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Showing 161 to 180 of 1354 Records
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2024 (3) TMI 1194
Smuggling - two kilograms of gold, with Swiss markings - Contraband item - number of material facts as well as the judgments cited were overlooked while arriving at conclusions - reliability of statements - burden to prove -HELD THAT:- It is from the statement under Section 108 itself that the identity of the person intercepted was revealed, which was found to be verified and correct by the Assistant Commissioner (Preventive) - The identity of the owner of the gold seized from the intercepted person also was revealed from the statement. The statement also admitted the person having boarded Howrah-Mumbai Mail Express, and that he was travelling to Raipur; in the course of which, some persons in civil dress woke him up and introduced themselves as officers of DRI, Patna. They searched his body and during the course of search, the smuggled gold kept hidden and covered inside the pants, was detected. So much of the statement has not been retracted from.
The person intercepted had also disclosed the name of the person from whom he had received the gold bars at Kolkata, who had directed him to hand over the same to the respondent, who was his employer. The statement indicated the intercepted person having confessed to his knowledge, that the gold was smuggled from Bangladesh, as told to him by one Sonu, who handed over the gold bars for onward transmission to his employer, the respondent - The retraction admits the possession of the gold bars at the time of interception. The description of which, as is found with the DRI, is also admitted to be that which was seized.
There is no escape from the fact that the contraband was imported as revealed from a mere visual inspection, which discloses the markings on the gold bars. Now, the question arises as to whether the alleged owner of the goods referred to as Noticee No. 2, the respondent herein, had obtained valid possession through a legal import made by him - The First Appellate Authority found that the entire case of the Department spins around the confessional statement of the intercepted person. The First Appellate Authority found that the statement recorded under Section 108 was specifically stated to be under duress and there was a finding by the Original Authority that he had not retracted the statement; while, in fact, the statement was specifically retracted. It was found that Section 108 of the Act, though is substantive evidence, some corroboration has to be available before acting upon it, which can be the slightest corroboration.
The First Appellate Authority and the Tribunal had entirely relied on the invoice dated 21.07.2017 produced by Noticee No.2 to hold that the seized gold bars were purchased from Saheli Gems and Jewellers Pvt. Ltd. It cannot but held that the reliance placed is wholly irrelevant since the two sets of bill books produced requires further evidence to establish the transactions between Saheli Gems and Jewellers and Adinath Jewellers having occurred on the day it is said to have occurred; prior to the interception and seizure, especially since no payment was made for the purchase - If Saheli Gems and Jewellers had imported it by a proper bill of entry filed and the same received from a notified entry point for the purpose of home consumption, then and only then would the burden of proof under Section 123 be discharged and the goods seized from Noticee No.1 be absolved of the confiscation proceedings under the Customs Act. The falsity of the story projected by the owner of the gold bars, is one another circumstance standing against the claim raised by the owner and in favour of the confiscation proceedings.
Whoever be the owner, the gold being one manufactured outside the country, if it is seized in the same form, the owner who raises a claim for release of the said gold should establish unequivocally before the Authority that it had been brought into India duly in accordance with the provisions of the Customs Act. This is the rigor placed on the person possessing or the owner of the seized goods, by Section 123, which puts the burden of proof squarely on the person from whose possession or the owner who has entrusted the said gold to the person possessing it, to establish the source from which it has been received.
The appellate authorities have found the findings of the original authority, regarding the absence of proof of the transaction, including the movement of the goods to be bad, only by reason of the invoice produced - the invoice is not a document on which any reliance can be placed. Even if such reliance can be placed, in the present case, the gold bars; which demonstrably were manufactured and sourced from outside the country, should be proved to have been brought into the country in accordance with the provisions of the Customs Act.
The orders of the Appellate Authorities set aside - the orders of the original authority restored - appeal allowed with costs computed at Rs. 5,000/- which can be recovered from the respondent by the Revenue.
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2024 (3) TMI 1193
Smuggling - Gold - baggage rules - petitioners have not given proper declaration in respect of the gold they were bringing in even if it was allegedly in the form of jewellery or bangles - existence of mens rea on the part of the petitioners to smuggle gold into India or not - HELD THAT:- The import and export of goods into and out of India are subject to the provisions of the Foreign Trade (Development and Regulation) Act, 1992. In exercise of the powers conferred by Section 3 read with Section 4 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1992), the Central Government has framed the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993. As per Rule 3(h) of this Order, a passenger of Indian Origin or having a valid Indian passport and who has a stay of more than six months abroad is allowed to import gold subject to certain conditions.
An international passenger is required to file International Customs Declaration Form (I.C.D.) with the Customs Department under Section 77 of the Customs Act, 1962. Merely wearing the bangles on body by the petitioners does not obviate the statutory requirement of filing an ICD form with the Customs Department. Further, the fact of non-filing this ICD Form and not submitting the same to the Customs Department has not been disputed by the petitioners.
