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2024 (4) TMI 1043 - CESTAT MUMBAI
100% EOU - Validity of EPCG Licenses - Cancellation of bonded warehouse licence, letter of permission (LOP) and registration - Duty liability u/s 28 - interest - ‘export promotion capital goods (EPCG)’ scheme in the Foreign Trade Police (FTP) - breach of the principles of natural justice - HELD THAT:- On a perusal of the scheme of Customs Act, 1962, we find that there is no provision whatsoever for the consequences of cancellation of a warehousing licence other than through section 58 of Customs Act, 1962 by giving one month notice in writing and opportunity to be heard. Therefore, notwithstanding the issue of letter of permission which was also the genesis of the private warehousing licence, provisions of Customs Act, 1962 do not envisage such deftailing of a scheme in Foreign Trade Policy with the self content and apprehensive provision for a warehousing in chapter IX of Customs Act, 1962 with the procedures formulated for implementation of such a scheme did prescribe the licencing of a private bonded warehouse for enabling operation as export oriented unit (EOU). Such a procedure cannot correct the existence and sanctity of a warehouse licenced under the provisions of chapter IX of Customs Act, 1962.
Any termination of the said warehousing licence and its consequence, was necessarily follow the provisions embodied in the said chapter and cannot be said to be linked to a permission accorded under the Foreign Trade Policy (FTP). It may also be noted that the said appendix in the Handbook of Procedures cited in the impugned order had been put in a place solely for the purpose other than the effect of the exemptions in Income Tax Act, 1961. There is no statutory reference whatsoever but Customs Act, 1962 and therefore the procedure prescribed for a scheme under a policy cannot render an institution established and controlled under a statute to be subservient them too.
It would, therefore, appear that the impugned order, fastening the consequences of payment of duty on goods that continued to be warehoused till 6th of April 2015 is not only contrary to the provisions of Customs Act, 1962 but also in breach of the principles of natural justice which prescribes consequences of termination of warehousing licence only after completion of the due process.
Thus, we set aside the impugned order and, as the show cause notice had not been decided after due consideration of the legal provisions, the matter is remanded to the original authority for a fresh decision on the termination of warehousing licence and consequences thereof, if any, strictly in accordance with law.
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2024 (4) TMI 1021 - CESTAT AHMEDABAD
Refund Of excess amount of duty paid on short shipped quantity - Valuation - erroneous calculation of FOB value of the subject consignment - Export of Metallurgical Grade Gibbsitic Bauxite of Indian Origin - 100% EOU - violation of principles of natural justice - whether the refund claim was considered by the adjudicating authority or not - HELD THAT:- It is clear from reading provision of sec.14 for Valuation of goods, that what is exported are goods as presented for export at Indian port with the value having been indicated as the transaction value being the value for export from India for delivery at the time in place of exportation (being India) in the case of export goods and such value commonly taken as FOB value.
The goods exported were as per description of “Metallurgical Grade Gibbstic Bauxite” and goods were assessed in the country of exportation as per the price initially agreed. The goods remained in the sea and were during the shipment exposed to moisture. The moisture over and above permissible was found at the port of discharge and price was renegotiated and the fresh price was arrived at to avoid termination of contract due to slightly higher moisture content.
Situation to that extent was similar to the contract of M/S. ORE CASE (INDIA) V/S. COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & S.TAX, BBSR-I AND COMMISSIONER OF CUSTOMS (PREVENTIVE), BHUBANESHWAR[2023 (10) TMI 757 - CESTAT KOLKATA] Excepting that instead of humidity element it was ferrous content in that case. It is to be noted in that case, it is on record that assessment at the time of exportation was on provisional basis and subjected to the final outcome of ferrous contents. The ferrous contents in any case cannot be different, in normal course at either of the ports of export and import. However, in this case, it is not coming on records, as to whether the assessment was provisional, or whether the department was made aware of likely variance in prices due to higher moisture content which is likely to happen even in course of shipment being in the sea. Further whether any moisture content was declared in India at the time of export is not forthcoming. Again it has to be decided as to what was the export goods at the time of exportation and what was the price at the time of exportation as per the statutory provisions, indicated above. Matter is therefore, remanded back to the original adjudicating authority to check up on all these facts specially if the assessment was provisional or department was aware of the contract which provided for variance in price at the later stage.
Further, since the department has not raised the issue initially that appeal was required to be filed by the party as per the decision of ITC case (cited supra). Department is precluded from raising the same in the instant remand proceeding. Party is free to raise its other legal objection if any.
Appeal disposed of by way or remand.
