| SERVICE TAX 2019-TIOL-2804-HC-MUM-ST-LB
CCE Vs Reliance Media Works Ltd
ST - Division Bench had referred the following questions to the Larger Bench viz. Whether the question of taxability or excisability of goods is an issue of rate of duty arising from orders of the Tribunal which are appealable only to the Supreme Court in terms of Section 35L(2) of the Act applies even to appeals from order of the Tribunal passed prior to 6th August, 2014 (i.e. the date of insertion of Sub-section (2) to Section 35L of the Act)?; Whether the amendment made to Section 35L of the Act on 6th August, 2014 by insertion of sub-section (2) therein, is clarificatory or prospective in nature?.
Held:
+ Apex Court in the case of Navin Chemicals Mfg. & Trading Co. Ltd. = 2002-TIOL-460-SC-CUS noted that the classification of goods under the Tariff for the purpose of determining the rate of duty would be a question having relation to the rate of duty - Thus, the above observations by the Apex Court would support the view that taxability / excisability is not appealable before the High Court, as decision on the above is in the context of it being classifiable under the Finance Act, 1994 or the Act r/w the Tariff: High Court LB [para 6(III)(c)]
+ Delhi High Court in the case of Ernst & Young Pvt. Ltd. = 2014-TIOL-263-HC-DEL-ST, while following the decision of the Hon'ble Supreme Court in Navin Chemicals (supra), in particular para 11 thereof, held that the orders of the Tribunal deciding the issue of taxability would be appealable to the Supreme Court: High Court LB [para 6(III)(d)]
+ Supreme Court has been entertaining and deciding the appeals under the Act relating to excisability of the goods - Bench is, therefore, in complete agreement with the reasons of the above Delhi High Court decision in Ernst & Young Pvt. Ltd. (supra) to conclude that issues of taxability and excisability from the orders of the Tribunal are appealable to the Hon'ble Supreme Court: High Court LB [para 6(III)(d)]
+ Introduction / insertion of sub-Section (2) to Section 35L of the Act was done as a matter of abundant caution so as to clarify and make explicit what was implicit in Section 35G(1) and 35L(1)(b) of the Act - This was done only to ensure that the Courts do not waste time examining the issue again and again, when the issue has already been decided by various Courts upon which the respondent assessee has placed reliance - this view is also supported by clause 99 of Notes on Clauses to Finance (No.2) Bill, 2014 which introduced sub-section (2) to Section 35L of the Act - It specifically states that Section 35L is being amended so as to clarify that issue of taxability / excisability is covered by the term rate of duty - Thus, what was implict has been made explicit - Punjab & Haryana High Court in DLF Golf Resort Ltd. 2017-TIOL-919-HC-P&H-ST has held that insertion of subsection (2) to Section 35L of the Act was clarificatory - Therefore, insertion of sub-section (2) to Section 35L of the Act w.e.f. 6th August, 2014 would not justify the contention of the Revenue that prior to 6th August, 2014, the appeals were maintainable before the High Court: High Court LB [para 6(III)(e)]
+ Even prior to the insertion of sub-section (2) to section 35L of the Act, the issue of taxability and excisability would be an issue relating to the rate duty of excise / services for the purpose of assessment - Therefore, the appeal from the orders of the Tribunal deciding issue of excisability / taxability, cannot be entertained by the High Court in terms of Section 35G(1) and 35L(1)(b) of the Act dehors Section 35L(2) of the Act: High Court LB [para 6(III)(f)]
+ Submission that insertion of sub-section (2) to section 35L takes away a right of appeal does not merit acceptance for the reason that Bench has already held that at all times even prior to the insertion of subsection (2) to Section 35L of the Act, an appeal to the High Court is not maintainable from an order of the Tribunal dealing with excisability / taxability but would only lie to the Hon'ble Supreme Court - Thus, there is no taking away of any right of appeal to the High Court by virtue of the amendment - Such a right never existed at all on the plain reading of Section 35G(1) and 35L(1)(b) of the Act - The amendment made to Section 35L of the Act by insertion of sub-section (2) therein is clarificatory and retrospective in nature: High Court LB [para 7(III)(d)]
+ Absence of consideration of the binding decisions cannot be filled up by referring to other decisions of the same bench - decision of this Court in Bajaj Auto Ltd. - 2015-TIOL-3028-HC-MUM-ST represents the correct view.: High Court LB [Para 8(c), (d)]
Conclusion:
Regarding question (a) - Appeals from orders of the Tribunal relating to taxability or excisability passed prior to 6th August, 2014 i.e. the date of insertion of sub-section (2) to Section 35L of the Act being a rate of duty issue would be appealable only to the Hon'ble Supreme Court and not the High Court.