The petitioners were permitted to redeem only on payment of redemption fine and appropriate customs duty so that the gold bangles would be cleared for domestic consumption. However, the option of re-export of gold bangles does not provide any right on the petitioner to get the gold bangles cleared for home consumption and it is under these circumstances that no duty is demanded on the option of re-export of gold bangles - there are no illegality or perversity on the part of the adjudicating authority at the first instance and then by the Commissioner of Appeals subsequently, while modifying the order, both of which subsequently stood affirmed by the CESTAT vide the impugned order under challenge in the present case.
In the instant case, the petitioner No. 1 was in possession of the gold bangles while passing through the Green Channel of the Customs at the Rajiv Gandhi International Airport, Shamshabad. Despite possessing the gold bangles which are dutiable goods, the petitioners neither adopted the Red Channel nor submitted the ICD Form to the Customs Department and thus tried to take the undue advantage of the Green Channel facility at the Customs violating the provisions of Section 77 of the Act - since the petitioners are not eligible passengers in terms of the provisions of the Foreign Trade (Development and Regulation) Act, 1992 read with the Foreign Trade (Exemption from Application of Rules in Certain Cases) Order, 1993, the original authority was correct in finding the petitioners ineligible to import the gold bangles. Thus, the order of the original authority to confiscate the gold bangles in terms of Section 111(1) of the Act, cannot be found fault with.
Another reason why this Court is not inclined to entertain the Writ Petition is the fact that the petitioners have voluntarily availed the option that was floated by the adjudicating authority at the first instance. Having availed the option floated and having paid the redemption fine and customs duty while redeeming the gold bangles, the petitioners cannot now be permitted to turn around and challenge the order which he has voluntarily complied with.
Petition dismissed.
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2024 (3) TMI 1192
Right of the Purchaser of confiscated vessel in an action - Vires of of Art. 14 and 19 of the Constitution of India - direction to issue No Due Certificate (NDC) in relation to subject vessel MSV Safina Al-Miraz to the Petitioner and permit the Petitioner to shift the Vessel from Salaya Port to Okha Port forthwith - seeking refund the amount paid by the Petitioner towards e-auction of MSV Safina Al-Miraz alongwith amount incurred by the Petitioner towards repairing of the Vessel, with interest - confiscation of vessel u/s 115 of the Customs Act, 1962 - HELD THAT:- It is not in dispute that the subject vessel was confiscated by the respondent Nos. 1 and 3 as per the provisions of the Customs Act and therefore in accordance with the provisions of Section 126 of the Act, the subject vessel would vest in the Central Government. Once such subject vessel vests in the Central Government, the mortgage of the respondent No. 4-GMB would come to an end and therefore the respondent No. 4-GMB is required to issue the ‘No Due Certificate’ qua the subject vessel which was auctioned to the petitioner by the Customs Authority in accordance with law.
With regard to the reliance placed by the learned advocate for the respondent No. 4-GMB in the decision of the Supreme Court in case of O. Konavalov [2006 (3) TMI 145 - SUPREME COURT] is concerned, the said decision is rendered under the Maritime Laws under the provisions of the Merchant Shipping Act, 1958 in relation to the pre-existing right of the crewmen vis-a-vis Section 115 read with Section 126 of the Customs Act. The Hon’ble Apex Court in the facts of the said case applied the principles enshrined in Article 21 to a foreigner for holding that confiscation by the Government of Vessel cannot extinguish the pre-existing rights of the crewmen as India has become signatory to various international conventions honouring the social, political, civil and economic rights of human beings. It was further held that India has travelled very far from 1950 and the Courts have given way to dynamic constructive approach in the aspect of social justice while referring to international conventions, etc. - The reliance placed on the provisions of the Admiralty (Jurisdiction and Settlement Maritime Claims) Act, 2017 to submit that maritime claim means mortgage or charge of the same nature on a vessel with regard to exercise of jurisdiction by the High Court under said Act to hear and determine such question on maritime claim against the vessel. Therefore, the judgment rendered by the Apex Court vis-a-vis the pre-existing rights of the crewmen of the vessel would not apply to the facts of the present case.
The respondent No. 4-GMB is directed to issue No Due Certificate to the petitioner so as to enable the petitioner to shift the vessel from Salaya Port to Okha Port - Petition allowed.
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2024 (3) TMI 1191
Seeking review of order - error apparent on the face of record or not - petitioner submits that while concluding that the applications filed by the petitioner for revalidating the Advance Authorizations were belated, the Court has not taken note of the amendments to the Foreign Trade Policy for the period 2009-2014 with effect from 27.08.2009 - HELD THAT:- The revalidation of the Advance Authorization can be made only for a period of six (6) months from the date expiry of the Original Authorization.
The application could be made in time before the expiry of the period. However, revalidation can be made only for a period of six (6) months from the date of expiry of the Original Authorization. The six (6) months period expired long before - as per paragraph 4.23 of the Hand book of Procedure as in force from 27.08.2009, the petitioner had to satisfy with the requirements of 4.23(b) as in Column II to the above table.
It cannot be said that there is an error apparent on the face of the record. The order is detailed. Therefore, a review of the order is impermissible. A review cannot be an appeal in disguise.
This Review Application is liable to be dismissed and is accordingly dismissed.