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2024 (4) TMI 1020 - CESTAT CHENNAI
Import of road construction machines - Benefit of exemption - Actual user conditions - requirements of a valid contract for road construction. - Goods declared as ‘New Python 5000 Pothole Patchers Machine’ - duty exemption under Notification No. 12/2012 (Sl. No. 368, list 16) - adjudicating authority denied the benefit of notification to the importer on the ground that the imported machines being used to patch-up or repair minor cracks / potholes which develop on the existing road surface were not found specified under List 16 - Validity of contract with NHAI etc. for the construction of roads in India - HELD THAT:- We find that Boards Circular F No 345/17/2008-TRU, dated 23/02/2009 has not been issued in connection with Customs Notification No. 12/2012 but is pertaining to Service Tax levy. Interpreting a notification benefit with a Circular issued for another enactment is always fraught with danger of misinterpretation. There is nothing in the exemption notification to show that only machines used for construction activities should be given its benefit and not extended to machines for maintenance and repair activities. The machines listed in list 16 cover a whole gamut of road construction activity like, paver finisher, surface dressing eqp., kerb laying, bridge inspection unit, stone crushing plant, tunnel excavators etc and not to road laying equipment/ machines alone. The matter has been discussed elaborately at para 7 of the impugned order. Further machines at Sl. Nos.4 and 5 can also be used for repair and maintenance activities of roads. We hence do not find the impugned order to be erroneous on this ground.
It is not Revenue’s case that the said contract was not entered into with this authorized agency. The Respondent has explained that one of the conditions for bidding for the contract was that they should be in possession of a machine for carrying out the contracted work. Hence the contract could only have been applied for while possessing a machine, necessitating its prior import. We feel that it is impossible for every notification to perceive exhaustively situations and circumstances that may emerge after its issue and where its application may be called for. Hence the process of interpretation combines both a literal and a purposive approach. The purpose of the concession is to ensure that the machine is used for the purpose specified in the notification. In exceptional cases the exemption could have been extended provisionally with a bond and finalised after a reasonable opportunity was given to the importer to produce the contract.
Thus, we find that the learned Commissioner (Appeals) has used his discretion fairly and judicially in interpreting the notification and his order does not merit interference. The appeal is hence rejected and the matter disposed of accordingly.
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2024 (4) TMI 1019 - CESTAT CHENNAI
Transaction value - Valuation (Customs) - Related person - loading of import value - Modular panels of different sizes for use in the construction industry - imports raw materials - provisional duty assessment - special or abnormal discount to the related buyers which were in excess of 3% discount - HELD THAT:- We find that the Chairman and Managing Director of Paschal Germany has confirmed that their normal trade practice in the course of international trade is to offer discount at the range of 25% to 40% of the normal sale price to all their customers located across the globe including the group companies/ affiliates. The importer has also demonstrated that even at the time that they were not in existence in India their parent company had allowed 25% discounts to buyers like NCC in India.
The cash discount of 3% is allowed by the parent company if the subsidiary pays the import bills within the time. No cash discount was ever availed by the Appellant as the import payments could not be made to the suppliers within the time. The cost construction statement duly certified by the CA shows that on average the profit margin was around 16%. None of this was refuted through facts. The OIO also mentions that the learned Adjudicating Authority did not find any cash flow back towards Royalty/ Technical Know-How fees/ Licence fee in respect of the imported goods.
We find that the department at the first instance has not shown any concrete reason to discard the transaction value. The OIO states that ‘it appears that the importer is giving 25% discount to their related parties and may be another 3% as per the terms and condition of the price list.’ He goes on to opine that ‘there can not be mass production of such machinery plant which warrants such huge discount’, without any factual substantiation. The whole arguments to discard the transaction value are based on conjectures and surmises. This being so the question of determining a fresh value as per the CVR does not arise.
The Commissioner (Appeals) after examining the matter is also unsure about the exclusive nature of the discounts affecting the transaction value on the imported goods and states in conclusion that ‘the discount enjoyed by the importer appears to be a special one made only for related importers’. On the other hand he has gone beyond his statutory functions, traversed beyond the scope of the appeal and taken on the role of an investigator directing the lower authority to examine why the loading of value should not be at 25%. Hence the impugned order must fail both for sustaining the OIO which was based on conjectures and surmises and could not give any concrete reasons to discard the declared transaction value and further for exceeding his statutory functions by ordering a fresh enquiry.
Thus, we set aside the impugned order. The appeal succeeds and is disposed of accordingly.
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2024 (4) TMI 1018 - CESTAT BANGALORE
Challenging the assessment of Bill of Entry - The assessing authority initially rejected this claim, prompting the appellant to file a revised Bill of Entry without claiming the benefit of these notifications. Subsequently, the appellant filed an appeal challenging the assessment made by the Customs authorities. - Benefit of concessional rate of customs duty and CVD - appeal rejected by taking the recourse of Section 17(5) of the Customs Act, 1962 - HELD THAT:- In the present case, it is found that after rejection of the appellant’s claim of benefit under the above said notifications as declared in their Bills of Entry, they paid the duty under protest and preferred appeal before the learned Commissioner(Appeals). Therefore, the learned Commissioner(Appeals) ought to have decided the appeals on merits instead of rejecting the same by observing that the appellant has accepted the re-assessment. Further, the Hon’ble Supreme Court in the case of ITC LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, KOLKATA -IV [2019 (9) TMI 802 - SUPREME COURT] has held that Revenue as well as appellant can prefer an appeal against the order of the assessment.
