9911796707
TMI Blog2017 (9) TMI 1786X X X X Extracts X X X X X X X X Extracts X X X X ..... ty along with interest. Accordingly, the Bench considers it as a fit case to settle the differential duty liability at ₹ 21,42,012/- as admitted by the applicant along with interest amounting to ₹ 7,94,604/-. This amount has been fully paid and the same is appropriated and adjusted towards the Customs duty and interest. Redemption fine - Held that:- he amount paid subsequently to the exporter as differential freight on account of demurrage charges was not brought to the notice of the Customs leading to the short collection of Customs duty, attracting the Provisions of Section 111(m) of the Customs Act, 1962. Therefore, the Bench holds that the goods are liable for confiscation. However, as the goods had not been seized at any point of time in this case imposing any fine on the goods in lieu of confiscation does not arise. Penalty - Held that:- This is a case where the applicant failed to declare ship demurrage charges, which should have been taken into account for arriving at assessable value for the purpose of charging Customs duty as per the provisions of Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination of Value of Imported Goods) R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt towards differential Customs duty which included ₹ 2,00,874/- paid voluntarily by the applicant which falls outside the statutory limit of 5 years for raising the demand. 1.2 Intelligence was developed by the Directorate of Revenue Intelligence, Kolkata to the effect that M/s. Ramco Cements Ltd., have been importing Coal and Petcoke through various ports in India and have been evading duty of Customs by not declaring certain elements of freight which would have been taken into account for the purpose of determination of assessable value of the goods for the purpose of payment of Customs duty as per provisions of Section 14 of the Customs Act, 1962 read with Customs Valuation (Determination of Value of Imported Goods) Rules, 2007. Intelligence suggested that the applicant firm have undervalued the subject goods while importing into India and suppressed the details of costs of demurrage incurred against such imports and thereby evaded Customs duty. 1.3 Bulk goods are normally imported in chartered vessels for purpose of transport. The applicant firm used to import directly from their suppliers on their own. In course of such imports, sometimes, vessels get delayed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shnapatnam Port + ₹ 22,251.30 pertaining to Vishakapatinam Port + ₹ 4,78,463.30 pertaining to Tuticorin Port). The applicant has further paid an amount of ₹ 2,00,874/- for such imports made through Krishnapatnam Port towards Customs duty on demurrage made against vessel named Alpha Happiness vide Bill of Entry dated 16-7-2010 which falls outside the statutory limit of 5 years for the demand. The present SCN is issued demanding Customs duty of ₹ 19,41,138/- only. 1.9 Therefore, M/s. The Ramco Cements Ltd., was called upon to Show Cause to the Joint/Additional Commissioner of Customs (Preventive) as to why : (a) Differential duty of Customs amounting to ₹ 2,05,857/-, payable on such goods imported through Krishnapatnam Seaport, on account of element of cost attributable to the ship demurrage charges paid by the importer over and above the normal price of the goods including freight to the suppliers, which was deliberately suppressed by the importer in contravention to the provisions of Sections 14(1), 17 46 of the Customs Act, 1962, and also in violation of Rule 3 and Rule 10(2) of the Customs Valuation (Determination of Value of imported Goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under Section 111(m) of the Customs Act, 1962 and duty of Customs payable under Section 28(4) of the Act ibid. AND 1.10 M/s. The Ramco Cements Ltd. was also called upon to Show Cause to the Joint/Additional Commissioner of Customs, Customs House, Port Area, Vishakhapattanam-530035, within 30 days of receipt of this notice as to why :- (a) Differential duty of Customs amounting to ₹ 1,06,250/- payable on such goods imported through Vishakhapatnam Seaport, on account of element of cost attributable to the ship demurrage charges paid by the importer over and above the normal price of the goods including freight to the suppliers, which was deliberately suppressed by the importer in contravention to the provisions of Sections 14(1), 17 46 of the Customs Act, 1962 and also in violation of Rule 3 Rule 10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007, should not be demanded under Section 28(4) of the Customs Act 1962; (b) Subject goods having assessable value of ₹ 7,27,63,324/ -, imported through Vishakhapatnam Sea Port should not be held liable for confiscation under Section 111(m) of the Customs Act, 1962, for be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cost attributable to the ship demurrage charges paid by the importer over and above the normal price of the goods including freight to the suppliers which was deliberately suppressed by the importer in contravention to the provisions of Sections 14(1) 17 46 of the Customs Act, 1962, and also in violation of Rule 3 Rule 10(2) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 should not be demanded under Section 28(4) of the Customs Act, 1962; (b) Subject goods having assessable value of ₹ 40,88,04,382/- imported through Tuticorin Seaport should not be held liable for confiscation under Section 111(m) of the Customs Act, 1962, for being imported by suppressing the cost elements in the form of Ship Demurrage Charges and for not disclosing the same to the Customs authority which resulted in incorrect determination of the assessable value of the imported goods leading to short payment of Customs duty. (c) Interest at appropriate rate under provision of Section 28AA of the Customs Act, 1962, should not be demanded and recovered; (d) Amount of ₹ 21,42,012/- paid vide TR-6 Challan Nos. should not be