CESTAT RULING - Taxindiaonline.comtaxindiaonline.com/RC2/pdfdocs/headnotes_index/... · used by the...

CESTAT RULING

2012-TIOL-389-CESTAT -BANG

M/s VXL Instruments Ltd Vs CC, Bangalore (Dated : November 25, 2011)

Customs – 100% EHTP Unit – Refund – Concessional rate of duty under Notification No. 6/06-CE denied for clearance of computers and accessories in DTA – Duty paid @ 16.48% as against 12.36% under protest and claimed as refund – Refund claim accepted on merits but credited to consumer welfare fund by original authority and order upheld by Appellate Commissioner – No dispute that appellants contracted with DTA buyers for cum duty price indicating rate of duty @12.36% - Duty at higher rate paid only at the insistence of department vide its letter wherein appellant denied benefit of Notification No. 6/06-CE for computing CVD component, which was withdrawn subsequently by letter dated 14.06.2008 – Appellants forced to pay higher rate of duty under protest and it is not in dispute that price before 14.06.2008 and after 14.06.2008 to the customers in DTA sale remained the same – Findings of Appellate Commissioner that refund barred by unjust enrichment, set aside – Refund to be allowed to appellant – Section 27 of Customs Act, 1962


P M Abdul Nazer Vs CC, Cochin (Dated : August 11, 2011)

Customs – Seizure of foreign origin gold biscuits resulting in absolute confiscation and levy of penalty – Gold biscuits found covered with cellophane tapes and kept concealed inside a long cylindrical cloth cover tied around abdomen of the carrier – No valid documents produced to prove licit import of foreign origin gold biscuits resulting in seizure – Carrier deposed under s. 108 of Customs Act, 1962 that appellant provided money for purchase of gold biscuits, which was also admitted by appellant in his statement under s. 108 ibid – Evidence on record indicates that carrier was carrying gold biscuits only at the instance of the appellant for a monetary consideration – Appellant could not adduce evidence of licit nature of goods – No evidence of any valid claim by the carrier or anybody else on the gold biscuits – Absolute confiscation of goods under s. 111(d) ibid upheld – Penalty of Rs. 3.6 lakhs disproportionate vis -à-vis value of goods determined by authorities – In the facts and circumstances of the case, quantum of penalty reduced to Rs. 1 lakh – Sections 108, 111(d), 112, 121 and 125 of Customs Act, 1962


M/s Champs On Web Pvt Ltd Vs CC, Hyderabad (Dated : November 29, 2011)

Customs – 100% EOU – Allegation of removal of capital goods procured duty free from bonded warehouse premises resulting in demand of duty foregone with interest and penalty – Shifting of unit from the registered premises to another location not intimated to authorities in time as Managing Director of company suffered from serious illness as substantiated by medical evidence – Circumstances in which impugned goods were removed from bonded warehouse not properly considered by lower authorities – When warehouse license expired on 21.01.2004 unit can be deemed to be de-bonded with effect from that date as there was no objection from

STPI authorities – Assessee liable to pay customs and excise duties on imported and indigenous capital goods respectively – Matter remanded to original authority to rework quantum of duties payable after allowing depreciation – Interest liable to be paid in terms of section 28AB of Customs Act, 1962 and section 11AB of Central Excise Act, 1944 – Confiscation upheld but in the facts and circumstances of the case, fine and penalty reduced to Rs. 50,000/- each – Penalty imposed on MD set aside


M/s Kudremukh Iron Ore Co Ltd Vs CC, Mangalore (Dated : September 12, 2011)

Customs – 100% EOU – Import of ‘carbon steel pipes' whether eligible for exemption under Notification No. 13/81-Cus as ‘capital goods' – Exemption denied on the ground that there is no evidence to show that goods were used within bonded area – Undisputedly, imported pipes were used for replacement of a segment of an underground pipeline exclusively used for bringing raw materials to the plant (bonded area) for manufacture of export goods – Question as to whether appellant violated any of the conditions of the Notification not examined in the proper perspective by Commissioner – Documents evidencing usage of goods were not examined by Commissioner – Matter remanded to Commissioner with a direction to pass speaking order on all issues in accordance with law by hearing the appellant – Notification No. 13/81-Cus dated 14.02.1981

2012-TIOL-360-CESTAT -MAD

M/s Sundaram Finance Ltd Vs CC, Chennai (Dated : March 2, 2012)

Customs – Fraudulent re -import of goods at inflated value – Goods originally exported from India - Imports made under EOU scheme by availing exemption under Notification Nos 13/81 Cus and 53/97 Cus and the goods are not capable of being used by the EOU as declared – Demand of duty upheld.

Valuation – Value at which the goods were originally imported will be relevant for computing the duty liability – Section 20 of the Customs Act, 1962 - Valuation adopted by the department for computation of the duty based on the mis -declared value in a case of mis -declaration of country of origin with added mis-declaration of nature of goods cannot be sustained.

Jurisdiction – ADG, DRI, having been appointed as a Commissioner of Customs is empowered to assign to any officer of customs the functions of a proper officer - In the absence of any conditions and limitations imposed by the Board under Section 5(1), the ADG, DRI can discharge the duties of a proper officer in terms of Section 5(2) of the Customs Act, 1962 – Section 2(34) and Section 5 of the Customs Act, 1962.

Importer under Customs Act, 1962 - The financing institution and the bank had ownership over the impugned goods and as owners they have to be treated also as importers under the Customs Act apart from the fact that the Bills of Entry have been filed by them – The other parties, M/s. ETK Softech and M/s. ORJ have also held themselves out to be importers and have filed the Bills of Entry and therefore they are also required to be treated as importers - No infirmity in holding that they are jointly

and severally liable for payment of customs duty.

Penalty – Considering the reduced liability due to reduction in value to be adopted, penalty imposed is reduced to Rs. 10,00,000/- each, in respect of M/s.SFL, M/s. ICICI Bank and M/s. ORJ and to Rs.10,000/- each in respect of individuals – Confiscation of the goods and redemption fine upheld.

Also see analysis of the Order

2012-TIOL-355-CESTAT-BANG

CC & CE, Hyderabad Vs M/s Nitin Digital Printers (Dated : September 16, 2011) Customs – Import of used photocopiers without requisite license resulting in levy of penalty and redemption fine – Lower appellate authority reduced redemption fine and penalty – Revenue appeal filed on the ground that levy of fine and penalty should be commensurate to market value/profit margin of goods and that appellant has imported such goods for a second time – Grounds of appeal does not have any reference to market value or profit margin, though general observations therein are vey relevant – Appellate Commissioner reduced redemption fine and penalty after consideration of entire facts and circumstances – No valid reasons to interfere with impugned order – Sections 112 and 125 of Customs Act, 1962


Abdul Kareem Poku Vs CC, Cochin (Dated : October 18, 2011)

Customs - Import of car - Investigation by authorities with manufacturer revealed year of manufacture as 2004 whereas importer declared the same as 2000 and that chassis number and engine number found to be different from what were declared in documents.

Valuation - Value of car enhanced by original authority along with imposition of penalty and absolute confiscation - Appellate Commissioner upheld enhancement of value and reduced penalty but allowed release of goods on payment of redemption fine of Rs. 2 lakhs resulting in appeals by both parties - No dispute that details furnished by assessee to Customs authorities were at variance with details found during examination and investigation - Appellant except stating that the website relied upon by department is an unknown website, has not adduced any positive evidence about alternative claim of valuation before lower authorities - Claim by appellant that value added towards refurbished items related to standard accessories not substantiated by making any such claim in reply to notice or before lower authorities or before Tribunal - No reason to interfere with order of Commissioner (A) upholding valuation made by lower authority.

Confiscation - No dispute that assessee fulfilled the condition of staying abroad for importing vehicle - Mis -declaration relates to period of use of vehicle by importer - In view of mis-declaration of relevant particulars, confiscation upheld - However, considering the nature of offence, absolute confiscation not warranted - Prayer of department for upholding absolute confiscation rejected - Section 111 (d) and (m) of the Custom Act read with Section 3(3) of the Foreign Trade (Development &

Regulation) Act, 1962.