The impugned order is set aside and the case is remanded to the learned Commissioner(Appeals) to decide the issues on merit, after affording an opportunity of hearing to the appellant. Since the assessment involved in the appeals is around a decade old, it is directed that the denovo proceeding be completed within three months from the date of communication of this order.
Appeal is allowed by way of remand.
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2024 (4) TMI 1017 - CESTAT NEW DELHI
Violation of principles of natural justice - denial of cross-examination - Pre-mature appeal - HELD THAT:- Though appellant contended that denial of cross-examination would prejudice the case of the appellant, but it would always be open to the appellant to raise this issue once the final order is passed by the Principal Commissioner. It would not be appropriate, at this stage, when the Principal Commissioner is in the process of adjudicating the show cause notice, to examine this issue.
The appeal is, accordingly, dismissed with liberty to the appellant to raise the issue of denial of cross-examination before the Tribunal after the Principal Commissioner decides the matter.
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2024 (4) TMI 1016 - CESTAT KOLKATA
Smuggling - Confiscation of Silver Jewellery, Silver Boondi & Indian Currency - third country origin - Penalty - recovery of contraband goods from the house and Gaddi - Burden of proof - presumption u/s 123 - HELD THAT:- We find that the search made on the basis of that respondent is dealing with the contraband goods and during the course of investigation, no contraband goods were recovered. The respondent being a trader in silver ornaments/silver boondi, was searched and 79.58 kgs. of Silver Jewellery, 50 kgs. of Silver Boondi, Indian Currency amounting to Rs. 79,00,000/- were recovered. These were presumed by the Revenue and these are the third country origin, but no such evidence has been produced by the Revenue to allege that these are third country origin.
In fact, during the course of investigation, it is a fact on record that boondi silver and silver jewellery were recovered from the shop of the respondent. So, the question arises that in the absence of any seizure of Port or Airport or not having any foreign markings on the goods seized from the respondent, how the officers came to the conclusion that the goods are third country origin goods. Therefore, first, onus on the Revenue is to make a reasonable belief that the goods are of third country. Admittedly, no such evidence has been produced by the Revenue to allege that to make a reasonable belief, the goods are of third country origin. In the absence of that, the goods in question cannot be confiscated.
Furthermore, the confiscation of Indian Currency recovered from the respondent was not proved by the Revenue that the same is sale proceed of the goods of third country origin. In that circumstances, the Indian Currency cannot be seized or confiscated.
We do agree with the observations made by the Ld. Commissioner (Appeals). Thus, we do not find any infirmity in the order passed by the Ld. Commissioner (Appeals) and do agree with the same.
Hence, we do not find any merit in the appeal filed by the Revenue. Accordingly, the same is dismissed.
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2024 (4) TMI 975 - SC ORDER
Review application - Maintainability of application before Supreme Court - Classification of goods - it was held by the High Court that Admittedly, in the instant case, the stand of the department is that the goods dealt with by the respondent/assessee are not covered by the exemption notification. If that be so, the appeal is maintainable before the Hon’ble Supreme Court - HELD THAT:- It is not required to interfere in the matter. The Special Leave Petitions are dismissed.
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2024 (4) TMI 974 - CESTAT CHENNAI
Refund of EDD - Period of limitation - Appellant unaware of finalisation of bills of entry - request for finalisation of their provisional bills of entry and cancellation of pre-deposit - HELD THAT:- It is found from the order in original dated 10.03.2021 that nowhere has the original authority mentioned the date of finalisation of the bills of entry, although he has only mentioned that the finalisation was made before July 2019. Further, in the communication dated 27.01.2020 again, the deputy commissioner while intimating about the finalisation of the bills of entry, has asked the appellant to approach refund section insofar as refund of EDD was concerned - In this communication also there is no mention about the date of finalisation of the bills of entry; the lower authority has only talked about the finalisation in the above manner without mentioning about the date of finalisation of assessment, which is very conspicuously absent. Moreover, even the date of dispatch, if made, is also not whispered anywhere, to avoid controversies.
None of the communications to the appellant indicates date of actual communication of the order in original dated 29.04.2015. Hence, the prima facie burden on the revenue to adduce proper evidence to show the actual date of communication of the Order in Original, not to speak of the date of dispatch, remains un-discharged - It is thus not only the order appears to have passed in strict conformity with the established principles of law, but even the communication of the same is not at all proved anywhere. Same also appears to be irregular as authorities have quite conspicuously omitted to bring on record the actual date dispatch and the date of communication of the said order, with supporting documentary evidences.
The case of the appellant accepted since even up to the date of its request made in the year 2018 for finalisation, apparently, the appellant was not served with the copy of the said Order in Original - the impugned order is set aside as Revenue has failed to prove or bring on record any of evidence in support of its claim that Order in Original was communicated on such and such a date and therefore, the application dated 04.08.2020 filed by the claimant was clearly hit by limitation within the meaning of section 27(1) ibid. - appeal allowed.
