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2025 (3) TMI 1407
Challenge to non-grant of relief in terms of drawback under Instruction No. 4/2019 issued by Central Board of Indirect Taxes and Customs - Petitioner’s case is as soon as the Instruction No. 4/2019 was issued, within a period of three months, the representations have been made - HELD THAT:- The reason for rejection, if any, ought to be spelt out and the order cannot be simply a cryptic order stating that the same has not been considered favourably.
This Court is of the opinion that the CBIC, Drawback Division ought to look into the matter and pass a reasoned order on the representations of the Petitioner while considering the purpose and the rationale behind issuance of the said Instruction No. 4/2019 dated 11th October 2019.
Conclusion - The CBIC, Drawback Division, must reconsider the Petitioner's applications and issue a reasoned order.
The present writ petition may be treated as a representation and a reasoned order may be passed by the CBIC, Drawback Division within three months - Petition disposed off.
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2025 (3) TMI 1406
Entitlement to duty drawbacks when exporting mobile phones, which have been unlocked and accordingly they had availed of the drawbacks - HELD THAT:- As per the judgement in M/s AIMS Retail Services Private Limited v. Union of India & Ors. [2025 (2) TMI 596 - DELHI HIGH COURT], this Court has held that duty drawback may be claimed in respect of unlocked mobile phones being exported, as the mere act of unlocking does not constitute the phones being “taken into use” within the meaning of the applicable provisions. Given that a mobile phone is capable of being utilized in several ways, the mere unlocking thereof cannot be deemed as the Petitioners having “taken it into use.”
Furthermore, this Court has observed that with the expansion of mobile phone manufacturing and assembly in India, the volume of exports is expected to increase. The mere fact that the said products are configured for use in foreign jurisdictions cannot operate as a ground to deprive the Petitioners of their rightful claim to duty drawback under the prevailing legal framework. The present case also pertains to the Respondents’ rejection of the Petitioner’s request for duty drawback on unlocked mobile phones being exported.
Conclusion - The unlocking of mobile phones for export does not constitute "use" under the Duty Drawback Rules. Exporters are entitled to duty drawbacks unless explicitly restricted by law.
Petition disposed off.
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2025 (3) TMI 1405
Refund of the Countervailing Duty (CVD) and Special Additional Duty (SAD) paid after failing to fulfill export obligations under the Advance Authorization and Export Promotion Capital Goods (EPCG) schemes - failure to fulfill export obligation - HELD THAT:- On perusal of Section 142, it is apparent that the respondent authorities could not have referred to and relied upon the provisions of section 142(8)(a) as the same would not be applicable to the facts of the case as the petitioners did not deposit the amount of duties in any recovery proceedings but the petitioners had voluntarily deposited the amount of duties on reconciliation of the imports made by the petitioners with the Advance Authorisation and EPCG license entitlement. Therefore, the case of the petitioners would be squarely covered by provisions of section 142(3) of the CGST Act which provides for considering the refund claim of the petitioners as per the existing law at the relevant time when import was made in the year 2016.
As held by Telangana High Court in case of Principal Commissioner of Customs v. M/.s Granules India Limited [2024 (12) TMI 725 - TELANGANA HIGH COURT], the respondents were required to process the refund claim under section 142(3) read with section 142(6)(a) of the CGST Act. The Hon’ble Telangana High Court held that 'The Tribunal, by taking into account the provisions of sub sections (3), (5) and (8A) of Section 142 of the CGST Act, has held that the assessee is entitled to claim refund of CVD and SAD paid after the appointed day. Accordingly, the assessee had been held to be entitled to refund of central value added tax credit of Rs. 3,28,75,733/-.'
This Court in case of Indo-Nippon Chemicals Co. Ltd. v. Union of India [2002 (2) TMI 136 - GUJARAT HIGH COURT], has also held that assessee would be entitled to the refund claim as per the proviso of section 11B of the Central Excise Act, 1944 and clause(c) of proviso could not be construed as enlarging the scope of the main provision in sub-section (1) of section 11B read with Cenvat Credit Rules,2004.
Conclusion - Refund claim filed by the petitioners is required to be processed under the provisions of Central Excise Act, 1944 read with Cenvat Credit Rules, 2004 as per the provisions of section 142(3) read with 142(6)(a) of the CGST Act,2017. Therefore, without disturbing the order rejecting Form TRAN-1 passed by the respondent authorities, so far as order-in-original dated 10.10.2019 rejecting the refund claim of the petitioner for Rs. 45,84,371/- is concerned, is herby quashed and set aside and the matter is remanded back to the respondent authorities so as to decide the refund claim of the petitioners on merits as per the provisions of Central Excise Act, 1944 read with Cenvat Credit Rules, 2004 in view of provisions of section 142(3) read with section 142(6)(a) of the CGST Act, 2017
The petition is partly allowed by way of remand.
