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CASE LAWS
2017-TIOL-412-HC-MAD-FEMA
CHERUVATHUR CHAKKUTY THAMPI Vs UoI: MADRAS HIGH COURT (Dated: January 24, 2017)
FEMA 1999 - Section 37 - Income Tax - Section 131 - Passport Act - Section 10 & Code of civil procedure - Section 102(1).
Keywords: Look out Circular - Habeas Corpus Petition - detention of passport - principles of natural justice & investigating agency
The petitioner, an NRI, is a promoter of various businesses in UAE. He had been investing money in India by purchasing agricultural lands. Revenue initiated investigation against him for having purchased agricultural lands in India in violation of FEMA. For this, a summon was issued to petitioner requiring him to appear for an enquiry. Petitioner also received series of summons from the respondents for his appearance in connection with the investigation both at Cochin and Delhi. Challenging the initiation of investigation against him, petitioner had filed writ petition before the Kerala HC and obtained interim stay. Ultimately, Kerala HC dismissed the writ petition filed by the petitioner. Thereafter, summon was issued to petitioner calling upon him to appear for an inquiry. According to petitioner, before he could appear on the relevant date, he landed at Chennai Airport on a private visit and on that date he was wrongfully detained in custody for one day on the basis of the alleged LOC, which according to petitioner, was issued without any prior notice to him. In such circumstances, petitioner filed Habeas Corpus Petition before HC and on the basis of an order passed by HC in the above said case, he was released from detention. On the same date, petitioner's passport was ordered to be impounded under the provisions of FEMA read with Income Tax Act. Later, a corrigendum was issued by the second respondent clarifying that the passport of the petitioner was impounded for 90 days. In the meantime, petitioner was directed to appear for inquiry which was postponed on being informed about the demise of petitioner's sister. On the next hearing date, HC permitted petitioner to appear before the concerned authority at New Delhi for an enquiry along with his lawyer. It was then brought to the notice of HC that on that day, the enquiry was adjourned. On both the dates of enquiry, petitioner appeared before the respondents.
On appeal, the High Court held that,
Whether fundamental right guaranteed to a petitioner under Article 21 of the Constitution of India can be curtailed merely by an investigating agency - NO: HC
Whether in case there is no notice issued to petitioner before issuing a Look Out Circular, it is to be considered that the same has been issued in violation of principles of natural justice - YES: HC
++ in so far as impounding of passport is concerned, SC in the case of Suresh Nanda vs. CBI, has held that police may not have power u/d 102 (1) of Code of Civil Procedure to seize a passport or to impound the same. It was further held that impounding of a passport can only be done by the Passport Authority u/s 10 (3) of the Passports Act, 1967. SC has also laid down a distinction and difference between seizing a document and impounding a passport by holding that a seizure is made at a particular moment when a person or authority takes into his possession some property which was earlier not in his possession. However, if after seizing of a property or document the said property or document is retained for some period of time, then such retention amounts to impounding of the property or document. In that case, SC held that the detention of passport by the CBI is held to be illegal and impounding and revoking the passport u/s 10 of the Passport Act is illegal. It was further held that as per Section 104 of Cr.P.C., a 'document' does not include a passport. In the present case, it is not the case of the respondents that they have taken necessary steps u/s 10 of the Passports Act to impound the passport Act and therefore, the mere detention of the passport of the petitioner at the airport without following the provisions contained under Section 10 of the Passport Act and issuing the look out circular without issuing prior notice are not legally sustainable;
Whether when necessary steps u/s 10 of the Passports Act have not been followed, mere detention of petitioner's passport at the airport is legally sustainable - NO: HC
++ after dismissal of writ petitions filed by petitioner before the Kerala HC, the respondents themselves wanted the petitioner to appear for inquiry only at Delhi on the ground that cumulatively, investigation can be done in Delhi. At any rate, it is contended that petitioner is cooperating with the enquiry. It is to be noted that the petitioner's passport, which has been impugned by the second respondent, is in the custody of authorities concerned for the past 30 days. In the meantime, petitioner has appeared before the authorities for inquiry on 15.01.2017 and 23.01.2017 and extended his cooperation for conducting the enquiry. Therefore, as per the decision rendered by the SC as well as the Division Bench judgment of the Bombay High Court, impounding of petitioner's passport is not warranted. In this case, in the impugned notices, there is no reason has been mentioned for calling the petitioner an absconder. It is also to be noted that the impugned look out circular has been issued without any prior notice to the petitioner and without giving him a reasonable opportunity. It is also not the case of the respondents that they have taken necessary action as contemplated under Section 10 of the Passport Act, without doing so, the impugned orders are legally not sustainable. In the light of the above and as per the judgment of SC, this Court direct the respondents to return the passport to the petitioner forthwith after cancelling the Look Out Circular with stringent conditions. It is made clear that since the next inquiry is on 03.02.2017 the petitioner has to necessarily appear before the respondents without fail. In the result, the writ petitions are allowed and the orders, impounding the passport of the petitioners are quashed. No costs. Consequently, connected Miscellaneous Petitions are closed. The respondents are directed to forthwith handover the passport to the petitioner after withdrawing the look out circular notices issued against him subject to the conditions mentioned above.
