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2025 (3) TMI 1148
Challenge to validity of the addendum to the show-cause notice alleging that relevant documents relied upon in the issuance of the addendum was not given to them - Redetermination of the assessable value of the imported dredger as declared by the appellant - classification of the additional length of cutter head ladder and jet pump set is under CTH 89051000 or under respective heading? - admissibility of benefit of N/N.01/2011-CE dated 01.03.2011 - Penalty - Confiscation.
Challenge to validity of the addendum to the show-cause notice alleging that relevant documents relied upon in the issuance of the addendum was not given to them - HELD THAT:- The addendum to the show-cause notice was communicated to the appellant and appellant has submitted a detailed reply rebutting each and every allegation both in response to the initial show-cause notice as well as in the addendum to the show-cause notice. In these circumstances, there is no violation of principles of natural justice and the addendum is valid and issued within the frame of law laid down under various judgments referred by the learned Commissioner.
Redetermination of the assessable value of the imported dredger - HELD THAT:- The Managing Director has never retracted the statement nor disputed to the acceptance of appointment of independent Chartered Engineer to ascertain the correct value nor contested this at any point of time. Also while rejecting the said discount, the learned Commissioner has recorded that no discount was given by the overseas party to the appellant in its previous imports vide Bill of Entry No.4898940 dated 12.10.2011 which clearly indicates that the discount was not ordinarily given by the overseas supplier to the appellant but was given to the appellant only as a favoured buyer. There are no discrepancy in the Commissioner’s observation that the transaction value declared by the appellant is liable to be rejected under Rule 12(2) of the Customs Valuation Rules, 2007.
Classification of additional length of cutter head ladder and jet pump system - to be classified under Chapter sub-heading 89051000 or under 84314990 and 84137097 respectively? - HELD THAT:- The learned Commissioner referring to the dictionary meaning of the ‘parts’ held that part means an element of a sub-assembly or assembly, not normally useful by itself and not amenable to further disassembly for maintenance purposes; also referring to various judgments on the scope of parts and accessories, he has observed that these are two different things and not the same. In this backdrop, analysing the facts of the case and requirement of the additional length of cutter head ladder and also the jet pump system - Further negating the argument of the appellant that since the dredger imported being huge item could not be imported in its complete form and imported in CKD condition of the item and all the parts imported are integral parts of the dredger, learned Commissioner has held that because the dredger was dispatched in 48 pieces in CKD condition, it cannot be itself make all the parts as integral parts of the dredger. Analysing the observation of the learned Commissioner in arriving at the classification of the additional length of cutter head ladder under CTH 84314990 and jet pump system under CTH 84137097, there are no apparent error in the reasoning of the Commissioner; hence, the observation relating to classification of the said products are upheld.
Admissibility of N/N.01/2011-CE dated 01/03/2011 - HELD THAT:- The learned Commissioner has held that the benefit of 1% Excise duty without cenvat credit facility cannot be extended to them. This issue is no more res integra and covered by the judgment of the Hon’ble Madras High Court in the case of CC(Exports), Chennai Vs. Prashray Overseas Pvt. Ltd. [2016 (5) TMI 1106 - MADRAS HIGH COURT] - there are no error in the order of the learned Commissioner in denying the benefit of N/N.01/2011-CE dated 01.03.2011 to the appellant.
Penalty - Confiscation - HELD THAT:- The appellant had misdeclared the value and suppressed their relationship with the overseas seller, the initial survey report from the knowledge of the Department which has been candidly admitted by the Managing Director of the appellant company, resulting to short payment of duty of Rs.54, 67, 041/-. Hence, confirmation of demand under Section 28(4) of the Customs Act, 1962 is justified and upheld. Consequently, imposition of penalty under Section 114A on the appellant company and penalty on the Managing Director under Section 114AA is justified. However, in calculating the penalty amount under Section 114A of the Customs Act, 1962 against the appellant company, the learned Commissioner has added interest amount to the differential duty, which is erroneous in view of series of judgments of this Tribunal. Therefore, the penalty imposed be restricted only to the extent of differential duty confirmed. Since the imposition of penalty under Section 114AA on the Managing Director is upheld, further penalty under Section 112(a) of the Customs Act in the circumstances is not warranted and accordingly set aside.
Conclusion - i) The transaction value declared by the appellant is liable to be rejected under Rule 12(2) of the Customs Valuation Rules, 2007. ii) Classification of the additional length of cutter head ladder under CTH 84314990 and jet pump system under CTH 84137097 upheld. iii) The denial of the exemption under N/N.01/2011-CE. upheld.
Appeal disposed off.