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2024 (3) TMI 1190
Absolute confiscation of 211.07 gms of gold - imposition of penalty u/s 112 (a) and (b) of CA - domestic transportation of foreign marked Gold Bars without proper documents - onus to prove - HELD THAT:- The appellant have led cogent evidence that they are jewellers dealing in gold and gold jewellery having their shop under the name of M/s Padmavati Jewellers at Vijayawada. Appellant have also led evidence that in the ordinary use of business they regularly purchase gold from the reputed sellers like M/s DP Gold Pvt Ltd., and M/s SVBC Gold etc. In support of their contentions, the appellant have led evidence being extract of their stock register, summary of gold dealings showing quantum and value for the financial year 2020-21 and also a copy of ledger account of M/s DP Gold and M/s SVBC Gold for the financial year 2020-21 wherein appellant have got regular purchases from these concerns and they have been making payments through the banking channel - Appellant have also led evidences being screen shots of summary of the invoice of the purchase by them which are reflected on GSTN portal for few months in support of their regular business transactions wherein they purchase gold upon proper GST invoices.
The cogent evidences led by the appellant have not been found untrue. Thus the appellant have discharged the onus under Section 123 of the Customs Act. Further, the Court below have rejected the cogent explanation given, arbitrarily based on assumptions and presumptions, having no legs to stand.
The appellant shall be entitled to return of the seized gold and if the same have been disposed of, shall be entitled for refund of the auction proceeds along with interest as per rules - the impugned order set aside - appeal allowed.
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2024 (3) TMI 1189
Short payment of Countervailing Duty (CVD) - evasion of Customs Duty - import of Motor Spirit falling under CTFI 2710, by not declaring that a substantial portion of such imported Motor Spirit was not ‘intended for sale without a brand name’ - benefit of Sl.No. 70(i) of N/N. 12/2012-CE dated 17.03.2012 (as amended) - HELD THAT:- The Hon’ble High Court of Bombay in the case of COMMISSIONER OF CUSTOMS (IMPORT), MUMBAI VERSUS MAHESH INDIA [2006 (7) TMI 306 - BOMBAY HIGH COURT] while considering the main issue as to whether the Show Cause Notice dated 22.03.1993 issued by DRI under Section 28 read with Section 124 of the Customs Act, 1962 is valid and proper had observed that the assessment being only provisional, the Show Cause Notice is not maintainable. It was held that the Show Cause Notice issued under Section 28 when the goods have not been finally assessed is bad in law and not maintainable.
The Hon’ble High Court of Calcutta in the case of JAJU PETRO CHEMICAL PVT. LTD. & ANOTHER VERSUS THE COMMISSIONER OF CUSTOMS (PORT) & OTHERS [2017 (7) TMI 633 - CALCUTTA HIGH COURT], considered the issue with regard to the demand raised under Section 28 of the Customs Act, 1962 when the assessment was only provisional. It was observed that when the duty to be paid is yet to be finalised the importer cannot be saddled with the guilt of not paying the duty or short paying the duty.
In the present case, the Show Cause Notice is issued under Section 18 read with Section 124 of the Customs Act, 1962. There is no invocation of Section 28 for recovery of short paid duty. However there is proposal for recovery of differential CVD. There is no requirement for issuing a Show Cause Notice under Section 18 for finalisation of assessment. At the time of finalisation, the Department is free to look into all factors and finalise the Bills of Entry. The Show Cause Notice has been issued invoking Section 18 and 124 proposing to confiscate the goods, proposing to recover the differential duty and for imposing redemption fine and penalties.
The appellant has added the additives to make the Petrol branded after filing the ex-bond Bill of Entry. During such process of branding by adding additives, the goods are not in shore tanks and are outside the Customs area. Taking all these aspects in to consideration, it is not found that the appellant had any malafide intention to evade Customs duty by availing concessional rate of duty. It is not established by the Department that the appellant had estimated the quantity that is to be sold as branded at the time of import itself - the order of confiscation of the goods and the imposition of redemption fine and penalties set aside, without disturbing the finalisation of the assessment and confirmation of higher CVD as paid along with interest by the appellant and appropriate by Department.
The impugned order is modified to the extent of setting aside the confiscation of goods and imposition of redemption fine and penalties imposed under Section 112 (a) of the Customs Act, 1962 - appeal allowed in part.
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2024 (3) TMI 1188
Classification of imported goods - Agricultural Reaper - Spare parts of Reaper - classifiable under CTH 84672900 and 84679900 respectively (Revenue) or under CTH 84331190 and 84339000 respectively? - Levy of penalty under Section 114A of the Customs Act - HELD THAT:- Being a matter of classification of goods the burden of proof is on Revenue to show that the particular case or item in question is taxable in the manner claimed by them. The correct manner of classifying imported goods under the Customs Tariff, is by interpreting the headings and notes etc. as per the Rules for the Interpretation of the Schedule to the Customs Tariff Act, 1985 - It is not dispute that the Schedule to the Customs Tariff in itself does not contain a specific heading for “Agricultural Reaper” and its parts. There is also no dispute that though different models of goods have been imported all are sought to be classified under one heading. Finally, it is also not disputed that the impugned goods are marketed and known in the trade as “brush cutters” as also seen from the product literature and the tender notices etc. enclosed with the appeal.
