2020-TIOL-NEWS-029, Dated: Tuesday, February 04, 2020

ST - The assessee, a club, was issued an SCN, proposing to recover some amount of duty from it - Hence the present writ.

Held - The final adjudication by the Revenue is yet to take place - Hence there is no reason to entertain the writ petition at a premature stage - In keeping with the decision of the Apex Court in Commissioner of Central Excise, Haldia v. Krishna Wax (P) Ltd., the writ petition merits being dismissed: HC

ST - The assessee is an authorised dealer and authorised service centre for M/s Ford India Pvt Ltd and were registered with Central Excise for Service Tax matters - It also regularly filed ST-3 returns and paid service tax - The Revenue observed that during the relevant year, the assessee short paid service tax and that the same was attributed to less value shown in the ST-3 return as compared to the value reflected in the balance sheet - SCN was issued proposing to raise duty demand - The same was confirmed upon adjudication - On appeal, the Commr.(A) reduced the quantum of the duty demand, allowing partial relief only - Hence the present appeal.

Held - The SCN was issued by invoking proviso to Section 73(1) of the Finance Act 1994 and there were allegations that the assessee wilfully suppressed the value of service provided in the ST-3 returns filed - Considering relevant parts of the SCN, it is clear that the allegation is to the effect that the assessee suppressed value and such suppression allegedly was as compared to the entries in the balance sheet - The Tribunal repeated held that if the information is available in the balance sheet, which is a public document, then allegations of suppression cannot be sustained - It is noted that the assessee filed ST-3 returns and the allegation is on the basis of information available in the balance sheet - Hence, no suppression has been established - Therefore, the extended period of limitation could not have been invoked - Thus, the O-i-A is not sustainable and merits being set aside: CESTAT

CX - Appellant is a PSU and has availed CENVAT credit on outward freight which falls under the definition of input service prior to the amendment in the definition of input service effected from 01/04/2008 - appeal before the Commissioner(Appeals) was filed in 2007 and the Commissioner(Appeals) after 12 years has given the personal hearing and decided the appeal and has denied the CENVAT credit on air freight and remanded the matter for quantification of the amount relating to airfreight - In view of the decision in JM Baxi & Co. and the Apex Court decision in the case of Citadel Fine Pharmaceuticals - 2002-TIOL-680-SC-CX, the adjudication by the Commissioner(Appeals) is bad in law as the Commissioner(Appeals) has not given any finding for taking the decision after 12 years and the same has caused prejudice - moreover, the Commissioner(Appeals) has gone beyond the show-cause notice inasmuch as the SCN was issued alleging that outward freight is not included in the input service whereas in the impugned order the Commissioner(Appeals) has held that the place of removal cannot be beyond the port/ICD/CFS - Furthermore, in the SCN there is no bifurcation between the outward transportation and air freight - in view of the decisions in the cases of Andhra Sugars Ltd.- 2018-TIOL-45-SC-CX and Ultra Tech Cement Ltd. 2018-TIOL-42-SC-CX, the appellant is entitled to take CENVAT credit on outward transportation - impugned order is not sustainable in law, hence the same is set aside and the appeal is allowed: CESTAT [para 6]

CUSTOMS

2020-TIOL-40-SC-NDPS

Sujit Tiwari Vs State of Gujarat

NDPS - Narcotic Drugs and Psychotropic Substances Act, 1985-In a case of smuggling of huge quantity of contraband (narcotics-heroin) by ship, the appellant was arrested on 4.8.2017 - the main allegation made against the appellant is that he sent the list of the crew members after deleting the names of 4 Iranians and EsthekharAlam to Vishal Kumar Yadav and Irfan Sheikh through WhatsApp with a view to make their disembarkation process easier - appellant has filed bail application before the Supreme Court.