Redemption fine/penalty - Since vehicle is lying in department's custody from 2007, there is scope for leniency with regard to redemption fine and penalty - Redemption reduced from Rs. 2 lakhs to Rs. 1 lakh and penalty reduced from Rs. 75,000/- to Rs. 50,000/-


CC & CE, Hyderabad Vs M/s Vignette Software India Ltd (Dated : October 7, 2011) Customs - Import of goods without any IEC allotted by DGFT nor does the importer come under IEC exempted category - Original authority imposed penalty of Rs. 2000/- under s. 117 of Customs Act, 1962 for importing without IEC Code - Revenue appeal seeking confiscation of imported goods rejected by Commissioner (A) - As it is only a case of procedural violation with no allegation of any mis -declaration of imported goods or non-payment of customs duty no valid reason to interfere with order of Commissioner (A) which has upheld the order of original authority sustaining penalty imposed on importer - Section 117 of Customs Act, 1962

2012-TIOL-320-CESTAT -MUM

Mahesh P Patel Vs CC, Mumbai (Dated : January 3, 2012)

Applicant, a Chartered Accountant had issued 'Export Promotion Certificate' & 'Solvency Certificate' after verification of export invoices, GR forms, bank statements, balance sheet and capital accounts - it is the allegation of the department that such certificates were issued without visiting the premises of the importer and without verifying books of accounts and thus enabling importer to import goods divert the same in domestic market - charge of aiding and abetment prima facie not sustainable as applicant has discharged his duties in accordance with the law - Pre -deposit of penalty waived and stay granted: CESTAT. [para 4, 5]


M/s Mic Electronics Ltd Vs CC, Hyderabad (Dated : September 19, 2011)

Customs – Stay/Application for waiver of pre -deposit – Import of capital goods availing benefit of exemption under Notification No. 25/02-Cus by DTA unit by following IGCRDMEG Rules, 1966 – Capital goods subsequently transferred to 100% EOU belonging to same legal entity – Though 100% EOU eligible to import capital goods without payment of duty including CVD, DTA unit having imported goods and kept without any use for itself not entitled to take credit – Pre-deposit waived subject to reversal of CENVAT Credit availed by DTA unit – As bank guarantee executed by appellant still in force, deposit of redemption fine waived – Balance of dues waived and stay granted with a direction to keep bank guarantee alive till the disposal of appeal – Section 129E of Customs Act, 1962 – IGCRDMEG Rules, 1996


CC, Tuticorin Vs M/s Stylewood Industries (Dated : September 19, 2011)

Customs - Export of sawn timber by declaring the same as “wooden furniture components” - The impugned goods are covered under Chapter 44, Sl. No 146 of the Export Licensing Schedule and are clearly prohibited for export - Interpretative Rules referred to by the respondents are actually a part of the First Schedule to the Customs Tariff Act, 1975 which contains the Import Tariff - The said rules have no application for the Export Tariff which is contained in the Second Schedule to the Customs Tariff Act, 1975 - Note 2 under "the General Notes to Export Policy makes it clear the export policy is determined by the item description and code number is only illustrative - Confiscation of the goods upheld - But redemption fine reduced to Rs 25,000/-.


M/s Gimpex Ltd Vs CC, Hyderabad (Dated : September 5, 2011)

Customs – Stay/Application for waiver of pre -deposit – Eligibility of exemption Notification No. 32/05-Cus dated 08.04.2005 for import of ‘continuous cast copper rods' under Target Plus Scheme - Exemption denied on the ground that goods imported were copper rods and goods exported were iron ore and stainless steel products and there is no nexus between inputs and outputs – Para 3.2.5 of HBP required only ‘broad nexus' with export product in the sense that any one or more items of the export product group specified in the certifica te/license could be exported by importer to claim benefit of exemption notification as held by Bombay High Court in M/s Essel Mining & Industries Ltd. Vs. Union of India & Ors (2011-TIOL-421-HC-MUM-CUS) quashing CBEC Circular dated 08.05.2007 – Prima facie case made out by appellant for full waiver of pre-deposit of dues – Stay granted for recovery of penalties – Section 129 E of the Customs Act, 1962 – Notification No. 32/05-Cus read with Chapter 3.2.5 of HBP Vol. I

Jurisdiction – Governmental steps to give retrospective effect to Notification No. 44/2011-Cus (N.T.) dated 6.7.2011 are halfway and since legislation is expected to be completed shortly, jurisdictional objection raised by appellants becomes untenable.

2012-TIOL-293-CESTAT-MUM

M/s DEE Pearls (India) Pvt Ltd Vs CC, Mumbai (Dated : December 26, 2011)

Rule 41 of the CESTAT Rules - Once Tribunal has passed an order granting stay against recovery of penalties and waiving the requirement of pre -deposit of penalties, there is no question of recovery of any amount under the Head of penalties or duties from the appellants - only the amount that the department is entitled to recover would be the redemption fine which is covered by the bank guarantee – balance amount of the bank guarantee, if any, should be cancelled/returned – Application allowed: CESTAT. [para 3]


M/s Madras Fertilizers Ltd Vs CC, Chennai (Dated : January 31, 2012)

Customs- Stay and Waiver of Pre-deposit: Import of urea by appellants - PSU Fertilizer company under license from DGFT with condition to manufacture NPK Fertilizer- Appellants packed and sold imported urea to authorized dealers as per governing law for Fertilizer – Held Customs Exemption Notification not violated - Waiver of pre-deposit of customs duty of Rs 32 Crores and interest – Penalty - Heavy penalty of Rs 32 Crores not justified - Violation of License condition; appellants directed to make pre -deposit of Rs 5 Lakhs.



CC, Bangalore Vs M/s CMC Ltd (Dated : September 12, 2011)

Customs - Stay/Application for waiver of pre -deposit – Import of computer network equipments assessed on the basis of unit price declared after allowing higher discounts - Lower authority disallowed higher discounts - No reasons adduced by lower appellate authority for allowing discounts of more than 97% of listed price based on similar imports, as prima facie , the sale involved is a conditional sale - Order of Commissioner (A) stayed as it would work as a precedent for assessing authorities in relation to similar imports


CC, Bangalore Vs M/s Apotex Pharmachem India Pvt Ltd (Dated : September 9, 2011)

Customs/Service Tax – 100% EOU – Refund of accumulated service tax credits under Rule 5 of CENVAT Credit Rules, 2004 – Commissioner (A) after considering the definition of ‘input services' and a plethora of Tribunal decisions held the impugned services as input services vis -à-vis the final products manufactured by assessee – No reason to interfere with the order of appellate commissioner – Rule 5 of CENVAT Credit Rules, 2004

2012-TIOL-269-CESTAT -AHM

M/s Jesons Industries Ltd Vs CC, Kandla (Dated : January 18, 2012)

Customs – Goods imported by claiming exemption under Notification No 73/2005 Cus for goods imported from Singapore – Country of origin mis -declared as Singapore – Investigation report by Singapore Customs revealed that the goods were actually obtained from Taiwan and Korea – The Adjudicating Authority had gone through the different judgements relied upon by the noticee and rightly held that the decisions are not applicable to the facts of the case – Plea that the appellant were not a party to this fraud as they were not aware of the tainted nature of the certificate of the origin is not sustainable -Order-in-Original confirming the duty demand and confiscating the goods and imposing penalties upheld.


Apco Constructions (P) Ltd Vs CC, Mumbai (Dated : January 3, 2012)

Notfn. 21/2002-Cus – Asphalt Hot Mix Plant imported by appellant for construction of roads in UP consequent upon winning contract but diverted and used in the state of Rajasthan and Tamilnadu as a sub-contractor – since appellant is not named as a sub-contractor they have violated the terms and condition of the exemption notification – Pre -deposit ordered: CESTAT [para 6]



Vijaya Enterprises Vs CC, Hyderabad (Dated : August 5, 2011)

Customs – Import of used multi functional copier machines with accessories without licenses under EXIM Policy – Consignments examined by approved Chartered Engineers resulting in enhancement of values – Duty paid on enhanced values but importers contested redemption fines levied in lieu of confiscation and penalties – Consignments imported are photocopiers with certain additional facilities – Facts in the instant case distinguishable with that of M/s Shivam International case - 2011-TIOL-851-CESTAT -BANG – No reason to interfere with orders of confiscation as adjudged by original authority and lower appellate authority – Since Tribunal gave substantial relief in various cases in r/o redemption fines and penalties, in the facts and circumstances of the cases, redemption fines and penalties reduced – Para 2.17 of Foreign Trade Policy


M/S Viraj Syntex Vs CC, Chennai (Dated : September 19, 2011)

Central Excise – Stay/Dispensation of pre-deposit – Imported nylon filament yarn – Exemption from additional duty of customs under Notification No 29/2004 CE dated 9.7.2004 - Notification No. 29/04-CE is meant for processed filament yarn and the impugned goods under import are not processed filament yarns, Prima facie, the appellants are not eligible for the duty concession claimed – 50% of the duty ordered

to be deposited.


M/S Vijay Refiners Pvt Ltd Vs CCE, Chennai (Dated : September 19, 2011)

Customs – Over-valuation - DEPB Scrips fraudulently obtained – Demand of Duty on buyer of DEPB Scrips - The DEPB scrips fraudulently obtained by over-valuation of exports are yet to be cancelled by DGFT. It is pre-mature of the department to demand duty on the buyer of said DEPB scrips. Demand set aside. Department at liberty to take action as warranted, as and when the relevant DEPB scrips are cancelled by DGFT. (Para 3)


Shri Krishna Overseas Vs CC, Trichy (Dated : October 12, 2011)

Customs – Import – Old and Used Photo copiers – Requirement of license – Restriction on import of photocopier machine is only w.e.f. 19.10.2005 as per amendment made by Notification No.31 dt. 19.10.2005 and not prior to that date. As import is prior to 19.10.2005, fine and penalty imposed are set aside. (Para 2)


CC, Tuticorin Vs M/s Floor Decor (Dated : September 29, 2011)

Customs – Conversion of free shipping bills into Advance Authorisation Bills - The respondents claimed that they were having authorization/licence under Advance Authorization Scheme issued to them and it was due to ignorance and communication gap the CHA has filed the shipping bills as free shipping bills and they have evidence to show the mistake was bonafide - The competent authority under Section 149 is the Commissioner and the respondents seek an opportunity to produce evidence before the Commissioner – Matter remanded to the Commissioner for fresh consideration, after giving opportunity to the respondents to produce evidence and after granting opportunity of hearing.