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2025 (3) TMI 1361
Seeking provisional release of containers pending clearance by securing the differential duty claimed by the Department - Section 110A of the Customs Act, 1962 - HELD THAT:- As far as securing the differential duty is concerned, there are no difficulty in the said condition being imposed. In fact, the learned counsel appearing on behalf of the Petitioner fairly conceded that the Petitioner is willing to secure the differential duty by furnishing a bank guarantee. As far as this aspect is concerned, there are no difficulty in the condition imposed by the Department.
Redemption fine - HELD THAT:- The Department is also justified in asking the Petitioner to secure redemption fine because admittedly this would be payable for release of the goods (of course subject to the fact that they were properly seized). The condition to secure the redemption fine is also justified.
Penalty - HELD THAT:- Before adjudication of the show cause notice, there is no justification on the part of the Department to ask the Petitioner to secure the penalty. It is not as if that in every single case penalty has to be imposed. Considering these facts and circumstances, it is directed that the goods of the Petitioner covered under Bill of Entry No. 6517826 dated 6th November 2024 and Bill of Entry No. 7587153 dated 3rd January 2025 shall be provisionally released on the Petitioner securing the differential duty as well as the redemption fine as more particularly set out in the emails dated 16th January 2025 and 28th February 2025 respectively.
Conclusion - The provisional release of goods ordered upon securing the differential duty and redemption fine, without requiring the securing of penalties. The demand for securing differential duty for past cases not upheld.
Petition disposed off.
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2025 (3) TMI 1360
Challenge to detention order under COFEPOSA Act - smuggling of foreign origin gold from Yangoon (Myanmar) to Gaya - it is the main contention of the petitioner that even though he has been released on bail by the High Court in connection with the aforesaid criminal complaint for the same incident, because of the impugned order of detention under the provisions of the COFEPOSA Act, he is continuing in detention for no purpose, which is illegal and arbitrary - HELD THAT:- The object of detention under the detention law is not to punish, but to prevent the commission of certain offences. Further, in the recent decision rendered by the Hon’ble Supreme Court in the case of Ameena Begum [2024 (1) TMI 4 - SUPREME COURT], it has been specifically held by the Hon’ble Supreme Court that a constitutional court, when called upon to test the legality of orders of preventive detention, would be entitled to examine certain aspects referred in paragraph 28.1. to 28.10 of the said decision.
In the case of Saraswathi Seshagiri [1982 (3) TMI 252 - SUPREME COURT], the Hon’ble Supreme Court has observed that the concerned detenue tried to export Indian Currency to the tune of Rupees 2,88,900.00 to a foreign country in a planned and pre-meditated manner by clever concealment of it in several parts of his baggage and, therefore, the Hon’ble Supreme Court observed that the detaining authority was justified in coming to the conclusion that he might repeat his illegal act in future also. His past act in the circumstances might be an index of his future conduct. Thereafter, the Hon’ble Supreme Court observed that the authority may prosecute the offender for an isolated act or acts of an offence for violation of any criminal law, but if it is satisfied that the offender has a tendency to go on violating such laws, then there will be no bar for the State to detain him under a Preventive Detention Act. What is required is that the detaining authority is to satisfy the Court that it had in mind the question whether prosecution of the offender was possible and sufficient in the circumstances of the case. It has been further observed that in some cases of international smuggling where it may not be possible to collect all necessary evidence without unreasonable delay and expenditure to prove the guilt of the offender beyond reasonable doubt, the past conduct or antecedent history of a person can appropriately be taken into account while passing the detention order.
In the case of Rekha [2011 (4) TMI 1217 - SUPREME COURT], the Hon’ble Supreme Court has observed that if the ordinary law of the land (the Penal Code and other penal statutes) can deal with a situation, recourse to a preventive detention law will be illegal.
Another contention raised by the petitioner is that there was a delay in service of the order of detention by contending that the detention order has been passed on 06.03.2024, which was communicated to him on 29.05.2024. However, the aforesaid contention is also misconceived. From the records, it transpires that the order of detention was passed on 06.03.2024, which was duly executed on the petitioner on 11.03.2024. Though the petitioner was made aware of his right to represent, he did not avail the same by making representation to the detaining authority and the Central Government and when the case of the petitioner was referred to the Advisory Board on 10.04.2024, he filed his defence statement there and the Advisory Board, after conducting the proceedings on 29.04.2024 and 13.05.2024, gave its opinion and opined that the detention of the petitioner is justified - it cannot be said that the order of detention dated 06.03.2024 was communicated to the petitioner on 29.05.2024. Hence, the said contention is misconceived.