Held: The case of the appellant is totally different from the other accused -reasonable possibility is there that he may be acquitted -he has been behind bars since his arrest on 4.8.2017 i.e. for more than 2 years and he is a young man aged about 25 years -he is a B.Tech Graduate -therefore, under facts and circumstances of this case, this is a fit case where the appellant is entitled to bail because there is a possibility that he was unaware of the illegal activities of his brother and the other crew members -the case of the appellant is different from that of all the other accused, whether it be the Master of the ship, the crew members or the persons who introduced the Master to the prospective buyers and the prospective buyers - the Court, however, feels that some stringent conditions will have to be imposed upon the appellant - the appellant is directed to be released on bail upon furnishing a bail bond in the sum of Rs.10 lakhs with two sureties of the like amount to the satisfaction of the Special Judge, NDPS Court at Porbandar on the following conditions:(a) he appellant shall deposit his passport, if any with the Court(b) the appellant shall either stay in Porbandar or Kolkata -he shall not go to any other place(c) the appellant shall give his cell phone number to the police authorities and shall not change his cell phone number without permission of the trial court (d) whether the appellant remains in Porbandar or Kolkata, in Kolkata he shall report to the Entally police station daily at 09:00 A.M., and in Porbandar he shall report to the Investigating Officer of the NCB at 09:00 A.M. everyday(e) the appellant shall join the investigation as and when called upon to do so before the authorities of the NCB(f) the appellant shall not in any manner hamper or try to interfere in the investigation(g) once the trial begins, the appellant shall not in any manner try to delay the trial - if the appellant violates any of these terms, the NCB shall be entitled to straightaway apply to the Special Judge for cancellation of his bail -the appeal is disposed of on the aforesaid terms : SUPREME COURT [para 11, 12, 13, 14, 15]

- Criminal Appeal disposed of: SUPREME COURT OF INDIA

2020-TIOL-239-HC-AHM-CUS

Petronet LNG Ltd Vs Assistant Commissioner of Customs

Cus - Challenge in this petition is the dismissal of the Appeal filed by petitioner challenging the order dated 2.1.2017 rejecting the claim of petitioner for refund, as prayed therein, on the ground that provisions of section 27 of the Customs Act, 1962 [Act] would operate and the claim of refund was time barred.

Held: In the instant case, it is true that Appellate Commissioner rendered its decision in favour of petitioner on 4.12.2013 and one can say that the petitioner was entitled to seek refund based thereupon -however, it deserves to be noted that the appeal challenging the said order was preferred by the Department before the CESTAT and CESTAT rendered its decision on 8.9.2014 -the said order dated 8.9.2014 was received by the petitioner on 29.9.2014 -therefore, within one year therefrom, the refund claim was made on 9.9.2015 -the order rendered by the Appellate Commissioner on 4.12.2013 could not be said to have rested the controversy as the department itself had chosen to prefer an appeal challenging the same and therefore, till the Tribunal rendered its judgment on 8.9.2014, and the order was received by the petitioner, it can be said that the claim of the petitioner for refund could not have been said to have been finally decided by the Court or Tribunal so as entitled him to raise the refund claim -the plain and simple reading of sections 131A and 153 of the Act, in the light of the decision rendered by this Court in the case of Vadilal Industries [2006 (197) ELT 160] would clearly indicate that the petitioner's claim of refund raised on 8.8.2015 and said to be received on 9.9.2015, could be said to be well within time under section 27 of the Act - when the petitioner's claim that it was not liable to pay duty on the quantum mentioned in the bill of lading as the actual quantity landed was lesser than the quantity mentioned in the bill of lading, was justified and upheld, the difference in duty levied, was required to be refunded -the petitioner's contention was upheld by the Appellate Commissioner under order dated 4.12.2013 and confirmed by the CESTAT under order dated 8.9.2014 -therefore, there was no justified reason whatsoever for denying the refund to the petitioner -even otherwise also, the withholding of refund amount was not justified in any manner especially when the undisputed facts would clearly indicate that the Tribunal upheld the claim of the petitioner only on 8.9.2014 and that being the date of attaching finality to the petitioner's entitlement to seek refund, the petitioner was well within its right to approach the authority for seeking refund as prescribed under section 27 of the Act -the stand of the Authority and Tribunal that the petitioner's claim for refund could not have been said to have been filed within a period of one year from the 4.12.2013 was, therefore, wholly erroneous, incorrect and deserves to be quashed and set aside and is accordingly, quashed and set aside -as a result, the petitioner is entitled to receive refund as per his claim contained in his application dated 8.8.2015 in accordance with law and the same shall be granted to the petitioner within a period of four months -petition is disposed of: HIGH COURT [para 19, 20, 21, 22, 23, 24]

