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Customs - Case Laws
Showing 61 to 80 of 39920 Records
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2025 (3) TMI 977
Undervaluation of transaction value of impoted to evade Customs Duty - HELD THAT:- The Hon’ble Supreme Court in Century Metal Recycling Pvt. Ltd. v. Union of India [2019 (5) TMI 1152 - SUPREME COURT], has examined the whole procedure of determining the transaction value of goods, the transaction value of which is doubtful and requires to be redetermined. It held that where the proper officer has reason to doubt the truth or accuracy of the value declared for the imported goods, a two-step verification and examination exercise is required to be carried out.
It is found that the Original Authority has not complied with the two-step verification and examination exercise, as stated by the Hon’ble Supreme Court. Revenue has not followed the procedure under sub-rule (2) of Rule 12 of CVR, 2007. This was all the more necessary when the proper officer only relied upon a value declared in a statement to arrive at the transaction value. The appellants request for cross-examination of certain witnesses was also denied. The averments made by the appellant in this case show that there has been a challenge to procedural fairness.
Rule 9 cannot be given an interpretation which is in violation of Section 14 of the Act. Rules are subservient to the Act and cannot deviate from the provisions of the parent Act.
Conclusion - The impugned order is vitiated by the vice of arbitrariness rendered by adopting a fictitious value, which has no sanction under CA 1962 and CVR, 2007, framed there under and hence merits to be set aside.
Appeal disposed off.
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2025 (3) TMI 915
Infringement of Petitioner’s right to speedy trial guaranteed under Article 21 of the Constitution of India - inordinate delay in the prosecution of the criminal case pending since 1996 - HELD THAT:- As rightly submitted by the Petitioner, there were about ninety dates between 1996 upto 2018; but before that there was inordinate delay in filing of the complaint itself. The investigation had started in the year 1983 and the complaint was actually filed in the year 1996. It took thirteen long years for the authorities to even file the complaint. After that, cognizance was taken and evidence before charge started in the year 1999. It was closed in February, 2003 but the prosecution was permitted to lead further evidence by recalling a witness on 25.4.2003. The dates after that reflect sorry state of affairs.
It can be seen that from 2003 upto 2018 continuously the prosecution witnesses were absent. The roznama also shows that the accused were also absent on almost all of these occasions but obviously the trial could not proceed in the absence of the prosecution witnesses. The evidence before charge was not formally closed in the year 2003. The order of the learned Magistrate passed on 13.11.2017, which is annexed at Exhibit-F to this Petition, mentions that till that date i.e. till 13.11.2017 the prosecution had examined only three witnesses - the Court directed that evidence before charge was closed and the matter was fixed for consideration of framing the charge. Thus, this order passed by the learned Magistrate shows that since November, 2003 till November, 2017 the prosecution did not take any steps to complete the step of evidence before charge and it had to be finally closed by the order of the learned Magistrate on 13.11.2017.
In the case of Kadra Pahadiya, the Hon’ble Supreme Court in Paragraph-2 has referred to this issue and held that as already held in the case of Hussainara Khatoon and others Vs. Home Secretary, State of Bihar, Patna [1979 (3) TMI 215 - SUPREME COURT], speedy trial was a fundamental right implicit in the guarantee of life and personal liberty enshrined in Article 21 of the Constitution of India and any accused who is denied this right of speedy trial is entitled to raise this issue - The Hon’ble Supreme Court further observed that the Court could not lose sight of the fact that the trial had not made much headway even though no less than twenty years had gone by. Such protraction itself means considerable harassment to the accused not only monetarily but also by way of constant attention to the case and repeated appearances in Court, apart from anxiety.
In the present case, the Petitioners – original accused had not challenged any order passed by the learned Magistrate before any higher forum. In that sense they had not caused any delay in conduct of the trial by approaching higher forums - the delay is not only at the stage of conduct of the trial but it starts right from the time when the investigation started as is observed by the Hon’ble Supreme Court in the judgments referred.
Conclusion - There is considerable force in the submissions of learned Senior Counsel Shri Jagtiani that the sword of prosecution was hanging on the Petitioner for almost half of her entire life which cannot be justified by any arguments which could be advanced in favour of saving the prosecution against the Petitioner Prabha. The delay in this case is so inordinate, so gross and so unjust, that this is a fit case where powers under Article 226 of the Constitution of India exercised to quash the proceedings.
Petition allowed.
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2025 (3) TMI 861
Compensation of respondent for the seized betel nuts that were destroyed while in their custody - illegal importation of betel nuts - onus of proof - HELD THAT:- First of all, there is clear admission by the appellant that as on the date of seizure the value of the goods was ₹88 lakhs. From the date of seizure up to the date of dumping of the goods in the pit about one and a half years had elapsed. These goods were in the custody of the Customs. They had an obligation to explain how the goods were or became unfit for human consumption. If the goods at the time of seizure were unfit for human consumption, they could not have been valued at ₹88 lakhs at that point of time. Therefore, this condition was reached in the custody of the Customs. Whether such deterioration was natural or due to some action or inaction on the part of the Customs had to be explained by the Customs authorities. The onus of proof was upon them. They have not been able to discharge it.