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2024 (4) TMI 973 - CESTAT KOLKATA
Reduction in the quantum of redemption fine and penalty - enhancement of value - old and used worn clothing, completely fumigated - Confiscation - HELD THAT:- This issue came up before this Tribunal in the case of VENUS TRADERS, RAINBOW INTERNATIONAL, AL-YASEEN ENTERPRISES, GLOBE INTERNATIONAL, KRISHNA EXPORT CORPORATION, PRECISION IMPEX, BMC SPINNERS PVT. LTD., SHIVAM TRADERS, LEELA WOOLEN MILLS, M.U. TEXTILES VERSUS COMMISSIONER OF CUSTOMS (IMPORTS) MUMBAI [2018 (11) TMI 625 - CESTAT MUMBAI], wherein this Tribunal has observed the failure of the original authority to comply with the direction in remand to disclose the margin of profit that prompted the fine and penalty, the matter would normally have to be remitted back by another remand order. However, the paucity of evidence and the negligible scope for ascertainment at this stage deters us from doing so.
Following the above cited decision of this Tribunal, it is held that the redemption fine and penalty imposed on the respondent to the tune of 10% & 5% respectively on the assessed value is sufficient. Therefore, the redemption fine and penalty confirmed by the ld.Commissioner (Appeals) are sufficient to meet the end of justice.
There are no infirmity in the impugned order and the same is upheld - appeal filed by Revenue dismissed.
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2024 (4) TMI 972 - CESTAT MUMBAI
Classification of imported goods - Small Form-factor Pluggable (SFP)-25G-SR Optical Transceiver - SFP-10G-SRL Optical Transceiver - QSFP-10G-UNIV Optical Transceiver, etc. - classifiable under Customs Tariff Item (CTI) 8517 6290 or not - exemption/ duty concession under Notification No.57/2017-Customs dated 30.06.2017 (Sl. No.20), as amended - HELD THAT:- It is found that imported goods under dispute have been declared with complete description as ‘Small Form-factor Pluggable (SFP) - Optical Transceiver’ of various models and notification benefit under Sl. No.20 of Notification No.57/2017-Customs dated 30.06.2017 was claimed for concessional Basic Customs Duty (BCD) of 10%. However, as the proper officer was not convinced with the justification given by the appellants, the impugned goods were re-assessed at merit rate of 20% BCD by denying the notification benefit and the same were appealed against before the Commissioner of Customs (Appeals).
On careful reading of the impugned order passed by the learned Commissioner of Customs (Appeals), it transpires that he has given a specific finding that the impugned goods fall under the category of ‘Optical transport equipment’. In coming to such conclusion, he had referred to the description of the imported item ‘Transceiver’ incorporates transmitter and receiver and thus it is an equipment for optical transportation. Accordingly, he has concluded that since these are optical transport equipment, the benefit of customs duty exemption in the exemption entry at Sr. No.20 of the Notification No. 57/2017-Customs dated 30.06.2017 is not applicable to the impugned goods.
Since the impugned goods are neither telephone sets under (i) above, nor an apparatus/independent machine for transmission or reception of voice, images or other data, under second group of items mentioned in (ii) above, and are also not covered as specified part under CTI 8517 7010 viz., ‘Populated, loaded or stuffed printed circuit boards’, these are specifically covered under the CTI 8517 7090 as ‘other parts’.
The product under consideration i.e., ‘Small Form-factor Pluggable Optical Transceiver’ of various models are classifiable under Customs Tariff Item (CTI) 8517 7090, and not under CTH 8517 62 90, as claimed by Revenue. Accordingly, the impugned goods are eligible for exemption/duty concession under Serial No. 5(a) of Notification No. 57/2017-Customs dated 30.06.2017, as amended. Therefore, the impugned order passed by the learned Commissioner (Appeals) in confirmation of the adjudged demands in the original order cannot be sustained on merits.
The appeal is allowed in favour of the appellants.
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2024 (4) TMI 971 - CESTAT CHENNAI
Valuation of imported Goods - Allowance of discount of 25% to appellant by foreign supplier - related party transaction - remittances made higher than the invoice price or not - HELD THAT:- In the agreement dated 16.06.2001 executed by the appellant and the foreign supplier, the amount of discount was mentioned as 17% only - The invoices raised by foreign supplier showed 25% discount and the remittance by the appellant was made accordingly. The department does not have a case that the remittances do not match with invoice value.
In para 8 of the denovo order the adjudicating authority has noted that the appellant has furnished all the particulars of imports made from the year 2001 to 2008 as well as copies of corroborated bank statement. There is no evidence adduced by department to establish that the appellant has made remittances higher than the invoice price. So also the appellant has produced the CA certificate substantiating the payments made to the supplier for the relevant period.