- Special Civil Application disposed of: GUJARAT HIGH COURT

2020-TIOL-238-HC-DEL-NDPS

Innocent Uzoma Vs State

NDPS - Narcotics, Drugs and Psychotropic Substances Act, 1985 [NDPS Act]/Foreigners Act, 1946-Vide impugned judgment dated 23.12.2016, the appellant was convicted under section 21(b) of the NDPS Act and section 14(a) of the Foreigners Act, 1946 -by an order dated 26.12.2016, the appellant was sentenced to undergo four years of rigorous imprisonment and a fine of Rs.50,000/- for the offence under section 21 of the NDPS Act -and, in default of payment of the said fine, to undergo simple imprisonment for a further period of three months -he was further sentenced to undergo rigorous imprisonment for a period three years and a fine of Rs.10,000/- for the offence under section 14(a) of the Foreigners Act, 1946 -and, in default of payment of the said fine, to undergo simple imprisonment for a period of one month - the Trial Court had found that the appellant was guilty of being found in possession of 25 grams of cocaine - whether the appellant's search conducted by police officials which yielded 25 grams of cocaine was not compliant with the provisions of section 50 of the NDPS Act, as it was not conducted in the presence of Gazetted Officer/Magistrate.

Held: In the present case, the notice issued under section 50 of the NDPS Act clearly informed the appellant of his right under sub-Section (1) of section 50 of the NDPS Act of being taken to the nearest Gazetted Officer or the nearest Magistrate for conducting his/her search -it is no longer res integra that it is mandatory to comply with section 50 of the NDPS Act -there is also no ambiguity as to manner in which section 50 of the NDPS Act is required to be complied -plainly, there is no requirement to conduct the search in the presence of a Magistrate or Gazetted Officer, if the person proposed to be searched did not so desire, after being informed of his right in this regard -the words "if such person so requires" as used in section 50(1) of the NDPS Act make it amply clear that the person to be searched would be taken before a Magistrate or a Gazetted Officer, only if he so requires- in the facts of the present case, the prosecution has established that the appellant was apprised of his right to be searched before a Magistrate or a Gazetted officer but he did not require that his search be conducted before the said persons - in view of the above, the appeal is dismissed: HIGH COURT [para 26, 35, 45, 46]

- Criminal Appeal dismissed: DELHI HIGH COURT

2020-TIOL-237-HC-DEL-NDPS

Arvind Kumar Vs Central Bureau of Narcotics

NDPS - The applicant Arvind Kumar seeks the grant of bail in terms of section 439 of the Cr.P.C., 1973 in Sessions Case No.374/2018 in relation to the alleged commission of the offences punishable under sections 8, 21, 22 and 29 of the NDPS Act with it having been alleged that for the entire quantity of seized narcotics and psychotropic substances, Harish Chander, proprietor of M/s.Shiv Medicos and the present applicant, proprietor of M/s.City Enterprises had not followed the mandated provisions of rule 65 of the Rules- the petitioner was arrested on 30.7.2018.