Even if the reports of the expert agencies like food analyst and the specialised laboratory made between December, 2017 and March, 2018 suggested that the goods were unfit for human consumption, still the respondent ought to have been given a chance to be present when the test was carried out or to be provided with a copy of the report to seek second opinion or to take some steps with regard to it.
Conclusion - i) The Customs authorities are liable for the deterioration of goods in their custody if they fail to provide a satisfactory explanation for the condition of the goods. ii) Valuation of goods at the time of seizure is binding unless there is evidence of a grave error or miscarriage of justice. iii) Authorities have a duty to inform the owners of goods before taking irreversible actions such as destruction, especially when the ownership and legality of the goods are contested.
The Customs authorities were directed to comply with the order to pay the respondent within four weeks - Appeal dismissed.
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2025 (3) TMI 860
Liability of Customs Duty - import of Fibre-optic Cables to be laid not only within the territorial waters of India but also in the Exclusive Economic Zone - HELD THAT:- The Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (for short the “Territorial Waters Act”) gives power to the Central Government to extend the enactments of India to the Continental Shelf, EEZ and other Maritime Zones by issuing Notifications in that regard as more particularly set out in Section 6 and Section 7 of the said Act. It is exercising powers under this Act that two Notifications have been issued by the Central Government. The first Notification is dated 14th January 1987 issued under Clause (a) of sub-Section (6) of Section 6 and Clause (a) of sub Section (7) of Section 7 [of the Territorial Waters Act] extending the Customs Act, 1962 and the Customs Tariff Act, 1975 to the designated areas in the Continental Shelf and the EEZ of India, with effect from 15th January 1987.
Since there is no dispute in the present case that the Fibre-optic Cables imported by the Petitioner are not for the purposes as mentioned in the Notification dated 7th February 2002, we find that a strong prima facie case is made by the Petitioner and which really goes to the root of the matter, namely, whether the Customs Act, 1962 and the Customs Tariff Act, 1975, at all apply to the Continental Shelf and to the EEZ with reference to the goods imported by the Petitioner.
Since the 3rd Respondent has issued a show cause notice to the Petitioner demanding an additional amount of duty on the goods imported and since the issue considered whether the Customs Act, 1962 and the Customs Tariff Act, 1975, at all apply to the goods imported by the Petitioner, as and by way of interim relief, it is directed that pending the final decision in the above Writ Petition, the adjudication of the SCN dated 2nd December 2024 shall remain stayed.
Conclusion - A strong prima facie case is made by the Petitioner and which really goes to the root of the matter, namely, whether the Customs Act, 1962 and the Customs Tariff Act, 1975, at all apply to the Continental Shelf and to the EEZ with reference to the goods imported by the Petitioner.
Petition disposed off.
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2025 (3) TMI 859
Correctness in attempting to negate the permission under Section 65 of the Customs Act, after having permitted not only the establishment of the warehouse but also the import of the equipment - HELD THAT:- It is apparent that the applicability of Section 65 of the Act and the prohibition contained under the MOOWR Regulations has been the subject matter of the decision. Hence, prima facie the contention of the learned Senior Standing Counsel for the Department does not appeal here.
It is appropriate to stay the operation of the impugned proceedings dated 24.06.2024 produced as Annexure-P1, subject to the condition that this interim order shall remain in operation till any orders that may be passed by the Hon’ble Apex Court in the pending SLP (C) No. 20274-20281 of 2024 preferred by the Central Board of Indirect Taxes and Customs. There shall be a direction to the State Bank of India, Jubilee Hills Branch, Hyderabad, to deduct a sum equivalent to 15% of the payment received under the PPAs dated 02.02.2022 and 07.07.2022 and retain the said sum in a fixed deposit until further orders from this Court.
Conclusion - The petitioner was entitled to interim relief, allowing the installation and operation of the equipment for power generation and supply for home consumption. It imposed conditions to secure the Department's interests, such as retaining a portion of payments received under power purchase agreements in a fixed deposit.
Petition allowed.
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2025 (3) TMI 858
Refund claim is hit by limitation of time and is therefore liable to rejection or not - principles of unjust enrichment - applicant has proved beyond doubt that the incidence of CVD has not been passed on to the buyers or not.
HELD THAT:- It is transpired from various decision that when a Certificate of a Chartered Accountant is submitted by an assessee to substantiate that the assessee would not be unjustly enriched, then it is for Revenue to establish by evidence that either the Certificate issued by the Chartered Accountant is incorrect or that the duty was actually passed on to the buyers. The decisions also hold that there is no requirement in law that the Certificate should be issued only by statutory auditors, for so long as the Certificate is issued by a Chartered Accountant and it is consistent with the accounts such as the Financial Statement, the Certificate issued by a Chartered Accountant should be accepted. The decisions also hold that when the differential customs duty is shown as “receivables” in the Balance Sheet/Financial Statement, it would follow that duty has not been passed on to the customers. The decisions also hold that in such a case the legal presumption under section 28 of the Customs Act stands rebutted.