In INDO-INTERNATIONAL INDUSTRIES VERSUS COMMISSIONER OF SALES TAX, UP. [1981 (3) TMI 77 - SUPREME COURT], it has been held by the Apex Court that "if any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted".
The Appellant has stated that as per Note 4 to Section XVI, which covers chapter 84, for machines with a clearly defined function by one of the headings in Chapter 84 or 85, the whole falls to be classified in the heading appropriate to that function. It is found that both the disputed heading fall under chapter 84 and as per the discussions have been found to have a clearly defined function covered by CTH 8467. Revenue has thus been able to discharge its burden and the impugned orders merit to be upheld - Since the classification of the goods is found to be falling under CTH 8467, hence in terms of Note 2(b) of Section XVI, parts of ‘brush cutter’ will be classifiable under CTH 84679900.
Levy of penalty under Section 114A of the Customs Act - HELD THAT:- As far as the description of the goods, quantity, classification etc. are concerned, the importer is bound to state the truth in the Bill of Entry. As per section 46(4) of the Customs Act, 1962, the importer while presenting the Bill of Entry shall make and subscribe to a declaration as to the truth of such Bill of Entry. Further, Section 114A does not incorporate ‘intention to evade payment of duty’. This is because while mens rea is an essential or sine qua non for criminal offence it is not an essential element for imposing penalty for breach of civil obligations or liabilities, unless specifically stated so in the statute. Similarly, the importer is required to make a true declaration of the description and quantity of goods etc which have actually been imported and not just the goods as declared in the import documents. Thus, if the goods actually imported are more in number or the actual description or CTH as determined by an order under the Act is different from what is declared in the Bill of Entry, the importer would have made a mis-declaration. If this is done knowingly it’s a willful misstatement.
Even if a matter is under appeal it does not mean that the legal stand of the importer which has been defeated in quasi-judicial proceeding can continue to be recognized as legitimate and duty short paid. A valid order determining the CTH of the imported goods and a statutory document filed for the same goods knowingly misstating the CTH cannot coexist legally and be recognised in law to be valid. It cannot be said that ordinary prudence has been exercised by the importer-appellant according to the standards of a compliant tax payer or even a reasonable person - The undertaking is meant to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed and thus cannot be brushed off as being merely procedural.
Hence if an order or judgment has been passed on a lis between the department and an assessee, he is bound to follow that order, until it is upset in appeal by a higher judicial forum. The responsibility is more when the tax is self-assessed. This is not a mere failure to pay duty. It is something more. The Appellant has deliberately sought to defeat the provisions of law. Thereby contravening the provisions of Section 46(4) ibid. Further there is nothing in the section to mean that because there is knowledge by the Department of the earlier mis-classification of the goods by the Appellant the willful misstatement in the Bill of Entry subsequently which stands established disappears.
The Hon’ble High Court of Madras in M/S. KING BELL APPARELS VERSUS THE COMMISSIONER OF CENTRAL EXCISE [2018 (10) TMI 267 - MADRAS HIGH COURT] held that the contention that once knowledge has been acquired by the department, there is no suppression and the ordinary statutory period of limitation would be applicable was rejected as a fallacious argument inasmuch as once the suppression is established, merely because the department acquires knowledge of the irregularity, the suppression would not be obliterated. A statutory penalty flows from a disregard of statutory provisions. With relaxation in procedure in the clearance of goods comes greater responsibility on the part of importers. This responsibility has not been discharged and the impugned order hence merits to be upheld on this score.
Further it is seen that interest is necessarily linked to the duty payable, such liability arises automatically by operation of law. As per the Hon’ble Supreme Court's judgment in COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS M/S SKF INDIA LTD. [2009 (7) TMI 6 - SUPREME COURT] interest is leviable on delayed or deferred payment of duty for whatever reasons.
The impugned order upheld - appeal disposed off.
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2024 (3) TMI 1187
Classification of imported goods - Rubber Processing Oil (RPO) - enhancement the value - mis-declaration of the country of origin in the bills of entry.
Whether the Rubber Processing Oil imported by the Appellant is classifiable under Chapter Heading No. 27101990 as classified by the Appellants or under Chapter Heading No. 27079900 as classified by the Revenue? - HELD THAT:- From the judgment of this Tribunal in AMIT PETROLUBES P. LTD VERSUS C.C. -KANDLA AND HEMANT SHAH VERSUS C.C. -KANDLA [2023 (12) TMI 796 - CESTAT AHMEDABAD], it can be seen that in the identical fact the department’s claim of classifying the RPO under 27.07 was rejected. Therefore with the support of the above referred judgment and particular facts of the present case, the impugned order on the issue of classification is not sustainable.