Held: The spirit of the verdict of the Supreme Court in Mohd. Sahabuddin and Another Vs State of Assam - 2012-TIOL-140-SC-NDPS would wholly apply as rightly contended on behalf of the Central Bureau of Narcotics and the entire quantum of the syrup containing codeine, sold by the petitioner without bills to Shri Harish Chander would have to be taken into account -furthermore, in terms of the verdict of the Supreme Court in Union of India Vs Shiv Shanker Kesari - 2007-TIOL-168-SC-NDPS ,in terms of section 37(1)(b) of the NDPS Act, the Court would have to take into account the statement recorded under section 67 of the NDPS Act and in the instant case, the statements recorded under section 67 of the NDPS Act of both the petitioner and the co-accused Harish Chander indicate that there has been a prima facie illegal sale, supply of the drugs containing codeine phosphate by the petitioner herein to Shri Harish Chander without any bills and documents and in such circumstances, it cannot be held that there are reasonable grounds for believing that the petitioner is not guilty of the commission of any offence in relation to a commercial quantity of illegal sale, purchase and supply of a Narcotic Drug containing codeine in contravention of section 8(c) of the NDPS Actfor as laid down by the Supreme Court in Union of India and Anr. Vs Sanjeev V.Deshpandey - 2014-TIOL-68-SC-NDPS-LB that the provisions of the NDPS Act operate in addition to the 1940 Act, i.e., the Drugs and Cosmetics Act, 1940 which deals with various operations of manufacture, sale, purchase etc. of drugs and in terms of Rule 65(5), requires the supply of a drug by wholesale to be made against a cash/credit memo bearing the name and address of the licencee and its licence number under the Drugs and Cosmetics Act, 1940 in the manner prescribed under Rule 65(5)(i) of the said Rules, which in the instant case has prima facie admittedly not been complied with -it has been categorically laid down by the Supreme Court in the case of State of Punjab Vs Rakesh Kumar, in CRL.A. No.1512/2018 with various CRL. A., vide verdict dated 3.12.2018, that the provisions of the NDPS Actcannot be read in exclusion to the Drugs and Cosmetics Act, 1940 and that if the action of an accused amounts to a prima facie violation of section 8 of the NDPS Act, the circumstances and the gravity of the offence does not entitle such an accused to be granted bail -in the circumstances, there is no ground for grant of bail and the application is thus, declined: HIGH COURT [para32, 33]

- Bail Application declined: DELHI HIGH COURT

2020-TIOL-236-HC-MAD-CUS

HSN Shipping Pvt Ltd Vs CC

Cus - Petitioner's license was suspended under Regulation 19(1) of the Customs Broker Licensing Regulations, 2013 - Ground for such action were certain irregularities attributed to the petitioner due to alleged forgery by staff of the petitioner of the signature of the clerk of the Container Freight Station pursuant to a complaint by the custodian of the imported goods - staff of the petitioner also admitted to the forgery - Petitioner challenges the suspension and the notice issued to revoke the license under regulation 20 - Petitioner submits that Regulation 20 contemplates initiation of proceedings within 90 days from the date of receipt of offence report and in their case, the respondent have admitted that the offence report dated 18.02.2015 was received on 23.02.2015 - inasmuch as the impugned notice dated 07.07.2015 was liable to be quashed in view of the settled legal position.

Held: Issue is squarely covered by the decisions in Patriot Freight Logistics Systems - 2017-TIOL-429-HC-MAD-CUS and Santon Shipping Services - 2017-TIOL-2388-HC-MAD-CUS , therefore, the impugned notice dated 07.07.2015 is quashed since issued beyond the period of limitation - Therefore, there is no justification in keeping the petitioners' license suspended any longer, same is also quashed - both the writ petitions are allowed with consequential relief: High Court [para 7 to 9]

- Petitions allowed: MADRAS HIGH COURT

2020-TIOL-235-HC-MUM-CUS

Ankit Ghanshyam Mutha Vs UoI

Cus - This petition seeks a Writ of Habeas Corpus and a direction to forthwith release of the petitioner (Detenu) from the custody of the Directorate of Revenue Intelligence [DRI] on the ground that the detention of petitioner in custody is illegal and the same is violative of Articles 14, 21 and 22 of the Constitution of India.