Regarding question (b) - The amendment made to Section 35L of the Act is clarificatory in nature and, therefore, retrospective in operation.
- Reference answered: BOMBAY HIGH COURT
2019-TIOL-3518-CESTAT-HYD
K Sesha Reddy Vs CC, C & ST
ST - The assessee was issued a SCN demanding service tax under Cargo Handling Service and Management, Maintenance or Repair Service - The SCN also proposed to demand interest on aforesaid amount and imposed penalties under sections 76, 77 & 78 of FA, 1994 - Based on specific intelligence collected by Department that assessee have not discharged service tax correctly, enquiries were conducted and documents were recovered from assessee which showed that they had entered into a contract with M/s Zuari Cements Limited for shifting the material from one place to another within their factory premises - They had also entered into an agreement for maintenance of railway track inside the premises of M/s Zuari Cements Limited and for this purpose, they had engaged skilled and unskilled labour to fill or remove gravel, checking the fish plates and track - The original authority confirmed the demands as proposed and imposed penalties, except the penalty under section 76 of FA, 1994 - As far as shifting of material within the factory from one place to another is concerned, it is now well settled and is no longer res-integra that such movement of material within the factory does not amount to cargo handling and is not leviable to service tax under Cargo Handling Service - This issue has been settled by Apex Court in case of Signode India Limited - 2017-TIOL-126-SC-ST - Cargo means "goods transported by a vessel, airplane or vehicle" - Material movement of goods within the factory premises do not qualify as cargo and any such handling or shifting of material does not amount to cargo handling and therefore is not chargeable to service tax under Cargo Handling Service - The demand confirmed by impugned order with respect to cargo handling services needs to be set aside along with interest and corresponding penalties - As far as the demand under Management, Maintenance or Repair Service is concerned, the first appellate authority has not recorded any findings and therefore it deems appropriate to remand the matter back to him for the limited purpose of recording his findings on this demand: CESTAT
- Matter remanded: HYDERABAD CESTAT
2019-TIOL-3517-CESTAT-DEL
Head Post Office Vs CCGST
ST - The assessee is providing the banking and financial services and also the courier agency service - The Department observed that for the period 2014-2015, they have not paid service tax of Rs. 1,23,519/- - The service tax return was also not also filed within the time - Accordingly, a SCN was served upon them demanding service tax along with interest and penalty - In view of the noticed circumstance and submission on behalf of Department that it is a statutory mandate for the returns to be filed at a specific time and that the late filing thereof invites the penalty of late fee, the relevant provision need to be looked into for the purpose is Section 68 (1) of FA, 1994 - It requires every person providing service to any person to pay service tax at the rate specified in Section 66 ibid in such manner and within such period as may be prescribed - Further, Rule 6 (2) of STR, 1994 says that "the assessee shall deposit the service tax liable to be paid by him with the bank designated by Central Board of Excise and Customs for this purpose in form TR-6 or in any other manner prescribed by the Central Board of Excise and Customs" - W.e.f. 01/10/2014, it has been mandated that every assessee shall electronically pay the service tax payable by him through internet banking - Most importantly Rule 6 of STR, 1994 says that the service tax shall be paid to the credit of Central Government by the 6th day of the month and if it is to be deposited electronically through internet banking, by the 5th day of the month, immediately following the calendar month in which the service deemed to be provided as per the rules framed in this regard - Since apparently and admittedly, the service tax returns for period April 2014 to March, 2015 were not filed in accordance of said provision, there is definite violation of above quoted provisions and also of Section 20 of Finance Act - Rule 7 (C) of STR, 1944 has rightly been invoked which makes an assessee liable to pay late fee due to said violation - In view thereof, no infirmity found in the impugned order, same is accordingly, upheld: CESTAT