Whether the value of the imported RPO can be enhanced based on the consent letters given by the directors of the Appellants at the time of release of the goods, without following the due process of law as contemplated under Section 14 of the Customs Act read with Customs (Determination of Value of imported value) Rules, 2017? - HELD THAT:- In the present case neither any contemporaneous value was adopted nor any method as prescribed under Section 14 read with Custom Valuation Rules, 2007 was followed. Therefore, merely on the basis of statements of director valuation cannot be enhanced. Therefore, the enhancement of the value is not sustainable in the facts of the present case. This similar issue has been considered in the case of GURU RAJENDRA METALLOYS INDIA PVT LTD VERSUS C.C. -AHMEDABAD [2020 (6) TMI 68 - CESTAT AHMEDABAD] wherein the tribunal held that only on the basis of the consent letters of the importer enhancement of valuation cannot be made - the enhancement of the value by the lower authorities is without any legal basis. Hence, the same will not sustain and accordingly, the enhancement of the value done by the Revenue is set aside.
Whether the Appellants mis- declared the Country of Origin in the Bills of entry filed by them? - HELD THAT:- The material information declared in the bill of entry mainly corresponds to the goods that are under import and mis declaration of country of origin is immaterial towards the valuation, description and other such particulars concerning the goods, and the appellant would have gained nothing as no preferential rate of duty was claimed by the appellant. Without prejudice, mis declaration of origin being an issue technical in nature does not seem to form any implication towards the revenue. Therefore, if there is a mis-declaration of country of origin the appellant being not the party to make any incorrect declaration cannot be held responsible and no consequential penalty can be imposed on the appellant.
Whether the quantum of penalties and redemption fine imposed disproportionate to differential duty involved in the matter? - HELD THAT:- This Tribunal held that for incorrect mention of country of origin, the importer cannot be penalized. Accordingly, in the present case also considering overall facts and the fact of incorrect declaration, if any, regarding country of origin in the Country of Origin Certificate, the appellant is not liable for any penalty or fine - As regard the appeals filed by individuals as observed, since there the impugned order against the main appellants is not sustainable, there is no reason to continue the personal penalty upon the individuals co- appellants.
The impugned order is set aside - Appeals are allowed.
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2024 (3) TMI 1186
Classification of exported goods - Abrasive Mesh - whether the goods exported are classifiable under CTH 2513 20 90 as ‘Abrasive Mesh’ as declared by the Appellant or under CTH 2513 20 30 as ‘Natural Garnet’ as assessed by the Department? - HELD THAT:- The Learned Commissioner (Appeals) while deciding the classification of the disputed goods under heading 2513 20 30 has not given any finding as to why the Appellant was not given an opportunity to cross examine the Chemical Examiner so as to determine what are the properties of the goods of the Appellant that correspond to the said classification nor ascertained reasons as to why the communications of M/s. IREL as requested by the Appellant were not shared with them.
It is noted that, the properties of the goods are technical in nature and vital to be determined before ensuring appropriate classification whereas the findings of the Commissioner (Appeals) are silent on this vital aspect of the factual circumstances.
This Tribunal draws support from the case of SWADESHI POLYTEX LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, MEERUT [2000 (7) TMI 85 - SC ORDER],wherein it was held that “if the Adjudicating Authority intends to rely upon the statement of any such persons, the Adjudicating Authority should give an opportunity of cross examination to the appellant".
The lower authorities have not considered the submissions made by the Appellants in order to properly come to the conclusion for correct classification of goods in question - the matter needs to be remanded for re-consideration back to the adjudicating authority - Appeal allowed by way of remand.
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2024 (3) TMI 1185
Levy of penalty under Section 114A of the Customs Act and under Section 112A and Section 114AA of the Customs Act, 1962 - nature of imported goods as Dried Garlic or not - contravention of various provisions of the Customs statute as well as the provisions of Destructive Insects and Pests Act, 1914, PFS Order, 1989 and Plant Quarantine (Regulation of Import Into India) Order 2003 - HELD THAT:- There is no mis-declaration on the part of the appellant and if at all there was any breach it was a technical breach of importing the goods through LCS not listed in Schedule 1 of the Plant Quarantine (Regulation of Import into India) Order 2003. However, it is found that the department has never objected on this score. The department of its own freewill and accord has not drawn any samples of the goods imported in these different consignments. However, it is a fact that all these imports were part of a single contract and a single letter of credit executed with the exporter of the country of origin. Be as it may, the department only at the time of last imports (out of six) chose to have the matter examined by the Plant Quarantine Authorities, which report undisputedly was not in contravention or violation of the statutory provisions - the test report has emanated almost after a gap of five months and has therefore chosen to disregard the findings under the presumption “I therefore hold that a Garlic Bulb can become dry during this period”. The delay in such test reporting certainly cannot be attributed to any omission or commission of delinquency on the part of the appellant.
All these evidences have been simply ignored without even a thought. Furthermore, a ‘Bulb’ is understood in local parlance as a short stem with fresh leaves or leaf bases that function as food storage organs during dormancy. It is very well known that Garlic, an agricultural produce, occurs as a bulb. Upon drying it loses moisture content to a large extent, but retains its shape as a bulb. Therefore, the mention of the term “Garlic Bulb” cannot be considered as determinative of the fact of it being dry or not. For which, if at all it was imperative for the department to get the water contents verified as they sought to dispute the classification declared and re-classified the product under heading 7032000. For this failure on the part of the department the assessee/importer/appellant cannot in any way be held responsible.