A Certificate issued by a Chartered Accountant, therefore, cannot be lightly brushed aside without there being any cogent evidence to the contrary. In the present case the Commissioner (Appeals) only doubted that the amount of Rs. 1,67,88,778/- was not included in the amount of Rs. 17,38,94,156/- shown in the Books of Account of the appellant. This doubt could have been clarified from the appellant but that was not done.
The decision of the Tribunal in Kohinoor India [2014 (11) TMI 192 - CESTAT NEW DELHI], on which reliance has been placed by the learned authorized representative appearing for the department, holds that mere production of a Certificate of the Chartered Accountant does not ipso facto grant refund to the respondent until material is produced by the assessee to show that burden of duty has not been passed on to the buyers. This decision would, therefore, not help the department.
Conclusion - The appellant had not passed the burden of duty to the customers in respect of the duty paid on the 4 Bills of Entry and was shown as recoverable from the customs department.
The impugned order dated 05.07.2021, to the extent it holds that refund amount should be credited in the Consumer Welfare Fund, therefore, deserves to be set aside and is set aside. The appellant would be entitled to refund of the amount with interest. The appeal is, accordingly, allowed.
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2025 (3) TMI 857
Sale proceeds of gold smuggled into India - Seizure of Currency - Confiscation under Section 121 of the Customs Act, 1962 - penalties imposed on the individuals - HELD THAT:- The learned Commissioner in the impugned order though acknowledged at para 34 of the order that the investigation has not been able to produce evidences regarding smuggling of gold or linking the seized currency directly to smuggled gold; however making a generalized remark held that smuggling of goods including the gold is primarily an offence that takes place at the border / frontier and it is almost impossible to distinguish or identify smuggled goods from licitly imported ones, once they move into the domestic tariff area. Further he observed that the currency must have been the sale proceeds of smuggled gold.
The said finding of the learned Commissioner is devoid of merit inasmuch as no evidence has been placed on record by the Revenue in discharging the onus which squarely rests on the department to establish that there has been smuggling of gold into the country and the recovered/seized currency of Rs.1.29 crores from the possession of these four passengers were sale proceeds of the smuggled gold. Needless to mention that burden lies heavily on the Revenue to establish that the currency seized was the sale proceeds of the smuggled gold. Similar view has been expressed by the Tribunal in the cases of Wall Street Finance Ltd. Vs. CC [2006 (9) TMI 437 - CESTAT, MUMBAI] and CC (Preventive), Mumbai Vs. Sadashiv R. Lele [2005 (5) TMI 176 - CESTAT, MUMBAI]. The case records reveal that the Revenue even could not able to trace or bring on record the statements of the person who handed over the currency to these four persons at Chennai, as mentioned in the notice.
The statements furnished by the four persons on 05.09.2013 were retracted on the next day i.e. on 06.09.2013. Therefore, in the said circumstances, it is necessary to establish through the corroborative and independent evidence about the smuggling of the gold and the currency seized from the four persons is the sale proceeds of the smuggled gold. The loose slips recovered from the four persons indicating the quantity of gold and the rate itself do not reveal that the seized currency has got any connection with proceeds of the smuggled gold. No doubt, it leads to some doubt/suspicion in the circumstances when recovery of huge cash concealed by the said four persons was made, but that itself is not sufficient. Therefore, it is difficult to accept the conclusion of the learned Commissioner following principle of preponderance of probability, that the currency seized form these four persons are sale proceeds of the smuggled gold and liable for confiscation under Section 121 of Custom Act, 1962.
Since the currency seized from the four persons could not be proved to be the sale proceeds of the smuggled gold, the same are required to be released to the owner i.e. Shri K.V. Kunhimohammed. Consequently, penalty imposed on all the appellants cannot be sustained.
The impugned order is set aside and the appeals are allowed.
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2025 (3) TMI 856
Refund of Additional Duty of Customs - Requirement of Re-assessment before refund - principles of Unjust enrichment.
Requirement of Re-assessment before refund - HELD THAT:- The self-assessment done by Micromax while filing Bills of Entry would also amount to assessment. Micromax imported mobile phone handsets of CTH 8517, self assessed the Bills of Entry on payment of Additional Duty of Customs @ 6%/ 10%/ 12.5%. Thereafter, they sought to claim the benefit of S. No. 263A of Notification No.12/2012 dated 17.03.2012 read with amendments and S. No. 132 of Notification no. 01/2011 CE dated 01.03.2011 as amended, which would amount to re-assessment. Re-assessment is done under Sec 17 of Customs Act, 1962, and without re-assessment of the said Bills of Entry, the said benefit under Notification cannot be availed.
The Refund Application is filled with the proper officer for refund i.e. Assistant Commissioner (Refund), who can only process the refund claim. The ITC judgement [2019 (9) TMI 802 - SUPREME COURT (LB)] clearly says that “It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27”. As per Law of Comity, only the proper officer who has done the assessment or verification of Assessment (in case of self-assessed Bills of Entry) can only do the re-assessment.
Micromax should have first opted for re assessment of the Bills of Entries, and only then they should have filed refund application. Having missed the prescribed time lines, it is held that Micromax is not eligible for the refund of Rs18.38 Cr & Rs 35.89 Cr as claimed by them.