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2025 (3) TMI 1147
Confiscation of 34,400 kgs of areca nuts - smuggling of foreign origin goods - notified item or not - confiscation was done solely on the basis of suspicions without any substantive proof to indicate that the goods were of foreign origin - HELD THAT:- The Department has not brought in any evidence to substantiate their allegation that the impugned goods are smuggled in nature. In this regard, the appellant has stated that the goods were lawfully purchased from local markets in Nagaland and Assam, and the confiscation was done solely on the basis of suspicion without any substantive proof to establish foreign origin of the goods in question. It is observed that the appellant's claim of purchase of the Betel Nuts/Areca Nuts from local market/mandi on payment of Cess has not been negated by the department. The goods were seized from the godowns in Indian territory far away from an international border. Since the goods were not seized within the Customs area, we observe that as per the provisions of Section 123 of Customs Act, 1962, the burden to prove that the seized goods were of foreign origin or smuggled in nature lies on Department.
The confiscation of the impugned goods is not sustainable and accordingly, the same is set aside. Since, the order of confiscation is not sustained, the demand of redemption fine in lieu of confiscation is not sustainable and accordingly the same is set aside. As the confiscation itself is not sustained, there is no question of imposing penalty on the appellant and hence the same is set aside.
The appellant needs to be compensated for the destruction of the impugned goods. Further, from the decision cited above, we observe that when goods valued Rs.88 lakhs was seized and destroyed at the pre-trial stage, the Hon’ble High Court has allowed the refund of Rs.60 lakhs. By adopting the same ratio, we are of the view that the appellant is liable to be refunded Rs.20 lakhs in lieu of the seizure value of Rs.32.68 lakhs. The refund is to be paid within a period of three months from the date of communication of this order and if the Department fails to comply, interest on the expiry of the said three months shall be payable on the refund amount at the rate of 12% per annum.
Confiscation - i) The appellant is eligible for refund of Rs.20 lakhs in lieu of the seizure value of Rs.32.68 lakhs. The refund is to be paid within a period of three months from the date of communication of this order and if the Department fails to comply, interest shall be payable on the refund amount at the rate of 12% per annum on the expiry of the said three months. ii) The impugned goods are not liable for confiscation. Accordingly, the order of confiscation is set aside. iii) The penalty imposed on the appellant is set aside.
Appeal disposed off.
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2025 (3) TMI 1146
Seeking provisional release of detained imported goods - Mulberry Raw Silk - detention on the ground that the documents pertaining to said goods were not available with the caretaker of the premises - HELD THAT:- The provisions of Section 110(2) of the Customs Act, 1962 came into effect on 29.03.2018 and at the seizure of the goods in question and release thereof, the said provisions were not in force. In that circumstances, the Revenue cannot rely on the amended provisions in 2018 for the release of the goods in 2016 provisionally. Therefore, the Revenue is duty bound to issue the show-cause notice within extended period of six months by the ld.Commissioner (Port), which they failed to do so.
The observations made by the ld.Commissioner (Appeals) in the impugned order not agrred upon and no show-cause notice was issued to the respondent within extended period of six months in terms of Section 110(2) of the Customs Act, 1962 as existed at the time of seizure of the goods - no proceeding is sustainable against the respondent and they are entitled to release of the goods, the personal Bond and Bank guarantee.
Conclusion - The respondent is entitled to the unconditional release of the goods and the return of the Bank Guarantee due to the Revenue's failure to issue a Show Cause Notice within the stipulated period.
The appeal filed by the Revenue is dismissed.
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2025 (3) TMI 1112
Seeking to quash the impugned order - Seeking provisional release of goods - allegation of undervaluation was raised against the Petitioner - a bank guarantee has been furnished by the Petitioner for the last more than 14 years which is now lying with the Respondent/Department - HELD THAT:- The present dispute would, in the opinion of this Court, be clearly covered by the circular dated 2nd November, 2013, as the amount involved is less than Rs. 50 lakhs. Upon hearing both the parties in detail, this Court is of the opinion that in view of the said instructions, the appeal of the Department before CESTAT deserves to be dismissed. Accordingly, in exercise of powers conferred under Article 227 of the Constitution of India, the appeal filed by the Department before CESTAT stands dismissed, in view of the monetary limits. The bank guarantee shall be released within a period of 8 weeks.
The Court acknowledges that the appeal was filed before the Instruction dated 2nd November, 2023 came into effect and finds no lapse on the part of the Department. However, the present order has been passed considering the fact that disregarding the Instruction dated 2nd November, 2023 would serve no useful purpose, as it would necessitate the restoration of the appeal for a fresh hearing. It would also mean that the Bank Guarantee would continue to be kept alive incurring further costs.
Conclusion - Considering the monetary limit of the Instruction would apply even to pending matters, the CESTAT would also inevitably follow the same course of action. Thus, instead of remanding the matter, considering that the monetary value in the Appeal before CESTAT is Rs. 29,66,805/- plus Rs. 20 lakhs, which is below the limit fixed for CESTAT appeals, the appeal before CESTAT deserves to be dismissed on this short ground itself.