M/s Avenue Impex Vs CC, Chennai (Dated : October 27, 2011)

Customs - Import of Oats for home consumption in bulk packs of 20 kgs - The appellants are undertaking to provide the details required to comply with the local

laws at the time of re -packing and re-labeling the impugned goods in the Customs bonded area before customs clearance - They are also undertaking to ensure that the Port health authorities are called upon to test the consignment before customs clearance is sought - The prayer made by the appellants is very reasonable and there is no reason why the same should not be allowed - Impugned order is set aside and the customs authorities are directed to allow the appellants to re -pack and re -label the impugned goods in a customs bonded premises, subject to mutual convenience.


M/s Parth Industries Vs CC, Goa (Dated : January 23, 2012)

Commissioner(A) transferring appeals to Call Book – Such an order is without application of judicial mind – there is no power with Commr(A) to pass interim orders – Matter remanded: CESTAT [para 7, 8]



M/s Santowin Polyester Ltd Vs CCE, Vapi (Dated : December 20, 2011)

Customs - Duty demand confirmed by lower authority with interest and penalties - Order of lower authority upheld by appellate authority on the ground that appellants did not comply with direction for order of pre -deposit - Plea that duty demands were confirmed without furnishing documents relied upon for issue of demand notice - Appellants attitude of informing adjudicating authority about non-receipt of documents after date of personal hearing not appreciated - Nevertheless, in the interest of justice, lower authority directed to supply copies of relied upon documents to appellant who will in turn furnish reply within two weeks - Lower authority directed to complete adjudication proceedings after receipt of reply, following principles of natural justice - Impugned order set aside


M/s Penshibao Wang Pvt Ltd Vs CC, Chennai (Dated : September 22, 2011)

Customs – Confiscation of "plant bio fertilizers" rejecting the classification under CTH 3101 0099 and re-classifying under 3808 9910 as pesticides – Fine and penalty - No reasoning has been given by the adjudicating authority for arriving at the quantum of fine and penalty - Taking into account the fact that the importers have incurred demurrage and accepting that the nature of the goods is such that delay has caused deterioration (the goods are made out of seaweed extract), fine is reduced to Rs 3,00,000/- and penalty is reduced to Rs 1,00,000/-


M/s Creative Industries Pvt Ltd Vs CC & CE, Hyderabad (Dated : September 21, 2011)

Customs - Stay/Application for waiver of pre -deposit -Import of Photo Composing System and Afga Type Setting Equipment availing benefit of Notification No. 90/94-Cus - BoEs assessed provisionally - Installation certificates not furnished within stipulated time period resulting in demand of differential duty and assessments finalized denying project import benefits - Appellants plea that installation certificates not furnished in time due to unforeseen circumstances acceptable - Tribunal in earlier instance in appellant's own case held that project import benefits cannot be denied for not furnishing installation certificates - Bank guarantee provided by appellant already encashed to recover dues partially - Prima facie case for waiver of deposit of balance dues - Section 129E of Customs Act, 1962


M/s Dott. ING. Scandura Calibration & Instrumentation (India) Pvt Ltd Vs CC, Chennai (Dated : September 7, 2011)

Customs - Valuation - Related party - Appellant is a 100% subsidiary of the overseas supplier acting as exclusive agent - As the seller settles the prices differently when it sells to third party customers as compared when it sells to the related buyer, declared value cannot be accepted in view of proviso (h) to Rule 4 (2) of the Customs Valuation Rules, 1988 - No error in the order of the Commissioner (Appeals) enhancing the level of price list price for unrelated buyer, minus adjustment of 5% for commercial level difference.

2012-TIOL-215-CESTAT -DEL

CCE, ICD, TKD, New Delhi Vs M/s Industrial Importers (Dated : January 13, 2012)

Customs - Nickel Silver Turning - Whether eligible for exemption under Notification No 21/2002 Cus dated 21.03.2002, Sl No 438 as “Nickel and Articles of Nickel” - Member (J) held that since the goods are classified under Chapter 75 of the Customs Tariff, exemption cannot be denied - Member (T) held that the description of goods do not satisfy the description given under the exemption notification as the impugned goods contained predominantly copper - Matter referred to the Third Member in view of the difference of opinion.



HPCL Vs CC, Mangalore (Dated : October 3, 2011)

Customs - Stay/Application of waiver of pre-deposit - Whether duty to be paid on shore tank receipt or quantity mentioned in bills of lading - As matter was already decided against assessees earlier, pre -deposit of Rs. 90 lakhs ordered – Section 129E of Customs Act, 1962

2012-TIOL-206-CESTAT -KOL

M/s Indian Farmers Fertiliser Co-Operative Ltd Vs CCE, CC & ST, Bhubaneswar (Dated : July 27, 2011)

Customs – Transaction value of ‘sulphuric acid' imported in bulk rejected by lower authorities on the basis of contemporaneous imports – Transaction value declared cannot be rejected without sanction of law – In Eicher Tractors Limited 2002-TIOL-06-SC-CUS , Apex Court held that if transaction value cannot be determined under Rule 4(1) [now Rule 3(1)] and does not fall under any of the exceptions in Rule 4(2) [now rule 3(2)], there is no question of determining the value under subsequent rules – Rule 12 of Customs Valuation Rules, 2007 does not empower proper officer to reject transaction value without establishing that the transaction value was not genuine – In r/o the very same assessee and import of the same commodity in a similar situation, issue had been held in favour of assessee-appellant by Tribunal 2010-TIOL-913-CESTAT -KOL – Impugned orders of lower authorities set aside – Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 read with Section 14 of Customs Act, 1962


M/s Binjusaria Metal Box Co Ltd Vs CC & CE, Hyderabad (Dated : October 3, 2011)

Customs – Goods cleared from DTA to SEZ developers/units – Export duty not leviable – Gujarat High Court decision in Essar Steel Ltd 2009-TIOL-674-HC-AHM-CUS followed – Impugned order set aside – Section 12 of Customs Act, 1962 read with Second Schedule to Customs Tariff Act, 1975


Gammon India Ltd Vs CC, Mumbai (Dated : December 23, 2011)

Import of Rig for construction of roads - Merely because after servicing and overhauling Rig was tested by boring 4-5 holes at Delhi Metro Rail premises it would be unfair to deny the benefit of exemption notification 21/2002-Cus - Prima facie case in favour - Pre-deposit of duty and penalty waived & stay granted: CESTAT [para 4, 5]



M/s Hibathullah Enterprises Vs CC, Mangalore (Dated : July 25, 2011)

Customs - Stay/Waiver of pre -deposit - Mis -declaration of export goods in shipping bill for export of goods to Dubai - Red sanders mis-declared as roofing tiles - Partner of appellant-firm admitted knowledge of replacement of tiles in a statement recorded under section 108 of Customs Act and this was corroborated by statement given by employee of appellant-firm who signed export contract with UAE Firm - Prima facie not a fit case for full waiver of pre -deposit - In view of the facts and circumstances and plea of financial hardship, appellant-firm directed to pre -deposit Rs. 3 lakhs, employee who signed export contract directed to pre -deposit Rs. 50,000 - Pre -deposit of balance amounts and penalties on other individuals waived - Section 108 of Customs Act read with Section 129E of Customs Act, 1962


CCE & CC, Goa Vs John Miranda (Dated : September 9, 2011)

Importer has provided NIDB data which is Customs own data bank to show that the black deck CD of 'Sony' make itself has been allowed import into India at USD ranging from 8.00 to 8.35 and the unbranded ones have been allowed imports at values ranging from USD 6.00 to 6.65 - value declared by importer is USD 6.65 per set which compares very favourably with the value of the contemporaneous imports not only of 'Sony' brand but also other unbranded varieties - department has completely failed to establish the case of undervaluation or mis -declaration – finding of lower appellate authority cannot be faulted – Revenue appeal devoid of merits hence dismissed: CESTAT [para 6 & 7]


Shri Sanjeevkumar Sood Vs CC, Cochin (Dated : August 12, 2011)

Customs - Seizure of Indian Currency amounting to Rs. 2 lakhs from Captain of vessel - Statement given by Captain and Steamer Agent that it was ship's currency received during its last call at Kochi and meant for procuring provisions and medicines – Letter addressed to Customs, Kochi for procuring an amount of Rs. 14.2 lakhs during its last call at Kochi endorsed by Customs authorities indicating that procurement permitted subject to usual formalities - Application for taking currency on board the vessel did not indicate the provision under which such permission was sought for and permission granted was also subject to usual formalities without any indication of said ‘formalities' – No formal letter of permission issued from any file of Customs department – No indication of officer who initialed such permission – Letter not produced before lower authorities – Matter requires reconsideration afresh by original authority – Orders of lower authorities set aside – Section 111(d) & (l) of Customs Act, 1962 read with Section 3(1)(c) of Foreign Exchange Management Act (Export & Import of Currency Regulations, 2000)


Shri Bhimendra Kumar Goyel Vs CC, Kolkata (Dated : July 28, 2011)

Customs – Goods imported at Kolkata port in the names of different persons in Nepal for transit through India – Goods seized at Kolkata on the suspicion that the same were to be sold in India without payment of customs duty – Appellant in Kolkata seeking provisional release of goods and revenue insists that goods could be released only to the owner - To ensure that the goods are delivered to the owner of the goods, the authorization from owners in Nepal to be obtained is required to be attested by appropriate Govt. Authority in Nepal to identify, the person and counter signed by the Counsel General of Nepal in Kolkata who had issued the authorization for CTD permit – Goods to be released on payment duty and execution of Bond and Bank Guarantee.