The Hon’ble Supreme Court in Mafatlal Industries Ltd. Versus Union of India [1996 (12) TMI 50 - SUPREME COURT]] has held that 'While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 - cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it.'
Hon’ble Supreme Court has time and again held in Priya Blue Industries Ltd. v. Commissioner [2004 (9) TMI 105 - SUPREME COURT] and Collector v. Flock (India) Pvt. Ltd. [2000 (8) TMI 88 - SUPREME COURT] that re-assessment of Bill of Entry is mandatory before filing refund. The Revenue was permitted to implead these additional ground on the basis of Supreme court decision in the case of ITC, which was permitted vide Misc Order 50175-176/2023 dated 03.07.2023. Therefore, it is not the case that Micromax was not aware that re-assessment of Bill of Entry was mandatory before filing the refund claims.
The said benefit was not availed by the appellant at the time of filing of Bills of Entry under the belief that they do not fulfill the condition as the goods were imported and not manufactured in India and filed the self-assessed Bills of Entry claiming 6% ad valorem. This is evident from the fact that they had not paid duty under protest. However, without seeking re-assessment or filing an appeal, mere filing of refund claim cannot be entertained, as laid down by the Hon’ble Supreme Court in ITC judgment.
Principles of unjust enrichment - HELD THAT:- The concept of unjust enrichment, is the retention of a benefit, which is considered contrary to justice or equity. Further, the assessment of Mobile phone was based on MRP and the goods are sold in the market accordingly, on the basis of declared MRP which include duty components. Once the goods are assessed on declared MRP having duty component, the incidence of duty is deemed to have been passed on to the buyer on sale of the same. Thus the incidence of Additional Duty of Customs @ 6% had already been passed and thus, attracting the clause of unjust enrichment.
The application was for amendment under Section 149 of Customs Act, 1962 and not for re-assessment under Section 17. We are of the view that under Section 149, only amendment of factual details of Bs/E can be done but not the assessment or re-assessment which includes extending the benefit of Notification, which is a quasi-judicial function. As per Section 17(5), re-assessment is possible for extending benefit of Notification but, the time limit for such re-assessment is 60 days from the date of Out of Charge - Section 149 is for amendment of details on the basis of document evidence which was in existence at the time the goods were cleared. In the instant case, it was extending of benefit of S. No. 263A of Notification No. 12/2012 dated 17.03.2012 read with amendments and S. No. 132 of N/N. 01/2011 CE dated 01.03.2011 as amended. The fact that importers are eligible for such benefit of Notification has come to light only after Hon’ble Supreme Court judgment in the matter of SRF Ltd. [2015 (4) TMI 561 - SUPREME COURT] which was delivered on 26.03.2015. This fact was not available at the time of filing/ OOC of Bs/E in June-July 2014.
Conclusion - i) There is a necessity of reassessment before processing refund claims. ii) The doctrine of unjust enrichment applies, barring refunds when the duty incidence is passed on to consumers.
Appeal of Revenue dismissed.
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2025 (3) TMI 855
Classification of imported goods - whether, the Works Rolls imported by the appellant can be treated as Capital Goods as is being claimed by the appellant or the same is to be treated as spare parts of the Capital goods, as is being claimed by the Revenue? - eligibility to utilize on 10% of the scrip amount to discharge the Customs Duty and the balance 90% is required to be paid by way of cash [TR 6 / GAR7 Challan] - Time Limitation - HELD THAT:- From the picture produced, it can be seen that the Works Rolls are attached to the machinery and are being used, in the factory of the appellant without the Works Rolls. There is no possibility for the Rolling Machine to become functional.
It can be seen the under the main heading “Metal-Rolling Mills and Rolls therefor, the “Rolls for rolling mills” are specifically classified under CTH 8455 30 00. The “Other parts” are classifiable under CTH 8455 90 00, which goes on to show that the “Other parts” ,whether in respect of “Metal-Rolling Mills” or in respect of “Rolls for the Metal Rolls” would get classified therein. Thus it is clear that “Rolls for rolling mills” are independent goods are in the nature of “Capital Goods” and are not in the nature of “Spare Parts”. In the present litigation, it is not the case of the Revenue that the imported goods are classifiable under CTH 8455 90 00. The appellant has adopted CTH 8455 30 00 in their Bills of Entry [sample verified by the Bench] and the Revenue has cleared the same. Even in the present proceedings, the classification is not disputed by the Revenue.
An identical issue was before this Bench in the case of Comm. of Customs (Port), Kolkata vs. M/s. Cosmic Ferro Alloys Limited, [2024 (8) TMI 674 - CESTAT KOLKATA]. In that case, the goods in question were “Roller Sets”, “Blades for Slitting Machines”, “Spacers” & “Spares for Cold Rolling Mills” and the issue was whether the import of such goods would be be covered by the definition of “Capital Goods” under Notification No. 104/2009-Customs dated 14.09.2009. This Bench has held that 'the goods imported are squarely fitting within the definition of 'Capital Goods' as defined in the FTP (2009-14) and Notification104/2009-Customs dated 14-09-2009, as amended. We observe that the definition of 'Capital Goods' is wide enough to cover the imported 'spares/parts of capital goods'.'