- Appeal dismissed: DELHI CESTAT
CENTRAL EXCISE
2019-TIOL-531-SC-CX
Bombay Dyeing and Manufacturing Company Ltd Vs CCE
CX - Appellant is engaged in the manufacture of cotton and man-made fabrics - fabrics was not amendable to excise duty since it was for captive consumption and in view of rule 9 and 49 of CER, 1944 - on this assertion and relying on the decision in J.K.Cottong Spg. & Wvg. Mills, the appellant filed two Writ petitions before the Delhi High Court and claimed relief accordingly - High Court of Delhi granted interim relief in terms of prayer clause (a) viz. grant order of stay permitting the petitioners forthwith to further process and use cellulose and non-cellulosic spun yarn, man-made filament yarn and cotton yarn in its composite mill in the manufacture of man-made fabric, cotton fabric and woollen fabric at nil rate of duty and to clear cotton fabrics forthwith upon payment of duty in respect of cotton fabric only (without payment of duty on cotton yarn) upon the petitioners undertaking to furnish the requisite bond in Form B-13 supported by bank guarantee for an amount equivalent to 25% of differential duty and to restrain the respondent from taking any action or proceedings pursuant to the directives of the Board - Pursuant to the modified interim relief, the appellant deposited 50% of its liability towards central excise duty in instalments and continued to make future payments - Writ petitions were eventually disposed of on 10/12/03.1993 and it was mentioned that the parties agreed that this case is covered by the orders and directions issued by the Supreme Court in CMP 8869 of 1988 and others in Rohit Mills Ltd. and it would be open to the petitioner to raise such other contention available to it before the adjudicating authority in response to the SCNs - consequent to the disposal of the Writ petitions, the Assistant Collector informed the appellant that section 11A of CEA was not applicable to the facts of the case as the amount was secured by bank guarantee furnished in terms of the interim order of the High Court - appellant asserted that SCN was mandatory moreso in the light of the decision of the apex court in Rohit Mills Ltd. - consequently, the Assistant commissioner proceeded to finalise the classification lists by noting that the CLs were treated as provisional; in furtherance of this communication, the Range Superintendent sent a letter to the appellant stating that all the RT-12 returns have been now assessed finally and the appellant is required to pay the duty amount of Rs.35,92,234.67 pursuant to the order of the Delhi High Court; the Assistant Commissioner reiterated the same and called upon the appellant to pay the amount within ten days failing which the department would take necessary steps to enforce the bank guarantee and recover the dues - subsequent to the above notice, a hearing was given when the appellant reiterated their stand of essentiality of SCN but the Assistant Commissioner negated the same and confirmed the demand - appeal to Commissioner(A) was met with rejection and the Tribunal too dismissed the appeal on 22.02.2006 - Appeal before the Bombay High Court too came to be dismissed on 13.09.2007 following the decision dated 07.09.2007 in Jam Shri Ranjitsinghji Spg. & Wvg. Mills - Appeal to Supreme Court.
Held:
+ Core issue that requires to be immediately addressed is about the purport of the order passed by the High Court of Delhi dated 10/12.3.1993, while disposing of the writ petitions filed by the appellant. The said order will have to be understood in the context of the stand taken by the appellant before the High Court.