The AA has held that the e-mail communication is a mere afterthought. The appellant has been continuously litigating contending that they had been given 25% discount by the foreign supplier. So also, they have later produced the amended agreement in which it has been expressly stated that the 25% discount is applicable retrospectively from the date of earlier agreement. Taking note of all these documents we are of the considered opinion that the appellant has succeeded in establishing that they have been given 25% discount by the foreign supplier.
The impugned order is set aside - Appeal allowed.
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2024 (4) TMI 919 - DELHI HIGH COURT
Detention Order under COFEPOSA - legal heirs of detenu - Smuggling - diesel oil of foreign origin - seeking to impugn detention order dated 02.05.2005 on the ground that proceedings under SAFEMA have been initiated (action against detenu was initiated under SAFEMA during his lifetime) - HELD THAT:- As per investigation conducted by DRI, detenu was found to be the person who was directly involved in the smuggling and for organizing the finances as well as logistic and, therefore, detention order passed under Section 3(1)(i) of COFEPOSA was fully justified. It is also reiterated that detenu, when he was alive, could have easily prayed this Court for disposal of his writ petition on merit but he himself submitted that it be dismissed as withdrawn with liberty to raise all the issues in case of initiation of any proceedings under SAFEMA. Petitioner is not justified in asserting that the earlier writ petition was withdrawn on 16.08.2007, with liberty as sought for, as it could not reach for final hearing. The orders available on website rather indicate that at one earlier point of time the final arguments were heard on merits and the matter was even reserved for judgment.
Be that as it may, there is nothing to infer that the detenu had withdrawn the petition as it could not reach final hearing. On the contrary, he himself had sought withdrawal, albeit, with liberty, as aforesaid.
After the demise of detenu, fresh summons and Notice in connection with proceedings under SAFEMA have been issued to his legal heirs. We have seen such communication dated 15.02.2019 and 08.12.2021. In later communication, detenu has been referred as affected person no. 1 (AP-1) and his wife as affected person no. 2 (AP-2) and according to such notice, there are two immovable properties in possession of AP-2 and she has, merely, been called upon to indicate the source of income or the means through which said two properties had been acquired. In case, affected person is in a position to satisfactorily explain about the manner in which the properties were acquired, naturally, there might not be any adverse action of any kind under SAFEMA. Thus, the petitioner can always respond to such notice appropriately - coming back to the instant petition, there is nothing here which may compel to quash the detention order.
Contentions made by the petitioner are found to be without any substance. There is nothing to indicate that detenu did not know English and it is also quite obvious that detenu was evading service and execution of the ‘detention order’ and since the repeated visits at his premises did not yield any result, eventually, publication had to be carried out in newspaper - There is also nothing which may portray that the time lapse, between detention order and its execution, is such as would lead to the inference that the live-link between the prejudicial activity of the detenu and the object of detention, namely, to prevent him from indulging in such prejudicial activity, stood snapped.
The petitioner herein is always at liberty to agitate all contentions in such proceedings under SAFEMA and she would also be at liberty to agitate about the delay in initiation of such proceedings - there are no merit in the writ petition.
The writ petition is dismissed.
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2024 (4) TMI 918 - CESTAT NEW DELHI
Levy of penalty - mis-declaration of goods - unflavoured boiled supari - reduction of the penalty under section 112 by the Commissioner (Appeals) - according to Revenue reduction was very high and unwarranted and according to the respondent it was fair and proper - what does the expression ‘shall be liable to‘, in section 112 (and 111, 113, 114, etc.) signify? Does it mean that a penalty shall be imposed or that a penalty can be imposed? - HELD THAT:- A common misunderstanding of this expression is that the adjudicating authority has to only see if the goods fall under one of the clauses of Section 111 or 113 and if so, confiscate them and to see if the persons fall under section 112 or 114 and impose penalty. However, the expression is not ‘shall be confiscated‘ but it is ‘shall be liable to confiscation‘. Similarly section 112 says “shall be liable to penalty” and NOT “penalty shall be imposed”. Liable to be means ‘likely to be‘ and not ‘shall be‘. After finding if the goods fall under one of the clauses of the section, the adjudicating authority can exercise his discretion and decide not to confiscate them. If the violation is, for instance, a technical violation or a minor violation, the adjudicating authority has the discretion to NOT confiscate the goods although they are liable to confiscation.
The High Court of Delhi has, in JAIN EXPORTS (P) LTD. VERSUS UNION OF INDIA [1988 (5) TMI 50 - SUPREME COURT] held that not only does the adjudicating authority have the discretion to decide whether or not to confiscate but he has to exercise this discretion judicially and not arbitrarily.
However, since the penalty under section 112 is based on the actions which rendered the goods liable to confiscation under section 111, it would be necessary to see how serious were these actions by the respondent. The Commissioner (Appeals) recorded that there was a reasonable cause for the respondent to classify the goods under CTI 2106 9030. He recorded that there were rulings by the Advance Ruling Authority that boiled areca nut does not fall under CTH 0802 at all - Merely because the importer‘s classification of the goods is different from that of the officer, the importer cannot be penalised. The Commissioner (Appeals) is fully agreed upon that the respondent had a reason to believe that the goods were classifiable under CTI 2106 9030 and this classification cannot be held against the respondent.
