CESTAT RULING (CUSTOMS)

Transcription

1 CESTAT RULING (CUSTOMS) 2014-TIOL-338-CESTAT -AHM M/s Firmenich Aromatics (India) Pvt Ltd Vs CCE & ST (Dated: December 27, 2013) Customs - Demand of interest - limitation - Interest demanded on goods kept in warehouse which could not be cleared within the time limit prescribed under Section 61(2 )( ii) of the Customs Act, It is settled law the demand for interest was required to be issued within a period of 6 months under Section 28 of the Customs Act, Present proceedings are clearly time barred - Impugned order set aside TIOL-333-CESTAT -MUM S N M Agency Vs CC (Dated: January 31, 2014) Cus - CHA prohibited to function as a Customs broker within the jurisdiction of CC(General), Mumbai - appeal to Tribunal - so long as section 146(2) of the Customs Act, 1962 does not provide for appeal against an order of prohibition, it cannot be presumed that CBLR, 2013 provides for an appeal - provisions of CBLR, 2013 cannot be interpreted in such a way so as to override the provisions of s.146(2) of the Act - appeal dismissed as not maintainable: CESTAT [para 5] 2014-TIOL-332-CESTAT -AHM M/s Marvellous Marble & Granite Vs CC (Dated: October 11, 2013) Customs - Import of rough Marble blocks without valid import licence - Appeal seeking reduction of fine and penalty - It is evident that imposition of lower fines and penalties have not deterred the marble traders from importing the sensitive commodity which may affect indigenous industry - No contemporary imports of rough marble slabs have been brought on record by the appellants where lesser redemption fine and penalties were imposed - No reason to interfere with the quantum of fine and penalty TIOL-324-CESTAT -MUM Alfa Laval (India) Ltd Vs CC (Dated: January 15, 2014) Cus - Bill of Entry was assessed but the goods were not received by the appellant - goods came later on and same was cleared by filing another B/E on payment of duty - appellant filing refund claim of duty for which they have not received any goods - lower authorities denying the refund on the ground that the assessment has not been challenged - in the light of the decision in Aman Medical Products Ltd. - (2008-TIOL CESTAT -DEL) appellant entitled for refund claim - appeal allowed with consequential relief: CESTAT [para 6] 2014-TIOL-313-CESTAT -MUM Kalyani Lemmerz Ltd Vs CC (Dated: January 21, 2014) Cus - Request for adjournment made on the ground that counsel is at Tirupati Balaji applicant not serious in pursing matter, hence application rejected: CESTAT [para 3]

2 2014-TIOL-312-CESTAT -MAD M/s Icomm Tele Ltd Vs CC (Dated: July 4, 2013) Customs - Stay / dispensation of pre deposit - Managed Leased Line Network equipment supplied on turnkey basis with overseas technical knowhow - exemption from customs duty under notification 21/2002-Cus (S. No. 157) and from CVD (Nil rate of duty in the Tariff till , and under notification 06/06-CE dated (S. No. 27) with effect from that date) claimed on software imported - denied in adjudication on the ground that the contract value was artificially split between hardware and software components; that the software was canned, not customized as required by the notifications - demands confirmed with interest and penalties on firm and individual; agitated herein TIOL-298-CESTAT -MUM Hind Offshore Pvt Ltd Vs CC (Dated: January 21, 2014) Cus - Early hearing as the issue involves classification of goods and the revenue involved is to the order of Rs.9.25 crore, application for early hearing allowed: CESTAT [para 3] 2014-TIOL-293-CESTAT -MUM S Rajiv & Co Vs CC (Dated: December 4, 2013) Cus - Diamonds, whether rough or semi-processed - From the expert's opinion obtained it is seen that the goods under importation are only semi-processed diamonds - as per the HSN explanatory notes and the Board Circular dated 29/12/2009, they fall under the category of rough diamonds and not as cut and polished diamonds - Kimberley Process Certificate produced by the appellant also certifies the product to be a rough diamond - In these circumstances, it cannot be said that the appellant made any misdeclaration with regard to the description of the goods under importation - confiscation of the goods under Section 111(m) is without any basis - Appeal allowed: CESTAT [para 5.1] Confiscation & Redemption fine - Appellant has cleared the goods already on payment of duty and the goods are not available for any redemption, therefore, imposition of redemption fine u/s 125 of the Customs Act, is clearly unsustainable in law - Merely, because the appellant had initially made a claim for exemption from duty based on the documents available, it cannot be said that the appellant had misdeclared the goods - No warrant for confiscation or imposition of any penalty - Appeal allowed: CESTAT [paras 5.1 & 5.2] 2014-TIOL-289-CESTAT -MUM Hind Offshore Pvt Ltd Vs CC (Dated: January 27, 2014) Cus proceedings arising out of o-in-o dated 14/02/2013 were stayed subject to the appellant executing a bond for a total assessment value of Rs crores and a bank guarantee equivalent to the total duty demand of Rs.9.24 crores appellant getting and order for execution of some work in the Sultanate of Oman and seeking permission for taking vessel out of India Customs authorities rejecting the request Miscellaneous application before CESTAT. Held: As vide order dated 17/05/2013, all proceedings initiated by Customs have been stayed, Customs authorities directed to