CC, Bangalore Vs M/s Kohler India Corporation Pvt Ltd (Dated : August 1, 2011)

Customs – Refund of SAD – Stay/waiver of pre-deposit – Applicant imported generator parts as trader and sold the goods on payment of VAT – Refund claimed under Notification No. 102/07-Cus rejected by original authority on the ground that sale invoices did not indicate that credit of SAD was not admissible – Appellate authority allowed refund as applicant was not a registered dealer to pass on CENVAT credit – No valid reasons adduced by Revenue to stay the operation of Commissioner (A) order – Section 129E of Customs Act, 1962


Sri Channa Kranti Kumar Vs CC, CE & ST, Hyderabad (Dated : October 4, 2011)

Customs – Stay/Application for waiver of pre-deposit – Car imported from UK absolutely confiscated for violation of Import Licensing Notes issued by DGFT – As car valued over Rs. 18 lakhs stands confiscated, pre -deposit of Rs. 50,000/- imposed as penalty under s.112(a) waived and stay granted – Section 112(a) read with section 129E of Customs Act, 1962


CC, Cochin Vs M/s Tata Tetley Ltd (Dated : August 1, 2011)

Customs – Liability to pay SAD on DTA sale of tea bags by 100% EOU – Revenue has not issued any demand notice under s. 28, if no provisions are invoked for demand of duty, any amount paid by assessee required to be refunded to him if such amount is not due – In the instant case neither there was demand of duty nor any finalization of

amounts required to be paid by assessee – In absence of any dues from assessee, findings of Appellate Commissioner legal and proper – No infirmity in impugned order – No merits in Revenue appeal


M/s Hinduja Foundries Vs CC, Chennai (Dated : October 12, 2011)

Customs – Adjudication – Impugned order passed by the Commissioner is like an advance ruling – Customs Act, 1962 separately provides for an authority for advance ruling and the Commissioner is not one such authority – Impugned order is set aside – Requests if any made by the importer may be dealt with by the appropriate adjudicating authority in accordance with law.


M/s Divine Shipping Services Vs CC, Jamnagar (Dated : October 11, 2011)

Customs - Stay - CHA license suspended for violation of Regulation 20(2) of CHALR for not obtaining authorization - Action initiated three years later and that too not based on any investigation but on an initiative from the O/o Commissioner namely, Assistant Commissioner, STF - Formal authorisation not essential where the importer who has imported goods does not contradict the CHA and does not say he has not authorised CHA to act on his behalf - Prima facie appellant has made out a case that contravention of Regulation 13(a) is arguable and requires consideration in detail - No clear basis as to how Commissioner reached to a conclusion that CHA was not given any advise and thereby violated provisions of CHALR - In the absence of any evidence to show that CHA had not been advised, contravention of Regulation 13(b) prima facie not sustainable - KYC norms prescribed by Regulation 13(o) introduced only w.e.f. 2010 and view adopted by Commissioner that this is applicable for past period also prima facie not correct - Impugned order suspending CHA license stayed in the interest of justice since issue leads to civil consequences as Revenue did not succeed in showing that immediate suspension was warranted or was in accordance with law or was justifiable prima facie on merits - Order of Tribunal issued without prejudice to the right of department to conduct inquiry and take action as deemed fit, in accordance with law - Customs House Agents Licensing Regulations, 2004


CC, Mumbai Vs Bridgestone India Pvt Ltd (Dated : October 18, 2011)

As per Joint Venture Agreement, Royalty and Licence Fee payments are liable to be made in respect of the goods manufactured and sold in India and not in respect of the goods under importation - provisions of Rule 10(1)(c) of the Customs Valuation Rules, 2007 are not attracted - Revenue appeal dismissed: CESTAT [para 7.2, 7.3]



M/s Singh Overseas Vs CCE, Rohtak (Dated : June 3, 2011)

Customs - 100% EOU - Allegation that appellant, a 100% EOU, was not engaged in any manufacturing activity but diverting duty free imported goods to local market and exporting ready made garments procured from open market - Polyester fabrics imported duty free and lying in factory detained on this premise and duty demanded - Goods in r/o which duty was demanded found in appellants premises which leads to a conclusion that the said goods were not diverted to local market - No demand of duty can be confirmed on the ground that previous consignments were diverted to local market - Demand on this count i.e. diversion of previous consignments neither raised in SCN nor confirmed in the lower authority's order - No presumption can be made that the impugned consignment would also be diverted to local market - Impugned order confirming demand of duty, confiscation and penalty set aside - Notification No. 53/97-Cus dated 03.06.1997


M/s Grasim Industries Ltd Vs CC, Mumbai (Dated : November 11, 2011)

Import under notfn. 21/2002-Cus - if the imported goods have not been used for specified purposes, in view of rule 8 of Customs (Import of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 1996, jurisdictional AC/DC of Central Excise is empowered to issue notice u/s 28 for recovery of Customs duty - Commissioner of Customs is not competent authority to issue SCN - Prima facie case in favour - Waiver of pre -deposit ordered and Stay granted: CESTAT [para 5]



M/s Ashwin Vanaspati Indus Pvt Ltd Vs CC, Kandla (Dated : April 27, 2011)

Customs – Refund – Crude palm oil imported and warehoused, cleared subsequently by inadvertently paying higher duty on higher tariff value in ignorance of prevailing notification – When there is no lis between parties regarding assessment of value and duty, refund claim of excess duty allowable without challenging assessment – Delhi High Court judgment in Aman Medical Products Ltd 2009-TIOL-566-HC-DEL-CUS followed – Supreme Court judgments in Flock (India) Pvt. Ltd 2002-TIOL-208-SC-CX and Priya Blue Industries Ltd 2004-TIOL-78-SC-CUS distinguished – Section 15(1)(b) read with Section 27 of Customs Act, 1962


M/s Integrated Rubian Exports Ltd Vs CC, Visakhapatnam (Dated : August 1, 2011)

Customs – Appeal filed before Appellate Commissioner was dismissed for delay on the ground that it was filed after a lapse of five years - Commissioner (Appeals) has no power to condone delay beyond 30 days as prescribed in section 128(1) of Customs Act, 1962 – Section 128(1) of Customs Act, 1962


Hindustan National Glass Industries Ltd Vs CC, Mumbai (Dated : December 20, 2011)

There is no provision of law where the future CENVAT credit admissible can be taken into account while calculating the customs duty payable under Notification no. 94/96-Cus - deduction of CENVAT credit amount while sanctioning refund is not correct – Prima facie case – Stay granted: CESTAT [ para 5 ]



M/s Fresenius Kabi India Pvt Ltd Vs CC, Nhava Sheva (Dated : December 12, 2011)

If the appeal is filed beyond sixty days and within ninety days of the communication of the order-in-original, the appellant should be given an opportunity to explain the reason for the delay - since Commr(A) has the power to condone delay for one month, rejection of appeal on the ground of delay without hearing is violation of natural justice - matter remanded - Stay application disposed: CESTAT [para 4]


M/s Borax Manufacturers Association Of India Vs CC, Kolkata (Dated : September 23, 2011)

Customs – Import of Boric Acid – Consignments not allowed to be cleared on the ground that appellants were not eligible to import the same because boric acid for non-insecticidal use can be allowed only on the basis of an import permit issued by Central Insecticide Board and Registration Committee (CIB and RC), Ministry of Agriculture – Tribunal has no powers to go into the vires of a notification and whether a notification issuing authority had the power to issue such notification – A challenge to vires of notification could be made only before a High Court or Supreme Court – Even assuming that Tribunal had powers to consider the vires of the notification and a challenge could be made, it was opined that the notification did not suffer from any defects – For the purpose of importation of boric acid, if it is an insecticide it is classifiable under Customs Tariff heading 38 and if it is not an insecticide it is classifiable under Chapter 28 – Insecticide Act does not bar restrictions being imposed on import of goods which are not covered by the Insecticide Act and in the instant case, since the goods were imported for non-insecticidal use, requirement of permit and registration flow from the FTDR Act and the notification issued thereunder – No

merit in the submissions that the impugned notification is contrary to the provisions of Insecticide Act – Appellants having failed to produce the import permit either at the time of import or subsequently the order of confiscation passed by lower authority cannot be faulted for confiscation and levy of penalty – Since the goods were absolutely confiscated and the total value of goods is less than One Crore Rupees, penalty reduced to Rs. 10 lakhs – Section 38 of Insecticide Act read with Foreign Trade Development and Regulation Act, 1992



M/s Mini Max Overseas Vs CC, Cochin (Dated : August 10, 2011)

Customs – Valuation of Sony brand TVs imported into India by mis-declaring country of origin as China – Department adopted import prices of Sony brand TVs emanating from Malaysia/Thailand pursuant to investigation which established country of origin as Malaysia/Thailand – When country of origin is established as Malaysia/Thailand, charge of mis -declaration stands established – Enhancement of values by department cannot be faulted – Redemption fine and penalty imposed by Commissioner (Appeals) not excessive


M/s Kanak Metal Industries Vs CC, Jodhpur (Dated : August 12, 2011)