Petition allowed.
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2025 (3) TMI 1111
Imposition of Anti-dumping Duty - rejection of the Petitioners' response due to a delay in submission - HELD THAT:- Under Rule 8, the Designated Authority is to satisfy itself about the accuracy of the information supplied by interested parties. The manner in which the information is to be provided is also set out in the initiation notice and the questionnaire which is put up by the designated authority in the present case. Under Rule 8, the accuracy can be ascertained on the basis of the information provided by the interested parties. Paragraph number 89 of the disclosure statement in fact records various observations about the information gleaned from the response filed by the Petitioners. The said paragraph also specifically records that the reported transactions which are relied upon by the Petitioners do not allow the identification of the product which is to be exported which would be a very crucial aspect in the investigation itself.
The system of imposition of anti-dumping duty does not end with the disclosure statement being published. In fact, after the disclosure statement is published, the authority has to determine the nature of the injury which the domestic industry is suffering and thereafter arrive at its preliminary findings or final findings in terms of the Rules. After arriving at such findings, the anti-dumping duties are determined.
The Petitioners are always at liberty to respond to the Designated Authority in respect of any grievances that they may have in the consideration of the data which has been given. In terms of the operating manual it cannot be stated that physical inspection is mandatory in every case. Moreover, it depends upon the product concerned, the nature of the injury which the domestic industry is suffering and the data which is furnished by the exporters/suppliers. In each and every case, if physical inspection is mandated, it would result in delay of the investigation.
Upon seeing the facts of this case, it cannot be said that adequate consideration has not been given at this stage. The Petitioners are free to file their responses and give any clarifications which they may deem appropriate to the disclosure statement which shall also be duly considered in terms of the Rules.
Conclusion - The Court allowed the Petitioners additional time to submit their response in the correct format, extending the deadline to 21st March, 2025, and disposed of the petition accordingly.
Petition disposed off.
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2025 (3) TMI 1110
Seeking direction to the Respondent to unconditionally release the seized gold bangles of the Petitioner forthwith - recovery of two yellow bangles weighing 50 grams - 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. In this case, the one year period itself has elapsed, thus no show cause notice can be issued. The detention is therefore impermissible.
Let the goods be appraised by the Respondent department on their own and the same be released, subject to verification, within four weeks to the Petitioner. Since the Petitioner has now attained majority, the appraisement shall be done either in the presence of the Petitioner or an Authorized Representative.
Petition disposed off.
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2025 (3) TMI 1109
Jurisdiction of Directorate of Revenue Intelligence (DRI) officials under Section 28 of the Customs Act, 1962 to issue SCN - proper officer or not - HELD THAT:- A common issue raised in all these writ petitions, including the present one, pertains to the jurisdiction of the DRI officials to issue show cause notices or pass adjudication orders. However there are various other issues that have been raised in some matters, which are not common across all petitions. Accordingly, in each of these matters, the Court will have to determine whether they are liable to be disposed of in light of the Supreme Court's decision in Canon - II [2024 (11) TMI 391 - SUPREME COURT (LB)] or if any outstanding issues remain to be adjudicated.
In this writ petition, the show cause notice dated 29th December, 2020 was challenged, however, during the pendency of the writ petition the Order-in-Original dated 28th September, 2022 has also been passed. The said order is stated to have been challenged by the Department as also by the Petitioner before CESTAT in two appeals being Customs Appeal Nos. C/87924/2022-CUS and C/87921/2022-CUS. In view of the fact that both parties have availed of their remedies before CESTAT, no further orders are called for in this writ petition.
Petition disposed off.
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2025 (3) TMI 1108
Jurisdiction of Directorate of Revenue Intelligence (DRI) officials under Section 28 of the Customs Act, 1962 to issue SCN - proper officer or not - HELD THAT:- A common issue raised in all these writ petitions, including the present one, pertains to the jurisdiction of the DRI officials to issue show cause notices or pass adjudication orders. However there are various other issues that have been raised in some matters, which are not common across all petitions. Accordingly, in each of these matters, the Court will have to determine whether they are liable to be disposed of in light of the Supreme Court's decision in Canon - II [2024 (11) TMI 391 - SUPREME COURT (LB)] or if any outstanding issues remain to be adjudicated.
The show cause notice/s dated 31st December, 2020 issued by the DRI, Lucknow Zonal Unit were under challenge. During the pendency of the petitions, the adjudicating authority has passed the Order-in-Original dated 20th December, 2022 in favour of the Petitioners. The same was brought on record vide separate applications bearing nos. CM APPL. 12354/2023 in W.P.(C) 6850/2021 and CM APPL. 12275/2023 in W.P.(C) 6851/2021. In view of the fact that the Order-in-Original is passed, in favour of the Petitioners, the challenge in these matters no longer survives.