+ In the said writ petitions, the appellant had asserted that the fabric manufactured by the appellant was not amenable to excise duty as it was not removed from the premises within the meaning of Rules 9 and 49 of the Rules. Indisputably, the purport of the stated Rules has been finally answered by this Court in M/s. J.K. Cotton Spinning and Weaving Mills Ltd. & Anr. vs. Union of India & Ors. after resolving the conflicting opinions of different High Courts including of the High Court of Delhi.
+ The stand taken by the appellant in the writ petition has been negatived by this Court, in the said decision. Thus, the question relating to liability to pay excise duty was not and could not have been disputed by the appellant at least after this decision. Concededly, the appellant had filed writ petitions taking clue from the exposition of the High Court of Delhi in J.K. Cotton Spinning & Weaving Mills Co. Ltd. & Ors. (supra @ F.N.1) . That view has been finally dealt with by this Court in M/s. J.K. Cotton Spinning and Weaving Mills Ltd. (supra @ F.N.12) , fastening liability on the assessee to pay excise duty.
+ Additionally, it may be apposite to underscore the purport of the interim conditional stay granted by the High Court of Delhi whilst entertaining the writ petitions filed by the appellant. Initially, vide order dated 25.5.1981, interim relief was granted in terms of the Prayer clause (a) of Civil Miscellaneous Petition No. 1699/1981, reproduced hitherto.
+ By this Prayer clause, the appellant had expressed its willingness to file undertaking/bond in Form B13 referable to Rule 9B supported by bank guarantee for an amount equivalent to specified differential duty in respect of the yarn in question. The said interim relief was then modified on 14.5.1985.
+ The fact remains that the appellant voluntarily furnished requisite bonds in Form B13 referable to Rule 9B supported by bank guarantee for equivalent amount of the differential duty. It is not an undertaking filed pursuant to the order of the Court. Concededly, the order disposing of the writ petitions does not absolve the appellant from the said bonds; nor the endorsements made thereon and on the monthly RT12 returns, indicating that it was a provisional assessment have been ordered to be effaced.
+ Suffice it to observe that the order dated 10/12.3.1993 passed by the High Court of Delhi, disposing of the writ petitions filed by the appellant in no way extricate the appellant from the process to which the appellant had voluntarily submitted itself at its own volition, namely, under Rule 9B of the Rules. Thus, it was not a case of duty not levied or not paid or shortlevied or shortpaid. The understanding of the parties was absolutely clear that the appellant was liable to pay excise duty, but for the exposition of the High Court of Delhi in J.K. Cotton Spinning & Weaving Mills Co. Ltd. & Ors. . Understood thus, the appellant is obliged to fulfill its statutory obligations including those arising from the undertaking/bonds in Form B13 and cannot resile from the process to which it had submitted itself without any demur, namely under Rule 9B of the Rules.
+ Indeed, the High Court of Delhi while disposing of the writ petitions vide order dated 10/12.3.1993, had adverted to the decision of this Court in Rohit Mills Ltd. (supra) . On a fair reading of that decision, it is obvious that the Court dealt with two situations referred to therein. First, where Show Cause Notices under Section 11A of the Act have been served and the claim does not cover any period beyond six months from the date of receipt of the notices. Second, where there is dispute as to whether the notice under Section 11A had been issued or not. In the present case, none of the above is attracted; and for the same reason the exposition in paragraphs 30 to 33 of M/s. J.K. Cotton Spinning and Weaving Mills Ltd. , on which reliance has been placed by the appellant, would be of no avail to the appellant.
+ The case at hand, however, would come within the dispensation predicated by Rule 9B of the Rules, which deals with provisional assessment to duty.