In the present case, after going the factual matrix, it is found that the above decision of this Bench is squarely applicable. As a matter of fact, the present appellants are in a better footing. While in that case, the issue was as to whether the “spare parts” can be considered as Capital Goods for the eligibility to use the SHIS scrip, in the present case, it is already held the goods in question are Capital Goods and are not mere “spare parts”. Hence, there are no hesitation in applying the decision of this Bench to hold that the impugned order is not legally sustainable. Accordingly, the same set aside and allow the appeal allowed on merits.
Time Limitation - HELD THAT:- The Tribunals have held that the importer would be eligible to use the SHIS scrip. Thus the bonafide belief of the appellant gets fortified by the Tribunal's decisions. Hence, the issue being that of interpretation, the Revenue is not justified in fastening the suppression clause on the appellant. Accordingly, the confirmed demand in respect of the extended period set aside even on account of limitation.
Conclusion - i) The Works Rolls are by themselves Capital Goods and not Spare Parts. Hence, they are eligible to be imported against full utilization of SHIS Scrip. Therefore, on this count the Appeal succeeds on merits. ii) The Dept. is precluded from taken different stand in respect of EPCG License and SHIS Scrip, when the FTP has a common definition of Capital Goods. Hence, when the goods have been treated as Capital Goods under EPCG License, the same cannot be treated as spare parts to deny the SHIS scrip benefit. Hence, even on this count the appeal succeeds on merits. iii) The issue is that of interpretation and has consistently been settled by the Tribunals in favour of the importer. Hence, the confirmed demand for the extended period is hit by time bar. Therefore, such demand is being set aside on account of time bar also.
Appeal allowed.
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2025 (3) TMI 827
Classification of imported goods - e-bikes in CKD-Kit or part of e-bike? - to be classified under HS code 8711 (1) (b) or HS code 8711 (2)? - assessment under S.No. 531A(1)(b) of N/N. 50/2017-Cus. dated 30.06.2017.
Whether the goods imported by the appellant under Bill of Entry No. 5864756 dated 28.11.2019, declared as E-Bike in CKD Condition, merit assessment under S.No. 531A(1)(b) of Notification No. 50/2017-Cus. dated 30.06.2017? - HELD THAT:- Admittedly the goods at the time of 100% examination were found to be the parts of e-bike like plastic cover, chasis, disc brake, shocker, front fork, seat, wheel rim, converter, controller etc. Admittedly the goods do not contain battery/battery pack and the electric compressor.
The bare perusal, in the light of above two admitted facts, makes it clear that the E-Bikes in CKD Condition were eligible for the benefit of customs duty/BCD at the rate as given in the said notification (at the rate of 15%) provided the knocked down kit of e-bike along with all necessary components, parts or subassemblies also has the disassembled battery pack, the motor controller etc. [sub clause (a)] or the preassembled battery pack, the motor controller etc. [sub clause (b)]. The duty benefit of 15% is available in case of disassembled battery pack and that of 25% is available to preassembled battery pack. For any other form of knocked down kit of e-bike the duty to be paid is at the rate of 50%. Since admittedly the impugned Bill of Entry does not contain the battery pack either disassembled or preassembled a clear understanding of this entry of notification establishes that the benefit of this notification was not available to the appellant.
Entry at S.No. 531A of Notification No. 50/2017 dated 30.06.2017 has apparently no ambiguity. If for sake of it, the ambiguity been there, it should be understood in favour of Revenue. The entry cites three situations with three different rates of duties. S.No. 531A(1)(a) required duty at the rate of 15%, 531A(1)(b) requires duty at the rate of 25% and S.No. 531A(2) required duty at the rate of 50%. Apparently and admittedly the impugned goods do not fall under 1(a) and 1(b) of 531A, hence the benefit of the Notification No. 50/2017 has rightly been denied.
Imported goods to be considered as the part of e-bikes which merit classification under CTH 87141090 or not? - the Commissioner (Appeals) has denied that relief based on the declaration of the appellant in the impugned Bill of Entry that the imported goods are E-Bike in CKD Condition - HELD THAT:- It is opined that the said declaration was made with a view of taking benefit of N/N. 50/2017-Cus. dated 30.06.2017. It is already held appellant not entitled for the said benefit. In the given circumstances, there has to be a specific finding vis-à-vis the entitlement of the appellant about the said alternate plea. It is deemed necessary that the original adjudicating authority shall examine the entitlement/eligibility of the appellant vis-à-vis impugned Bill of Entry as to whether the imported goods can fall under CTH 87141090 in the given set of circumstances.
Conclusion - The appellant was not entitled to the duty benefit under the claimed notification due to the absence of necessary components in the imported kit. However, matter remanded to the original adjudicating authority to examine the appellant's alternate plea regarding classification under a different tariff heading.
Appeal allowed by way of remand.