In the present petition, the show cause notice which is under challenge is SCN dated 31st December, 2020 issued by the DRI, Mumbai Zonal Unit. This would be covered by directions given in paragraph 168 (vi) (a) of the Canon-II [2024 (11) TMI 391 - SUPREME COURT (LB)], wherein the adjudication of the show cause notice is to be restored to the adjudicating authority.
Petition disposed off.
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2025 (3) TMI 1107
Jurisdiction of Directorate of Revenue Intelligence (DRI) officials under Section 28 of the Customs Act, 1962 to issue SCN - proper officer or not - HELD THAT:- In this matter, there were two grounds for challenge. One is that the DRI did not have jurisdiction which is now settled by the Canon - II [2024 (11) TMI 391 - SUPREME COURT (LB)] and the next ground is to the fact that while passing the Order-in-Original dated 26th February, 2021, no hearing was afforded to the Petitioner.
List for hearing on 8th April, 2025 at 2:30 p.m.
Petition disposed off.
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2025 (3) TMI 1106
Jurisdiction of Directorate of Revenue Intelligence (DRI) officials under Section 28 of the Customs Act, 1962 to issue SCN - proper officer or not - HELD THAT:- A common issue raised in all these writ petitions, including the present one, pertains to the jurisdiction of the DRI officials to issue show cause notices or pass adjudication orders. However there are various other issues that have been raised in some matters, which are not common across all petitions. Accordingly, in each of these matters, the Court will have to determine whether they are liable to be disposed of in light of the Supreme Court's decision in Canon - II [2024 (11) TMI 391 - SUPREME COURT (LB)] or if any outstanding issues remain to be adjudicated.
In the present petition, the show cause notice dated 17th November 2017 issued by the DRI, Lucknow Zonal Unit is challenged. This SCN would be covered by directions given in paragraph 168 (vi) (a) of the Canon-II - Accordingly, the proceedings in the show cause notice under challenge dated 17th November 2017 shall now proceed before the adjudicating authority in accordance with law.
Since the writ petition was pending for a long period, the Petitioner is afforded 60 days to file a reply to the show cause notice. The opportunity of a personal hearing shall be granted to the Petitioner and the show cause notice shall then be adjudicated.
Petition disposed off.
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2025 (3) TMI 1076
Restricted import or not - Scope of N/N. 12/2015-20 dated 12th June, 2020 - Brand New All Steel Radial Mining tires fall within the purview of said notification or not - amendment to import policy by the notification for various goods falling under Customs Tariff Heading (CTH) 4011 from ‘Free’ to ‘Restricted’ - HELD THAT:- In 2024, the disputed goods were tested by IRMRA. However, the tests were carried out on specific assumptions / requests of the DRI. The letter by DRI requesting the IRMRA to test the subject goods as per specific assumptions is neither on record nor provided to the Respondents when specifically asked. As per the tests reports of the IRMRA, the tests were not conducted on the basis of IS 15636:2022. In other words, despite the tires being categorized as “D” marking (i.e., speed not to exceed 65 km/hr), the disputed goods were tested as “J/K” category (i.e., speed not to exceed 100 km/hr or 110 km/hr).
The tests shall be conducted by Indian Rubber Manufacturers Research Association (IRMRA). This is on account of the fact that in 2022, similar tests were conducted by IRMRA (in terms of IS 15636:2022) when samples were drawn and forwarded by Central Intelligence Unit (CIU). IRMRA vide the test reports dated 15th September 2022, certified that the intended use of the tires was mining applications. Apart from the above tests, the IRMRA shall carry out any other test that it deems fit to determine whether the imported tires are of a kind used on construction, mining or industrial handling vehicles and machines. In the event the IRMRA also decides to do a speed test on the tires, the test report should indicate clearly that at what speed the tires were tested and the duration of the test as well as the wear and tear, if any, on the said tires.
Conclusion - IRMRA shall conduct specific tests to determine the classification of the tires as "Special-use" or "Normal-road-use". The results of these tests will inform the final determination of whether the tires fall under the restricted import category.
Stand over to 15th April, 2025.