+ Indisputably, the appellant voluntarily executed bonds in Form B13 referable to Rule 9B of the Rules and also furnished bank guarantee for an amount equivalent to the differential amount of duty in respect of the fabric in question. The authorities have made endorsements on the bonds and on the monthly RT12 returns filed by the assessee, indicating that it was a case of provisional assessment. Having submitted to that process, it is not open to the appellant to urge that an express order of provisional assessment has not been passed by the authorities.
+ Be that as it may, the stand taken by the parties as recorded in the order dated 10/12.3.1993, is limited to accepting the fact that if notice is required to be given, the same will be given and in that case it will be open to the appellant to file response thereto and further, the authorities would take decision after giving opportunity to the assessee.
+ Nothing more can be read into the order dated 10/12.3.1993 passed by the High Court of Delhi. It is certainly not an order to undo the obligation accepted by the assessee by voluntarily executing the bonds in the prescribed format, namely, Form B13 referable to Rule 9B of the Rules to treat the process as provisional assessment until the disposal of the writ petitions. It is also noticed that the authorities have later on passed the final order after the disposal of the writ petitions.
+ A priori , the authorities have not violated any stipulation or direction contained in the order dated 10/12.3.1993 passed by the High Court of Delhi and for having proceeded in accordance with law for the period between 25.5.1981 to 13/14.5.1985.
+ The authorities have not been nor could be prohibited by the High Court of Delhi from proceeding with the matter in accordance with law. In the present case, all that the authorities have done is to follow the procedure consequent to provisional assessment, by passing a final order and raising demand on the basis of that order.
+ The appellant, as a matter of fact, in terms of the conditional interim order is obliged to discharge its obligation in terms of the bonds executed in Form B13 and the monthly RT12 returns filed from time to time for the relevant period.
+ We are of the considered opinion that the appellant cannot be allowed to approbate and reprobate for inviting the High Court of Delhi to pass interim order stipulating that the appellant would execute bonds in Form B13 referable to Rule 9B of the Rules and continue to file monthly RT12 returns from time to time, on which endorsements have been made indicating that it is a case of provisional assessment.
+ The appellant cannot now be permitted to urge that it had not submitted to the process of provisional assessment as such for lack of a specific order of the concerned authority in that behalf. The order passed by the High Court of Delhi on 10/12.3.1993, will have to be understood in proper perspective and not to give undue advantage to or bestow favour on the appellant and thereby deprive the legitimate State exchequer.
+ Resultantly, this appeal deserves to be dismissed and the same is accordingly dismissed.
- Appeal dismissed: SUPREME COURT OF INDIA
2019-TIOL-530-SC-CX
Reliance Cable Industries Vs CGST
CX - Clandestine removal - High Court had while dismissing the appeal filed by the assessee against the order of CESTAT held that the questions of law urged by the appellant are purely factual; that upon a total analysis of the circumstances, especially the statements made by the various parties including the third parties i.e. the sellers of the raw material, the inference drawn by the Commissioner that the appellant indulged in clandestine manufacture and removal of wires and cables without payment of any CE duty could not have been faulted - Special leave petition filed against this order.
Held: Petitioner seeks to withdraw the SLPs - accordingly, the SLPs are disposed of as withdrawn: Supreme Court
- Petition disposed of: SUPREME COURT OF INDIA
2019-TIOL-2805-HC-MP-CX
Mahle Engine Components Vs UoI
CX - CENVAT - Input Service - Rule 2(l) of CCR, 2004 - Appeal filed against the disallowance of CENVAT Credit of Service Tax amounting to Rs.1,68,882/- paid on outward transportation of goods from the premises of the appellant manufacturer to the premises of buyer during the period from April, 2006 to March, 2011.