Customs – Export of stainless steel utensils under claim for DEPB benefit – Benefits disallowed and exporter penalized for mis -declaration of ‘Present Market Value' and FOB value – DGFT PN No. 10/97 dated 21.05.1997 provides that amount of credit entitlement rate in r/o export products whose DEPB rate is 15% or more, shall not exceed 50% of the PMV of such goods – CBEC Circular No. 69/97-Cus dated 08.12.1997 clarifies that amount of credit has to be restricted with reference to domestic price of the product and not with reference to FOB price declared on GR Form/Shipping Bill – SCN and O-I-O clearly highlight wrong understanding of phrases ‘present market value', FOB value and applicability of appropriate values for determining DEPB credit entitlement – When CBEC Circular 77/02-Cus dated 27.11.2002 offers no clarity on the point as to whether rate is to be applied on PMV or benefit has to be capped at 50% of PMV, Public Notice issued by DGFT prevails over CBEC Circular as regards affixation of PMV and credit entitlement – Entire case based on wrong understanding of facts and law especially the understanding that DEPB benefit to be restricted to 20% - Impugned order holding that FOB value of export goods should have been declared at the price of goods in local market has no legal basis, set aside – DGFT PN dated 10/97 dated 21.05.1997, CBEC Circulars 69/97-Cus dated 08.12.1997, 27/2000-Cus dated 05.04.2000, 77/2002-Cus dated 27.11.2002

Penalty – When adjudicating officer himself is confused with regard to understanding of expression 'present market value', exporter cannot be penalized – No case warranting confiscation of goods under s. 113(d) made out for justifying levy of penalty under s. 114(i) and (iii), confiscation, fine and penalty set aside – Sections 113 and 114 of Customs Act, 1962


M/s Girnar Impex Ltd Vs CC, Amritsar (Dated : June 3, 2011)

Customs - DEPB - Allegation of mis-declaration and over-invoicing of export goods for claiming higher benefits under DEPB scheme - Investigations revealed that goods actually exported were non alloy steel items based on recovery of parallel invoices from the briefcase of director of appellant-company - Incriminating evidences relied upon by lower authority to impose heavy penalties for fraudulently claiming DEPB benefits - No prima facie case for waiver of pre-deposit - Appellants engaged in direct fraud directed to deposit 25% of penalties - Suppliers of invoices who abetted in fraud by facilitating bogus invoices on commission basis were ordered to deposit Rs. 50 lakh each


M/s Hindustan Steel Industries Vs CCE, Kanpur (Dated : June 3, 2011)

Customs - Import of electric bicycles - Appellants claim for benefit of Notification No.21/02-Cus denied by lower authority on the ground that goods were in partially assembled condition and not in CKD condition - Goods alleged to have been imported at a port not notified and in contravention of Rule 126A of Central Motor Vehicle Rules which is a pre -condition as per import licensing note to Chapter 87 of ITC (HS) - Importer allowed to clear a sample of bicycle parts to ARAI, Pune for testing and obtaining certificate of compliance - Importer directed to transfer goods to a notified port at their cost by following procedure for transhipment from one port to another- Impugned order set aside and matter remanded to lower authority - No opinion expressed on eligibility of Notification No. 21/02-Cus - Notification No. 21/2002-Cus dated 01.03.2002 as amended


CC, New Delhi Vs M/s Semi Conductor Laboratory Deptt Of Space, Govt Of India (Dated : May 23, 2011)

Customs - Import - Refund - Remand Order - Finality of - The order of the Commissioner (Appeals) having achieved finality, the lower authorities are bound by it - It was not open to the original adjudicating authority to keep on rejecting the refund claims on the ground of non-challenge of assessment orders. (Para 10)


Shri Ram Chhordas Agarwal Vs CC, Lucknow (Dated :December 22, 2011)

Customs – Silver bullion, ornaments, cash and car carrying the same seized by customs officials – Appellant arrested and produced before magistrate before whom it was claimed that statements were recorded from him under duress – Appellant ultimately released on bail by Allahabad High Court – Immediately after release,

appellant retracted his confessional statement – SCN issued proposing confiscation of silver bullion, ornaments, cash and car confirmed by lower authorities but set aside by Tribunal on the ground that confessional statement was retracted and cannot be a basis for confiscation and penal proceedings – Revenue appeal to High Court resulted in remand back to Tribunal holding that burden to prove innocence was on the alleged smuggler and Tribunal's order was perverse and liable to be set aside – In terms of s. 123 (1) of Customs Act, 1962, where any goods to which this section applies are seized in the reasonable belief that the same are of smuggled origin, the burden of proving that they are not of smuggled origin shall be on the person from whose possession the same were seized – Since this section provides for presumption regarding smuggled nature of goods notified in this section seized from a person, this presumption is a rebuttable presumption and once the person produces some evidence indicating their legal import, the burden would shift to department – Once the appellant, immediately after his release on bail, produced evidence in support of legal origin of silver under seizure, the burden of proof shifts to the department and department did not produce any evidence to rebut appellants plea regarding legal origin of silver – Statement of seizing officer before magistrate lends credence to appellants allegation that he had been illegally detained and in view of judgment of Supreme Court in Vinod Solanki vs. Union of India - 2009-TIOL-01-SC-FEMA , the correctness of his confession would become doubtful, as the same would be hit by section 24 of Indian Evidence Act, 1872 – Merely on the basis of a confessional statement (which is of doubtful nature) confiscation of silver bullion, cash, car etc not sustainable – Impugned order set aside


CCE , Rohtak Vs M/s Sai Sales Corporation (Dated : November 21, 2011)

Customs Valuation – Rejection of Transaction value : during the period of dispute i.e. during the period prior to 10.10.07, as per the pro visions of Section 14 of Customs Act, 1962 read with Customs Valuation Rules, 1988, as the same stood during that period, for rejecting the declared transaction value, either concrete evidence to prove that the conditions as provided in Rule 4(2) of Valuation Rules are not satisfied or as per the provision of Rule 10 A material evidence to doubt the declared transaction value must be produced and only in such a situation, the burden to prove the correctness of the declared transaction value will shift to the importer and if he is not able to discharge the burden of proof, the preponderance of probability in support of allegation of the transaction value not being true and correct will be treated as having been established. Mere difference between the declared transaction value and price of contemporaneous imports of similar/identical goods is not sufficient for rejecting the declared transaction value-for rejecting the declared transaction value, it must be proved with cogent evidence that the difference is due to the conditions of Rule 4(2) not being satisfied or due to existence of reasons for doubting the declared value which would justify invoking Rule 10A . [ par 6.2]


M/s Kerala State Electricity Board Vs CC, Cochin (Dated : August 5, 2011)

Customs – Import of special tools by KSEB – Refund claim of excess duty paid against short shipment of goods filed within one year in terms of section 27(1)(a) of Customs Act, 1962 – Claim rejected on the ground that KSEB is not Government but merely a Government undertaking and limitation of six months applies - When government has notified KSEB as state transmission utility under Electricity Act, 2003 and granted

transmission license, such utility cannot be regarded as government, limitation of six months applies - No merit in appeal - Section 27(1)(a) of Customs Act, 1962 read with Electricity Act, 2003 and Electricity Supply Act, 1948


M/s A G International Vs CC, Allahabad (Dated : September 19, 2011)

Customs – Smuggled Goods – Onus to prove heavily on revenue : The onus to prove that the goods in question are of smuggled goods, lies heavily on the revenue as though the fabrics made wholly or mainly of synthetic yarn and covered by Section 123 of Customs Act, 1962, in absence of any foreign marking on the goods or any other evidence indicating that the goods of smuggled origin, there is no basis for exercising reasonable belief that the same are goods smuggled and therefore the provisions of Section 123 can not be invoked. The said onus is required to be discharged by adducing positive and concrete evidence and not on the basis of doubts, assumptions and presumptions. In the present case, there is nothing to prove that fabrics in question are of foreign origin just because the appellant in their sale invoice were mentioning the goods as imported velvet, the same cannot be treated as of foreign origin. No reasons to confiscate the fabrics or to impose penalty on the appellants.


CC, Kandla Vs M/s Adani Exports Ltd (Dated : November 29, 2011)

Customs - Import of Cotton Seed Oil (Edible grade) by claiming benefit of duty exemption under Notification No. 20/99-Cus - Bills of Entry which were provisionally assessed were stamped as finally assessed on 25.05.2001 - In such a scenario, claim of Revenue that rate of duty and total amount was yet to be changed on the basis of test results, under the impression that late charge has already been given and confirmed, amounts to misreading provisions of Customs Act, 1962 - Assessment of Bill of Entry is an appealable decision under provisions of Customs Act, 1962 - If Bills of Entry were indicated as finally assessed and there being no change in rate of duty as well as amount of duty, there cannot be any presumption that Bills of Entry were provisionally assessed and remained to be provisionally assessed - No legal infirmity in order of Commissioner (Appeals) setting aside order of lower authority - Revenue appeal devoid of merits - Section 18 of Customs Act, 1962



M/s Metal Plast Exim (India) Ltd Vs CC, Kandla (Dated : December 15, 2011)

Customs – Refund of fine consequent to the favourable order of the Tribunal – Claim for interest rejected by revenue on the ground that the refund is not covered under Section 27 of the Customs Act, 1962 and by relying on the order of Tribunal in case of

Calcutta Iron & Steel Company vs. CCE Chennai - In view of the fact that the decision of the High Court of Himachal Pradesh and of the Tribunal allowing interest were not cited before the Tribunal while contesting the issue in Calcutta Iron & Steel Company case and the order was passed without noting these contrary decisions or distinguishing the facts, the ratio of the same cannot be followed – Appellant is entitled for interest.