Conclusion - In the present case, the respondent detaining authority has followed all the constitutional, statutory and procedural requirements as well as safeguards. The subjective satisfaction of the detaining authority does not vitiate, as has been contended by the petitioner. Therefore, when the detaining authority after satisfying itself subjectively after considering all the relevant material, passed the impugned order of detention, the same cannot be interfered with while exercising power under Article 226 of the Constitution of India.
Petition dismissed.
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2025 (3) TMI 1359
Invocation of extended period of limitation - issuance of multiple SCN on same facts - Classification of imported fabrics - to be classified under CTH 55151230 or not - eligibility for BCD exemption under N/N. 026/2000-Cus. dt. 01.03.2000 - HELD THAT:- The Commissioner of Customs had ordered the extension of period of limitation by six months as proposed in the SCN and accordingly, in strict compliance thereto, Department did issue another SCN under Section 28 and 124 of the Customs Act.
There is no dispute that the said notice is issued just before the expiry of six months. The time limit extended by the Commissioner having been honoured, the only course available was to adjudicate at least this second SCN, but however, the issuance of another show cause notice after the extended six months period, by violating the Commissioner’s OIO has been questioned since this SCN is apparently issued by invoking the extended period of limitation. The arguments of the appellant is that the extension provided by the Order-in-Original [supra] was for issuing SCN and nothing else and once the SCN having been issued, the Revenue could not have assumed jurisdiction once again, that too after the expiry of permitted six months by treating directions in the said OIO as an endless permission, which is not permissible under the Statute. This even cannot be accepted since the said notice which came to be adjudicated per impugned Order-in-Original was issued clearly after the artificially permitted extension of time and hence, the very foundation itself is not proper.
Conclusion - i) The invocation of the extended period of limitation for issuing SCNs not justified, as the facts were already known to the authorities, and subsequent notices based on the same facts did not constitute suppression. ii) The procedural lapse regarding cross-examination did not materially affect the decision, as the primary issue was the improper invocation of the extended period.
Appeal allowed on limitation.
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2025 (3) TMI 1358
Levy of penalties u/s 112(a) of the Customs Act, 1962 on appellant - undervaluation of imported goods - denial of cross-examination and the non-supply of crucial documents - violation of principles of natural justice - satatement of co-accused - HELD THAT:- There is not an iota of evidence to establish that the appellant was in effect the kingpin in the racket of undervalued imports of said goods. The fact that the appellant was a financer who enabled the payment of differential duty through the importers /the custom broker cannot ipso facto be held to conclude the appellant as the importer, and who had knowledge about the undervalued imports or intentionally involved in such malpractice of goods and subjected to penal proceedings under Section 112(a).
It is an undisputed fact that the department neither provided cross-examination of the co-accused as sought for by the appellant nor provided the basic import documents to the appellant for furtherance of his defence and while rightly going about redetermination of the transaction values in accordance with law failed to establish nexus of the appellant with the improper imports effected. The admitted role of the appellant being that of a financer of subject imports having voluntarily made good the differential duty of Rs.30 lakh cannot lead to conclude that the appellant had knowledge and intentionally indulged in such imports when there is nothing on record to establish the connection of the appellant to of having done an act rendering the offending goods liable for confiscation - There is nothing on record to bring out any specific knowledge on the part of the appellant herein or having played a role in under-valued imports. Moreover, as stated earlier the appellant has been denied a total recourse to Natural Justice in the present matter, in as much as even the Bill of Entry and the import invoice not supplied to him, and there’s no reason for such a course of action.
Conclusion - The statement tendered by the co-accused lacks evidentiary value unless it is examined and an opportunity of cross examination provided to the accused. Nothing therefore comes out on record to substantiate the penal liabilities imposed on the appellant in the instant matter. As held in a series of cases non-supply of Relied upon/Non-Relied upon documents as also not affording cross-examination are a serious flaw and violation of natural justice.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 1357
Confiscation of imported goods - levy of redemption fine and penalty - finalization of the provisional assessment not challenged - HELD THAT:- The finalization of the assessment of Bills of Entry was never challenged by the Revenue. Therefore, on that score itself the valuation matter has reached finality.
The impugned OIA, which was passed when the matter was sub judice before the Tribunal, does not survive - Appeal allowed.