Held: There is no dispute that the petitioner was remanded by the Competent Court for a period of two days vide order dated 29.8.2019 by the ACMM -thus, when the present petition was filed the detention of the petitioner was authorized by the Competent Court -in this view of the matter the Writ of Habeas Corpus would not be maintainable-so far as the case of the petitioner that he was arrested on 27.8.2019 and was detained till his formal arrest is shown on 28.8.2019 vide the Memorandum of Arrest, the Court is unable to accept the same -after the arrest of the petitioner on 28.8.2019, the petitioner was produced before the Court of Competent jurisdiction on the next day - there is nothing on record to show that after the petitioner was taken to ED Office, the petitioner was arrested or detained, merely because inquiry was made with the petitioner, hence he could not leave the office or was not allowed to leave office of the ED does not make out his arrest or detention -the time spent for taking the petitioner to Special Court needs to be excluded -hence, the Court is unable to accept that there was breach of safeguard laid down under Article 22(2) of the Constitution of India -it is necessary to mention that when the petitioner was produced before the Magistrate, upon asking as to whether he has any grievance against the prosecuting agency the petitioner has not disclosed to the Magistrate that he was detained on 27.8.2019 and produced on 29.8.2019 -this coupled with the fact that the order passed by the Magistrate remanding the petitioner to the DRI custody for two days dated 28.8.2019 does not reflect that the point of illegal detention of the petitioner on 27.08.2019 was pressed into service on behalf of the petitioner at the time of opposing the remand application -in this view of the matter also, the Court is not inclined to entertain the present Habeas Corpus Writ, as the petitioner is in custody in pursuance of the remand order passed by the Competent Court-the competent court has remanded the petitioner to DRI custody by passing a detailed order and hence the ratio of the Supreme Court judgment in the case of Sadhwi Pragyna Singh Thakur [ (2011) 10 SCC 445 ] is squarely applicable to the facts of the present case -it is clear from the order that the ACMM has applied mind to the relevant facts and documents while passing the order of remand, hence the remand order cannot be said to be passed mechanically and without application of mind - taking into consideration the overall facts and circumstances of the case and in view of the serious allegations leveled against the petitioner about his involvement in the multi crore scam of the smuggling of gold in which the petitioner has actively participated, the Court is not inclined to exercise its discretion in favour of the petitioner for issuance of Writ of Habeas Corpus -the petitioner has efficacious remedy of filing the Bail Application and seeking regular bail before the competent court -the legal position as laid down by the authorities of the Supreme Court and this Court makes it clear that even if the remand order is illegal, which is passed mechanically in a cavalier fashion, still the remedy of the Writ of Habeas Corpus cannot be said to be an efficacious remedy, but in terms of the Supreme Court filing of Bail Application in such circumstances is appropriate remedy -the petitioner is entitled to avail appropriate remedy as available in law for seeking bail as per the advice -the Court is, therefore, not inclined to entertain this petition and hence the Writ Petition is dismissed : HIGH COURT [para 16, 19, 20, 24, 30, 31]

- Writ Petition dismissed: BOMBAY HIGH COURT

2020-TIOL-234-HC-MAD-CUS

Central Board of Excise and Customs Vs KG Denim Ltd

Cus - Foreign Trade (Development and Regulations) Act, 1992 - The Appellants-Revenue have filed the present intra Court appeals aggrieved by the impugned order of the Single Judge whereby the Single Judge allowed the writ petitions filed by respondent - the Single Judge held that the Policy Circular Nos.6 and 35 could not override the statutory provisions in favour of the Assessee for granting the benefit of the DEPB or Duty Drawback, in case the Assessee in Domestic Tariff area gets the job work of manufacturing yarn converted into Denim Fabrics through 100% EOU Unit and the said goods are exported out of India.

