SRIBA AGRO LTD Vs CCE & ST: HYDERABAD CESTAT (Dated: September 28, 2016)

2017-TIOL-271-CESTAT-DEL

JAPAN AIRLINES INTERNATIONAL COMPANY LTD Vs CST: DELHI CESTAT (Dated: January 13, 2017)

Cus - Whether on the facts the CESTAT was justified in holding that Serial No.26 of notification No.42/96-Cus dated July 23, 1996, 21/2002-Cus is applicable only to the water treatment plant and cannot be applied to the ductile pipes.

Held: In the case of Pratibha Industries Ltd., the Supreme Court has on 27th April, 2015 while dismissing the appeal of the assessee held that the Tribunal - 2004-TIOL-946-CESTAT-MUM has rightly come to the conclusion that the appellant shall not be covered by the Notification No.21/2002-Cus., which grants complete exemption from payment of basic excise duty and additional duty falling under Heading 9801 required for drinking water supply project for supply of water for human and animal consumption - In the light of the authoritative pronouncement by the Supreme Court of India and dealing with an identical controversy, the substantial question of law cannot be answered in favour of the assessee - Appeal dismissed: High Court [para 5, 7]

Appeal dismissed

Customs - Cross examination - The appellant was intercepted on arrival at Chennai; and gold jewellery alleged to be concealed was seized - The gold was confiscated in adjudication, along with penalty under section 112(a) of the Customs Act, 1962 - During the first stage appeal proceedings, he sought cross examination of witnesses, which was rejected along with the appeal - the appellant filed an appeal before the CESTAT and initiated a parallel proceedings by way of a writ petition - the writ petition was disposed, directing the CESTAT to dispose of the appeal after affording an opportunity to the appellant herein; however, the Tribunal dismissed the appeal on the ground of jurisdiction - the instant appeal is filed against the order passed in W.P.No.33285 of 2015.

Held: It is not in dispute that the order of Commissioner (Appeals) can be agitated only before the revisional authority, but, by misconception, the appellant had approached the CESTAT and now, the CESTAT also had dismissed the appeal on the ground of jurisdiction - Single Judge has erred in directing the appellant herein to approach the CESTAT when the jurisdiction lies only with the Joint Secretary, who is the revisional authority - However, since there is non-compliance of principles of natural justice and even no roving enquiry was held in the matter, it would be better if the appellant approaches the Joint Secretary by filing a revision, who shall consider the matter afresh, after affording opportunity to the appellant dispose of the case on merits and in accordance with law, within a period three months from the date of receipt of a copy of this judgment - It is open to the appellant to raise all his contentions before the revisional authority, who shall also consider the request of the appellant to cross-examine the witnesses - Accordingly, the direction of the learned Single Judge is modified [Para 6, 7].

Appeal disposed of

Customs - Confiscation, Redemption Fine & Penalty - For violation of the rules relating to Standards of Weights and Measures (Packaged Commodities) Rules, 1977, viz., non-declaration of MRP on the packaged goods confiscation and penalty was adjudicated - Commissioner (Appeals), held that since there was no mala fide intention on the part of the appellant/importer to evade duty; that there is no revenue loss to the Government, and relying upon the Boards circular No.19/2001, reduced RF and penalty - Revenue filed appeal before the Tribunal, which increased the RF & Penalty, culminating in the present appeal filed by the importer.

Held: By virtue of Section 11 (1) of the Act, power is vested with the Central Government, upon proper satisfaction, to prohibit any goods for import or export of any specified description, by way of a notification insofar as it relates to purposes specified in Section 11(2) - Section 125 provides for confiscation of goods and release of the same in lieu of payment of redemption fine and penalty subject to the satisfaction of the adjudicating authority - it is evident that any commodity, be it exported or imported, if it is not in compliance with any law or is in contravention of any law, could be prohibited, by notification, for being exported or imported - MRP is mandated to be displayed on all packaged commodities, be it manufactured in India or imported from outside India, as per the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 - in the instant case the MRP has not been displayed on the packaged carton; hence the adjudicating authority has exercised the power vested in him and had released the confiscated goods on payment of redemption fine and payment of penalty - goods worth more than Rs.37 lakhs had been confiscated, which had been released on payment of redemption fine - only the RSP had been declared based on which duty had been calculated and paid; therefore, over and above the RSP, the wholesaler, dealer and retailer would be taking profits and, therefore, naturally, the MRP would be over and above the RSP declared - Though the adjudicating authority had taken into consideration the value of the goods and the returns on the same and released the goods on payment of redemption fine and penalty, the Commissioner (Appeals), without proper application of mind, has reduced the penalty to a far lesser amount on the reasoning that there is no revenue loss to the Government - The display of MRP on the packaged carton is for the knowledge of the public, hence there is no question of revenue loss to the Government; therefore, the reasoning given by the Commissioner (Appeals) for reducing the redemption fine and penalty is not justifiable. [Para 9-14]