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2025 (3) TMI 1327
Seeking issuance of an appropriate writ directing the Respondents to pass an order for unconditional and provisional release of the goods entered for export - grievance of the Petitioner is that despite repeated letters to the Commissioner of Customs, requesting for release of the goods and seeking reasons for detention, no response has been received by the Petitioner - HELD THAT:- The Customs Department is taking steps only after filing of the present writ petition. The delay in this manner would not be permissible as consignments of the Petitioner and other similarly placed persons are held up, when expedited steps are not taken for clearing of goods.
A perusal of the letters on record also show that on 20th January 2025 and 12th March 2025, repeated communications have been written by the Petitioner to the Commissioner of Customs inter alia requesting for release of the goods, but no response was elicited.
Under these circumstances, it is directed that within a period of seven days, the Customs Department shall take a decision in this matter and provisionally release the goods, subject to any reasonable conditions that it deems appropriate on facts.
Petition disposed off.
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2025 (3) TMI 1326
Failure to adjudicate SCN - whether a SCN issued by the Customs Department, which has remained unadjudicated for a long period of time, in excess of ten years, in the present case, should be quashed only on such ground? - HELD THAT:- This Court finds that the notice issued by the Joint Director General Foreign Trade, Ahmedabad is substantially similar to the impugned show cause notices issued by the Customs Authority. This Court finds that even if the merits of the impugned show cause notice are not gone into to compare the similarity with the show cause notice dated 13.04.2010 issued by the Joint Director General Foreign Trade, Ahmedabad, the fact remains that the impugned show cause notices dated 08.03.2010 and 03.11.2011, in spite of personal hearings in the same having been granted in 2012, are yet to be adjudicated.
This Court, in Dhultawala Exim [2025 (1) TMI 1532 - GUJARAT HIGH COURT], relied upon several decisions of various High Courts including this Court and it was held that 'In the case of Siddhi Vinayak Syntex Pvt. Ltd. v. Union of India [2017 (3) TMI 1534 - GUJARAT HIGH COURT], held that a matter cannot be revived after 17 years when there is no appropriate reason for the delay and hence, the Show Cause Notice was quashed.'
Conclusion - The impugned SCNs have remained pending for more than 15 years and 13 years respectively. Considering the aforesaid decisions, this Court has no hesitation in holding that due to an inordinately long lapse of time, the impugned show cause notices dated 08.03.2010 and 03.11.2011 can no longer remain pending for adjudication and must be quashed and set aside on that score alone.
Petition allowed.
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2025 (3) TMI 1325
Time limitation for demanding SAD - Suppression of facts or not - main pleading of the appellant is on the ground that there was no suppression on their part and accordingly, the SAD amount could not have been demanded after more than 4 years from the date of clearance of the goods after the appellant has clearly indicated in the Bill of Entry that they are claiming the exemption under N/N. 20/2006 - HELD THAT:- The Commissioner (Appeals) has dismissed the appeal only on the ground that the appellant has not appeared before him whenever the hearings were granted to him. When the appeal has been filed alongwith the Statement of Facts and Grounds of Appeal taken by the appellant, it is incumbent on the Commissioner (Appeals) to go through these details and pass a detailed order on an ex-parte basis even if the appellant does not come for the Hearing. The appellant has demonstrated before us that in the CA-1 filed on 22.04.2016, in the Grounds of Appeal and in the Statement of Facts, they have clearly taken stand about the Show cause being barred by limitation.
The Commissioner (Appeals) was bound to consider this and give a finding as to why it is not acceptable to him in case the OIA is decided against the appellant. This has not been done - the imports have taken place on 13.04.2011 and 28.04.2011 that is immediately after a few days after this amendment was carried out. While the party can be pardoned for not going through this amendment and still claiming the SAD, it was also for the officers of the customs to check the Bills of Entry and immediately point out as to why this SAD exemption was being claimed when this amendment has already taken place with effect from 8.04.2011. This was not done.
The mistake of the party can be taken as a normal mistake committed by any importer when an amendment is carried out just a few days before the actual import. On the other hand, even after coming to know that this amendment has taken place on 8.04.2011, the Department has not come out with any explanation as to what made them wait for more than four years to issue the Show cause notice on 25.05.2015 by invoking the extended provisions of the Appellant to demand the differential Customs Duty - the Department has made out any case of suppression on the part of the Appellant.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 1324
Misdeclaration of the quantity and value of the imported goods - violation of provisions of the Customs Act 1962 and also a violation of the EPCG licence and the Foreign Trade Policy - on examination of the imported container one headstock and 12 drums were found in excess - excess quantity was not included in the EPCG License available with the appellant at the relevant time of import - HELD THAT:- In this case the importer has subsequently obtained an EPCG licence covering the excess goods discovered. Although this was brought to the notice of the Original Authority, no decision has been recorded on the same. Once the importer produces a licence it is for the Customs authorities to verify its validity and extends all benefits to the goods if covered by the same. Further now the appellant has also produced a copy of EODC dated 09.01.2024, purportedly evidencing the fulfillment of their export obligation, which requires verification.