Held: It has been held by the apex court in the case of Ultra Tech Cement Ltd.- 2018-TIOL-42-SC-CX that the assessee is not entitled for CENVAT Credit for input services - goods transport agency service availed for transport of goods from the place of removal to buyer's premises - therefore, as the issue has been concluded by the judgment delivered by the Supreme Court, no question of law arises in the present appeal - Appeal stands dismissed and the order passed by the adjudicating authority as well as the appellant authority are affirmed: CESTAT [para 7, 8]
- Appeal dismissed: MADHYA PRADESH HIGH COURT
2019-TIOL-3516-CESTAT-BANG
Dyanyogi Shri Shivakumar Swamiji Sugars Ltd Vs CCT & CE
CX - The assessee-company manufactures Sugar, molasses and ethyl alcohol falling under Chapter 17 of the CETA 1985 - It availed Cenvat credit under CCR 2004 - It also produces electrical energy which is captively consumed for manufacturing excisable goods while the surplus power is sold to power distribution companies for consideration, without payment of duty, as no rate of duty has been prescribed in the CETA 1985 - Hence the Cenvat credit pertaining to input and input services related to such quantity of power which is wheeled out was denied to the assessee - The Revenue raised duty demand equivalent to 6% of the value of the power wheeled out - Such duty demand confirmed by the adjudicating authority was sustained by the Commr.(A) - Hence the present appeal.
Held - The issue at hand is no longer res integra and stands settled by the decision of the Allahabad High Court in Gularia Chini Mills vs. UOI which was sustained by the Apex Court in UOI vs. M/s. DSCL Sugar Ltd. - Besides, the Division Bench of the Tribunal in Jakarya Sugars Ltd. vs. CCE also considered the same issue and held that in generation of electricity from bagasse, no other input or input servuice is used - Hence electrical energy is neither excisable u/s 2(d) of the CEA 1944 not is exempted goods - Hence the provisions of Rule 6 are inapplicable - In light of such precedent cases, the demand of 6% on the value of electricity sold to various companies is not sustainable in law - Hence the demand merits being set aside: CESTAT
- Assessee's appeal allowed: BANGALORE CESTAT
2019-TIOL-3515-CESTAT-DEL
Dinesh Aggarwal Vs PR CCGST
CX - These Appeals have been preferred against impugned O-I-A by which penalty imposed have been confirmed - The appellant, M/s. Amar Steel Syndicate is the partnership firm trading in iron and steel items, as a registered dealer having their shop premises at Loha Mandi, Faridabad - The other appellants-Shri Dinesh Aggarwal and Shri Rajesh Aggarwal are brothers and partners in the said firm - The main allegation against them as per SCN is that they have supplied invoices to one M/s. Delight Industries, Delhi, to facilitate the availing of cenvat credit without supplying goods - In the chain of transaction, supply of goods in question from M/s. Bokaro Steel Limited to M/s. Prompt Enterprises has not been doubted - Further, the transaction between M/s. Prompt Enterprises and the appellant M/s. Amar Steel Syndicate, have not been doubted - The doubt has been raised by Revenue on not finding the goods at the time of inspection, for which a cogent explanation was given by partners of M/s. Delight Industries that such goods were lying with their job workers at the relevant time, that no further investigation was made in this respect - So far, the evidence of transporters and personnel of M/s. Prompt Enterprises is concerned, such statements have been recorded behind the back of these appellants - Further, such persons whose statements were recorded and relied upon by Revenue, were neither examined during the adjudication proceedings nor were offered for cross examination - Hence, their evidence cannot be relied upon as the same is hit by the provisions of Section 9D of Central Excise Act - Further, no mis-match of the records of these appellant nor any mis-match in the physical stock on the day of search was found - Revenue have not investigated that if the goods were not received by M/s. Delight Industries, then to where alternatively were they dispatched - Further, the crucial evidence of truck drivers in question have not been recorded - No goods were found to be removed clandestinely attracting confiscation and accordingly the penalty invoked under Rule 25 on the appellant firm and Rule 26 on the partners is bad and not imposable - Further, the cogent explanation given by partners of M/s. Delight Industries was not found untrue - Further, the parties in question have maintained proper records and the transaction in question was found recorded in the relevant books of accounts, registers, maintained in ordinary course of business - Accordingly, the impugned Order is set aside: CESTAT
- Appeals allowed: DELHI CESTAT
CUSTOMS
2019-TIOL-529-SC-CUS
Chander Prakash Verma Vs CC
Cus - Smuggling of 18 Kgs of gold - in the matter of appeal filed against the order of CESTAT, the High Court while dismissing the same had held that when a Court or Tribunal is faced with concurrent findings of two authorities, it is not necessary to include a detailed reappraisal of the evidence in the judgment of the second appellate forum and that a brief statement of the facts which have appealed to the Court and the reasons which have led it to affirm the findings of the authorities is sufficient - Special Leave Petition filed against this order before the Supreme Court.