As for this eligibility to exemption Notification seeking concessional rate of duty for import of the impugned goods from the People’s Republic of Bangladesh, it is found that the dispute on this score is completely arbitrary and baseless. It has nowhere been disputed that the goods did not originate and have been imported from Bangladesh. The importer has submitted necessary Government certification as referred above in support of his contention. The impugned goods are squarely covered in terms of Notification No.99/2011 dated 09.11.2011 and therefore exemption from payment of duty is admissible to the appellants in terms of the said Notification.
Thus, no case can be made out for imposition of any of the penalties on the appellant - the order of the lower authorities is therefore liable to be set aside - appeal allowed.
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2024 (3) TMI 1184
Levy of penalty for delay in submission of documents for two Bills of Entry, under regulation 5 of the Customs Provisional Duty Assessment) Regulations, 2011 - HELD THAT:- From the records it is seen that the appellant has imported goods vide 31 Bills of Entry and there was a delay in submission of the documents only in respect of two Bills of Entry, for finalisation of the provisional assessments. Subsequently, they have submitted all the documents, in respect of the remaining two Bills of Entry also, and they have been finalised. As there was a delay in submission of documents in respect of two Bills of Entry, the Department initiated proceedings for imposition of penalty under Regulation 5 of the above said Regulations 2011.
The adjudicating authority has imposed a penalty of Rs.20,000/- as the appellant has already submitted the documents in respect of the two Bills of Entry and they also have been finalised. The Appellant cited various decisions in support of their contention that reduced penalty can be imposed for such procedural violations - On perusal of decisions cited by the appellant in support of their contentions that the enhanced penalty is not sustainable in this case. In the case of M/S JAI BALAJI INDUSTRIES LTD. VERSUS COMMR. OF CUSTOMS (PREVENTIVE) , BHUBANESWAR [2021 (1) TMI 767 - CESTAT KOLKATA], this Tribunal has held The order of the Commissioner (Appeals) does not establish any ground for enhancing the penalty to the maximum of Rs. 50,000/- per Bill of Entry yet to be finalised.
The present case on hand is squarely covered by the decisions cited above. The appellant has already submitted the documents necessary for finalization of the provisional assessment. Thus, the penalty of Rs.20,000/- imposed by the Assistant Commissioner would be sufficient to meet the ends of justice. It is also found that the Ld. Commissioner (Appeals) has not given adequate reason for enhancing the penalty from Rs.20,000/- to Rs.1,00,000/-. In view of discussions and the decisions cited above, the enhanced penalty is not warranted in this case. Accordingly, the same is set aside.
The enhanced penalty set aside - appeal allowed.
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2024 (3) TMI 1183
Recovery proceedings by SEBI - Maintainability of provisions of IBC over the provisions of the SEBI Act - notice was challenged by the appellants on the ground that the same cannot be enforced as the proceedings under the Insolvency and Bankruptcy Code, 2016 and the provisions of the Provincial Insolvency Act, 1920 initiated against the appellants are pending and the orders of interim moratorium have been passed - penalty imposed and sought to be recovered from the appellants by issuing the impugned certificate fall within the meaning of ‘fine’, which is excluded under clause (a) of sub-section (15) of Section 79 of IBC and therefore, the interim moratorium order issued in favour of the appellant No. 1 has no application to the penalty sought to be recovered under the impugned certificate
HELD THAT:- Once an application is admitted under Section 100, a moratorium shall commence in relation to all the debts and shall cease to have effect at the end of the period of 180 days beginning with the date of admission of the application or on the date the adjudicating authority passes an order on the repayment plan under Section 114, whichever is earlier.
In the instant case, so far as appellant No. 1 is concerned, the period of moratorium commenced on 04.02.2022 which cease to operate on expiry of 180 days i.e., 04.08.2022. Similarly, in respect of appellant No. 2, the period of moratorium commenced on 13.12.2022 and the same expired on efflux of 180 days on 13.06.2023. The writ petition was heard by the learned Single Judge on 19.09.2023. Thus, it is evident that no moratorium was in force in favour of the appellants. Therefore, respondents No. 1 and 2 were justified in issuing the impugned certificate under Section 28A of the SEBI Act. It is pertinent to note that the provisions of Chapter IV of IBC, namely Sections 121 to 124 do not apply to the facts of the case as the application under Section 122 was not filed when the Certificate under Section 28A of the SEBI Act was issued. The issue whether the impugned levy is a fine or a penalty is also not required to be decided in the facts and circumstances of the case and we keep the same open to be adjudicated in an appropriate proceeding.
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2024 (3) TMI 1182
Liquidation of the Corporate Debtor - The right of the appellant to propose a revised resolution plan - Chance to revive the corporate debtor, emphasizing the entity's MSME status and its potential for rehabilitation - HELD THAT:- The IBC itself recognises the right of MSME to revive a Corporate Debtor and even if certain ineligibility under Section 29A are not attracted. The object of Corporate Insolvency Resolution Process is always to revive the Corporate Debtor and liquidation being the last resort, which is nothing but a corporate death.