M/s Virchow Laboratories Ltd Vs CCE & CC, Hyderabad (Dated : August 17, 2011)

Customs – Refund – Refund of excess anti-dumping duty paid granted pursuant to Tribunal's Final order with interest – Refund claim filed for interest on delayed payment of interest – Interest on delayed payment of interest not permissible as held by CESTAT Larger Bench decision in Sun Pharmaceuticals Industries Ltd - 2005-TIOL-558-CESTAT-DEL-LB – LB decision equally applicable to Customs Act and/or rules made thereunder – Section 27A of Customs Act, 1962


M/s Bengal Export Corpn Vs CC, Kolkata (Dated : September 13, 2011)

Customs - Classification - Importer declared consignment as heavy melting scrap falling under CSH 7204 whereas on examination it was found to be old and used pipes classifiable under CSH 7304 - Goods confiscated and allowed for redemption on payment of fine and penalty on the ground that old and used pipes imported without valid license under FTP - Contention of importer that CSH 7304 covers only new pipes and not old pipes not acceptable - Once appellant-importer accepted the classification at original adjudication stage, appellant cannot change stand subsequently since department would not be in a position to conduct any investigation or verification at that stage - Impugned goods are not covered by Para 2.17 of Foreign Trade Policy, which allows free import of goods since this paragraph does not cover goods under CTH 7304 - As it is a question of interpretation as to whether used and old pipes can be considered as heavy melting scrap or not and appellant has gone by the description in the invoice of supplier, charge of mis -declaration not sustainable - Confiscation upheld, redemption fine reduced to Rs. 35,000/- and penalty reduced to Rs. 10,000/- - Para 2.17 of EXIM Policy read with section 111(d) of Customs Act, 1962


Smt Salma Shakil Vs CC (Preventive), Lucknow (Dated : September 29, 2011)

Customs - CHA Licence - Licence rejected on the ground that the applicant is only a graduate and does not have a professional degree as mentioned under Regulation 6(a) of the CHALR 2004 - Since the applicant had passed the examination under CHALR 1984, cla rification given by the CBEC vide Circular No 25/2011 Cus would apply - If the appellant have passed the examination in the additional subjects, she

will be deemed to have passed the examination under Regulation 8 of CHALR-04 - The Commissioner's other objection that an applicant who had passed examination from one Custom House cannot be considered for the grant of CHA licence from another Customs House is without any basis - The matter is remanded for denovo decision.

2012-TIOL-97-CESTAT-DEL

M/s Amarnath Jhujnjhuwala Vs CCE, Amritsar (Dated : October 21, 2011)

Customs - Import of Raw Silk from China and eligibility of Notification No. 38/96-Cus - Goods confiscated subject to payment of redemption fine and penalty on the ground that benefit of said notification available only to local persons residing along the border - Ratio of CESTAT judgment in Krishna Singh Garbyal case followed 2011-TIOL-1454-CESTAT-DEL - Commissioner referred to and relied upon the same MOU between India and China, Circulars and Clarifications issued from various field formations - CESTAT in Krishna Singh Garbyal case ibid held that MOU, Circulars/Clarifications cannot lay down restrictions contrary to normal wordings of Notification - Wordings in the notification nowhere puts any restriction to import of raw silk through the impugned route - Benefit of Notification not deniable - Impugned orders set aside - Notification No.38/96 Cus dated 23.7.1996


CC, New Delhi Vs M/s Bharat Hotels Ltd (Dated : September 21, 2011)

Customs - Penalty - Import of smart card (part of door lock) by declaration of lower assessable value based on wrong value mentioned in commercial invoice - Supplier apologized for mistake and affirmed correct value of consignment - As there was no malafide on the part of importer, penalty imposed under section 112(ii) of Customs Act, 1962 set aside by Appellate Commissioner - Though question of mens rea not relevant for levy of penalty under section 112, it is relevant for quantum of penalty - A token penalty would serve inte rest of justice, penalty enhanced from NIL to Rs. 1000/- Appeal of Revenue disposed of - Section 112 of Customs Act, 1962


M/s Bentley Systems India Pvt Ltd Vs CC, New Delhi (Dated : April 20, 2011)

Customs – Valuation – Import of computer software by importer where importer is a related person to foreign supplier – Based on directions of department, appellant paid duty on the basis of transfer price agreed between foreign supplier and appellant after making a deposit of 1% of AV based on transaction price from May 2006 to January 2007 and a deposit of 5% thereafter – No evidence produced by department regarding price for sale at the same commercial level and same quantity level – No merit in Revenue's argument that goods imported by a distributor should be assessed on the basis of list price for retail sale – Rules 2(2), 3(3), 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007

Customs – Valuation – Whether any addition has to be made on account of Corporate service charges being paid by importer to parent company-supplier located abroad – Once Transfer Price Agreement for products or services is not objected to by Income Tax Department a case that the value of goods has been transferred to service has to be proved with more meaningful evidence rather than a comparison with list price for sale to retail buyers especially when evidence exists for discounts given even to retail buyers – No case made out by Revenue that CSC payment is disproportionate to any reasonable estimate of cost of such services – Order of lower authorities set aside – This order shall not be a bar for making out a proper case against importer on the basis of demonstrable evidence that the price of imported goods has been transferred to services – Rules 2(2), 3(3), 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007

Service tax on corporate service charges – Services availed by importer from its holding company, for which CSC is paid, are likely to be chargeable to service tax under section 66A of Finance Act, 1994 and it is open to the Customs authorities to notify the service tax authorities concerned for taking action as permitted under law for recovery of service tax if not already paid


M/s Bentley Systems India Pvt Ltd Vs CC, New Delhi (Dated : April 20, 2011)

Customs – Valuation – Import of compute r software by importer where importer is a related person to foreign supplier – Based on directions of department, appellant paid duty on the basis of transfer price agreed between foreign supplier and appellant after making a deposit of 1% of AV based on transaction price from May 2006 to January 2007 and a deposit of 5% thereafter – No evidence produced by department regarding price for sale at the same commercial level and same quantity level – No merit in Revenue's argument that goods imported by a distributor should be assessed on the basis of list price for retail sale – Rules 2(2), 3(3), 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007

Customs – Valuation – Whether any addition has to be made on account of Corporate service charges being paid by importer to parent company-supplier located abroad – Once Transfer Price Agreement for products or services is not objected to by Income Tax Department a case that the value of goods has been transferred to service has to be proved with more meaningful evidence rather than a comparison with list price for sale to retail buyers especially when evidence exists for discounts given even to retail buyers – No case made out by Revenue that CSC payment is disproportionate to any reasonable estimate of cost of such services – Order of lower authorities set aside – This order shall not be a bar for making out a proper case against importer on the basis of demonstrable evidence that the price of imported goods has been transferred to services – Rules 2(2), 3(3), 4(2) of Customs Valuation (Determination of Price of Imported Goods) Rules, 2007

Service tax on corporate service charges – Services availed by importer from its holding company, for which CSC is paid, are likely to be chargeable to service tax under section 66A of Finance Act, 1994 and it is open to the Customs authorities to notify the service tax authorities concerned for taking action as permitted under law for recovery of service tax if not already paid


M/s Khanna Paper Mills Ltd Vs CC, Amritsar (Dated : April 21, 2011)

Customs – Demand of duty, imposition of redemption fine and penalty based on allegation of mis -declaration of export goods and wrongly obtaining DEPB scrips from DGFT – Appellant exported writing and printing paper in rolls and reels claiming DEPB benefit against Entry 459B of DEPB Schedule – DEPB scrips issued to exporter by DGFT for duty free imports after exports were allowed after examination of goods by customs – Amendment in DEPB Schedule S. No. 459B made only with effect from 27.01.2006 and the same not applicable to exports prior to that date – Department has not made out a case that DEPB scrips were forged and not issued by DGFT – No dispute that clarification was sought by department from DGFT and DGFT clarified that exports made by appellants prior to 27.01.2006 were eligible for benefit of DEPB under S. No. 459B – When valid DEPB scrips were used for duty free imports, no reason for sustaining demand of duty, confiscation of goods and imposition of penalty – Impugned orders set aside – Sections 28, 111(o), 113(i), 114, 114A, 125 of Customs Act, 1962


M/s J S Designer Ltd Vs CC(ICD), New Delhi (Dated : December 8, 2011)

Customs – Export of fabrics under claim of DEPB – Value declared suspected by the revenue and export allowed after execution of bond with bank guarantee of Rs 2 crores – The appellant realized the export proceeds and the claim of DEBP was pending with the department - Directions of the adjudicating authority to further execute bank guarantee of 25% of the value of subsequent consignment is harsh and unjust - Taking into account the ove rall facts and circumstances of the case, earlier bank guarantee of Rs. 2 crores executed by the appellant should be considered as sufficient to cover the subsequent consignment also - There is no need to give further bank guarantee as directed by the Commissioner - The appellant is directed to furnish a bond for an amount equal to the value of goods and letter from the bank to the effect that the bank guarantee already executed will cover the dispute about the subsequent shipment also and the same would be kept alive.