Held: As none appeared for the petitioner even on the second call, the Special Leave petition is dismissed for non-prosecution: Supreme Court
- Petition dismissed: SUPREME COURT OF INDIA
2019-TIOL-3520-CESTAT-BANG
Parisons Agrotech Pvt Ltd Vs CC
Cus - The brief issue that requires consideration is as to whether the assessee have violated the prohibition imposed by DGFT Notfn 39/RE2007; as to whether, they are liable for penalty and as to whether the Commissioner should have imposed redemption fine on the goods imported by them and cleared provisionally - The main contention of assessee is two-fold - They contended that in view of the Stay granted, by High Court of Kerala, on the operation of Notification, they have not violated any prohibition and that the agreements for sale of RBD Palm Oil or Palmolein have taken place when the prohibition was not even notified and therefore, in terms of Para 1.5 of the provisions of Foreign Trade Policy, they have not violated any prohibition imposed on the import of impugned goods - The assessee filed a Writ Petition before the High Court of Kerala challenging the constitutional validity of Notfn 39(RE-2007)/2004-2009 - The High Court was pleased to grant an Interim Stay - Later vide order dated 20.11.2017, High Court was pleased to modify the Interim Order and to permit one consignment of assessee to be discharged at Kochi Port - The High Court further ordered that the benefit of the order dated 25.10.2007 will be applicable to all vessels from which the goods were being discharged on or before 20.11.2007 - Finally, the High Court of Kerala dismissed the Writ Petition filed by assessee vide its Order dated 15.02.2008 - Meanwhile, M/s Parisons Foods Pvt. Ltd. have imported RBD Palmolein and crude Palm oil and M/s Parison Agrotech imported RBD Palmolein valued at Rs.10.43 crores - Assessee have submitted a bond at the time of provisional release inter alia stating that the proper officer has agreed to allow clearance of the goods subject to the importer production within 6 months from the date hereof a valid license to cover the import of the goods mentioned in the Schedule and the Final Orders from the High Court of Kerala regarding importability of the item through Cochin Port - This being the position, assessee cannot claim that the imports have taken place during the period when prohibition was not in place, in view of the Interim Order - As submitted by the Commissioner AR, bond executed by assessee at the time of provisional release provides for payment of any penalty and fine in lieu of the confiscation - Having bound themselves in such a manner, the assessee cannot take shelter under the High Court's Interim Order, where the High Court has dismissed the Writ Petition - The second contention of assessee was that the consignments were contracted before the imposition of prohibition and in terms of Para 1.5 of Foreign Trade Policy the impugned imports are excluded by the restriction imposed by the Notification - Ongoing through the records of the case, it is found that the assessee have submitted a few disconnected documents which look like sale deeds, contracts and agreements, however as pointed out by Commissioner AR, the documents are full of inadequacies making the authenticity of the documents subject to doubt - It is also not coming forth as to which of these documents pertain to the impugned imports - Moreover, no conclusive agreements found indicating that an irrevocable letter of credit has been opened or has been enforced at the time of shipment - Assessee's argument fails on both counts and it is found that they have imported the impugned goods in violation of prohibition imposed by DGFT Notification and thus, they have rendered the impugned goods liable for confiscation and rendered themselves liable for penalty - The assessee have not only imported the impugned goods in violation of the prohibition imposed but also have attempted to misuse the legal provisions available under Writ jurisdiction of High Court - With the dismissal of writ petition, the High Court has restored the position which was existed before - Moreover, in view of the bond submitted by assessee as the time of provisional release, they have bound themselves to produce a proper order from the High Court failing which they have bound themselves to pay fine and penalties as applicable - The imposition of penalties in the impugned order is legal, proper and justified: CESTAT
