2015 (9) TMI 1136 - AT - Customs

Scope of the remand in earlier round of the litigation - Whether the imported goods could be called ship stores as per the definition under Section 2 (38) of the Customs Act - Import through courier - Import of goods in hand baggage by its employees without declaring the same or by mis-declaring the value - Whether in case of imports made by sea could duty have been demanded from the Appellant - Levy of duty in case of where good were transshipped/re-exported - Evasion of duty - appellant is a service provider to ONGC and was engaged for rendering services such as wireline testing, measurements while drilling, etc. for their offshore oil well drilling operations. Regarding scope of remand - Held that - the order passed by CESTAT, remanding the matter back to the adjudicating authority cannot be so read so as to limit its scope only to the determination of the effective rate of duty. It is nobody s case that the appellant had before the CESTAT given up on all its other contentions and had confined its case to a dispute only on the quantum of duty demanded and the consequent penalty. In my view unless there is an express conceding of the issue and the legal contentions, which the Tribunal records in its order, it cannot be construed that when the matter has been remanded by finding merit in one of the contentions urged, that, the other contentions stand given up or foregone. - the contention that contention that they were not the importer is required to be examined. Whether the imported goods could be called ship stores as per the definition under Section 2 (38) of the Customs Act - Held that - The goods imported in the instant case have been taken to offshore locations where the provisions of the Customs Act had not been extended and that the goods after being used there, were brought back to India for being re-exported out of the country. The situation in the present case is squarely covered by provision of Section 54(2) of the Customs Act, wherein it is provided that any goods imported into a Custom Station for transshipment to any place outside India, may be allowed to be transshipped without payment of duty. - consequently no customs duty could have been demanded. Import through courier - duty evasion - Held that - there is no evidence relied upon which would even suggest let alone establish that Appellant was the consignee of the courier parcels. It is not in dispute that during investigation the investigating officials were able to identify the courier docket number, etc in a few cases yet they chose not to investigate as to who the consignee was as also whether there was any authorization from the appellant in favour of the courier to file the bill of entry. In the absence of these details having been brought on record the demand of customs duty against the Appellant cannot be sustained. Import of goods in hand baggage by its employees without declaring the same or by mis-declaring the value? - Held that - the demand for customs duty can only be raised against the passenger who was the importer and not against the Appellant. It has been pointed out that here again the demand has been confirmed by the Respondent on the erroneous premise that the Appellant was the owner of the goods. - Appellant is admittedly not the owner of the goods imported and consequently the ratio laid down in the case of Associated Cement Companies Ltd vs CC 2001 (1) TMI 248 - Supreme court of India does not apply to the facts of the present case. Whether in case of imports made by sea could duty have been demanded from the Appellant? - Held that - the onus was on the revenue to establish as to who had actually filed the Bill of entry and had taken upon it the mantle of an importer. The Revenue having failed to discharge this burden, it was not open for the Revenue to draw an adverse inference against the Appellant and call upon it to prove the negative. Levy of duty in case of where good were transshipped/re-exported - Held that - Appellant not being the importer, as also the goods having been transshipped/re-exported, the duty liability could not be fastened upon the Appellant. However I hasten to point out her that the Appellant having time and again, before different authorities accepting that it did not wish to claim refund of the duty paid and that it was contesting the matter only in view of the penalty imposed on it. Given the undertaking made by the Appellant they would not be eligible for refund of the duty deposited by the Appellant even though the same was not recoverable from them, confirmation of duty is erroneous. Reasons assigned by the Respondents for imposing penalty are not sustainable.- no penalty under Section 112 was imposable on the Appellant - Decided in favour of assessee.

Summary

Issues Involved:
1. Whether the appellants can raise the issue that they are neither the importer nor the owner of the goods at this stage.
2. Whether the goods imported qualify as "ship stores" and are exempt from customs duty.
3. Whether the appellants or the courier agency is considered the importer in case of imports through courier.
4. Whether customs duty can be demanded from the appellants for goods brought in as hand baggage by their employees.
5. Whether ONGC or the appellants should be considered the importer for goods imported by sea.
6. Whether any customs duty is chargeable from the appellants.
7. Whether penalties imposed on the appellants under Section 112 of the Customs Act are justified.

Detailed Analysis:

1. Issue of Importer Status:
The appellants argued that they are neither the importer nor the owner of the goods, and thus, no duty can be confirmed against them. The Tribunal found that the remand order was not limited to determining the effective rate of duty but allowed the appellants to raise all contentions. The Tribunal held that the appellants had consistently contended they were not the importer, and this issue could be examined.

2. Qualification as Ship Stores:
The appellants claimed that the imported goods were "ship stores" and exempt from customs duty. The Tribunal found no evidence to conclusively establish that the goods were used as ship stores. The goods were used in offshore locations beyond the customs jurisdiction at the relevant time. The Tribunal held that since the goods were transshipped to areas where the Customs Act did not apply and were re-exported after use, no customs duty could be levied on such goods.

3. Importer in Case of Courier Imports:
The appellants argued that the courier agency should be considered the importer. The Tribunal agreed, stating that the courier agency, acting as an agent, filed the bill of entry and not the appellants. There was no evidence suggesting that the appellants authorized the courier to file the bill of entry on their behalf.

4. Goods Brought as Hand Baggage:
The appellants contended that customs duty should be demanded from the passengers (employees) who brought the goods as hand baggage. The Tribunal held that the appellants were not the owners of the goods, and the demand for customs duty could not be sustained against them. The duty could only be demanded from the passengers who brought the goods.

5. Imports by Sea:
The appellants argued that ONGC filed the bills of entry for goods imported by sea. The Tribunal found no evidence that the appellants filed the bills of entry. The onus was on the revenue to establish who filed the bills of entry. The Tribunal held that the demand for customs duty could not be fastened upon the appellants.

6. Chargeability of Customs Duty:
The Tribunal held that the appellants were not the importers, and the goods were transshipped and re-exported. Therefore, no customs duty could be levied on the appellants. However, the appellants had undertaken not to claim a refund of the duty paid, which was not legally recoverable from them.

7. Imposition of Penalties:
The Tribunal found that no customs duty was legally due from the appellants, and there was no intention to evade duty. The goods were urgently required for petroleum operations, which were otherwise exempt from duty. The Tribunal held that no penalty under Section 112 was imposable on the appellants or their employee, Mr. Sudhir Pai.

Final Decision:
In view of the majority decision, the appeals were allowed, and the penalties imposed were set aside.