CC, New Delhi Vs M/s Venus Traders (Dated : May 26, 2011)

Customs – Valuation – Enhancement of value of worn clothings based on contemporaneous imports – No error in the order of Commissioner (Appeals) holding that there cannot be any identical nature of the goods or similarity in the goods imported under two consignments when the goods are old and used clothings – Revenue's appeal rejected.


M/s B E Office Automation Products Pvt Ltd Vs CCE, Delhi (Dated : December 14, 2011)

Customs - Import of old and used parts of photocopiers - Parts of used photocopiers cannot be treated as capital goods for the purpose of para 2.17 of the import policy and import of same requires licence - Confiscation upheld - There is no justification for increasing the penalty to about 61% and 24% of the assessable value approved - Fine and penalty reduced to Rs.1,25,000/- and Rs.50,000/- respectively.


CC & CE,Tirupathi Vs M/s Lanco Industries Ltd (Dated : August 2, 2011)

Customs – Import of Low Ash Metallurgical Coke for manufacture of Pig Iron claiming benefit of exemption from anti-dumping duty and benefit of concessional rate of duty under Notification No. 17/2007-Cus – Concessional rate available subject to following procedure under IGCRDMEG Rules, 1996 – Investigations disclosed that 8184 MTs not fed into blast furnace for manufacture of Pig Iron resulting in demand of differential duty by denial of duty exemptions – Original authority allowed operating losses in r/o LAM Coke and losses upto 7% in r/o coke fines while demanding duty in excess of 7% loss – Order of original authority upheld by lower appellate authority resulting in Revenue appeal – Words "for use" used in the relevant notification to be construed to mean "intended for use" as held by Apex Court in BPL Display Devices Ltd (2004-TIOL-121-SC-CUS) – Benefit of Notification deniable to importer only where they divert any part of imported goods – Findings of original authority to the effect that 8184 MTs of LAM Coke was imported for intended purpose of manufacturing Pig Iron and which was upheld by lower appellate authority conspicuously unchallenged by Revenue – Notification No. 17/2007-Cus read with IGCRDMEG Rules, 1996


M/s John Deere Equipment Pvt Ltd Vs CC, Goa (Dated : October 3, 2011)

Notification 52/2003-Cus – assessee, a 100% EOU - in respect of re -import, appellant filed BE for clearance of returnable racks to be used as packing material for export of tractors – though at the time of re -importation, the said goods were not specified in the Letter of Intent issued by Development Commissioner, the same were incorporated by an addendum – in terms of para 2.26 of the EXIM Policy the appellant was rightly entitled for duty exemption - Merely because the appellant did not have the exemption certificate when the BE was filed, duty exemption could not have been denied to the appellant when the certificate was produced later – appeal allowed with consequential relief: CESTAT.

EOU is a custom bonded warehouse where goods are to be deposited and used without /payment of customs duty - Since returnable racks are used for the packaging of tractors which are exported, the movement of the goods from the port of import to 100% EOU is in fact movement under bond wherein duty payment is not required - Therefore, denial of customs duty exemption to the appellant on the said returnable rack under Notification No. 52/2003-cus dated 31.3.2003 is totally incorrect.


M/s Kamal Sehgal Vs CC, New Delhi (Dated : September 14, 2011)

Customs - Import - Smuggling - CHALR, 2004 - Suspension of CHA License - License of CHA has been suspended as he has been helping behind the scene in smuggling and such persons cannot be trusted to be a Customs House Agent.

HELD - Suspension is normally done to ensure that the CHA does not misuse his position, having access to Customs area to destroy evidence if any, and also to be on guard about his actual involvement that may be unearthed during investigation. As a show cause notice has been issued for revocation of license, the said reasons no longer exist. There is delay in complying with time frame prescribed by CBEC in Circular No.9/2010 dated 8.4.2010. Considerable time has lapsed after the suspension order. Also, there is no procedure prescribed for periodic review of suspension order which is confirmed after post decisional hearing. Considering all these aspects, the impugned order suspending the license of the CHA is set aside. (Para 8)


CCE, Mumbai Vs Adlab Films Ltd (Dated : September 27, 2011)

ROM application filed by Revenue alleges grievous error – applicant has misconceived the facts inasmuch as in para 2 submissions made by appellant are recorded and findings of the Bench have been recorded in para 4 which have not been gone through – ROM dismissed. [para 3]


Murli Industries Ltd Vs CC, Nagpur (Dated : October 20, 2011)

Imported waste paper – applicant manufactured news print out of waste paper and the off-cut side edges were sold and used other than as “Newsprint” - Whether entitled for benefit of notification 21/2002-Cus – since in case of Ellora Paper Mills Ltd. vs. CCE - 2010-TIOL-379-CESTAT -MUM Bench has granted unconditional waiver of pre -deposit, same followed in the present case also – Application allowed. [para 5]


M/s Satkar Enterprises Vs CCE, Ludhiana (Dated : June 1, 2011)

Customs - Import - Service of Order-in-Original - Date of receipt - Limitation in filing appeal - The order-in-original is dispatched by speed post and also pasted on the front door of the factory, when the factory itself was admittedly closed since the last three years. The residential address of the director was available with the Revenue. In fact the letter for recovery was sent to the assessee's residential premises. In such a scenario, when the factory was found to be closed, the impugned order could have been served to the assessee's director at their residential premises. Hence, without going into the actual date of receipt of the order-in-original the delay in filing appeal is

condoned. (Para 3 & 4)

Personal Hearing - Non-receipt of notice for personal hearing - Non-submission of reply - Undisputed fact on record is that the impugned order stands passed by the Commissioner without there being any defence reply on record. Further though the Commissioner has fixed a number of personal hearing dates and has made efforts to serve the said notices to the appellant but the fact remains that no hearing notice was received by the assessee and as such the impugned order stands passed without hearing the appellant in person. In the intere st of justice the matter is remanded to Commissioner for fresh decision. (Para 8)


CC, Cochin Vs M/s Sagar Enterprises (Dated : August 12, 2011)

Customs - Import of used photocopies without license under FTP - Original authority enhanced values based on CE certificate and imposed redemption fine and penalty - Duty paid on enhanced values without contest - Redemption fine and penalty reduced by Appellate Commissioner - No infirmity in order of Appellate Commissioner to reduce fine and penalty exercising his discretionary powers - In the facts and circumstances of case, reduction of fine and penalty not unreasonable or arbitrary - No valid reason adduced to interfere with order of Appellate Commissioner


M/s Panna Lal Banarasi Das Vs CCE, Jaipur (Dated : November 22, 2011)

Customs - Seizure of Gold: Burden of Proof : primary gold is one of the specified item in terms of the provisions of Section 123 of the Customs Act, 1962. As such, the onus to prove that the seized gold biscuits are legally imported biscuits is upon the person from whose possession the same are recovered or upon the person who claims the ownership of the same. {Para 11}

Smuggled Gold : conclusion as to whether the gold in question is smuggled or not has to be arrived at based upon the appreciation of the evidence available in each and every case. The appellants in the present case have been trying to cover the transaction with three sale vouchers. Having examined the authenticity and genuineness of the said three vouchers, the same cannot be held to be covering the transaction in question. As such, the adjudicating authority have rightly rejected the said evidence. Further, there being no other evidence produced, held that the appellants have not been able to discharge the onus placed upon them showing the legal importation of the gold in question. Consequently, it is held that gold biscuits in question are smuggled. { para 16}

Redemption : in the case of any imported goods (other than gold) seized for the reason that the goods are not covered by proper import licence, option to redeem the confiscated goods on payment of a redemption fine is normally given except in cases where the goods may cause injury to society at large, may interfere with the public policy, may cause threat to security of the nation, etc. The nature of the prohibition and the nature of the goods have to be taken into account while exercising such discretion. There can be no such reason for absolute confiscation of gold after liberalised policy for its import has came into force since 1991. It is also to be noted that in this case the seizure is not at the point of import, where there is higher onus

on the importer to give proper declaration and to comply with import restrictions and to pay applicable duties. {Para 20}


CC, New Delhi Vs M/s Chandra Prabhu International Ltd (Dated : June 3, 2011)

Customs – Refund of Anti-dumping duty paid under protest – Revenue seeks to reject the refund on the ground that the assessed bill of entry was not challenged by the importer – Held: No infirmity in the order of the Commissioner (Appeals) holding that the provisions of Customs Act do not apply to the refund of anti-dumping duty - Merely because the original adjudicating authority has not dealt with the applicability of Customs Act, it cannot be said that the same was not the issue to be decided - The Commissioner (Appeals) has come to a clear finding that the provisions of the Customs Act do not apply to the refund of the anti-dumping duty - By paying duty under protest, the respondents have put their seal of disapproval to the fact of payment of duty – Revenue appeal has no merit - Section 9A(2) of the Customs Tariff Act, 1975


Hindustan Lever Limited Vs CC, Mumbai (Dated : October 7, 2011)

Once advance licences are issued as per the input/output norms by the competent licensing authority, the question of denial of customs duty exemption on goods imported under the advance licences cannot arise unless any of the conditions of exemption is violated: the licensing authority has not questioned the appellant with regard to the usage of various items in the manufacture of export products and have issued advance licences in accordance with the standard input/output norms prescribed in the policy. Once advance licences have been issued for a given quantity and for a given value, the Customs cannot deny benefit of Customs duty exemption in respect of such quantity and value of import on extraneous grounds for which they have no jurisdiction to investigate. Therefore, so long as the terms and conditions of advance licences have not been violated by the appellant, the benefit of customs duty exemption under the aforesaid notifications cannot be denied or withheld.