It has been held by the Hon’ble Supreme Court in Atul Commodities Pvt. Limited v. CC, Cochin [2009 (2) TMI 18 - SUPREME COURT] that if any doubt or question arises in respect of interpretation of Foreign Trade Policy or in the matter of classification of any item of the ITC (HS) or in the Handbook, the said question or doubt shall be referred to DGFT, whose decision thereon shall be final and binding. We find that a similar position obtains with regard to extending the benefit of an EPCG licence for which EODC is stated to have been issued.
There has been a contravention of the provisions of the Customs Act 1962, in as much as there has been imports of goods in excess of the declaration made in the Bill of Entry and which was not covered by the EPCG license available with the appellant at the time of import. Tendering of an incorrect invoice was also alleged - The Customs Act 1962 and the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) operate in their own spheres. Hence this division of authority between the DGFT and Customs has to be adhered to, in line with the jurisdiction granted by the respective statutes under which the authorities operate. However, whether a penalty should be imposed for failure to perform a statutory obligation, under the Customs statute, is normally a matter of discretion of the authority to be exercised judicially, based on the current facts and circumstances of the case, unless stated otherwise in this statute.
Conclusion - Verification of the subsequent EPCG licence and EODC certificate is essential to determine the applicability of benefits for the excess goods.
The impugned order is set aside and the matter is remanded to the Original Authority, for de novo adjudication - Appeal disposed off by way of remand.
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2025 (3) TMI 1323
Valuation of imported goods intended for re-export - re-determination of value assessed to duty at rate corresponding to tariff item 8479 8999 of First Schedule to Customs Tariff Act, 1975 - HELD THAT:- The first appellate authority failed to take cognizance that the original authority should have read section 46 of Customs Act, 1962 as only the first of two ‘stepping stones’ by which the goods could legally be cleared for home consumption in terms of section 47 of Customs Act, 1962 and that assessment, either under section 17 of Customs Act, 1962 or under section 18 of Customs Act, 1962, must necessarily precede clearance for home consumption for the ‘proper officer’ to permit extinguishment of customs jurisdiction as envisaged in section 47 of Customs Act, 1962 Mere filing of bill of entry, under section 46 of Customs Act, 1962 and of essence to build in contingencies of ‘relevant date’ for rate of duty and tariff valuation, does not trigger empowerment of levy and assessment to duty in section 17 of Customs Act, 1962 which is the only stage for recourse to section 12 and section 14 of Customs Act, 1962 by ‘proper officer’ therein. These – the ‘charging’ and ‘valuation’ provisions – are stipulative and, like the definitional provision, to be referred to when embarking upon the machinery provisions in Customs Act, 1962.
Otherwise, in terms of section 46 of Customs Act, 1962 and chapter IX of Customs Act, 1962, the ‘imported goods’ are to be deposited, in a public warehouse or private warehouse, as the case may be, until clearance is to be effected either for home consumption under section 68 or for export under section 69 of Customs Act, 1962. A comparison of section 47 of Customs Act, 1962 and section 68 of Customs Act, 1962 makes it abundantly clear that these are mutually exclusive and that, once goods are warehoused, section 47 of Customs Act, 1962 ceases to be of relevance. The ‘trigger happy’ adjudication was, thus, upheld in appellate proceedings without application of mind.
The original authority and the first appellate authority are in need of refreshing their approach to assessment procedure; the fault may, probably, not be limited to this lack of appreciation but also in oversight – supervisory and statutory. Empowerment to review, as prescribed in chapter XV of Customs Act, 1962, appears to have been observed in its breach. The malaise is, thus, systemic. The hazard, in consequence, may be oblivion. A copy of this order may be placed before the Chairman, Central Board of Indirect Taxes & Customs (CBIC) for appropriate remediation if ‘ease of doing business’ is to have a chance.
Conclusion - The re-determination of value for the goods in question is unjustified, as the goods were intended for re-export and not for home consumption. The Customs Valuation Rules, 2007, and Section 14 of the Customs Act, 1962, are inapplicable in this context.