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2025 (3) TMI 1075
Levy of penalties u/s 114(iii) and section 114AA of the Custom Act, 1962 - Penalty on F -card holder of Custom House Agent (CHA) - export of Led Flash Torch light by gross over-valuation and mis-declaration with an intention to avail higher export incentive benefit - corroboration to the confession of appellant - admissible evidence or not - HELD THAT:- The allegations of attempt to export goods improperly have been confirmed against the appellant solely relying upon his statement alleging the same as the admission on part of the appellant. The copy of the said statement is produced by the department. Perusal thereof reveals that the appellant is admittedly the authorized CHA of the exporting firm, the main appellant. He produced all the requisite documents when demanded as that of packing list, invoices etc. as were provided to him by the respective exporters or their representatives. He also deposed that his firm prepared check lists of shipping bills on the basis of said documents and thereafter filed the same with the customs authority at ICD, TKD. This deposition clarifies that none of the ingredients of attempt appears to be fulfilled as against the appellant. There is no denial of the department that the detained consignment was tallying in quantity with the packing lists submitted along with the shipping bills.
Overvaluation - HELD THAT:- The appellant in his statement has deposed that he is not aware regarding the actual value of the goods, however he accepted that supplier had overvalued the exported goods. In addition, he deposed that he was getting 1% of the IGST/Drawback from the exporters in cash in lieu of preparing export documents of the goods which were overvalued by them. However, except the said deposition, there is no corroborative evidence produced by the department to show the receipt of the said amount by the appellant as an additional amount to his professional charges and nor to show that the appellant had knowledge of overvaluation being done by the exporters prior filing the shipping bills.
No doubt the department has taken the stand that admissions need not to be proved but it has also been the settled proposition of law that such admissions which are voluntary and does not get vitiated on account of any of the premises envisaged Section 24 of the Evidence Act are admissible as cogent evidence.
As per department, the statement of Shri Mali Ram Agarwal is a corroboration to the confession of the appellant. However, testimony of any statement recorded in the present case cannot be relied upon for the imposition of penalty unless it stands the test of Section 138B of the Customs Act, 1962 which is para materia to sub-section (1) of Section 9D of the Central Excise Act. The plain reading of both these provisions makes it clear that clause (a) and (b) of the said sub-section set out the circumstances in which a statement made and signed by a person before the officer of a gazetted rank, during the course of enquiry or proceeding under the act, shall be relevant for the purpose of proving the truth of the facts contained therein provided that the person making the said statement has been examined by the adjudicating authority. Section 9D came in for detailed consideration and examination by Hon’ble Delhi High Court in the case titled as J.K. Cigarettes Ltd. Vs. CCE [2009 (8) TMI 64 - DELHI HIGH COURT], it has been held that in absence of the circumstances specified in Section 9D(1), the truth of the facts contained in any statement recorded by the gazetted officer is not admissible into evidence.
The statement of Shri Mali Ram Agarwal has not stood the test of Section 138B of the Customs Act, also that the appellant has objected his statement recorded under Section 108A as involuntary, recorded under pressure. Resultantly, the statements on record are miserably insufficient to prove the alleged act of attempt to export improperly and to use the false information is wrong. For appellant’s alleged admission also since same stands retracted subsequently no evidentiary value can be attached that too in absence of any corroborative evidence.
Conclusion - The department has failed to prove the guilt of the appellant who otherwise was the authorized CHA, had all the KYC documents and had filed the shipping bills based on the documents provided to him by the respective exporter or their representative and that he was not personally sure about the value of the goods imported.
The order of imposition of penalty upon the appellant set aside - appeal allowed.
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2025 (3) TMI 1074
Additions of 'license fee' and 'advertising expenses' to the assessable value of imported goods - Lack of SCN - HELD THAT:- On a perusal of the records, it is found that the appellant herein had been importing from their overseas affiliates, and admittedly related parties, since 2006 and their original declarations, accepted by order of 29th March 2006, were, thereafter, sought to be renewed by communications of 23rd March 2009, 4th January 2011, 12th October 2012 and 24th June 2013 but it appears, in the absence of explanation in the orders of the lower authorities, that those, kept pending, were taken up for disposal only in July 2015 leading to the order for addition of specific components of recompense to overseas entities and which, but for the modification in the impugned order, were upheld by the first appellate authority.
It also transpires from the records, inasmuch as that the order of the original authority, directing loading for the imports covered for the period 2003-04 to 2013-14, was found to be unjustifiable to the extent of imports beyond five years from the relevant date, that the specific imports intended to be covered and those to be excluded, consequent upon the impugned order, remains unknown.
The impugned order is far from clear about to the reasons for limiting the additions to five years if, as stated in the order impugned before that authority, intent was to enable finalisation of provisional assessments. On the other hand, if the intent was to recover duty short-paid by reasons of evidence of the ingredients enumerated in section 28 of Customs Act, 1962 for invoking the period beyond the normal period of limitation, there should have been a finding of evidence to that effect consequent upon the importer being placed on notice of intent to invoke extended period of limitation as well as the consequential penalties specifically noted in such finding.
Conclusion - It would appear that the appeal before the first appellate authority had not been examined in terms of outcome of differential duty or evaluation of correctness of declared value in specific bills of entry which alone could have been cause of grievance. The correctness of the legality and propriety of the additions cannot be determined.