3 release the vessel forthwith and allow the vessel to be taken out of India to the Sultanate of Oman and bring back the same within a period of six months subject to appellant executing an undertaking to the said effect: CESTAT [para 3] 2014-TIOL-288-CESTAT -MUM Shri Santosh Chawla Vs CC (Dated: January 3, 2014) Cus - Export of basmati rice - DRI alleging that what is sought to be exported is nonbasmati rice - goods confiscated with option for redemption and penalties imposed - as per DGFT Circular No.33/2008 dated , samples for testing to ascertain variety for identification are to be sent to Agmark Testing Centre - in present case samples sent for testing to other agencies, so cannot be relied upon - from a copy of the report obtained by the CHA from the Revenue under RTI Act, it is evident that the export was made of rice-milled basmati rice' - charges of misdeclaration are vitiated - based on retracted statement charges cannot be established - Tribunal has already allowed appeal of CHA based on the above conclusion - Appeal of exporter allowed: CESTAT 2014-TIOL-277-CESTAT -MUM Yakub Ibrahim Yusuf Vs CC (Dated: January 1, 2014) Cus - matter remitted to the Commissioner for purpose of quantification of redemption fine - department approaching High Court against the order after a gap of two years and even after filing the appeal 1 ½ years have passed and department has not initiated any action to get the order stayed - Complete inertia on the part of the department in pursuing the matter to its logical conclusion - Department to comply with the order within one month: CESTAT 2014-TIOL-274-CESTAT -MUM Globe Exim Vs CC (Dated: December 19, 2013) Cus - Boric Acid imported for non-insecticidal purpose - in view of Section 38 of the Insecticides Act, 1968 appellants are not required to obtain any permission from the Ministry of Agriculture - Accordingly, they are entitled for the benefit of DGFT Notification 2/2006 dated and eligible for the benefit of the DFIA Scheme - Appeal allowed: CESTAT [para 6] 2014-TIOL-273-CESTAT -AHM M/s India Polyfins Ltd Vs CCE & ST (Dated: November 28, 2013) Customs - Condonation of delay in filing the appeal before the Tribunal - The advocate to whom the case was handed over, has specifically stated that the courier agency engaged by him to dispatch the appeal to Tribunal had given the consignment slip, but unable to trace the proof of delivery; he has shut down the practice and no papers are available with him - There cannot be any reason for appellant to disbelieve that advocate on record had preferred the appeal and stay petition as the consignment slip