The present is a case where the Appellants – Promoters of the Corporate Debtor have undertaken to liquidate the entire debt of the Financial Creditor, who is the only Financial Creditor consisting of 100% CoC. It is relevant to notice that there are no other creditors of the Corporate Debtor. It is also relevant to notice that Appellant is making efforts from very beginning to revive the Corporate Debtor - When the Appellant is ready to liquidate the entire debt of the Financial Creditor/, there are no reason to deny an opportunity to revive the Corporate Debtor on its feet. There is no doubt that Financial Creditor is entitled to entire debt and it cannot be directed to take any haircut. The present is a case where the Appellant has undertaken to clear the entire claim, which was admitted in the CIRP.
The Adjudicating Authority committed error in not accepting the Bank Draft of Rs.75 lakhs shown to the Court on the date when the matter was heard. The Adjudicating Authority ought to have given an opportunity to deposit the Bank Draft to complete the payment of Rs.1 crore as was directed by the Adjudicating Authority.
The order passed by Adjudicating Authority is set aside - the order dated 07.08.2022 passed in IA 64 of 2023 directing the liquidation is set aside - Appellant is permitted to deposit the entire balance amount of Rs.4,92,81,826/- within 30 days from today by the Bank Draft or RTGS to the Bank. The Appellant shall bear entire CIRP costs.
Appeal disposed off.
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2024 (3) TMI 1181
Legality of arrest and consequential payment of compensation - HELD THAT:- Earlier order records that the issue of legality and validity of the arrest of the appellants as well as the other questions will be gone into in these appeals.
The said questions need not be decided in these appeals. Therefore, legal contentions arising in these appeals are left open to be decided in appropriate cases.
Appeal disposed off.
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2024 (3) TMI 1180
Rejection of the Petitioner’s Application filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground that the amount of tax is not quantified before 30th June 2019 and investigation is going on - HELD THAT:- It is thus seen that the Department has taken a clear position that the duty liability admitted by any person during enquiry, investigation or audit would amount to making him eligible for the benefits of the scheme. Such interpretation, as made by the Department, has also become relevant in terms of Section 121(r), which defines the term quantified. Section 125 (1) (e), as referred, clearly sets out that an assessee, who has been subjected to an enquiry or investigation or audit, and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019, would not make him eligible to take the benefit of the scheme. However, in the present case, the duty was quantified much prior to the cut off date of 30th June 2019.
The rejection, as generated by the electronic system, appears to be not correct, and would be required to be held to be illegal considering the clear position as brought out by the terms and conditions of the Scheme, and the clarification of the Scheme as issued by the Circular of the Revenue dated 27th August 2019.
The Petitioner was clearly eligible to avail benefits of the Scheme and the rejection, as impugned, is illegal - Petition allowed.
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2024 (3) TMI 1179
Levy of Service tax - Banking & Financial Services - providing corporate guarantee on behalf of its sister concerns to lenders but had not charged any commission or interest or fees for providing the guarantee - demand has been made only on a notional amount which, according to the Revenue, the respondent could have received had it charged its sister concern for providing the guarantees - HELD THAT:- Service tax can be charged on the consideration received for providing taxable services. In other words, there must be a service provider, a service recipient, a taxable service and a consideration. The service provider shall be liable to pay service tax on the consideration which it receives for providing a taxable service. Any amount which is received but which is not a consideration for providing a taxable service is not exigible to service tax. Similarly, if a service is rendered, but no consideration is received no service tax can be charged. It is for the reason that if the consideration received is zero any percentage will be zero itself.
In the case of OLAM AGRO INDIA LTD VERSUS COMMISSIONER OF SERVICE TAX [2013 (11) TMI 1503 - CESTAT NEW DELHI] it is recorded “a show cause notice dated 03.04.2012 was issued covering the period October 2010 to 31.12.2011 proposing levy of service tax, interest and penalties for corporate guarantee commission remitted by the petitioner to the signatory entity and agency commission remitted for service provided by agents in respect of the export business of the petitioner”. Thus, in both cases, a commission or other consideration was received for providing the taxable services and the dispute was whether service tax could be charged on such commission which is received.
In the present case, there is not an iota of doubt that no consideration was received at all because the show cause notice itself says so. This being the position, it is found that the impugned order is correct and proper and calls for no interference.
The impugned order is upheld and Revenue’s appeal is rejected.
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2024 (3) TMI 1178
Classification of service - service rendered by the appellant to overseas universities/colleges amounts to “export of service” or “intermediary service” or not - period 1.07.2012 to March 2016 - HELD THAT:- The undisputed fact is that the appellant had entered into agreement with various foreign universities whereby the appellant was required to provide services to the universities which implies that the service provider is located in India and the recipients of service were located outside India. It is also an undisputed fact that the appellant was receiving the consideration for the service rendered by way of convertible foreign exchange. The nature of service provided by the appellant was to recruit students in the courses conducted by these universities/institutes.