Matter remanded back to the first appellate authority for a fresh decision - appeal allowed by way of remand.
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2025 (3) TMI 1073
Classification of imported goods - Fiber Optic Transmitters/Receivers/Transceivers - classifiable under CTH 85176290 or CTH 854230? - applicability of exemption under S.No.20 of N/N.57/2017 - Extended period of limitation - confiscation - penalties.
Whether the impugned goods imported by the appellant are classifiable under CTH 85176290 or under CTH 854230 as contended by the appellants? - HELD THAT:- The adjudicating authority has gone through the details furnished by the appellant as well as various other documents referred to supra to come to the conclusion that goods are clearly classifiable under CTH 85176290 and the goods are also in the nature of OTE, in view of their actual function. He has also categorically ruled out the possibility of its classification as simple electrical integrated circuit, keeping in view the HSN explanatory note, according to which, essentially, at least one of the components are required to be present, which incidentally was not found to have been used in the said impugned goods.
The adjudicating authority has taken into account the statements recorded from technical expert of the appellant as well as expert opinion and felt that these are in the nature of apparatus or devices meant for certain specific functions like conversion of, inter alia, electrical signal into optical signal and vice versa, using optical fiber cable and therefore, they are more in the nature of OTE. The fact that OTE has been categorically classified under CTH 85176290 in the notification itself also supports that if the impugned goods are in the nature of OTE then it would obviously fall under CTH 85176290.
Applicability of exemption under S.No.20 of N/N. 57/2017 - HELD THAT:- The impugned order is a well reasoned order, where after going through the detailed submissions and other evidence on record, the adjudicating authority has rightly held the impugned goods to be classifiable under CTH 85176290 and has also rightly held that these are in the nature of OTE and therefore, they shall not be entitled for the benefit under notification 57/2017. In view of the same, the classification as well as denial of benefit under S.No.20 of the notification 57/2017 upheld.
Invocation of extended period - HELD THAT:- There is nothing wrong for the appellant to have a bonafide belief to choose a heading which may be more beneficial to them even though, ultimately, it may not be found to be correct classification. However, this, per se, cannot become ground for invoking extended period of limitation. There has to be much more evidence on record to prove their deliberate plan or deliberate suppression in order to hoodwink the department into believing something else. Merely because they chose to claim classification under a heading, which they thought was more appropriate, it cannot be a ground for invoking extended period. Further, though the adjudicating authority has tried to bring in the concept of fraud for invoking extended period in the sense that they were deliberately misleading the department, it has neither been alleged in the SCN nor has been explained in what way the appellants were indulging in fraud. Therefore, invocation of extended period is not tenable and therefore, to that extent the impugned order is liable to be set aside.
Wrong calculation of duty demanded - HELD THAT:- There are no discussion on this issue and therefore, the matter needs to be remanded back to the adjudicating authority to examine this aspect and allow the benefit of this amount if it has already been paid, as submitted by the appellant.
Confiscation - HELD THAT:- When the issue is primarily that of classification, the confiscation cannot sustain and therefore, on that count itself, the impugned order to the extent of confiscation of impugned goods and imposition of fine is also not tenable.
Penalty u/s 114A - HELD THAT:- In view of the fact that the extended period cannot be invoked in the present case, as also there is no element of fraud, suppression or misstatement, etc., therefore, the penalty under this section is not sustainable.
Penalty u/s 114AA - HELD THAT:- In this case, whenever they have used a different classification than the classification which was indicated in the invoice, they knew that they are entering wrong classification in the bills of entry and therefore to that extent, the appellants knowingly and intentionally made the said entries. Their bonafide belief will not be of much help as here, it is an established fact that the classification mentioned in the bills of entry was different than the classification indicated by the supplier of the said goods. Therefore, there are no infirmity in the imposition of penalty under section 114AA.
Conclusion - The goods are classified under CTH 85176290, the exemption under Notification No.57/2017 is denied, the extended period for demand set aside, penalties under sections 112(a) and 114A are dismissed, the penalty under section 114AA is upheld, and the confiscation of goods is overturned.
Appeal partly allowed by way of remand for redetermination of quantum of demand.
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2025 (3) TMI 1039
Rejection of the petitioner's application for compounding of the offence under Section 137 of the Customs Act, 1962 - failure to follow the instructions and guidelines issued by the respondents themselves - HELD THAT:- In the instant case, after the applicant had submitted his application, the application was first got scrutinized by the compounding officer within the Department and thereafter the petitioner was called for personal hearing. The petitioner had availed the opportunity of personal hearing, appeared before the compounding officer, accepted his guilt and offence and prayed for allowing the compounding application and also expressed his willingness to pay the compounding fees.
