2017-TIOL-887-HC-DEL-PMLA
ANAND CHAUHAN Vs DIRECTORATE OF ENFORCEMENT : DELHI HIGH COURT (Dated: April 10, 2017)
Prevention of Money Laundering Act, 2002 [PMLA] - The petitioner has preferred bail application seeking regular bail under section 439 of the Code of Criminal Procedure (Cr.P.C) read with section 45 of PMLA in RC No.ECIR/HQ/02/HIU/2015 the petitioner submits that his arrest under section 19(1) of PMLA is premature and in violation of Article 21 of Constitution of India - he submits that section 45 of PMLA is not applicable to the case of petitioner the main accused Shri Virbhadra Singh has been granted protection in the FIR/RC filed by the CBI by Himachal Pradesh High Court vide order dated 1.10.2015, and that there is no case against Shri Virbhadra Singh registered by the respondent under the PMLA he submits that as he has been charged with abetment of the schedule offence, the PMLA cannot be invoked against him and that the rigours of section 45(1)(ii) of the PMLA would not apply to him.
HELD The writ petition preferred by Shri Virbhadra Singh has been dismissed by this Court on 31.3.2017 and the interim orders passed therein stand vacated - the charge-sheet also stands filed thus, it cannot be said as on date, that the main accused Shri Virbhadra Singh is being protected, while the petitioner herein has been arrested under the PMLA even a person who is not a public servant has been noticed in the definition of "criminal misconduct" as defined in section 13(1)(e) of the PC Act -no doubt, the offence of criminal misconduct is committed by the public servant, but the offence under section 13(1)(e) of the PC Act may also rope in-as an abettor, any person who is in possession of such unexplained pecuniary resources and property disproportionate to the known sources of income of the public servant, i.e. who holds the said pecuniary resources or property on behalf of the public servant -a reading of section 3 of the PMLA shows that the person who commits the offence of money laundering need not necessarily be the one who may have been involved in the acquisition of the proceeds of crime -thus, even if the petitioner herein is assumed to be not guilty of the offence under section 13(2) read with section 13(1)(e) of the PC Act, nevertheless, he is a person charged with abetting the said offence and with the laundering of the proceeds of the crime of Shri Virbhadra Singh -the proceeds of crime may be acquired by another person who commits one of the scheduled offences, and the person charged with money laundering may have only, directly or indirectly, assisted or knowingly become a party, or may be actually involved in the process or activity of, inter alia, concealing, possessing, acquiring or using and projecting or claiming the said proceeds of crime as untainted property -the purpose of scheduling the offences under the PMLA appears to be to enlist the various crimes through which the proceeds of crime may be generated -thus, the submission of the petitioner that he cannot be charged under the PMLA, does not appear to have any merit the Special Judge has opined that it cannot be said that there are reasonable grounds for believing that the petitioner is not guilty of the scheduled offence -this prima-facie finding of the learned Special Judge on a reading of the allegations made against the petitioner herein in the FIR/RC registered by the CBI, as well as on a perusal of the complaint preferred under the PMLA, appears to be justified and there is no reason to take a different view of the matter at this stage in the case of Gautam Kundu - 2015-TIOL-300-SC-PMLA , the Supreme Court has categorically held that the conditions specified in Section 45 of the PMLA are mandatory and needs to be complied with- PMLA has an over-riding effect and the provisions of the Code would apply only if they are not inconsistent with the provisions of the PMLA -the Supreme Court has held that the compliance of the provisions of section 45 of the PMLA should be insisted upon by the High Court as well, while considering an application under section 439 Cr.P.C. -in the present case, the prima facie finding returned by the trial court with regard to the petitioner's involvement in the scheduled offence is unexceptionable - this Court is considering the present application within the boundaries of section 45 of the PMLA as laid down in the case of Gautam Kundu - no merit found in the present petition and the same dismissed : HIGH COURT [para 22, 24, 27, 28, 29, 30, 31, 33, 34]
Application dismissed
GUJARAT STATE FERTILIZERS AND CHEMICALS LTD Vs CCE: GUJARAT HIGH COURT OF(Dated: March 29, 2017)
CX (1) Whether the Appellate Tribunal was justified in confirming rejection of refund in absence of any notice under section 11A of the Central Excise Act, 1944 [Act] (2) whether the Appellate Tribunal was justified in not considering the Chartered Accountant certificate, which certifies that no incidence of duty is passed on by the appellant (3) Whether the Appellate Tribunal was justified in ignoring evidences produced before them being a last fact finding authority and especially when error apparent on record was pointed out (4) Whether the Appellate Tribunal was justified in summarily rejection of rectification of mistake application when error apparent on record was specifically pointed out.