Misdeclaration of nature of the goods - HELD THAT:- The CRCL test report does not say what the imported goods were nor does it deny that the goods were ‘unflavoured boiled supari‘. Secondly, it comments on the classification of the goods as per supplementary notes- Note 2 to Chapter 21‘. Classification of the goods under Customs Tariff is the responsibility of the importer or the proper officer or any further appellate authority. The chemical examiner in CRCL has no role to play in the classification because classification is a part of assessment which is a quasi-judicial and appealable order. All that the chemical examiner should say is what the goods are, what is the purity, etc. It is thus found that the allegation of mis-declaration of the nature of goods is not very serious especially since it is based on a somewhat ambiguous test report of CRCL.
There are no reason to interfere with the order of the Commissioner (Appeals) insofar as the reduction of penalty under section 112 is concerned - the impugned order is upheld - appeal dismissed.
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2024 (4) TMI 917 - CESTAT MUMBAI
Suspension of license of public bonded warehouse - bonded goods were stored in non-bonded tanks - appellants pleaded that the disputed goods cannot be confiscated, when subsequent permission for bonding of tanks was given by the department - Sub-section (2) of Section 58B of the Customs Act, 1962 - HELD THAT:- It is an admitted fact on record that the appellants have obtained the public bonded warehousing license from the competent authorities for carrying out the activities therein. Whenever the imported goods were required to be stored in the warehouse, the appellants have taken necessary permission from the competent authority for movement of goods from the customs station for the purpose of depositing in the warehouse. The activities of removal of goods from one warehouse to the other were always within the knowledge of the department and such activities were undertaken by the appellants with due permission from the department.
Reading of the above statutory provisions vis-à-vis the activities undertaken by the appellants as the warehouse licensee, it is found that none of the said provisions have been contravened or violated by the appellants inasmuch as in respect of all the B/Es listed above, the activities were carried out with the approval and necessary permission given by the department as well as under supervision of Customs.
In view of the statutory provisions regarding the warehoused goods and the instructions issued by the CBEC, it is amply clear that movement of goods within the bonded warehouse is permissible, subject to the condition that such activities should be within the knowledge of the department and necessary approval for such activities should be obtained by the warehouse licensee - the appellants have complied with such statutory provisions in carrying out the activities within the warehousing station(s). Therefore, it cannot be said that the goods dealt with by the appellants are liable for confiscation and accordingly, the appellants cannot be exposed to penal consequences provided under the statute.
The impugned order dated 08.01.2024 has invoked the provisions of Section 111(h) and 111(j) ibid for confiscation of the goods and for imposition of the redemption fine on the appellants. The provisions of Section 111(h) ibid are attracted for confiscation in the eventuality, when any dutiable or prohibited goods unloaded or attempted to be unloaded in contravention of the provisions of Section 33 ibid or Section 34 ibid. It is not the case of Revenue that the appellants had not obtained the permission from the department for carrying out the activities within the bonded area - It is a fact on record that the bulk liquid cargo dealt with by the appellants are not prohibited for importation and that the appellants had obtained due permission from the customs department for carrying out the activities within the warehousing premises, which is evident from the above tables, mentioning the date of permissions issued by the department including the specific tank numbers for which such permissions were being issued by them - the provisions of Section 111(j) ibid are not attracted for confiscation of goods in the circumstances of the present case.
Since there is no improper importation of goods and more specifically, the goods are not liable for confiscation as per the provisions under Section 111 ibid, the provisions of Section 112 ibid shall not be attracted for imposition of penalty on the appellants. Further, the provisions of Section 114AA ibid cannot also be invoked in the present case, inasmuch as there is no mis-declaration, nor any forged documents were presented by the appellants with the intent to evade payment of customs duty - There is nothing on record in the form of any evidence to show that proper accounting for receipt, transfer or removal of the goods in the warehouse was not maintained by the appellants in terms of extant Regulations dealing with warehousing of goods - Furthermore, all the activities were under the direct supervisions and control of the customs officers posted in the warehouse. Similarly, the penalty clause contained in Section 117 ibid cannot also be attracted in the case in hand, inasmuch as no licensing conditions were violated by the appellants.
There are no merits in the impugned order dated 08.01.2024, insofar as it has ordered for confiscation of goods, imposed redemption fine and penalties on the appellants. Since there are no substance in confirmation of the adjudged demands towards fine and penalties, the impugned order passed for revocation of suspension of warehousing operation shall also not be sustained - the impugned order is set aside - appeal allowed in favour of appellants.