Whether once the licensing authority certified that export obligation has been fulfilled whether such certification is final and binding on the Customs authorities ?: the licensing authority has accepted the fulfillment of export obligation and have issued export obligation discharge certificates and have discharged the appellants from any further obligation. That being the position, the Customs authorities cannot deny the benefit of Customs duty exemption under the notifications governing the advance licensing scheme. If at all they felt that the appellant had violated any of the terms and conditions of the licences, they should have referred the matter to the licensing authority for appropriate action rather than taking action suo motu.

Appellant's eligibility to import crude Palm Stearine under the advance licences and consequent eligibility for Customs duty exemption thereon : crude palm stearine did not satisfy the definition/criterion of 'material' which were permitted to be imported duty free both under the EXIM policy and the relevant customs notifications. The material imported should be capable of being used in the manufacture of the export product. Crude Palm Stearine did not also satisfy the criterion stipulated in the customs notification that "the materials are required for the manufacture of export

product". Therefore, Crude Palm Stearine was not eligible for customs duty exemption and therefore, the demand of customs duty on the said goods confirmed in the impugned order is sustainable in law.

Limitation - Bond : The question of time bar in this case will not arise for the reason that the duty demand is raised in terms of the bond and letter of undertaking executed by the importer appellant with the customs authoritie s. In terms of the said bond/LUT, there is an obligation on the part of the appellant to fulfill the terms and conditions of import, which we have already held that the appellant has not fulfilled. The bond/LUT executed with the customs has not been discharged and therefore, duty demand can be raised at any time before the bond is discharged. Since the duty demand is sustainable, the liability to pay interest thereon is automatic and consequential. Therefore, the appellant is liable to pay interest on the duty demand in terms of the bond/LUT executed by them at the appropriate rates. Since the appellant has failed to fulfill the terms and conditions of the relevant customs notification in respect of the end use specified therein, the quantity of crude palm stearine is liable to confiscation under the provisions of section 111 (o) of the Customs Act, 1962. Consequently, the appellant would be liable to penalty under section 112(a) of the Customs Act, 1962. Since the crude palm stearine was allowed to be cleared in terms of the bond executed with the customs, in lieu of confiscation, redemption fine under section 125 of the said Customs Act can also be imposed.

Customs authorities have no jurisdiction to decide the matter with regard to the eligibility of credit under the DEPB scheme: it is for the licensing authority to decide whether any particular export qualifies for the DEPB scheme or not. The Customs authorities, at best, can bring to the notice of the licensing authority the factual position and it is for the licensing authority to decide whether the export would qualify for the DEPB benefits or not. The Customs, on their own cannot decide upon the issue of eligibility to DEPB benefits of exports made by an exporter.

Customs authorities cannot demand import duty on the inputs imported duty free and which have been used in the manufacture of export product on which DEPB credit is claimed : When the scheme itself permits that the materials imported in excess of actual use can be used in the manufacture of other goods which may be sold in the domestic market by the manufacturer himself, there can not be any objection to the export of the manufactured product also. No doubt, there is a mis-declaration when the exports are made under claim for DEPB. In such cases, what is legally possible is to deny the DEPB credit on such exports and not denial of exemption under customs notifications relating to DEEC. Such action for denial of DEPB credit can be taken only by the DGFT authorities and the customs have no jurisdiction in that matter. For a violation in respect of exports made under DEPB scheme, action has to be taken under that scheme itself and it does not stand to reason that action can be taken under DEEC scheme when no violations have been committed with respect to that scheme.

Penalty on General Manager: Since the bulk of the duty demand on the appellant has been held to be not sustainable and in view of the fact that he did not stand to benefit personally in respect of the transactions involved, and also considering the fact penalty is imposed on the appellant firm, penalty on the General manager is not warranted in the facts and circumstances of the case.


2012-TIOL-52-CESTAT-AHM

M/s Gujarat Boron Derivatives Pvt Ltd Vs CC, Ahmedabad (Dated : October 10, 2011)

Customs Refund Denial of benefit under Notification No. 102/07-Cus for refund of SAD on the ground of unjust enrichment Board Circular No. 18/2010-Cus clarifies that field formations shall accept Chartered Accountant's Certificate for satisfying that there was no unjust enrichment Circular also clarifies that there is no requirement to scrutinize balance sheet and P & L A/c to ensure that there was no unjust enrichment Board Circular applies retrospectively from 2007 and not prospectively from current financial year as held by Appellate Commissioner In the instant case, since the certificate was produced by statutory auditor it cannot be said that they were unaware of records maintained by appellant CA Certificate clearly shows that importer has not collected SAD directly or indirectly, refund not deniable Notification No. 102/2007-Cus dated 14.09.2007


Cantronics Office Equipment Pvt Ltd Vs CC, Mumbai (Dated : November 17, 2011)

Barcode Printer imported for sale in Shopping Malls – Shopping Mall or Stockist cannot be regarded as Institutional Consumer – they are also not similar to service industry or akin to a transporter or hotel as defined under rule 2A of the SWAM Rules, 1977 – Retail sale price is required to be declared on package and Additional duty of Customs to be calculated based thereon: CESTAT [ para 6 ]



CC, Jamnagar Vs M/s Atlantic Shipping Corporation (Dated : September 20, 2011)

Customs – Refund arising out of finalization of assessment of ship's bunkers and tools whether attracts provisions of unjust enrichment – Bar of unjust enrichment not attracted for period prior to amendment of section 18 of Customs Act on 13.07.2006 – No infirmity in impugned order of Appellate Commissioner


M/s Reco Industries Vs CC, New Delhi (Dated : September 7, 2011)

Customs - Export - Drawback - Readymade garments found to be rags - Evidence on record and the statement of the Managing Director corroborate that the goods attempted to be exported are rags and the value thereof is less than the claim of drawback. Hence, denial of drawback upheld. However, redemption fine and penalty reduced. (Para 4)


M/s Marathon Traexim Ltd Vs CC, Visakhapatnam (Dated : June 30, 2011)

Customs – Import of betel nuts (areca nuts) from Bangladesh and eligibility of exemption @ 60% of applied rate of duty under Notification No. 105/99-Cus – Department applied exemption @ 50% of applied rate holding ‘areca nuts' as covered under Part A of said Notification while rejecting importers claim that impugned goods are covered under both Part A and Part B thereof – When impugned goods are covered by two exemptions, assessee entitled to benefit of that exemption which provides greater relief – Apex Court judgment in India Petrochemicals = 2002-TIOL-662-SC-CX followed – Impugned order held unsustainable, set aside – Customs Exemption Notification No. 105/99-Cus dated 10.08.99 as amended by Notification No. 13/03-Cus dated 20.01.03


M/s IDBI Bank Ltd Vs CC, New Delhi (Dated : June 3, 2011)

Customs – Penalty under Section 114 of the Customs Act, 1962 imposed on Bank and the employee of the Bank for carelessness in accepting the currency declaration form (CDF), in connection with the case of claiming export benefits fraudulently using fake CDFs – The finding against the employee is one of carelessness and failure to perform his duties - These might constitute facts to institute departmenta l proceedings against him, but these facts are not adequate to constitute an offence under section 114 of the Customs Act – Penalties on Bank and the employee set aside.


M/s Baheti Metals & Ferro Alloys Ltd Vs CC, Kandla (Dated : September 16, 2011)

Customs – Stay/Modification of order of pre -deposit – Tribunal has inherent powers to modify stay orders under Rule 41 of CESTAT (Procedure) Rules, 1982 – Order of Bombay High Court in Sarla Performance Fibers Ltd 2008-TIOL-783-HC-MUM-CX and Judgment of Apex Court in Benara Valves Ltd = 2006-TIOL-156-SC-CX followed – Condition imposed in stay order modified – Pre-deposit waived and in lieu of this applicant directed to pledge his residential bungalow worth 6.28 crores – Appellant directed to submit all original documents relating to the property to be kept in custody of Assistant Registrar, CESTAT – Failure to comply with this order or if any document is proved to be wrong/illegal, appeal liable for dismissal itself – Stay order stands modified to this extent – Order not to be quoted as a precedent – Section 35F of Central Excise Act, 1944 read with Rule 41 of CESTAT (Procedure) Rules, 1982



M/s Keshodwala Steels Vs CC, Ahmedabad (Dated : October 4, 2011)

Customs - Export/Import - Ship with the consignment of goods meant for export grounded near Veraval port and got damaged - Appellant purchased the cargo from Insurance company and import duty was demanded from the appellant - Held: The appellant has not produced any proof to substantiate their claim that the ship had not crossed Indian territorial waters - It is also not in dispute that the original exporter had been given all the export benefits under DEEC scheme which establishes that the export had taken place in which case, the clearance of the goods from customs at the time of re-import have to be considered as import of the goods - Demand of duty upheld.

Valuation - Since there is no challenge by revenue against the order of Commissioner (Appeals) holding that the value at which the goods were sold to the appellant by the Insurance Company has to be treated as assessable value, duty has to be re-quantified accordingly.

Date post:	25-Mar-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times