The impugned order set aside - appeal allowed.
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2025 (3) TMI 1260
Maintainability of appeal on the ground of low tax effect - Refund of the deposited SAD - rejection on the ground that the same were filed beyond limitation and the original documents had not been furnished - HELD THAT:- A perusal of the table in paragraph 3 of this order, would show that firstly, the appeals would not be liable to be entertained on the ground of Low Tax Effect. In addition, there have been consistent decisions by the Coordinate Benches of this Court in Commissioner of Customs v. Nanak Electronics [2023 (1) TMI 1315 - DELHI HIGH COURT] and Commissioner of Customs v. Bhimeshwari Overseas [2023 (1) TMI 1316 - DELHI HIGH COURT].
In the opinion of this Court, the most important feature would be that there have been consistent decisions of Coordinate Benches and the ld. Single Judges, that in such cases, SAD would be liable to be refunded. The Bombay High Court decision in CMS Info Systems Ltd. [2017 (1) TMI 786 - BOMBAY HIGH COURT] has not been followed by this Court. In view of the fact that the issues raised in these appeals are fully covered by the above decisions as also on the issue of Low Tax Effect, this Court is not inclined to entertain the present appeals.
Appeal dismissed.
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2025 (3) TMI 1259
Confiscation of export goods - prohibited goods or not - Whether export goods become prohibited for export on account of non-declaration of technical characteristics of inputs on shipping Bills as was required in terms of DFIA Scheme? - HELD THAT:- In the present case, the show cause notices have been issued with respect to the exports made by appellants. Apparently and admittedly no exemption from duty has been claimed on such exports. Further these notifications require that the product manufactured out of these imported inputs i.e. the Resultant Product should have same quality, technical specifications and characteristics as that of the imported materials used in the said resultant product.
The Revenue/department has failed to produce any evidence to prove that the exported goods were the resultant goods and were not of same quality, technical characteristics and specifications as those of the inputs used in the said resultant product. It becomes clear that there is no evidence to support the violation of Condition No. (i) of both the notifications.
Hon’ble Supreme Court in the case of Titan Medical System Pvt. Ltd. Vs. Collector [2002 (11) TMI 108 - SUPREME COURT] has held that in the absence of any action taken by the licensing authority, revenue cannot take any action that too on the allegations of misrepresentation/suppression on part of assessee. Thus we are of the opinion that non-compliance of condition of DFIA/Notifications in the shipping bills could affect the duty free import of inputs but shall have no effect on export of products for which there is no evidence that the export goods were “resultant products” as mentioned in 4.55 of HBP.
Revenue has failed to produce any such law, rule, notification policy or any such thing, according to which there is restriction in export of pan masala and gutkha. In such circumstance, any condition on imports and non-compliance thereof cannot affect the exportability; Not specifically in the present case when DFIA was obtained post impugned export and was transferred also to third party and also when no exemption is availed by appellants while exporting pan masala and gutkha. More so for the reason the exported products were got manufactured from synthetic oils procured domestically. The synthetic oils are not mentioned in para 4.55 of HBP. Revenue also has failed to produce any evidence that the exempted pan masala and gutkha were the Resultant Products of the duty free inputs i.e. the natural essential oils imported under DFIA.
Whether non compliance of condition of DFIA i.e. non-declaration of technical characteristics of inputs on the shipping bills as required under para 4.55/4.32 of HBP and under Notification No. 40/2006 dated 01.05.2006 and Notification No. 98/2009 dated 11.09.2009 for the purpose of duty free import of inputs can render the export goods as “Prohibited Goods”? - HELD THAT:- On looking into the definition of “Prohibited goods means goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with.” Apparently there was no condition on the export of pan masala and gutkha. The condition which is alleged to have been violated is the condition of import. Thus, it is clear that based on impugned allegations freely exportable pan masala and gutkha cannot be called as prohibited goods. Above all, appellant has availed no benefit out of alleged non-declaration.
Levy of penalty under Section 113(1) of the Customs Act, 1962 - HELD THAT:- The alleged non-compliance cannot render the export goods prohibited, the order of confiscation passed by adjudicating authority below is not sustainable. Once goods are not found to be liable for confiscation, penalty under Section 113(1) of the Customs Act, 1962 cannot be sustained. The penalty imposed is also required to be set aside.
Conclusion - The goods exported i.e. pan masala and gutkha were freely exportable goods in terms of Foreign Trade Policy. Those have wrongly been called as prohibited for alleged violation of the conditions meant for duty free imports. Also there is no evidence proving connection between imported inputs and the export goods. The order confiscating those export goods and imposing penalty on the appellants is, therefore, not sustainable.
