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TMI Blog2019 (12) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... only) liable to confiscation under the provisions of section 111(d) and (m) of the Customs Act, 1962. However the same are not available for confiscation. 5.1.3. I confirm the demand of differential duty of Rs. 71,38,777/- (Rupees seventy one lakh thirty eight thousand seven hundred seventy seven only) and order its recovery from M/s. Hitech Sweet Water Technology Pvt. Ltd., under section 28(1) of the Customs Act, 1962. 5.1.4. I confirm the demand of Rs. 6,74,584/- (Rupees six lakh seventy four thousand five hundred eighty four only) being interest on the amount of duty confirmed in para 5.1.3. above and order its recovery from M/s. Hitech Sweet Water Technology Pvt. Ltd., under section 28AB of the Customs Act, 1962. 5.1.5. I impose a penalty of Rs. 78,13,361/- (Rs. 71,38,777/- + Rs. 6,74,584/-) (Rupees seventy eight lakh thirteen thousand three hundred sixty one only) under section 114A of the Customs Act, 1962 on M/s. Hitech Sweet Water Technology Pvt. Ltd. 5.1.6. I impose a penalty of Rs. 5,00,000/- (Rupees five lakhs only) under section 114AA of the Customs Act, 1962 on M/s. Hitech Sweet Water Technology Pvt. Ltd. 5.1.7. I do not impose penalty under section 112 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the "water purification equipment" the benefit of exemption claimed was sought to be denied to them. 2.5 Appellant being a manufacturer and trader of water purification equipments and parts thereof was fully aware of the actual use of the said imported item since the same were being used by them in manufacture of their own products. It was also noticed that they were paying the duty without availing the benefit under notification No 6/2006-CE, in respect of the same imported goods from the same supplier in past. Thus importer had misrepresented and suppressed the facts about actual nature and use of the said goods to avail undue benefit of CVD exemptions. 2.6 Appellants admitted and paid the duty along with interest due in respect of each B/E as detailed below: Bill of Entry Assessable Value 'Rs Duty paid in Rs Interest Paid in Rs Number Date On Clearance Differential 687534 29.01.10 6850565 824397 812537 126222 757278 24.07.10 11309551 1360991 1341410 168135 802863 25.08.10 18880044 2769565 995485 111484 862263 25.09.10 10487020 1759547 746311 73916 939853 09.11.10 3333152 559248 237204 19105 604776 13.12.10 3425945 574817 243808 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No 6/2006-CE. In view of various pronouncements as follows, it cannot be inferred that they had claimed the benefit of the wrong exemption notification with intent to evade payment of duty * Mahavir Corporation [2003 (160) ELT 355 (TBom)] * Northern Plastic Ltd [1998(101) ELT 549 9SC)] * Surbhit Impex P Ltd [2012 (283) ELT 556 9TMum)] * N D Metals Ids Ltd [2009 (236) ELT 83 (T)] * Gaurav Enterprises [2006 (193) ELT 532 (T)] * Padamanabh Silk Mills [2006 (193) ELT 536 (Guj)] * Jaramsons Plastic Industry [1993 (63) ELT 558 (T)] * Mala Bhakatani [1993 (63) ELT 563 (T)] * Bajaj Health & Nutrition P Ltd [2004 (166) ELT 189 (T)] * Assessment is basically the job performed by the revenue as has been held in the following decisions- * Hindustan Ferodo Ltd [1997 (89) ELT 16 9SC)] * Garware Nylons Ltd [1996 (87) ELT 12 (SC)] * HPL Chemicals Ltd [2006 (197) ELT 324 (SC)] * They had bonafide belief in respect of admissibility of the exemption notification- * Surbhit Impex P Ltd [2012 (283) ELT 556 (TMum)] * Vijeta Textiles [2011 (268) ELT 267 (T-Ahd)] * Rajdhani Timbers Products P Ltd [209 (239) ELT 188 (T-Ahd)] * Alembic ltd [2009 (241) ELT 439 (T-Ahd) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2016 (333) ELT 356 (T-Del)] 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 The issue on merits as submitted by the learned Authorized Representative is no longer res integra and covered by the decision in case of Pure & Cure Technology [2019-TIOL-38-CESTAT-Mum] wherein it has been held as follows: "7. We find that while discarding the said argument in the impugned order, the Ld. Commissioner (Appeals) recording reasons observed that membrane no doubt play a crucial role in purifying water, but the question is one whether the membrane itself straightaway purifies the water. Then referring to the definition of equipment as defined under Oxford Dictionary, the Ld. Commissioner (Appeals) concluded that the membrane cannot be