There is no need for another show-cause notice to be issued to the petitioner or the applicant seeking compounding of an offence. Secondly, what also weighs more in the minds of this Bench is the fact that, every application for compounding of offence need not be accepted as a matter of routine. There has to be an element of scrutiny to be done and in addition there has also to be the subjective satisfaction of the compounding officer for reaching to the conclusion that the contents of the compounding application is full and true disclosure of the relevant facts. It would be difficult to accept the situation where the petitioner at the first instance takes a different stand both in his statement under Section 108 and also in the statement at the time of preparation of Panchnama and later to take a somersault and take an entirely different version while applying for compounding of the offence.
In the instant case, admittedly there is a vast variance in the contents in the statement under Section 108 that which is recorded in the Panchnama when compared to the contents made in the application for compounding of the offence - Surprisingly, there has been no statement available on record to show that the petitioner had retracted from the statement that he had given under Section 108 as also in the Panchnama.
If the compounding officer found substantial variance in the statements so made by the petitioner, the rejection of the compounding application cannot be held to be bad in law or being contrary to the circulars governing the field of determining the compounding application.
Conclusion - The rejection of the compounding application was justified due to the petitioner's failure to make a full and true disclosure of facts. It is held that every application for compounding of offence need not be accepted as a matter of routine.
Petition dismissed.
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2025 (3) TMI 1038
Seeking grant of regular bail during the pendency of the trial - smuggling of Gold - bailable or non-bailable under Section 104 of the Customs Act, 1962, in view of value of gold - admissibility and relevance of the statements recorded under Section 108 of the Customs Act, 1962 - applicant argued that the complaint is confined only to the alleged recovery of 2000 gms of gold and the recovery effected from the house of Ankit Jindal being in the nature of ornaments is not the subject matter or case property for his prosecution for violation of the provisions of Customs Act, 1962 - HELD THAT:- This Court finds that the officials of the DRI had intercepted a roadways bus wherein accused persons Anil Kumar Sharma and Sudhir Kumar were travelling and from them 1 kg gold each was recovered. Of course, the value of the recovered gold individually is below 1 Crore whereas collectively, it is more than 1 crore, but while deciding the prayer for bail, this Court is not inclined to make any comment on the nature of offence whether it is bailable or non-bailable.
No doubt, in the case of Mohd. Tufial [2023 (3) TMI 1293 - ALLAHABAD HIGH COURT], this Court has observed that the recovery effected from each accused is to be considered to determine the nature of the offence, but this Court is not inclined to comment upon the nature of the alleged offence, if, it would fall under section 104(6) or 104(7) Customs Act, 1962 as the charges against the accused have also not been framed so far. Otherwise also, this issue can be effectively decided by the trial court on the strength of the evidence of the parties.
The admissibility of the statements of the accused recorded under section 108 Customs Act, 1962 would also be tested during trial. However, considering the stand of the accused, who claim that the recovered material was acquired by them in legitimate manner, this Court is of the opinion that further detention of the applicants may not be necessary for any useful purpose. Concededly the investigation in the matter is complete and after filing of the complaint/ charge-sheet even the charges have not been framed against the accused, therefore, it is clear that the trial is yet to start.
Keeping in view the nature of the crime as well as the period undergone by the applicants and the punishment provided for the alleged offences, this Court deems it proper to extend the concession of regular bail to them, as the conclusion of trial is likely to consume considerable time. Further, the material witnesses are the officials of DRI and at present there does not seem to be any possibility of their being won over.
Conclusion - Thus, without meaning any expression of opinion on the merits of the case, the bail application is allowed and it is ordered that the applicants Ankit Jindal, Anil Kumar Sharma and Sudhir Kumar be released on regular bail, subject to fulfilment of conditions imposed.
Bail application allowed.
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2025 (3) TMI 981
Classification of imported goods - Roasted Areca Nuts - to be classified under Chapter Heading No. 2008 19 20, as claimed by the petitioner, or under Heading No. 080280, as suggested by the respondents - respondents' requirement for the petitioner to submit a provisional bond and Bank Guarantee of 25% of the differential duty for provisional release of goods - HELD THAT:- The petitioners are directed to deposit reduced security amounts and ordered the respondents to issue provisional release orders within three days of deposit. The final assessment was to be expedited following the receipt of the petitioners' replies and evidence.
Petition disposed off.
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2025 (3) TMI 980
Seeking setting aside of the seizure of the gold Kada - waiver of SCN and perosnal hearing - no SCN was issued and more than one year has elapsed since the detention - HELD THAT:- There was waiver of show cause notice and no personal hearing was also granted to the Petitioner. As per the operative portion of the order, there is complete confiscation of one elongated gold piece bent in kada shape.