Appeal allowed.
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2025 (3) TMI 1258
Confiscation of gold bangles - diversion of export consignment of gold jewellery, after completion of all export formalities - levy of penalties u/s 114(iii) and 114AA of the Customs Act, 1962 - quantum of redemption fine.
Version of the exporters, Shri Preet Kumar Agarwal and Shri Sanjay Agarwal, is that as Shri Preet Kumar Agarwal was not having the boarding pass and immigration clearance, therefore, he was unable to board the plane, whereas, version of the DRI is that on an intelligence that the export consignment would be diverted, the DRI caught Shri Preet Kumar Agarwal while he was proceeding to Gate No. 11 of the NSCBI Airport while boarding the flight while having no jewellery in his hand.
HELD THAT:- As there were twisted facts from both the sides, to know the truth of the facts, the CCTV footage was very much relevant in order to ascertain as to whether the exporters were correct or the DRI was correct. However, admittedly, the CCTV footage was not placed in the present case and are not part of the relied upon documents. However, other CCTV footages have been relied upon by the DRI to establish their case. This indicates that there were some lapses in the investigation.
It is the case of the DRI that after taking Shri Preet Kumar Agarwal into custody while he was boarding the flight without jewellery, on his intimation that the said jewellery had been handed over to Shri Sanjay Agarwal who had booked the said jewellery in air cargo for Hyderabad, the flight was stopped by the DRI and Shri Sanjay Agarwal, who had boarded the plane, was apprehended by taking him out of the said flight. Here, the question arises that: if the DRI was having prior information on 03.04.2018 that diversion of export consignment would take place, then, when Shri Preet Kumar Agarwal handed over the consignment to Shri Sanjay Agarwal outside the Airport, why did the DRI not apprehend Shri Sanjay Agarwal who was carrying the export consignment at the time when diversion of the goods was taking place? This raises a question mark on the version that the DRI was having prior knowledge of diversion of export consignment of gold jewellery.
The investigating team has heavily relied on the statements recorded during the course of investigation. However, all those statements were retracted before the Additional Chief Judicial Magistrate. However, the procedure prescribed under Section 138B(b) of the Customs Act, 1962 that a statement relied during the course of proceedings is required to be examined in chief and thereafter be allowed for cross-examination, has not been followed in the present case. Therefore, in such circumstances, the statements recorded by the investigating team, which have been retracted before the Additional Chief Judicial Magistrate, have no relevance to implicate the exporters in this case.
Although COFEPOSA proceedings were initiated, the proceedings against Shri Preet Kumar Agarwal were dropped vide Order of the Central Economic Intelligence Bureau, COFEPOSA Wing dated 16.08.2015, who, as per the allegations, was the main person involved in diversion of the gold jewellery in question. When the COFEPOSA proceedings against the person who was involved in diversion of the gold jewellery in question as per the investigation have been dropped, the case against the co-exporters are also not sustainable.
Any goods cleared for exportation which are not loaded for exportation on account of any wilful act, negligence or default of the exporter, his agent or employee or which having been loaded for exportation, are unloaded without the permission of the proper officer, are liable for confiscation. Admittedly, it is a case of negligence on the part of the exporters, being the circumstances at that time, the exporter was required to take more precaution but failed to do so and the goods cleared for exportation were not loaded for exportation - the goods in question are liable for confiscation under Section 113(k) of the Act.
Imposition of penalties under Section 114(iii) of the Act - HELD THAT:- Since the goods have been held liable for confiscation under Section 113(k) of the Act, penalties under Section 114(iii) are imposable on the appellants/exporters.
Imposition of penalty under Section 114AA of the Customs Act - HELD THAT:- The said provisions are not attracted in this case as penalty under Section 114AA can be imposed on a person who 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, in the transaction of any business for the purposes of the Act. Admittedly, in this case, documents were not found to be false or fabricated. Therefore, the provisions of Section 114AA are not attracted in the present case to impose penalty.
Quantum of redemption fine to be imposed - HELD THAT:- The appellants-exporters have submitted that the value addition is only to the extent of Rs. 43,400.43 if making charges of the said jewellery after importation are taken into consideration. Thus, the redemption fine imposed on the appellant is on the higher side. Accordingly, the redemption fine imposed reduced to Rs.15,00,000/-.