Assessee's writ allowed
2017-TIOL-411-HC-MUM-CX
VIJAY SYNTHETIC PRINTS LTD Vs UoI: BOMBAY HIGH COURT (Dated: Februay 20, 2017)
CX - Petitioners challenge the demand for interest u/s 11AA of CEA, 1944 – Petitioners state that after receipt of the letter dated 16th October 1995, the petitioners had paid the additional duty of excise amounting to Rs.2,31,06,902/- - Petitioner submits that Section 11AA of the Central Excise Act, 1944 had no application; that petitioner had already paid the sums and once that is paid, the amount is also appropriated by the Government and the only sum directed to be paid was a penalty, then, there is no question of interest being levied thereon.
Held: Section 11AA could have been invoked only when the sum determined under Subsection (2) of Section 11A has not been paid within three months from the date of the determination - Once this is not the case, then, interest as claimed and by taking recourse to the above provision, was not recoverable - As per the general law and prevailing then, the proceedings for recovery of interest for wrongful withholding of the sum is independent of the action under the Central Excise Act, 1944 - There is no provision in the Central Excise Act, 1944 and then prevailing, enabling recovery of such interest - For all these reasons, the demand for interest in terms of the Central Excise Act, 1944 was not tenable - All coercive measures to recover the amount were improper in law - Writ Petition succeeds - Amount of interest which is deposited in this Court with accrued interest shall be paid over to the petitioners after a period of four weeks from the date of receipt of a copy of this order: High Court [para 10, 11]
Petition allowed
2017-TIOL-410-HC-MAD-ST
NAVIN HOUSING PROPERTIES PVT LTD Vs CST: MADRAS HIGH COURT (Dated: February 09, 2017)
ST - By virtue of order dated 21.12.2016 passed by the Supdt. of CE (Service Tax-Appeals II), the petitioner's appeal against the order-in-original dated 14.10.2016, has been returned upon purported failure to comply with the requirements of pre-deposit of service tax and penalty - Petitioner is before High Court and submits that prior to the show cause notice dated 09.02.2012, which was the subject matter of the order-in-original dated 14.10.2016, an earlier show cause notice dated 12.10.2011, was issued and which upon adjudication a sum of Rs.99,94,773/-, which had been paid by the petitioner, was appropriated; that the said SCN dated 12.10.2011 covered the period December, 2008 to January, 2010 and the SCN dated 09.02.2012 which was adjudicated by o-in-o dated 14.10.2016 pertained to the period spanning between April, 2008 and March, 2010 and under which demand amounting to Rs.29,16,716/- qua service tax was confirmed; that the payment pursuant to the show cause notice dated 12.10.2011, would cover the demand raised qua the subsequent show cause notice dated 09.02.2012, as well; that that the requirement of pre-deposit of 7.5% of the service tax stands fully covered and that these aspects were brought to the attention of the authority concerned but were not adverted to.
Held: There appears to be, prima facie, some merit in the assertions made by the counsel for the petitioner - Unfortunately, the authority while passing the impugned order has not adverted to any of the assertions made by the petitioner and is silent on the aspects adverted to in the representation dated 16.12.2016 - In these circumstances, the impugned order is set aside and concerned authority will hear the authorised representative of the petitioner and pass a fresh order within two weeks - Petition disposed of: High Court [para 9, 9.1, 10]
Petition disposed of
2017-TIOL-409-HC-MUM-CX
CCE Vs IVP LTD: BOMBAY HIGH COURT (Dated: February 20, 2017)
CX - CENVAT - Common inputs - Rule 6 of CCR, 2004 - Finance Act, 2010 - Respondent-assessee, even if it had failed to maintain a separate account, in view of the retrospective amendment, it was entitled to reverse proportionate Cenvat Credit - The option of paying an amount equal to 10% sale value of exempted goods, therefore, could not have been enforced on the assessee - Revenue appeal dismissed: High Court [para 5]
Appeal dismissed
2017-TIOL-408-HC-ALL-CX
CCE Vs LAXMI OIL AND VANASPATI PVT LTD: ALLAHABAD HIGH COURT (Dated: February 10, 2017)
CX - Where the Committee has taken a decision not to file an appeal and the matter has attained finality, then after a lapse of one and half years, the same matter should not be reopened - Tribunal was justified in the facts and circumstances of the case of rejecting the delay condonation application - delay is to be condoned only in exceptional circumstances and no exceptional circumstances were there in the present case to condone the delay - no merit in Revenue appeal, hence dismissed: High Court [para 4, 5]
Appeal dismissed
2017-TIOL-407-HC-DEL-CUS
LAVA INTERNATIONAL LTD Vs UoI: DELHI HIGH COURT (Dated: February 20, 2017)
Cus - Petitioner sought refund of excess amount of Customs Duty (CVD) paid - Petitioner's refund application to be processed after consideration of all materials submitted and excess amount to be remitted with interest: HC