4 of the courier indicates dispatch of some papers to Tribunal - Though there is a considerable delay in filing appeal, the delay can be condoned due to the reasons that the appellant counsel's error in not filing appeal in time should not come in the way for rendering justice, but the main appellant needs be saddled with a cost, which is fixed as Rs.5000/ TIOL-255-CESTAT -MUM Caliber Chemicals Pvt Ltd Vs CC (Dated: December 20, 2013) Cus - S.13 of Customs Act, Pilferage of imported goods - appellant seeking refund of duty paid on such pilfered goods - claim denied on the ground that the appellant had not got the Bill of Entry re-assesseed - Board Circular 58/96-Cus has clarified that when pilferage is found during the course of examination before out of charge is given, the assessee is entitled for refund claim of the duty paid on shortage of goods - claim of Revenue that pilferage was found after out of charge was given is without presenting or bringing any evidence on record and is not sustainable - appeal allowed with consequential relief: CESTAT [para 7] 2014-TIOL-254-CESTAT -MUM George Joseph Chandrakant Thakkar Ashte Logistics Pvt Ltd Vs CC (Dated: February 30, 2013) Cus - Handling of Cargo in Custom Area Regulation, Appellant operating as CFS from Survey no. 117 also but the same was not entered in the Registration Certificate - cannot be considered as a bonafide mistake - penalty rightly imposed but since highly excessive reduced to 50% on company & on individuals to 25% - Appeal disposed: CESTAT [paras 5 & 6] 2014-TIOL-252-CESTAT -DEL M/s Sasol Solvents Vs UoI (Dated: December 10, 2013) Customs - Anti-dumping duty on acetone under Notification No 33/2008 Cus dated Appeal against the Anti-dumping duty on the ground that the Designated Authority did not conduct simultaneous investigation in respect of all the countries resulting in failure of determination of dumping and injury correctly. Held: No departure to the basic rule of investigation was noticed - While investigating into exports of South Korea was considered by DA, he also considered export figures and consequence thereof relating to subject countries in the final findings against exports from South Korea. No deviation to law was noticeable. Plea of the appellant that initiation of investigation was ab -initio void is without any force, in the absence of any cogent evidence led by appellant to set aside the investigation. Evidence led by domestic industry proved dumping and dumping injury as apparent from the records of the DA for initiation of investigation. Evidence also shows that the exports of subject goods from subject country were above de minimus level. Appellant misconceived the concept of simultaneous investigation pleading that exclusion of exports from South Korea did not result in simultaneous investigation. Such plea is untenable because DA cannot postpone investigation into dumped exports above de minimus level awaiting such level to be achieved by the exports of another country as South Korean exports in the present case. Trade remedy measure is to be expeditiously provided without any loss of time when the DA is prima facie satisfied as to dumping and injury - Domestic industry, DA and Ministry of Finance was right to argue that even by inclusion of exports from South Korea with the exports of subject countries no relief could be granted to the appellant.

5 2014-TIOL-251-CESTAT -MUM CC Vs Andrew Telecomm India Pvt Ltd (Dated: January 1, 2014) Cus - Refund claim filed in respect of duty paid against Bill of Entry under which no goods were received - Refund denied on the ground that the assessment was not challenged - Commissioner (A) allowing appeal with a direction to adjudicating authority to do reassessment and consider refund claim again - Revenue in appeal. Held - since respondent was not required to pay duty at all, section 27 of Customs Act, 1962 comes into play and a person can file a claim for refund of duty which was not required to be paid by him - no infirmity in order of Commissioner(A) - matter remanded to adjudicating authority to consider refund claim: CESTAT [para 5] 2014-TIOL-237-CESTAT-AHM M/s Vestas Wind Technology India Pvt Ltd Vs CC (Dated: December 3, 2013) Customs Classification dispute as to whether "tower sections" imported by the appellant for Wind Operated Electricity Generator (WOEG) are classifiable under Customs Tariff Heading 7308 or 8503 Impugned imports classified as 'parts of tower' under CTH by Revenue and agitated by appellant. Held: Section Note 1(f) of Section XV of the Customs Tariff Act specifies that articles of Se ction XVI are not covered under Chapter 73 - the goods imported are required for the purpose of placing the windmill at a height and some extent also used to control the windmill face in relation to direction of the wind - towers meant for WOEG are designed solely and specifically for the purpose of WOEG and are not meant for any other purpose - As per Section Note 2 to Section XV, only parts of general use can be classified under Chapter 73 but the parts solely and specifically designed for use in a particular type of machinery will have to be classified in that chapter where the main machine is classified - clarified by the CBEC Circular dated wherein it has been held that such towers are essential components of WOEG - if for Central Excise purposes, the same goods are considered as components of WOEG then there is no reason as to why for Customs classification purposes they could not be treated as essential components of WOEG - the towers imported by the appellant are correctly classifiable under Heading 8503 of the Customs Tariff Act and subsequent benefits were correctly availed by the appellant TIOL-229-CESTAT -DEL Marque Enterprises Vs CC (Dated: October 8, 2013) Cus - Whether, if the appellant has waived his right to waive the SCN he foregoes his right to challenge the proposed action in SCN for ever - Whether, without adducing any evidence, can Revenue discard the declared transaction value - Whether, for violation of EXIM provisions, imposition of redemption fine and penalty of 10% & 5% respectively of value of goods sufficient - difference of opinion - Matter referred to third Member: CESTAT 2014-TIOL-221-CESTAT -DEL