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2024 (4) TMI 916 - CESTAT BANGALORE
Classification of imported goods - Navigation System - Multifunctional Devices or not - classifiable under CTH 8527 2900 or under Chapter Heading 8526 9190? - penalty u/s 114A of the Customs Act, 1962 - Extended period of Limitation - HELD THAT:- The Bills of Entry placed on record is seen, where the description of the products was mentioned as ‘Navigation System’. However, on investigation, after verifying the catalogue and the instructions manuals, it was found that the goods were actually described as ‘infotainment system’. The importer is an accredited client where certain privileges are extended to them and the Bill of Entry was cleared under RMS, the lapse was noticed only after SIIB investigation and therefore, the Commissioner (Appeals) was right in invoking suppression/mis-declaration, since the goods were mis-declared by the appellant knowing very well as per the catalogue and the manual that they were multifunctional devices. The appellant’s only defence is that though the catalogue/technical literature is only for the purpose of marketing to show that it is a one stop solution to all the features required in the car cannot absolve them from the responsibility from making a true and correct declaration of the description of the product so as to decide its appropriate classification by the assessing authorities. Also, this itself proves that the appellant was well aware of all the features but still decided to declare them only as a ‘navigation equipment’ thus wilfully mis-declaring the products.
Penalty under Section 114A of the Customs Act, 1962 - HELD THAT:- The appellant’s only defence is that though the catalogue/technical literature is only for the purpose of marketing to show that it is a one stop solution to all the features required in the car cannot absolve them from the responsibility from making a true and correct declaration of the description of the product so as to decide its appropriate classification by the assessing authorities. Also, this itself proves that the appellant was well aware of all the features but still decided to declare them only as a ‘navigation equipment’ thus wilfully mis-declaring the products. Therefore, the Commissioner (A) was justified in invoking the suppression on the ground that the facilities provided to the appellant being an ‘Accredited client’ was misused by mis-declaring the facts. Accordingly, the differential duty with interest is upheld along with mandatory penalty under Section 114A of the Customs Act, 1962.
Extended period of limitation - HELD THAT:- The Hon’ble Supreme Court in the case of Commissioner of Central Excise Ahmedabad Versus M/s. Urmin Products P. Ltd. And Others [2023 (10) TMI 1112 - SUPREME COURT] observed Thus, in the event of mis-description, wrong description or erroneous description or intentional improper classification of the product manufactured, would not tie the hands of the Competent Authority from piercing the corporate veil to ascertain the true nature of the product and reclassify the same, necessarily after affording an opportunity of hearing which would be in compliance of the doctrine of natural justice. In view of the above, it is found that the Commissioner was justified in invoking the extended period of limitation.
The impugned order is upheld - the appeal is rejected.
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2024 (4) TMI 915 - CESTAT BANGALORE
Refund of SAD - denial of refund claim on the ground of failure to submit necessary documents - HELD THAT:- As per the Order-in-Original, the respondent produced documents and when objection was made, the representative of the respondent appeared for personal hearing and produced VAT Challan and Chartered Accountant’s Certificate. However, VAT Challan does not show the Bill of Entry and for that reason it is concluded that the respondent failed to comply with the conditions stipulated in the notification. In appeal, while allowing the appeal, the Appellate Authority has given a very detailed order - Only objection is that said VAT Challan could not be correlated with the imported goods as per the Bill of Entry. There is no requirement for mentioning Bill of Entry number in the Sale Tax/VAT Authority on the sale of goods and certificate of Chartered Accountant with details linking each of the sale invoices with the corresponding Bill of Entry alone is sufficient for said correlation.
There are no reason to interfere with the order passed by the Appellate Authority - appeal dismissed.
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2024 (4) TMI 876 - SC ORDER
Smuggling - Gold - suppression of bill for the purchase of gold despite its seizure from his bag - retraction of statement given under section 108 of Customs Act - reliability of the statements - accused admitted the commission of offence or not - validity of judgment of acquittal of the accused - it was held by High Court that The prosecution had not examined any witness or produced any document to show such previous conduct by the accused, and on the other hand, the evidence of DW1 indicates that the accused had been coming down to Kerala for business purposes, which evidence could not be dented by the prosecution during cross-examination. Therefore, the impugned judgment cannot be said to be perverse or impossible - HELD THAT:- There are no reason to interfere with the impugned order(s) - SLP dismissed.
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2024 (4) TMI 875 - CESTAT MUMBAI
Revocation of Customs Broker license - forfeiture of security deposit - levy of penalty - gold smuggled in a consignment of medical equipment, Air Nebulizer - violation of Regulations 10(a), 10(d), 10(m) and 10(n) of CBLR.
Violation of of Regulation 10(a) - failure to check whether third person Shri Ravindra Sonar (from whom CB accepted the documents) is an authorised representative of the importer firm M/s Albela Traders and has power to authorize the appellants CB for filing the documents or not - HELD THAT:- In the absence of any document to prove the claim of that the appellants had acted in an unauthorized manner in mis-declaration of the goods or in smuggling of the contraband, it is difficult for fastening such liability on the appellants CB for holding them responsible for violation of Regulation 10(a) ibid.