HELD Appellant contending that in case of erroneous refund, before making any recovery, notice under section 11A of the Act is required - in the instant case, the Tribunal set aside the order of refund and, therefore, necessity of recovery of the amount already paid, pursuant to the O-i-I passed in the refund application had arisen - therefore, it cannot be said to be recovery of the duty on the ground of erroneous refund - section 11A of the Act shall not be applicable as recovery of the duty cannot be said to be on the ground of erroneous refund the Chartered Accountant Certificate produced by the appellant was not considered sufficient by the adjudicating authority and the first appellate authority in appeal, it was submitted by the appellant that they are ready and willing to produce the certificate issued by the Government to the effect that the duty on methane was taken into account while fixing the price of fertilisers therefore, vide order dated 24.5.2005, the Tribunal remanded the matter to the adjudicating authority by giving an additional opportunity to the appellant to produce the requisite certificate from the Government this order of remand cannot be said to be an open remand - however, the appellant failed to produce the certificate from the Government before the adjudicating authority and, therefore, on the ground of unjust enrichment the appellant failed to satisfy the adjudicating authority therefore, it cannot be said that all the authorities below have committed any error the Tribunal has rightly dismissed the appeal preferred by the appellant appeal dismissed : HIGH COURT [para 5, 5.1, 6]
Appeal dismissed
ANDHRA CEMENTS LTD Vs CCE & ST : HYDERABAD HIGH COURT OF (Dated:
March 24, 2017)
CX - Aggrieved by an O-i-O confirming a demand of interest under section 11AA of the Central Excise Act, 1944 [CEA], the petitioner has come up with the present writ petition - petitioner contending that once the scheme sanctioned by BIFR had attained finality with the AAIFR not granting any relief to the Department by its order dated 3.12.2014, the Department is bound by the scheme in view of section 32 of the Central Act No.1/1986[Sick Industrial Companies (Special Provisions) Act, 1985] - the Department cannot refuse to give effect to the provisions of the sanctioned scheme, in terms of which, the entire duty liability of Rs.6.29 crores had already been discharged -whenever, a sick company is ordered to be revived and rehabilitated, especially in terms of the provisions of the Central Act No.1/1986, the Central and State Governments are obliged to lend a helping hand -since section 32 contains a non obstante clause, the petitioner contends that the Department cannot claim anything more than what is sanctioned under the scheme.
HELD - The modified scheme sanctioned by BIFR (paragraph 9.4) does not specifically speak about the waiver of interest and penalty under the CEA, though it specifically speaks about the waiver of penalty and interest under the Income Tax Act -therefore, the protection under section 32(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 is not available -even if we read the modified scheme as containing a provision for waiver of interest and penalty, the same stood diluted by the judgment of the Delhi High Court dated 1.9.2004, which left it to the Department to decide the question -therefore, neither the order of the AAIFR nor section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 is of any assistance to the petitioner, for successfully challenging the impugned O-i-O - as a matter of fact, the petitioner does not appear to deserve any sympathy, as can be seen from the long litigation that they have fought over a period about 30 years from 1988 the petitioner has to be seen as a person who gained advantage from a Civil Court by way of an interim order and by the time the interim order got vacated, the petitioner secured protection under section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 -this protection was enjoyed by the petitioner from the year 1990 till the year 2008 when the modified scheme was sanctioned -it must be remembered that the scheme first sanctioned, failed due to the inability of the company to get revived and BIFR recommended winding up -but by repeatedly litigating, the petitioner survived -in any case, a person, who gained an advantage by an interim order of the Court, cannot subsequently turn around and seek umbrage under section 32 of the Sick Industrial Companies (Special Provisions) Act, 1985 -de hors the above, the Delhi High Court and AAIFR granted liberty to the Department to examine the question of waiver of interest and penalty -this has been done by the 1st respondent, with specific reference to the mandate of section 11AA of the CEA - therefore, there are no merits in the writ petition and hence it is dismissed : HIGH COURT [para 29, 30,31, 32, 33]
Petition dismissed
017-TIOL-884-HC-MAD-CX
CCE & ST Vs Bharat Heavy Electricals Ltd : MADRAS HIGH COURT (Dated: April 13, 2017)
CX - During the period in dispute, the assessee/first respondent had cleared boilers without payment of duty - initially, they had also availed cenvat credit on some input services which were used in or in relation to the manufacture of boilers - no separate accounts had been maintained for input services - Revenue invoked rule 6(3)(b) of the Cenvat Credit Rules, 2004 to demand 10% of the net sale price of the exempted goods - Tribunal allowing the appeal of the assessee - Revenue before High Court submitting that the issue is covered by the Division Bench judgment of this Court in the case of Commissioner of Central Excise, Puducherry Vs. CESTAT, Chennai.
