covered under warranty, they support the customers with a replacement for exchange price. 8. Further, the importer vide their letter dated 20.06.2017 furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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