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2025 (3) TMI 794
Legality and validity of the purported DEPB license cancellation letter - Non-adjudication of the Show Cause Notice (SCN) issued on 02.05.2005 for nearly two decades - HELD THAT:- The 38 DEPB Scrip Cancellation letters are in respect of the same DEPB Scrips which were subject matter of the impugned SCN which remains unadjudicated till date. As noticed in the order dated 28.01.2025, the non-adjudication of the impugned SCN was conceded by the concerned Deputy Director General of Foreign Trade, who was present in Court on the said date - It is also apparent that the cancellation order/letter dated 07.08.2019 was passed without any prior intimation/notice to the petitioner and almost 15 years after the impugned SCN was initially issued. The basis for issuance of the 38 DEPB Scrip cancellation letters has been set out in the impugned SCN. The factual premise of the same is strenuously contested by the petitioner.
As noticed in the present case, despite the impugned SCN remaining unadjudicated for decades, the cancellation order / letter dated 07.08.2019 was issued, which effectively condemned the petitioner unheard.
Conclusion - i) The non-adjudication of the SCN for nearly two decades is a valid ground for setting it aside. ii) The cancellation of the DEPB licenses without affording the petitioner a hearing violated principles of natural justice, rendering the cancellation invalid. iii) The issuance of DEPB Scrip cancellation letters without adjudicating the SCN is procedurally flawed, leading to their invalidation.
The impugned SCN, the communication dated 07.08.2019 and the 38 DEPB Scrip Cancellation letters referred to in the impugned cancellation order/ letter dated 07.08.2019, addressed to Commissioner of Customs Department (Preventive) by the Foreign Trade Development Officer, are set aside - Petition allowed.
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2025 (3) TMI 793
Seeking provisional release of 53 kgs of gold seized by the Directorate of Revenue Intelligence (DRI) - import of gold under Advance Authorization - diversion of duty free gold imported - HELD THAT:- Under the Advance Authorization, the export obligation was required to be fulfilled within 120 days from the date of clearance. The gold was detained by the authorities on 17.08.2020. It is for this reason that the appellant contended that the obligation could not be fulfilled and it had sought extension of the date for fulfillment of the export obligation. In regard to the prayer made by the appellant for extension of the Advance Authorization License, the Delhi High Court observed that the appellant would be at liberty to apply for extension/re-validation after the adjudication of the show cause notice dated 11.08.2021.
The appellant had filed a Writ Petition in the Delhi High Court not only for release of the seized gold but also for extension of the Advance Authorization and the Delhi High Court, in its judgment [2024 (1) TMI 538 - DELHI HIGH COURT], made it clear that the appellant would be at liberty to apply for extension/re-validation of the Advance Authorization License after the show cause notice dated 11.08.2021 was adjudicated. The Delhi High Court also made it clear that as and when such application is filed, the Directorate General of Foreign Trade shall consider the same in accordance with law keeping in mind the peculiar facts of the case as the appellant was prevented from exporting the jewellery because the gold had been seized.
The finding recorded by the Commissioner that the premises did not have a fully mechanized machine for manufacture of jewellery is not based on any evidence. The panchanama dated 13/14.08.2020 clearly mentions that two machines for manufacture of jewellery were available on the fifth floor. The Commissioner assumed that these two machines were not fully mechanized. It was imperative for the Commissioner to have obtained a report about the two machines found on the fifth floor before recording a finding whether they were mechanized or not.
Conclusion - There are prima facie merit in the contention advanced on behalf of the appellant that 53kgs of gold bars at the time of detention were found in the declared premises and, thus, could not have been seized.
The impugned order dated 01.05.2024 passed by the Commissioner cannot not be sustained and is set aside - Appeal allowed.
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2025 (3) TMI 792
Levy of penalty for non finalization of provisionally assessed Bills of Entry - Regulation 5 of Customs (Provisional Duty Assessment) Regulations, 2011 - HELD THAT:- It is seen that in case of 8 Bills of Entry, the assessment were not finalized without any fault on the part of the Appellant. The issue is also covered by the case law of Jai Balaji Industries Ltd. [2021 (1) TMI 767 - CESTAT KOLKATA] wherein, this Tribunal has held that 'The department has not been able to establish any deliberate delay or any mala fide intention on the part of the appellant. As and when the appellant could gather the requisite documents they were presented before the assessing officers for finalizing the provisional assessments. In fact, out of the 35 Bills of Entry involved, 27 could be finalized even before passing of the adjudication order.'
Conclusion - Penalties should be proportionate and based on the actual conduct and fault of the parties involved. In the absence of deliberate delay or mala fide intention, a lenient penalty is appropriate.
Appeal allowed.
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2025 (3) TMI 791
Undervaluation of imported goods - Oath Token - enhancement of value - rejection of value under Rule 12 of the Customs Valuation Rules, 2007 (CVR) - redetrmination of value by proceeding sequentially through Rule 4 to 9 of CVR, 2007 - It is submitted that the enhancement of value in the present case cannot be sustained based on the earlier enhancement by the Revenue - HELD THAT:- It is a fact that the appellant had filed Bills of Entry 4200544 and 2454990 had imported 4000 oath tokens and declared the value as 50 USD in the Bills of Entry and cleared the same on payment of duty. The present consignment of identical goods quantity varying from 800 to 1600 have been declared at 6.5 USD inspite of the fact that the earlier consignment value was accepted as 50USD. Hence the revenue enhanced the value to USD 50 which is objected to by the appellant only on the ground that earlier also they had declared 6.5 USD which was enhanced to USD 50 accepted by the appellant. Having accepted the value the appellant cannot now claim that the enhanced value cannot be the basis for redetermination of the value.