Conclusion - i) The order of confiscation of the consignment of 1194 pcs of gold bangles weighing 54096 gms. upheld, having an ascertained value of Rs.16,10,43,792/- cleared by diversion of the consignment in the domestic area, under Section 113(k) of the Customs Act, 1962. ii) Redemption fine of Rs.15,00,000/- imposed u/s 125 of the Act for redemption of the goods confiscated on account of diversion of the export consignment. iii) Since the goods have been held liable for confiscation under Section 113(k) of the Act, penalties under Section 114(iii) are imposable on the appellants/exporters. iv) The provisions of Section 114AA are not attracted in the present case to impose penalty. v) The gold jewellery, which has been seized from the possession of Shri Sanjay Agarwal, is to be released to Shri Sanjay Agarwal on payment of redemption fine and penalties. vi) No proceedings are sustainable against the other noticees to the SCN issued in this case.
Appeal disposed off.
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2025 (3) TMI 1208
Seeking release of the two detained gold items on the ground that the same are personal jewellery of the Petitioner - Time limitation - HELD THAT:- Once the goods are detained, it is mandatory to issue a show cause notice and afford a hearing to the Petitioner. The time prescribed under Section 110 of The Customs Act, 1962, is a period of six months and subject to complying with the formalities, a further extension for a period of six months can be taken by the Department for issuing the show cause notice.
Since the outer period of one year has also elapsed in the present case, the goods of the Petitioner deserve to be released. Moreover, they were personal jewellery of the Petitioner which could not have been detained in the first place.
Let both the gold items be released to the Petitioner without payment of any storage charges within four weeks - Petition disposed off.
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2025 (3) TMI 1207
Seeking issuance of an appropriate writ setting aside the seizure of goods (personal jewellery) detained by the Customs Department of the Petitioners - HELD THAT:- When the Petitioners landed at the Indira Gandhi International Airport, New Delhi on 29th July, 2024, the personal jewellery of Petitioner No. 1, containing of one gold kangan, four gold rings, one gold necklace along with also personal jewellery of Petitioner No. 2 containing of one gold chain with pendant, one gold kada and three gold rings were seized by the customs officers. The detention receipt was issued on 29th July, 2024. The total weight of the products seized was 318 grams and 597 grams.
The Court has perused the documents placed. Clearly, the Petitioners are Indian citizens who were coming back after attending a social family event in the USA and the jewellery which was owned by them were their personal effects - The detention took place in July 2024 and show cause notice has also not been issued.
There can be no justification for detaining the said goods. The same shall accordingly be released within four weeks to the Petitioners in person or through an authorized representative subject to verification - no storage charges shall be collected by the Customs Department.
Conclusion - There are no justification for the detention of the goods, particularly as no show cause notice had been issued since the seizure. The goods are ordered to be released.
Petition disposed off.
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2025 (3) TMI 1206
Classification of goods - PVC Resin Grade SP 660 (Suspension Grade) - CESTAT, Chennai refused to entertain the matter and had disposed it on the ground of monetary value - HELD THAT:- Considering the fact that the same product is involved even in the order passed by CESTAT, Chennai and the classification of this product for the period prior to 2017 has not been settled, this Court deems it appropriate to remand the matter to CESTAT, Principal Bench, New Delhi for a fresh adjudication on the classification issue itself and not to dispose of the matter on merely the monetary limit.
Petition disposed off by way of remand.
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2025 (3) TMI 1205
Seeking issuance of an appropriate writ directing the Respondent to release the electronic devices of the Petitioners - smuggling of substantial quantity of foreign origin gold in a completely concealed manner through triangular valves - HELD THAT:- If any particular document, which is downloaded from the devices of the Petitioners is also relied upon by the Respondent either in the show cause notice proceedings or in the prosecution complaint, the said Relied Upon Documents (RUDs) shall be listed and copies shall be provided to the Petitioners. In light of the above, the Petitioner would not raise any objections as to non-fulfilment of any requirement under Section 63 of the Bharatiya Sakshya Adhiniyam, 2023 and Section 138C of the Customs Act, 1962.
This process could be adopted by the Commissioner of Customs in all the Commissionerates, so that persons from whom devices are seized can be returned the same, after the data is copied. The retention of the devices throughout the Show Cause Notice (SCN) proceedings and the prosecutions, unless essential, could then be avoided, as the devices themselves may become completely out-dated and retrieval of data from the same after a few years also becomes difficult. The proper copying of the data and retention of the same on Servers in the Customs Department would also make it accessible to the investigation officers as also other personnel.
Conclusion - The return of electronic devices ordered, after data copying, with the Petitioners agreeing not to object to the data's mode of proof. A standard procedure for data retrieval and preservation was recommended.
Petition disposed off.
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