From the definition of “intermediary services”, it is found that activity between two parties cannot be considered as an intermediate service as intermediary essentially arranges or facilitates the main supply between two or more persons, which is not the case here. Further, the definition of intermediary service excludes any person who has provided the service on their own account. Here from the facts, it is evident that the appellant has provided the service on his own account to the recipient of service, i.e. the foreign university placed beyond the taxable territory of India.
The Chandigarh Bench in M/S SUNRISE IMMIGRATION CONSULTANTS PRIVATE LIMITED VERSUS CCE & ST, CHANDIGARH [2018 (5) TMI 1417 - CESTAT CHANDIGARH] considered the issue whether the assessee is an intermediary with reference to the service to universities, colleges and banks and whether any service tax could be levied and answered the issue in favour of the assessee.
Following the observations in MS EVALUESERVE SEZ PVT LTD, EVALUESERVE COM PVT LTD VERSUS C.C.E & S.T GURGAON – I (VICE-VERSA) [2018 (12) TMI 1242 - CESTAT CHANDIGARH], that receipt of consideration from the overseas client excluded them from tax as intermediary, the appellant cannot be held to be providing intermediary service as it is an admitted position that the appellant had been receiving consideration in the form of commission from the recipients of service placed abroad.
The stand of the department that the appellant was rendering two types of services, one by way of rendering consultancy services to the students who wanted to study abroad by assisting them and the second was service to foreign universities by way of recruitment of students for them, is not correct. Firstly, the fees deposited by the students is directly remitted to the universities. Secondly, the appellant is not charging any consideration from the students and there cannot be any taxable service without any consideration - there is no privacy of contract between the appellant and the prospective students as laid down by the Delhi High Court in VERIZON COMMUNICATION INDIA PVT. LTD. VERSUS ASSISTANT COMMISSIONER, SERVICE TAX, DELHI III, DIVISION-XIV & ANR. [2017 (9) TMI 632 - DELHI HIGH COURT].
The learned Counsel for the appellant has taken an alternate plea in terms of the exemption notification No. 25/2012 dated 20.06.2012 issued by the Central Government in exercise of power under section 93 of Finance Act, 1994, where at serial No. 9 services provided to or by an educational institution in respect of education has been exempted from service tax and subsequently by amendment vide Notification No. 06/2014 dated 11.07.2014 the exemption was provided to services relating to admission to, or conduct of examination by such institution and therefore the appellant was not liable to pay service tax.
The impugned order deserves to be set aside - The appeal is, accordingly allowed.
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2024 (3) TMI 1177
Short payment of service tax - service of Authorised Service Station for Motor Vehicle servicing and repairing - non-addition of the value of consumable used while providing service to vehicle owners and free service commission in the taxable value - HELD THAT:- The issue as regards includability of the cost of spares in the gross taxable value is in contradiction as regards Circulars dated 05.03.2003 and 23.08.2007. It is observed that positive findings need to be recorded on the basis of factual verification as regards existence of separate bills for spare parts and/ or payment of sales tax/VAT thereon before arriving to the conclusion to drop demand. It is found that separate invoices were not found as regards the Assessee having carried out installations on CNG kits that despite the assessee having carried out such installations and paid VAT thereon, it cannot be ipso facto concluded that they have not rendered any taxable service and are not liable to service tax. Therefore in the interest of justice the said issues need to be examined in depth.
The issue needs to be remanded to the adjudicating authority for reconsidering the value for demand taking to consideration the dispute raised in the show cause notice and submissions made by both the sides.
The appeal is allowed by way of remand to the adjudicating authority to decide the issues de-novo.
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2024 (3) TMI 1176
Levy of service tax - liquidated damages - Circular No. 178/10/2022-GST dated 3.8.2022 - HELD THAT:- The issue as contended by the learned Advocate, in the case on hand, has already been addressed to in M/S SOUTH EASTERN COALFIELDS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX, RAIPUR [2020 (12) TMI 912 - CESTAT NEW DELHI] and settled in favour of the taxpayer where it was held that It is, therefore, not possible to sustain the view taken by the Principal Commissioner that penalty amount, forfeiture of earnest money deposit and liquidated damages have been received by the appellant towards “consideration” for “tolerating an act” leviable to service tax under section 66E(e) of the Finance Act.
The service tax liability fastened on the appellant on the liquidated damages received does not survive - the impugned order set aside - appeal allowed.
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2024 (3) TMI 1175
Classification of service - insurance service or not - general insurance scheme related to P&I Clubs which is only a membership fee paid to the club for third party insurance - HELD THAT:- Since both the counsel agree for remanding the matter back to the file of the original authority for denovo adjudication, it is deemed appropriate to set aside the impugned order and restore the matter back to the file of the original authority who shall pass a denovo adjudication order in the light of the judgment of the Hon'ble Supreme Court in STATE OF WEST BENGAL & ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE & ORS. VERSUS M/S. RANCHI CLUB LTD. [2019 (10) TMI 160 - SUPREME COURT].
The appeal is allowed by way of remand.
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