The Supreme Court of India in the case of Century Metal Recycling Pvt. Ltd. vs. UOI [2019 (5) TMI 1152 - SUPREME COURT] observed that 'Declared valuation can be rejected based upon the evidence which qualifies and meets the criteria of ‘certain reasons’. Besides the opinion formed must be reasonable. Reference to foreign journals for the price quoted in exchanges, etc. to find out the correct international price of concerned goods would be relevant but reliance can be placed on such material only when the adjudicating authority had conducted enquiries and ascertained details with reference to the goods imported which are identical or similar and ‘certain reasons’ exists and justifies detailed investigation. These reasons are to be recorded and if requested disclosed/communicated to the importer. Valuation alerts could be relied upon for default valuation computation under the Rules.'
Since the appellant had cleared identical products earlier on payment of USD 50, the Commissioner’s order to redetermine the value based on the earlier acceptance of the value at USD 50 cannot be found fault with. In fact, the appellant in the present 5 Bills of Entry vide his letter dated 29.09.2011 has clearly admitted that the differential duty and interest has been voluntarily paid and had requested to drop all proceedings. It is also a fact that the appellant had admitted that the goods were received free of charge under no charge invoice as submitted by them in their letter dated 15.11.2011. However, the claim of the appellant that the assessments were provisional has to be accepted as we notice that the present bills of entry the word ‘provisional’ is mentioned in all these bills of entry. Hence, since the assessments are provisional the question of investigation and imposition of penalty without finalizing the assessments does not arise.
Conclusion - i) Having accepted the value the appellant cannot now claim that the enhanced value cannot be the basis for redetermination of the value. ii) Since the assessments are provisional, the question of investigation and imposition of penalty without finalizing the assessments does not arise.
Appeal is allowed by way of remand.
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2025 (3) TMI 790
Adjudication of the Show Cause Notice issued on 28.09.2004, which was concluded on 22.09.2023 - Jurisdiction of Additional Director General of DRI to issue the SCN - delay in adjudication constitutes a violation of the principles of natural justice or not - HELD THAT:- The facts which are not in dispute are that imports took place during the period July, 2002 to November, 2002 and the Show Cause Notice has been issued on 28.09.2004 and the adjudication took place on 22.09.2023. The said adjudication is bad in law as held by this Tribunal which has examined the issue of adjudication in reasonable time in the case of Kopertek Metals Pvt. Ltd. and Others [2024 (12) TMI 269 - CESTAT NEW DELHI] observing that 'the adjudication has taken place beyond the period stipulated in sub-section (11) of section 11A of the Central Excise Act and there is no plausible explanation as to why it was not possible for the Adjudicating Authority to complete the adjudication process within the stipulated time.'
The Show Cause Notice has been adjudicated with inordinate delay. In that circumstances, the proceedings against the appellants are not sustainable.
Appeal allowed.
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2025 (3) TMI 789
Demand of differential I.G.S.T., along with interest and imposing redemption fine and penalty - rejection of classification adopted by the appellant on the imported goods - to be re-classified under CTH 8709 1100 or not - extended period of limitation - HELD THAT:- It is a fact on record that the import took place during the period from November, 2017 to January, 2018 and the goods were cleared for home consumption by assessment of the Bills of Entry. Therefore, we observe that the Show Cause Notice issued on 29.07.2020 is highly barred by limitation.
The same view has been taken by this Tribunal in the case of M/S. DIC INDIA LIMITED VERSUS COMMISSIONER OF CUSTOMS (PORT) , KOLKATA [2024 (9) TMI 186 - CESTAT KOLKATA] wherein it has been observed that 'the re-classification of the imported goods vide the 17 Bills of entry under CTH 2710, on the basis of Test Report received from IIT, Kharagpur, is not sustainable.'
The extended period of limitation is not invokable in the case. Consequently, the proceedings against the appellant are not sustainable.
Conclusion - Classification under Chapter 86 upheld. The extended period of limitation is not invokable in the case. Consequently, the proceedings against the appellant are not sustainable.
The impugend order is set aside - appeal allowed.
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2025 (3) TMI 788
Liability to pay Social Welfare Surcharge (SWS) in case Basic Customs Duty is exempted in terms of N/N. 24/2015-Cus & 25/2015-Cus both dated 08.04.2015 - HELD THAT:- The said issue has already been decided by this Tribunal in their own case vide Final Order No.77304-77500/2024 dated 14.11.2024 [2024 (11) TMI 746 - CESTAT KOLKATA], wherein this Tribunal has held that 'SWS is payable at 10% on BCD but where the BCD is Nil. SWS shall also be computed Nil.'
Conclusion - The appellants are not liable to pay Social Welfare Surcharge (SWS) when Basic Customs Duty is exempted in terms of N/N. 24/2015-Cus & 25/2015-Cus both dated 08.04.2015 issued under the MEIS and SEIS Scheme.