HELD - The Division Bench has observed that if reversal of cenvat credit has been carried out, prior to issuance of SCN, then, it amounts to payment of duty - Tribunal has remanded the matter to the Adjudicating Authority to not only verify the said fact but to also ascertain the exact amount of cenvat credit qua which reversal has, purportedly, been carried out by the assessee - Tribunal also directed for verification of the claim made by assessee to the effect that it is not liable to pay interest, as at the relevant point in time, it had sufficient balance available in the RG 23A account - given the aforesaid position, no interference is called for with the impugned judgment and order of the Tribunal - appeal of Revenue dismissed : HIGH COURT [para 5, 6, 6.1, 6.2, 7]
Appeal dismissed
D V KISHORE Vs CC : MADRAS HIGH COURT (Dated: March 28, 2017)
Cus (1) Whether the first respondent authority and the second respondent Tribunal is correct in holding that the charges of section 112(a) & (b) of Customs Act, 1962 is made out in the facts and circumstances of the case against the appellant, warranting imposition of penalty of Rs.10 lakhs &(2) Is the Tribunal right in attaching importance to the alleged confessional statement of the appellant, especially when the same has been retracted at the earliest point of time and such confessional statement has not been corroborated by any independent evidence.
HELD In the O-i-O, the first respondent has mainly relied upon the confessional statements given by the accused persons including the appellant there is no other evidence directly attributing the link or involvement of the appellant in the alleged conspiracy out of which only the action of smuggling had taken place the first respondent has specifically rejected the retracted statement given by the appellant as an afterthought nowhere it is the case of the respondent that the contraband had been seized from the appellant nor it is the case of the authorities that the contraband had been in possession of the appellant if at all, any link is to be given, it is that the appellant allegedly contacted one of the persons in the team by giving intimation that the contraband has arrived at the port - the Trial Appellate Court has given an acquittal to the appellant by stating that the prosecution has failed to prove the case beyond reasonable doubt -once the criminal prosecution has failed to prove the case against an accused person beyond reasonable doubt and based on which if an accused person has been acquitted, on the same set of facts and circumstances, whether the person's guilt can be proved in the departmental enquiry/adjudication process, has been infact answered by the Apex Court in the case of Gopaldas Udhavdas Ahuja - 2004-TIOL-123-SC-CUS wherein it has been held that it would be unjust, unfair and oppressive to allow the decision of the Authorised Officer in confiscation proceedings to stand against acquittalin this case also since the appellant has been acquitted from the criminal charges by the competent Trial Appellate Court, in the criminal proceedings, that too on the basis of the failure on the part of the prosecution to prove the case beyond reasonable doubt, allowing the findings of the Adjudicating Officer and his O-i-O as confirmed by the Tribunal, is nothing but unjust, unfair and in fact oppressive, in the words of Apex Court - these aspects had not at all been considered by the Tribunal in the impugned judgment - in fact, the appellant had started retracting his statement of confession itself from the beginning and when that being so, such a finding as has been given by the Tribunal, would not stand legal scrutiny merely because the other persons had pleaded guilty before the Trial Court and accepted the punishment, that would not have a bearing on the appellant's position, as there is no direct evidence that he was involved in the said activity of smuggling as there was no recovery from the appellant-hence, the Tribunal has erred in giving such a conclusion, confirming the O-i-O - accordingly, the questions of law are answered in favour of the appellant - appeal allowed by setting aside the impugned order : HIGH COURT [para 17, 18, 19, 20, 22, 23, 24, 25, 27, 28, 29]
Appeal allowed
FOSHAN SHANSUI ROMANTIC CERAMICS COMPANY LTD Vs UOI : DELHI HIGH COURT (Dated: March 20, 2017)
Cus Anti-dumping duties had been imposed against import of the Vitrified/Porcelain Tiles originating in or exported from the People's Republic of China - during the tenure of the said levy, a New Shipper Review (NSR) under rule 22 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and For Determination of Injury) Rules, 1995 [Rules] was notified on 1.5.2003 - the review was sought before respondent no.2, the Designated Authority (DA) by the six petitioners, who are producers, shippers and importers of Vitrified/Porcelain Tiles - petitioner nos.1 to 4 claimed that they had neither exported the said goods nor were they related to any of the exporters during the initial period of investigation, hence, they were eligible for an individual dumping margin under the aforesaid Rules - the anti-dumping duty continued vide Sunset Review (SSR) notification dated 27.6.2008 the DA issued final findings on 28.3.2016 recommending imposition of anti-dumping duty on all the imports made through petitioner nos.1 to 4 on the ground that they could not be treated as "New Shippers" under rule 22 of the Rules -subsequently, respondent no.1 vide Customs Notification dated 7.6.2016 imposed dumping duty on all imports of the subject goods produced by them - thereafter, six appeals were filed before the CESTAT by the petitioners contending that the DA had failed to verify the relevant details before confirming the levy of anti-dumping duty on 25.1.2017, the petitioners' appeals were rejected by a Common Final Order - the petitioners are before High Court seeking quashing of the Final Order dated 25.1.2017 passed by CESTAT as well as the quashing of the Custom Notification dated 7.6.2016.