appropriated and adjus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore differential duty on demurrage charges as and when paid to the overseas supplier was not paid. They became aware of their requirement of payment of duty on all demurrage charges only when Customs authorities having jurisdiction over Karaikkal Port advised them of the legal provisions relating to valuation of imported goods and differential duty on demurrages relating to imports made through Karaikkal was paid. Immediately after discharging duty liability for imports made through Karaikkal port, they initiated steps to compile the details of payment of demurrage charges for imports made through ports of Krishnapatnam, Vizag and Tuticorin and in the absence of any other dispute with Customs authorities in relation to such imports, the records relating to payment to demurrage charges right from July, 2010 to July, 2015 had to be retrieved from the Customs records relating to the imports made in the past years. When the process of compilation of differential duty on demurrage charges relating to imports made through three other ports specified in the SCN was in a final stage of completion, a letter dated 4-7-2016 seeking information of imports made through vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted Goods), Rule, 2007. The applicant never declared their liability of Customs duty on such ship demurrage charges in the past 10 years. Only after initiating investigation and detailed scrutiny of the documents by the Officers of DRI, that the leakage of Revenue came to light. Only after investigations, the applicant paid the duty for a period of five years from the date of investigation which amounted to ₹ 21,42,012/- towards differential duty and ₹ 7,94,604/- towards interest. As the applicant has not declared the actual value of the goods for the purpose of determination of duty which ultimately resulted in short payment of Customs duty, 100% penalty should be rightly imposed on them in terms of Section 114A of the Customs Act, 1962 and penalty should be imposed under Section 112(a) of the Customs Act for improper importation of goods. As there is a clear suppression of facts by not taking into account cost of ship demurrage charges in the assessable value of the goods which resulted in non-payment of duty, the goods have been rendered for confiscation under Section 111(m) of the Custom Act, 1962. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concede that demurrage charges which were paid to the overseas suppliers long after the clearance of the goods after assessment, is includible in the assessable value. However, due to long time gap, same could not be included in the assessable value at the time of assessment of the goods. That they were under the bona fide impression that Rule 10A of the Customs Valuation Rules which seeks to include demurrage charges in the assessable value for payment of duty is applicable only in the case of Chartered Vessels and their price was FOR destination. Since all their imports were not under chartered vessels and therefore differential duty on demurrage charges as and when paid to the overseas supplier was not paid. They became aware of their requirement of payment of duty on all demurrage charges only when Customs authorities having jurisdictional over Karaikkal Port advised them about liability. The differential duty of ₹ 21,42,012/- and interest of ₹ 7,94,604/- in respect of 59 Bills of Entry was paid between 24-8-2016 - 26-8-2016 i.e., before issuance of show cause notice. Hence no penalty or redemption fine in lieu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- pertaining to Krishnapatnam Port + ₹ 1,06,250/- pertaining to Vizag Port + ₹ 16,29,031/- pertaining to Tuticorin Port) along with applicable interest. 6.3 The applicant accepted the tax liability in the SCN dated 7-10-2016 and has paid an amount of ₹ 21,42,012/- (which included an amount of ₹ 2,00,874/- paid voluntarily by the applicant) as confirmed by the Revenue. The interest liability of ₹ 7,94,604/- was also paid before issue of the SCN. However, they submitted before the Bench that at the time of import they were not aware of the quantum of Demurrage and thus were also under the bona fide belief that Rule 10 of the Customs Valuation Rules, 2007 is not applicable in this case. 6.4 The Bench is of the view that the applicant has made full and complete disclosure of the duty liability, co-operated with the investigation and discharged their duty liability along with interest. Accordingly, the Bench considers it as a fit case to settle the differential duty liability at ₹ 21,42,012/- as admitted by the applicant along with interest amounting to ₹ 7,94,604/-. This amount has been fully paid and the same is appropriated and adjuste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years for raising the demand. The applicant has not contested the demand though it is barred by limitation of time. The payment of differential duty to the tune of ₹ 2,00,874/- and interest thereon in respect of the imports made in July, 2010, i.e. the period beyond five years from the date of issue of the SCN amply establishes bona fides of the applicant in discharging duty liability. 6.8 Taking into account the facts and circumstances of the case, the Bench is inclined to take a lenient view and refrains from imposing any penalty on the applicant. Prosecution 6.9 Considering the facts of the case, the Bench is inclined to consider grant of immunity from prosecution to the Applicant in as far as this case is concerned. ORDER 7.1 In the light of the above, the Bench settles the case under Section 127(5) the Customs Act, 1962 on the following terms and conditions : i. DUTY : The Additional differential amount of Customs Duty in this case is settled at ₹ 21,42,012/- (Rs. 4,06,731/- pertaining to Krishnapatnam Port + ₹ 1,06,250/- pertaining to Vizag Port + ₹ 16,29,031/- pertaining to Tuticorin Port). As the applicant has alread ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