Violation of Regulation 10(d) ibid - HELD THAT:- In the instant case, the smuggling of gold in imported consignment was found by the department only on the basis of specific investigation conducted by the DRI authorities, and it was a case of concealment of gold in the declared imported goods. It is also a fact that there was no misdeclaration in any of the documents or in the imported goods. Hence, the appellants CB cannot be found fault for the reason that they did not advise their client importer to comply with the provisions of the Act. The act of smuggling is a conspiracy created by the smuggling syndicate in which there was no role of appellants CB. Further, the voluntary statement given by Ms. Priya Hemant Bandarkar, Proprietor of the appellants CB firm on 04.04.2019 clearly show that such smuggling activity in the imported consignment was not known to the appellants CB. Thus, there is no possibility for the appellants CB to bring it to the notice of the Deputy Commissioner of Customs (DC) or Assistant Commissioner of Customs (AC) about the misdeclaration of imported goods involving smuggling of gold - the violation of Regulation 10(d) ibid, as concluded in the impugned order is not sustainable.
Violation of Regulation 10(m) - HELD THAT:- There is no case of importer or any other person having complained about the inefficiency or delay in clearance of the imported goods by the appellants CB. In the DRI investigation report recorded in inquiry proceedings also it was brought out that the smuggling of gold has been orchestrated by a syndicate in which none of the appellants CB’s employees or proprietor is involved. Therefore, the conclusion arrived at by the learned Commissioner of Customs that the appellants have failed to discharge their obligations cast on him under Regulation 10(m) ibid is factually not supported by any evidence and thus it is not legally sustainable.
Violation of Regulation 10(n) - HELD THAT:- In the present case, the appellants CB had obtained the KYC documents and submitted the same to the Customs Department. Thus, there are no legal basis for upholding of the alleged violation of Regulation 10(n) ibid by the appellants in the impugned order on this basis.
There are no merits in the impugned order passed by the learned Principal Commissioner of Customs (General), Mumbai in revoking the CB license of the appellants; and for forfeiture of entire security deposit, inasmuch as there is no violation of Regulation 10(a), 10(d) and 10(m) of the CBLR, 2018, and the findings in the impugned order is contrary to the facts on record. However, in view of the failure of the appellants to have acted in a proactive manner in fulfillment of the obligation under Regulation 10(n) ibid, particularly when they had received the documents from importer through intermediary, we find that it is justifiable to impose a penalty of Rs.10,000/-, which would be reasonable.
The impugned order is set aside - appeal allowed.
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2024 (4) TMI 874 - CESTAT AHMEDABAD
Valuation of exported CD ROMS - Import of goods by availing excess export promotion benefits i.e. DEBP/DEEC Credits - intention of fraudulently obtaining excess DEBP/DEEC Credits, which were subsequently utilized for duty free import thereby causing loss of the Customs Duty - mis-declaration of value - suppression of facts - whether the duty foregone amount is liable to recovered from the respondents? - HELD THAT:- The transaction value declared is fair and the exports are genuine, the second allegation that respondents are not eligible for the DEPB entitlements, automatically loses its sanctity. Since the issue is no longer res integra, the instant revenue’s appeals can not be sustained.
The department’s appeal does not allege that the licences had been cancelled by the Additional Directo rGeneral of Foreign Trade in the instant case. Clearly, the facts are on record that the DGFT has not cancelled the DEPB credit scrips and same were valid in the eyes of law. The DGFT has still not cancelled or modified the DEPB licences already granted. So it is clear that DGFT does not agree with the contention of the department.
The allegation of the revenue that the exports have been misdeclared and DEPB scrips have been sought for and obtained fraudulently and imports have been made using invalid DEPB scrips, cannot be agreed upon. If it is the case of the department that DEPB scrips are fraudulently obtained by the respondents, It would have been appropriate that the department and customs authorities should have taken steps to get the DEPB scrips cancelled by making reference to the DGFT authorities who issued the scrips. Without taking any such action, to say that the DEPB scrips issued by competent authorities are invalid and fraudulently obtained is not proper and legal.
The Hon’ble Bombay High Court in the case of PRADIP POLYFILS PVT. LTD. VERSUS UNION OF INDIA [2004 (1) TMI 93 - BOMBAY HIGH COURT] considered the scope of jurisdiction of the customs authorities to question the validity of DEPB licences and held Once the licensing authorities have held that the export product is covered under the DEPB Scheme and have issued the DEPB licence, it is not open to the Customs authorities to hold that the said export product is not covered under the DEPB Scheme and have issued the DEPB licence, it is not open to the Customs authorities to hold that the said export product is not covered under the DEPB Scheme.
As valid DEPB scrips have been used for import of the goods by the respondents, there are no reason for demand of duty or confiscation of the goods, or imposition of penalties. In the light of this, no valid grounds have been brought out to interfere with findings of the Ld. Adjudicating authority.
There is no infirmity in the impugned orders and they need to be upheld - appeals filed by the revenue are dismissed.
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