Appeal Allowed
2017-TIOL-406-HC-KAR-CX
CCE Vs DATASOL INNOVATIVE LABS: KARNATAKA HIGH COURT (Dated: February 8, 2017)
CX - Limitation - Assessee manufactures parts of aircraft for HAL and claimed exemption from duty vide Notfn 184/1986 and subsequent Circular - Limitation period of 1 year or 5 years depends upon facts of case and Tribunal is the ultimate fact finding authority - HC must limit itself to question of law unless there is gross error in facts recorded by Tribunal - There was no intention to nullify the Circular relied on by assessee to claim exemption- Thus, findings of Tribunal neither perverse nor erroneous - Duty demand set aside as it is barred by limitation: HC
Revenue's appeal dismissed
2017-TIOL-405-HC-MAD-SERVICE
ALL INDIA ASSOCIATION OF CENTRAL EXCISE GAZETTED EXECUTIVE OFFICER ASSOCIATION Vs P BHARATHAN: MADRAS HIGH COURT (Dated: December 23, 2016)
Service Matter - Both these Writ Petitions are directed against the interim order in OA No.1237/2016 dated 05.8.2016, passed by the Central Administrative Tribunal, wherein the cited Original Application was admitted, directing the official respondents to postpone the holding of DPC for considering the personnel in the feeder post to the post of Assistant Commissioner of Central Excise based on the existing seniority list of Direct Recruit Inspectors till 06.09.2016.
Held: Tribunal ought to have decided the Original Application itself having chosen to grant interim order virtually stalling the entire process of promotion to the cadre of Assistant Commissioner of Central Excise; and ought to have also modified the interim order suitably in the event of adjournments being granted in order to protect the interest of the administration - It is not appropriate for the Tribunal in allowing the matters adjourned for indefinite period and at the same time, continuing the interim order which, in fact, would not any way advance the cause of administration - In any event, any action taken by the Department pending proceedings either before the Tribunal or before this Court is always subject to the final outcome of the pending proceedings - the interim order passed by the learned Tribunal in O.A.No.1237 of 2016 dated 5.8.2016 and continuation of the same, is suspended pending disposal of the Original Application - in the interest of administration, it is appropriate that the Original Application is directed to be disposed of by the Tribunal as expeditiously as possible, protecting the rights of the parties concerned; in accordance with law, by affording opportunity to all the parties concerned, within a period of four weeks from the date of receipt of a copy of this order - It is made clear that any action to be taken consequent to this order, is always subject to the final outcome of the main Original Application, pending before the Tribunal [Para 9-11]
WP disposed of
2017-TIOL-404-HC-MUM-CX
PREMIER LTD Vs UoI: BOMBAY HIGH COURT (Dated: February 13, 2017)
CX - Petitioners seek a declaration that the proceedings pursuant to a Show Cause-cum-Demand Notice dated 22.07.1991 issued to them, be declared as non est and the Notice itself be quashed and set aside for it refuses to bind the petitioners after such an unexplained and enormous delay. Held: Revenue must understand that just as it is anxious to recover public money, the assessee is equally keen to face the consequences of legal proceedings - They do not wish to keep the proceedings lingering for they would want to concentrate on their business and not legal proceedings - It is a waste of their time as well - If an adjudication order is passed with reasonable expediency, even the assessees would arrange their affairs and in the event they are aggrieved, they would avail of the further remedies - Therefore, this is a power coupled with a duty and which the Revenue officials must realise - The earlier it is, the better it would be for all concerned - In the present case, High Court finds that the petitioners' argument is that it is impossible for them to remember what was the issue and some decades back what are the records on which it is based and how it is to be presented - Possibly all the records with them are destroyed or the units having been rearranged, it is impossible for them to retrace the records for want of staff and resources - In the circumstances, High Court does not think that the petitioners should be denied the relief – SCN quashed – it is declared that SCN cannot be adjudicated any longer: High Court [para 9, 12, 13]
Petition allowed
2017-TIOL-403-HC-MAD-CUS
LOVELY OFFSET PRINTERS Vs CESTAT: MADRAS HIGH COURT (Dated: February 15, 2017)
Appeal - Appellant imported second-hand printing machines and allegedly sold them in violation of Customs Act & EXIM policy - Machines already sold were confiscated and fine imposed on appellant - Also the matter was remanded for de novo adjudication and further penalty imposed - HC judgment of 2015-TIOL-2173-HC-MAD-CUS was followed - No bar on Adjudicating authority in re-adjudication/de novo proceedings to impose fine/penalty according to facts and circumstances of the case: HC
Appeal Dismissed