construed as water purifying equipment, accordingly not eligible to the benefit of notification. Further analyzing the classification declared by the appellant and alleged in the show cause notice, the Ld. Commissioner (Appeals) observed that the imported membrane elements merits classification under CTH 84219900 rather than 84212190 which claimed by the appellant as more specific; w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for benefit of the said notification that's why we have all ready paid the differential duty with interest as applicable. I .... that we have not misdeclared anything, we have already admitted that we are not eligible for above notification and that's why we paid duty and interest and we do not wish to claim any refund also of the differential duty and interest, as per Annexure A." 4.5 In our view once the appellants have paid duty and interest and have admitted their liability they are barred in subsequent proceedings, to claim the benefit of limitation in respect of the amounts so paid. Discussing the principle of Estoppel, Hon'ble Supreme Court has in case of B.L. Sreedhar & Ors vs K.M. Munireddy (Dead) And Ors [AIR 2003 SC 578] held as follows- "Estoppel is a rule of evidence and the general rule is enacted in Section 115 of the Indian Evidence Act, 1872 (in short 'Evidence Act') which lays down that when one person has by his declaration, act or omission caused or permitted another person to believe a thing to be true and to act upon that belief, neither he nor his representative shall be allowed in any suit or proceeding between himself and such person o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or irrebutable presumption), where the fact presumed is taken to be true, not as against all the world, but against a particular party, and that only by reason of some act done; it is in truth a kind of argumentum ad hominem. "In our old law books," said Mr.Smith in his notes to the Duchess of Kingston's case, "truth appears to have been frequently shut out by the intervention of an estoppel, where reason and good policy required that it should be admitted.... However, it is in no wise unjust or unreasonable, but, on the contrary, in the highest degree reasonable and just, that some solemn mode of declaration should be provided by law, for the purpose of enabling men to bind themselves to the good faith and truth of representations on which other persons are to act." "An estoppel is not a cause of action- it is a rule of evidence which precludes a person from denying the truth of some statement previously made by himself." Per Lindley L.J. in Low v. Bouveria, (1831) 3 Ch. 82 at p.101. In the same case, at p.105.Bowen L.J. added:" Estoppel is only a rule of evidence; you cannot found an action upon estoppel." Estoppel though a branch of the law of evidence is also capa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me effect is the definition in Termes de la Ley. (See Stroud's Judicial Dictionary, Fourth Edition, Page 943). "An estoppel," says Lord Coke, "is where a man is concluded by his own act or acceptance to say the truth." Mr. Smith, in his note to the Duchess of Kingston's case, characterizes this definition as a little startling but it nevertheless gives a good idea of what it is, by no means easy to include within the limits of a definition. (1 Smith L.C. 760) Though estoppel is described as a mere rule of evidence, it may have the effect of creating substantive rights as against the person estopped. An estoppel, which enables a party as against another party to claim a right of property which in fact he does not possess is described as estoppel by negligence or by conduct or by representation or by holding out ostensible authority. Estoppel, then, may itself be the foundation of a right as against the person estopped, and indeed, if it were not so, it is difficult to see what protection the principle of estoppel can afford to the person by whom it may be invoked or what disability it can create in the person against whom it operates in cases affecting rights. Where ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to complain of the act." (Duke of Leeds v. Earl of Amherst 2 Ph. 117 (123) (1846). This is the proper sense of the term acquiescence, "and in that sense may be defined as acquiescence, under such circumstances as that assent may be reasonably inferred from it, and is no more than an instance of the law of estoppel by words or conduct." (De Bussche v. Alt. L.R. 8 Ch.D. 286 (314). Acquiescence is not a question of fact but of legal inference from facts found. (Lata Beni Ram v. Kundan Lall, L.R. 261 I.A. 58 (1899). The common case of acquiescence is where a man, who has a charge or incumbrance upon certain property, stands by and allows another to advance money on it or to expend money upon it. Equity considers it to be the duty of such a person to be active and to state his adverse title, and that it would be dishonest in him to remain willfully passive in order to profit by the mistake which he might have prevented. (Ramsden v. Dyson L.R. 1 E & I, Ap. 129(140)(1865). x x x x x x 42. In such cases the conduct must be such that assent may reasonably be inferred from it. The doctrine of acquiescence has, however, been stated to be founded upon conduct with a knowledge of le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made a representation to another person ("the representee") in words or by acts and conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention (actual or presumptive), and with the result, of inducing the representee on the faith of such representation to alter his position to his detriment, the represent in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making, or attempting to establish by evidence, any averment substantially at variance with his former representation, if the represent at the proper time, and in the proper manner, objects thereto." In Article 1175 at page 637 of Halsbury's Laws of England, 3rd Edition, Volume 14, it is stated as follows: "Waiver is the abandonment of a right, and is express or implied from conduct. A person who is entitled to the benefit of a stipulation in a contract or of a statutory provision may waive it....." "The essence of waiver is "estoppel" and where there is no "estoppel" there can be no "waiver", the connection between "estoppel" and "waiver" being very close. But, in spite of that, there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h intent is immaterial. The necessary condition is the detriment of the other party by the conduct of the one estopped. An estoppel may result though the party estopped did not intend to lose any existing right. Thus voluntary choice is the essence of waiver for which there must have existed an opportunity for a choice between the relinquishment and the conferment of the right in question. Nothing of the kind could be proved in this case to estop the first respondent." In Indira Bai v. Nand Kishore (1990 (4) SCC 668), it was observed as follows: "Estoppel is a rule of equity flowing out of fairness striking on behaviour deficient in good faith. It operates as a check on spurious conduct by preventing the inducer from taking advantage and assailing forfeiture already accomplished. It is invoked and applied to aid the law in administration of justice. But for it great many injustice may have been perpetrated. Present case is a glaring example of it. True no notice was given by the seller but the trial court and the appellate court concurred that the pre-emptor not only came to know of the sale immediately but he assisted the purchaser-appellant in raising construction which went o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to them, we do not find any merits in the penal proceedings undertaken against them. Appellants had in the Bill of Entries, clearly described the imported goods, declaring them to be "Filmtec Membrane 70078, TW30-1812-75 (Water Filter Parts)", "Filmtec Membrane 70075, TW30-1812-50 (Water Filter Parts)", "Filmtec Membrane 70195, BW30-7095 (Water Filter Parts)", "Filmtec Membrane 70034, BW30-365 (Water Filter Parts)", "Filmtec Membrane 70195, BW30-4040 (Water Filter Parts)", "Filmtec Membrane 70037, BW30-400 (Water Filter Parts)" and "Filmtec Membrane 11357, BW30LE-4040 (Water Filter Parts)". Since appellants have clearly and correctly described the imported goods as part of water filter, the error in claiming the benefit of wrong exemption notification cannot be act of deliberate misdeclaration. Hence we do not find any merits in the order of Commissioner imposing penalty on the appellants under Section 114A.
5.1 In view of discussions as above, we partly allow the appeal and set aside the penalties imposed on the Appellant under Section 114A or Section 114AA of the Customs Ac, 1962. With the above modification the impugned order is upheld.
(Order pronounced in the open court) X X X X Extracts X X X X X X X X Extracts X X X X
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