Held: There is no merit in the present intra Court Appeals filed by the Revenue and the view of the Single Judge deserves to be upheld - the Circulars like Circular No. 74/1999-Cus dated 5.11.1999 as well as the Circular No. 31/2000-Cus dated20.4.2000 could not have restricted or denied the benefit of Drawback or DEPB if such manufacturing was done by 100% EOU Units and then exports were made by such 100% EOUs -para 4 of Circular 74/1999 clearly reveals that by the said Circular 74/1999, the Central Board intended to prescribe the authority as to who will assess and clear the consignments in question, where the exports were made by EOU/EPZ units or the Bills of Entries will mention as well as the DTA Units viz., the present Assessee/Respondent - para 4, however, ends up with another alleged clarification saying that no drawback/DEPB benefits shall be admissible either to EOU/EPZ units or to the DTA unit for such exports - this denial of benefit to the Assessee under the guise of a clarification for which, Bench opines, no power was bestowed on the Central Board - more so, such Circulars come in direct conflict with clear statutory provisions of law or Import Export Policy having statutory character -therefore, respectfully agreeing with the views of the earlier Division Bench Judgments of this Court in the case of Commissioner of Customs, Tuticorin V. L.T. Karle & Co. - 2006-TIOL-406-HC-MAD-CUS as well as the Karnataka High Court in the case of Karle International V. Commissioner of Customs, Bangalore [2012 (281) E.L.T. 486 (Kar.)], no merit found in these Writ Appeals filed by the Revenue Department - the Judgments relied upon by the Appellant-Revenue were rendered in different context and they pertain to statutory Notifications issued by the Central Government and not with the Circulars issued by the Central Board of Excise and Customs - in view of the aforesaid observations, the present Writ Appeals are bound to be dismissed and they are dismissed: HIGH COURT [para 6, 7, 8]

- Writ Appeals dismissed: MADRAS HIGH COURT

2020-TIOL-227-HC-DEL-NDPS

Leela Devi Vs NCB

NDPS - The present writ was filed by the petitioner, seeking that a bank account belonging to her, be de-freezed - The petitioner also claimed that directions be issued against the Investgating Officer for misleading the Special Judge under the NDPS Act, having given statements that the financial investigation is still pending & without filing any documents in this regard - The petitioner also claimed that the Special Judge lacked the jurisdiction to freeze the bank account since the same was not confirmed by the Competent Authority as per Section 68F(2) of the NDPS Act.

Held - In the present case, the petitioner contests only the order which was issued for freezing the bank account held by the petitioner - Perusal of a letter issued in this regard, reveals it to be an intimation to the manager of the bank branch, requesting to immediately stop outgoing transactions from this account - The freezing order was passed by the IO and was sent for confirmation to the authority concerned, as stipulated u/s 68F(2) of the Act - The time prescribed for this procedure is 30 days - Hence the present petition is liable to be dismissed as there is no challenge to the freezing order, which in any case, had been sent for confirmation by the competent authority, who had 30 days' time to confirm or decline the freezing order - The petitioner approached the court without challenging the order - Hence the petition is not maintainable as there is no challenge to the freezing order - Nonetheless, as the proceedings were stayed by virtue of a subsequent order, the time for completion of proceedings by the competent authority is extended by 25 days from date of disposal of the present petition: HC

- Writ petition dismissed: DELHI HIGH COURT

2020-TIOL-227-CESTAT-BANG

Balakrishna Sales Corporation Vs CCT & CE

Cus - Appellant, at the time of import, paid the Special Additional Duty (SAD) - Subsequently they filed refund of the SAD paid as provided under Notification 102/2007-Cus. - claim of the appellant was finally allowed by the Tribunal - After the decision of the Tribunal, the original authority sanctioned the refund but did not grant interest on the ground that there is no provision for payment of interest in the Notification 102/2007-Cus - Commissioner (Appeals) has accepted that the appellant is eligible for interest for delay in payment of refund but he wrongly considered the date of filing the claim as 6th June 2017 which was only the date of submitting the copy of the Tribunal's Final Order - such computation has resulted in reducing the period of delay to mere 7 days whereas as per the appellant the actual delay has been from 857 days to 399 days as detailed in the statement annexed with the appeal.

Held: Issue of grant of interest has been settled by the Apex Court in the case of Ranbaxy Laboratories Ltd. - 2011-TIOL-105-SC-CX wherein the Apex Court has held that the assessee is entitled to interest after the expiry of three months from the date of making the application - following the ratio of the Apex Court, Bench is of the considered opinion that the impugned order is not sustainable in law - Order is set aside - held that appellant is entitled to interest of Rs.43,091.42 as per the statement of interest filed along with appeal papers - appeal is allowed: CESTAT [para 6]

- Appeal allowed: BANGALORE CESTAT