6 M/s Swastik Mechatronics Pvt Ltd Vs CC (Dated: December 19, 2013) Customs - Import of goods declared as stock lot of colour picture tubes - wrong tariff entry mis -declaration Penalty confirmed: By majority Member (J): It is held by various Courts that the charges of under valuation cannot be upheld on the basis of NIDB data. Apart from the fact that NIDB data cannot be held to be an admissible evidence for the purpose of enhancement of value, in the present case, the goods imported by the appellant were unbranded. It does not stand disclosed in the impugned orders that the value picked up from the NIDB data was of unbranded goods or branded goods. In any case, unbranded goods cannot be compared with other branded or unbranded goods, especially when the goods were stock lot goods and there is no other evidence on record produced by the Revenue upheld the allegation of undervaluation. In respect of wrong classification claimed by the appellant, such wrong classification claim, when the description of the goods stand correctly given by the assessee cannot be a reason for alleging mis -declaration of the goods so as to invite penal action against them. Member (T) : Invoices on record show import of branded goods though in examination these are described as unbranded goods. Appellants have attempted to evade duty by way of misdeclaration of the import. Once misdeclaration as to value, and classification is found, appropriate duty became payable with other consequences of law. Plea that it was only wrong classification and no misdeclaration is unsustainable. Once misdeclaration is proved and duty ramification are there, price declared becomes unacceptable. Matter referred to Third Member: Whether there was deliberate misdeclaration of classification and description as well as value inviting penal provisions under section 114 of Customs Act, 1962 as held by Hon'ble Member (Technical) or penalty is to be set aside as held by Member (Judicial). Third member: The only point to be decided in this case is as to whether there is mis - declaration of description as well as mis -declaration of value rendering the goods imported liable for confiscation under Section 111(m) of Customs Act, 1962 so as to attract penalty under Section 112(a). Penalty under which section?: Though the order of learned Member (Technical) mentions imposition of penalty under section 114, this section is not attracted in this case, as section 114 is for imposition of penalty for attempt to export goods improperly, while this is a case of improperly imported goods to which the provisions of section 111 and 112 apply. Misdeclaration : In view of the fact that the assessment is online and in normal course, the assessment would have been done online on the basis of declared description without seeing the invoice and without examination as bill of entry had been assessed online under Risk Management System under "no assessment, no examination order" and without any compulsory compliance requirement, the act of the appellant has to be treated as deliberate, as when the invoice mentioned the goods as stock lot of colour picture tubes and the goods were actually colour picture tubes meant for colour television, there was absolutely no reason for the appellant for mentioning the words "data graphic display tubes colour with phosphor dot Screen pitch smaller than 0.4 mm" in the bill of entry and at the same time, classifying the same under sub-heading pertaining to data/graphic display tubes and claiming nil rate of duty on this basis. In the background in which the wrong description had been given, it has to be treated as deliberate. Therefore, held that the description of the goods had been deliberately mis -declared with intent to evade the

7 duty so as to attract the provisions of Section 111(m). Majority Order : the penalty of Rs.1.50 lakhs is maintained against the appellant and appeal is rejected 2014-TIOL-215-CESTAT -AHM M/s Exechon, Vadodra Vs CCE & ST (Dated: November 25, 2013) Customs - Demand of duty on the goods supplied as deemed exports against Advance Authorisation Scheme on the ground that sale proceeds have been effected in Indian Currency, but not in foreign exchange - It is evident from the provisions/procedures prescribed under the Policy that supplies made under Para 6.9 of Chapter-6 of the Exim Policy has to be included while calculating NFE - It is further observed from Para 6.9 of the Exim Policy, effective from , that Clause 6.9(b) relied upon by the Adjudicating Authority was deleted and did not exist during the period under dispute - No other contrary provision was brought to the knowledge of the Bench to the effect that such DTA sales under Advance Authorisation Scheme are not to be considered for the purpose of calculating NFE - Demand set aside TIOL-207-CESTAT -MUM Leadking Sea Air Forwarders Pvt Ltd Vs CCE & C (Dated: January 21, 2014) Cus - CHA not allowed to function by Customs authorities inspite of orders of the Tribunal - complete defiance - Commissioner directed to implement order forthwith and also directed to Show Cause as to why contempt proceeding should not be initiated against him: CESTAT [paras 5 & 6] 2014-TIOL-200-CESTAT -DEL M/s Euro Asia Global Vs CC (Dated:December 3, 2013) Customs Stay Modification application filed consequent to the order of High Court to examine the plea of financial hardship - While seeking waiver of pre-deposit and stay of all further proceedings for realization of the adjudicated liability, the petitioners have failed to disclose particulars of the transfer of 40,000 shares in favour of his son by Mr. Sangit Agrawal, Director - This was crucial information which was bound to be disclosed Prima facie, there is suppression of material facts while seeking the discretionary relief of waiver of pre -deposit and stay. Taking the totality of the circumstances into account and duly considering the hardship of the petitioners and the interests of Revenue as well, there is no justification to modify the earlier order directing remittance deposit of 25% of the adjudicated liability as pre -deposit - The petitioners may either deposit 25% of the duty liability assessed or may furnish a bank guarantee for this amount TIOL-199-CESTAT -AHM