The impugned order is set aside and the appeals are allowed.
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2025 (3) TMI 787
Tenability of Customs House Laboratory Report relied upon by the departmental authorities - rejection of transaction value without adequate justification - levy of penalties - HELD THAT:- In this case, the samples were taken by CRCL on 03.10.2002 for Bill of Entry No.226 and 29.11.2002 in case for Bill of Entry No.313 and the test report has been delivered on 20.11.2002 and 22.07.2003 respectively. The said report has lost their evidential value as the test reports are cryptic and its results have been delivered after a long delay. In that circumstances, the test reports are not reliable test reports.
In the case of M/s Moorgate Industries (I) Private Limited Vs. Commissioner of Customs (Port), Kolkata [2023 (12) TMI 963 - CESTAT KOLKATA], this Tribunal has observed 'Since the report of the Customs Lab is cryptic and incomplete without showing the BIS Standard and protocol and method of testing, it is noticed that the appellant sought to cross examine the Customs Officer who had drawn the sample and the Chemical Examiner who had tested the sample.'
Admittedly, in this case, the samples were drawn in terms of International Standards. Moreover, the test report is cryptic and it is submitted with a delay. The test report is required to be submitted immediately. The test reports produced by CRCL, which has been relied upon by the adjudicating authority to demand Customs Duty on the appellant, are not reliable evidence. Accordingly, it is held that it is not a piece of evidence to demand the Customs Duty from the appellant. Accordingly, the duty paid by the appellant on transaction value is the correct duty paid by them.
The penalties are also dropped.
Conclusion - i) The test reports produced by CRCL, which has been relied upon by the adjudicating authority to demand Customs Duty on the appellant, are not reliable evidence. ii) The transaction value is valid, and the penalties are unjustified.
The impugned orders are set aside - appeal allowed.
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2025 (3) TMI 786
Smuggling - Confiscation of seized consignment of betel nuts of foreign origin - onus to prove - report from the Arecanut Research and Development Foundation (ARDF) is a valid basis to determine the origin of the betel nuts or not - notified item under Section 123 of the Customs Act, 1962 or not - Penalty u/s 112(b) of the Customs Act - HELD THAT:- There is no evidence brought on record to substantiate this allegation that the goods were of foreign origin and smuggled in nature. It is observed that betel nut is not a notified item under Section 123 of the Customs Act, 1962. Thus, the onus is on the Department to prove that the goods were smuggled in nature.
The lower authorities have relied on the Report received from ARDF to substantiate their allegation that the goods were of foreign origin and smuggled into India. In this regard, it is observed that ARDF is not an organization accredited by the Government for issuing the certificate of origin - This view has been expressed by the Hon’ble Allahabad High Court in the case of Maa Kamakhya Trader v. Commissioner of Customs (Preventive) [2024 (3) TMI 140 - ALLAHABAD HIGH COURT], wherein it has been observed that 'The report of the ARDF has also been held to be not reliable inasmuch as it could not be shown with any degree of certainty that the origin of the betel nuts could be established by testing in a laboratory, as is clear by the answer to the RTI query given by Directorate of Arecanut And Spice Development, Ministry of Agriculture and Farmers Welfare, Government of Kerala.'
Therefore, by relying on the decision, it is held that the ARDF Report alone cannot form the basis for arriving at the conclusion that the goods were of foreign origin and smuggled in nature. The allegation of foreign origin and smuggled nature of the goods must be substantiated with cogent evidence. Confiscation of the goods cannot be done merely on the basis of assumptions and presumptions or a mere suspicion that the goods were of foreign origin.
There is no corroborative evidence brought on record by the investigation to substantiate the allegation that the goods were of foreign origin and smuggled in nature. Thus, the Department has failed to establish that the goods were of foreign origin and smuggled into the country without payment of customs duties - Since betel nut is not a notified item under Section 123 of the Customs Act, 1962, the onus is on the Department to prove that the goods were smuggled in nature. As the Department could not produce any evidence to substantiate the allegation that the betel nuts were of foreign origin, except the ARDF report, the goods are not liable for confiscation. As the goods are not liable for confiscation, the question of imposing redemption fine in lieu of confiscation does not arise.
Penalty u/s 112(b) of the Customs Act - HELD THAT:- Since the violations alleged by the Department has not been substantiated with evidence, the appellants are not liable for penalty. As the confiscation of the goods is not sustained, the penalty imposed on the Appellant No. 1 under Section 112(b) of the Customs Act is not sustainable and accordingly, the same is set aside.
Conclusion - i) The burden of proof lies on the Department to establish the foreign origin and smuggled nature of goods not notified under Section 123 of the Customs Act. ii) Reports from non-accredited organizations cannot be solely relied upon to substantiate such claims.
The impugned order is set aside - appeal allowed.
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2025 (3) TMI 755
Seeking release of the gold bars, which were detained by the Customs Department - HELD THAT:- It is expected that the Customs Department would adhere to the said directions, in terms of Section 153 of the Customs Act, 1962. Since the Petitioner has received the order only today from the ld. Counsel for the Respondent, the Petitioner is given thirty days time to avail of his remedies in accordance with law.
The petition is disposed of.
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