HELD CESTAT was set up as a judicial body for hearing the appeals i.e., to deal with an order impugned before it on merits after discussing the details of the case -it is supposed to return a finding on the issues framed or raised before it -the impugned order evidently is shorn of such details or the rationale for arriving at the conclusion it has -mere reference to paragraph numbers of the final findings ex facie does not satisfy the requirements of passing a reasoned order -the impugned order has not examined either the specified procedure, the strict timelines or the matter or merits; especially the de minimis claim -furthermore, when the DI's second SSR request was rejected by the DA and the subject goods were no more subject to anti-dumping duty, then what would be the effect of the NSR which was to be only for the remainder period of the five years of the 1st SSR anti-dumping duty levy -could the NSR or its corollary provisional anti-dumping duty be sustained when the main anti-dumping duty itself was not payable after June, 2013 -furthermore, the written submission of the respondents could not have been taken into consideration by the Tribunal without a copy of the same being furnished on the petitioners -this deprived the latter of an opportunity for effective representation, hence there was denial of natural justice - for the aforesaid reasons, the impugned order and the petitioners' case warrant a deep analysis and thorough adjudication - accordingly, the order of the CESTAT is hereby set aside -the case is remanded back to the CESTAT, which shall decide the appeals on the merits after dealing with all submissions of the parties including the period of limitation - as regards the petitioners contention that neither the Final Findings nor the Customs Notification could have been notified after the lapse of 18 months and that it fell outside the purview of such levy because its dumping/injury margin was diminished i.e. less than 2% would be adjudicated upon as a preliminary issue de hors the contentions of the Domestic Industry in its appeal before the CESTAT writ petition disposed of: HIGH COURT [para 16, 17, 19, 21]
Petition disposed of
017-TIOL-881-HC-ALL-ST
CCE & ST Vs AASHIRWAD CONSTRUCTION COMPANY : ALLAHABAD HIGH COURT (Dated: April 4, 2017)
ST - Whether it was open for Tribunal to look into merits of order of Adjudicating Authority when order in appeal passed by Commissioner (Appeal) was such, whereby appeal was dismissed by Commissioner (Appeal) on the ground of limitation.
HELD - The scope available for Tribunal was, whether Commissioner (Appeal), decided appeal by dismissing on the ground of limitation, correctly or not, and if it finds that appeal was within the period of limitation or within condonable period of limitation, it could have remanded matter to Commissioner (Appeal) to decide appeal on merits but there was no scope of looking into correctness of Adjudicating Authority's order and even set aside the same - impugned judgment passed by Tribunal cannot sustain - question formulated above is answered in favour of appellant and against respondent-assessee - appeal allowed - impugned judgment set aside - matter is remanded to Tribunal to examine, whether appeal preferred by assessee was within the period of limitation or within condonable period of limitation and whether Commissioner (Appeal) has passed order correctly holding that it was beyond the period of limitation or not - if Tribunal finds that appeal was within the period of limitation or within condonable period of limitation, then the matter, at the best, can be remanded to Commissioner (Appeal) - Appeal of Revenue allowed: HIGH COURT [para 8, 11, 12]
Appeal allowed