8 M/s Atlantic Shipping Pvt Ltd Vs CC (Dated:December 6, 2013) Cus - Refund finalization of provisional assessment whether hit by the provisions of unjust enrichment both, the adjudicating authority and first appellate authority have given a finding that appellant has not submitted documents like charter-party agreement, balance sheet or Audited financial documents to support CA certificate to the effect that unjust enrichment is not attracted in order to meet the ends of justice, opportunity given to appellant to substantiate their claim of refund matter remanded: CESTAT [ para 5] 2014-TIOL-181-CESTAT -AHM M/s Rodex International Vs CC (Dated: December 4, 2013) Customs - Stay / Dispensation of pre deposit - Micro Brand SD Memory cards of 2GB smuggled by concealing in refrigerators - confiscation and imposition of penalties on firm (authorized for trading under SEZ regulations) and individuals under Sec 112(a) and Sec 114AA of the Customs Act 1963 adjudged in the impugned order and agitated herein. Held: Appellants have not made out prima facie case for complete waiver - considering the arguments advanced by them as to the financial difficulties / hardships being faced, pre deposit of Rs. 5 lakh each ordered from M/s Rodex International & Shri Lilaram Arjandas Asudani; and Rs.50,000 from Shri Dipak Lilaram Asudani; upon compliance, applications for waiver of pre-deposit of the balance amounts involved are allowed and recovery thereof stayed till disposal of the appeals - regarding Shri Anand Dilip Mehta and Shri Sarav Pramod Chandra Suthar, role played is not clear and plea for complete waiver of pre deposit allowed - since pre deposit ordered on firm, waiver granted in respect of partner, Shri Dilip Ratilal Dhakan - Miscellaneous applica tion seeking directions to lower authority to clear goods dismissed as devoid of merit since the impugned order specifies conditions for release of goods, which, if satisfied, would automatically result in clearance TIOL-180-CESTAT -MUM M/s Hind Offshore Pvt Ltd Vs CC (Dated: Jaunary 20, 2014) Cus - If the Customs authorities do not want the appellant to take vessel out of India, they should pass a written order stating the reasons therefor and cannot pass any oral instructions - AR to ascertain facts and inform: CESTAT [para 3] 2014-TIOL-174-CESTAT -MUM CC Vs M/s Forever Living Health Nutrition And Beautycare Products Pvt Ltd (Dated: January 1, 2014) Cus - sections 27, 28C & 28D of Customs Act, Refund - Dispute continued for more than three years and no prudent business man/organization would continue to bear incidence of higher duty without passing the same to the buyer of the goods - inevitable conclusion that can be drawn from the accounting method followed by the importer is that they have considered the disputed amount of Customs duty as the cost of material - accounting system does not anticipate the said amount as receivable - sales price of the goods is very high compared to disputed duty amount - in fact, post-sale, respondent claims to pay 43% bonus to distributors - it is perhaps for such reasons that wholesale prices of the goods which are being sold as multi-level marketing were not changed and the disputed duty was considered as the cost of

9 material sold - Since no separate duty has been indicated in the invoices, it has to be assumed that tota l burden of Customs duty has been passed on to the buyer of the goods - refund claims hit by Bar of unjust enrichment - Revenue appeals allowed: CESTAT 2014-TIOL-163-CESTAT -KOL CC Vs M/s Amarnath Enviroplast Ltd (Dated: September 13, 2013) Customs - Refund - Interest under Section 27A of the Customs Act, 1962 Refund claim rejected initially and later allowed by the Tribunal Liability to pay interest Contention of the revenue that interest is payable only after three months from the date of Tribunal's order is not correct Respondents are entitled for interest after three months from the date of filing refund claim No merit in revenue's appeal against the order of Commissioner (Appeals) directing to pay interest.