The Tribunal, after considering in detail the interest of the public at large as also the violation caused and to prevent public exploitation, while enhancing the RF and penalty, had also taken the interest of the importer and had fixed the quantum far lesser than the one ordered by the adjudicating authority - The said exercise, by no stretch of imagination, could be said to be done with haste and without reasoning, as the Tribunal had followed the rule of law in fixing the reasonable fine and penalty, which would be a deterrent for persons, who indulge in exploiting people - the order passed by the Tribunal is justifiable and no interference is called for; the Final Order No.41360/2015dated 30.9.2015 passed by the Tribunal is upheld. [Para 15, 16]

CMA dismissed

Central Excise - Refund - Respondent is a manufacturer of Polyester Staple Fibre, and Polyester Chips; they removed Polyester Staple Fibre to Khadhi and Village Industries Board (TN) and Khadhi and Village Industries Commission without payment of duty in terms of Notification No.191/85-CE dated 28.8.1985 - Since credit had been availed for the input [Polyester chips], the respondent reversed the total credit of Rs.3,48,526/- and later, filed a claim seeking refund of Rs.1,00,471/- since it was already reduced - the claim was rejected in adjudication as time barred under section 11-B of the Central Excise Act, 1944; the rejection was upheld by Commissioner (Appeals), and agitated before the Tribunal, who granted relief, against which the present appeal is filed by the Department.

Held: The duty has been refunded at the appellate stage; thus, the date of claim would have to partake to the original date and not from the subsequent date - the view that the claim is a time barred one is not correct and the refund has been correctly granted - the order of the Tribunal is confirmed, but on a different aspect; it is for the Department to refund the amount. [Para 5]

CMA dismissed

CE/CUS - Question is whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in holding that when the charge against the respondent, which is 100% EOU, of diversion of imports and the goods are not available for confiscation, the question of confiscation of such goods and redemption under Section 125 of the Customs Act, 1962 does not arise?

Held: On execution of such B-17 bond and the conditions mentioned in the bond, the respondent-Unit was permitted to warehouse the goods without payment of any duty - It is an admitted position that thereafter, the respondent-Unit clandestinely removed the goods and thereby committed breach of condition by diverting the goods illicitly into the open market and the raw materials which were procured by forgoing Customs duty have not been used for the purpose for which they were imported, and therefore, the goods were liable to be confiscated - Once the confiscation of such goods was authorized, Section 125 of the Customs Act shall be applicable - However, as the goods were not available for confiscation at the time of adjudication, as the same were already released on bond and/or permitted to be warehoused without payment of duty on furnishing the bond and undertaking, redemption of fine in lieu of confiscation was imposable - Matter is remanded to the Adjudicating Authority for imposition of redemption fine in lieu of confiscation with respect to the goods which were illicitly diverted into the open market, which were permitted to be imported and deposited in the warehouse without payment of duty - Tax appeal allowed: High Court [para 5.1, 5.2, 5.4, 7]

Appeal allowed

CX- Refund - Tribunal concluding that any amount deposited during the pendency of adjudication proceedings or investigation, the said amount would be in the nature of deposit under protest and, therefore, the principles of unjust enrichment would not apply; that presumption under Section 12-B is a rebuttable presumption and once the assessee produces evidence in support of his claim of having not passed on the incidence of duty whose refund is claimed, to the customers, the burden of proof would shift to the Department to prove that the claim of the assessee is false - no perversity shown in the aforesaid findings recorded by Tribunal - questions are already covered by various judgments - Even otherwise, basically they are questions of fact - appeal lacks merits, hence dismissed: High Court [para 4, 8, 10, 11]

Appeal dismissed

CX - CENVAT - Claim of assessee that Assessee that 'Welding Electrode' is specified under Head 8311.00 of CETA and used in repair and maintenance of 'Machines', therefore, would fall within the category of 'Capital Goods' was accepted by Tribunal allowing Assessee's appeal - Revenue appeal before High Court.

Held: 'Capital goods' as defined under Rule 2(b) of CCR, 2002 and 2(a) of CCR 2004, in substance, are pari materia with the 'capital goods' specified in Rule 57Q of Rules, 1944 and there is no substantial difference therein - It is admitted by the parties that the Heading of Chapter 8311 is not included specifically in the definition of 'capital goods' - similar question and submissions have already been considered by this Court in CE Appeal No. 135 of 2005 (M/s Upper Ganges Sugar & Industries Ltd. Vs. Commissioner Customs & Central Excise) decided on 25.2.2015 - 2015-TIOL-2984-HC-ALL-CX and wherein credit has been denied on Welding Electrodes - Tribunal order quashed and Revenue appeal allowed: High Court [para 8 to 10]

Appeal allowed