This Court is of the opinion that following the decision in Mr. Makhinder Chopra v. Commissioner of Customs [2025 (3) TMI 19 - DELHI HIGH COURT], waiver of show cause notice and waiver of personal hearing in standard format is contrary to law.
It appears to the Court that even in the present case it is a standard form waiver. Under these circumstances, the order in original cannot be sustained and the same is accordingly quashed. The gold Kada be released, however, subject to payment of storage charges - Let the Petitioner approach the Customs Department for release of said Kada.
Conclusion - The gold Kada is ordered to be released to the Petitioner, subject to payment of storage charges, as the confiscation could not be sustained.
Peition disposed off.
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2025 (3) TMI 979
Seeking provisional release of imported goods u/s Section 110A of the Customs Act, 1962 - old and used tyres - HELD THAT:- This petition is disposed of with a direction to the petitioner to prefer an Appeal challenging the order dated 6th February, 2025 rejecting the application for provisional release within a period of two weeks from today. The Appellate Authority shall decide the Appeal within a period of four weeks from the date of receipt of copy of such appeal memo after giving an opportunity of hearing to the petitioner. It is clarified that the merits of the matter not entered into, and the further proceedings may be decided by the concerned authorities in accordance with law.
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2025 (3) TMI 978
Classification of imported goods - to be classified as Polystyrene GPPS 1450 in powder form under CTH 39031910 or if they should be reclassified as Polystyrene in granular form under CTH 39031990? - exemption form BCD under N/N. 10/2008-CUS dated 15.01.2008, as amended by N/N. 53/2015-CUS dated 23.11.2015 - levy of penalty on Director of the appellant-company under Section 114AA of the Act - time limitation - suppression of facts or not - Confiscation - interest and penalty - HELD THAT:- When suppression clause is invoked, the Show Cause Notice is to be adjudicated within a period of one year from the date of issue of the notice. In this case, the Notice was issued on 05.07.2018. It was adjudicated within one year. The submission of the appellant in this regard is that there is no suppression of fact established against them in this case and hence the notice should have been adjudicated within 6 months from the date of issue of the notice. It is found that the said notice has been issued by invoking extended period of limitation.
The appellant had enjoyed BCD exemption provided under Notification No. 10/2008- Cus. dated 15.01.2008 on the imported goods, Polystyrene GPPS 1450, based on the Certificate of Origin issued by the designated authority of the Country of export i.e., Singapore in respect of the earlier 17 Bills of Entry. However, in respect of the last Bill of Entry No. 4199210 dated 29.11.2017, the sample was tested and found to be in ‘Granular Form’ - the Department has applied the test report received in respect of the goods imported vide Bill of Entry No. 4199210 dated 29.11.2017 for all the previous imports and charged Customs duty on all the 18 Bills of Entry, which is legally not sustainable. It is observed that the test report received in respect of the goods imported vide Bill of Entry No. 4199210 dated 29.11.2017 is applicable only for that Bill of Entry and the same cannot be applied to all previous imports.
The test report in respect of the goods imported vide Bill of Entry 4199210 dated 29.11.2017 cannot be applied to the goods imported earlier under the 17 Bills of Entry, as no samples have been drawn in respect of the said Bills of Entry. In these circumstances, we hold that the demand of Customs duty confirmed in the impugned order in respect of the past imports vide 17 Bills of Entry is not sustainable. Accordingly, the same is set aside.
Interest and penalty - Confiscation - HELD THAT:- Since the demand of Customs duty in respect of the 17 Bills of Entry pertaining to past imports is found to be not sustainable, the demand of interest and imposition of penalty on the differential duty confirmed on this count against the appellant-company is also not sustainable and accordingly, the same are set aside. Since, the mis declaration alleged in the previous 17 imports is not established, it is also held that the said goods imported vide those 17 Bills of Entry are not liable for confiscation.
Penalty on Director of the Appellant-Company, under Section 114AA of the Customs Act, 1962 - HELD THAT:- Mis-declaration with intention to evade Customs duty has been established in this case in respect of the goods imported vide Bill of Entry No. 4199210 dated 29.11.2017. Hence, penalty u/s 114AA of the Act is liable to be imposed on the Director of the Appellant- Company, but the penalty imposed should commensurate with the duty involved in the said Bill of Entry. In these circumstances, the penalty imposed on Shri Rushab Thakker, Director of the Appellant-Company, u/s 114AA of the Act is reduced from Rs.10, 00, 000/- to Rs.1, 00, 000/-.
Conclusion - i) The demand of Customs duty for the past 17 imports is set aside due to lack of evidence of mis-declaration. ii) The demand for the goods under Bill of Entry No. 4199210 dated 29.11.2017 is upheld, with penalties for mis-declaration. iii) The penalty on the Director is reduced, reflecting the lack of evidence of intentional evasion for past imports.
Appeal disposed off.
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