- Appeals rejected: BANGALORE CESTAT
2019-TIOL-3519-CESTAT-DEL
Its My Name Pvt Ltd Vs Addl Director General
Cus - The assessee is a manufacturer, exporter (MSME), a three star export house, operating under Advance Authorisation Scheme and Exhibition Export Scheme of FTP - They have earned approximately 140 millions USD foreign exchange and also possesses importer-exporter code - Under the Advance Authorisation Scheme, assessee is entitled to import upto 1,000 Kg. of gold - They keeps proper records of its business transactions, which are subject to audit under various tax laws - Out of last import of 50 Kgs., stock of 31.1 kg. have been detained by DRI, from the registered workshop cum business premises such as 25,000 gms Gold bars (25 Nos.) and 26,404 gms W.I.P. (gold bar pieces, gold dust, assorted gold jewellery) - So far as the seizure of 25 gold bars (one kg. each) totaling weighing 25 kg. and cut pieces of gold bars, gold dust and assorted gold jewellery weighing 26404 gms. and certain silver bars and cut pieces weighing 44908 gms. is concerned, it has been shown that out of the 25 gold bars weighing 1 kg. each is concerned, 22 gold bars have been imported by assessee under Advance Authorization Scheme - The bill of entry for import have been assessed at the nil rate of duty under Advance Authorization for import of gold bar having purity of 0.995 - It's a matter of record that 50 gold bars had been imported by assessee under bill of entry dated 17 April 2019 which are having specific and unique bar number - On verification of unique bar number of seized gold bars with gold bars imported vide above-mentioned bill of entry having packing list dated 15 April 2019 for the invoice H-3470, it is found that 22 gold bars weighing 1 kg. each totaling weighing 22 kg., absolutely tallies with the gold bar numbers which was imported under bill of entry No. 2873288 - It is also a matter of record that the main 'Karigar' of assessee who was supervising manufacturing of gold jewellery has categorically mentioned that from the imported gold bars, he has made jewellery of 7 kg. and certain other jewellery and certain quantities were 'work-under progress' in the form of gold, dust and other pieces of jewellery at different stages of manufacturing - Assessee have also made certain purchases of gold from the local market and for which he has necessary purchase invoices and this gold has also been used for manufacture of gold jewellery - The seizure made by Investigating Agency at the factory premises of assessee does not explain in detail as to why the goods have been seized when the assessee have been working in the bonded premises and he has all the documents for legal possession of primary gold bars as well as gold jewellery - Prima facie, no ground found to hold that the seized/ detained goods fall under the category of prohibited goods as the assessee prima facie has all the legal documents for rightful possession of the same - The assessee is an established business concern registered with the Customs dept, DGFT, Income Tax and GST - Due to seizure of almost the whole working capital (Goods, raw material, W.I.P.), for over 6 months, assessee is facing difficulty of livelihood, it's workmen, and others too - The assessee is also incurring regular fixed cost or establishment cost, unable to fulfill its time-bound export obligation, resulting in irreparable loss and civil consequences - Provisional release allowed on the terms i.e. Bond for full value of the seized goods and the bond be backed by Bank Guarantee of Rs. 1.25 crores, with auto renewal clause in favor of revenue authority - Subject to fulfilment of stipulated conditions, the revenue Authority is directed to release the detained/seized goods forthwith: CESTAT
- Appeal allowed: DELHI CESTAT | 
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