2020-TIOL-53-SC-CUS
Nola Ram Dulichand Dal Mills Vs UoI
Cus - "Vishesh Krishi Upaj Yojna" gives incentives to promote export of fruits, vegetables, flowers, minor forest produce, dairy, poultry and their value added products - Petitioner had challenged Circular dated 21st January, 2009 on the ground that it is contrary to the Foreign Trade Policy 2004-2009 - Rajasthan High Court had dismissed the petition filed and hence the petitioner has filed civil appeals before the Supreme Court - appellant argues that in Para 3.8.2.2 of the Yojna, the benefit of exports is not available if the exports are made by EOU or units situated in SEZ Units; that only exports by these units are not entitled to incentive whereas the appellants are not part of either EOU or SEZ Unit as the expression used is exports made ‘by' EOU and SEZ Unit and not ‘through' them - Counsel for Revenue argued that 100% export-oriented units have been specifically excluded from benefit of the Scheme when it was notified on 7th April, 2006; that the appellant is purchaser from the said 100% export-oriented unit and claiming benefit of the Scheme in respect of exports made by it; that since the 100% export-oriented units are not entitled to the benefit under the Scheme, therefore, the purchasers from such export-oriented units will also not be entitled to the benefit of the Scheme; that what cannot be done directly cannot be done indirectly and since there was ambiguity in the Scheme, the same was clarified by the Circular dated 21 st January 2009.
Held:
++ The purpose of the Scheme is that 100% Export Oriented Units or units situated in Special Economic Zone are not to be granted incentives - The purpose and object of the Scheme notified cannot be defeated by granting incentives to units which exports though 100% Export Oriented Units - Bench finds no merit in the argument that the Scheme excludes the benefit of exports by units in DTA in a Scheme pertaining to Focus Market Scheme (FMS) notified along with Yojna in April 2006 for the reason that FMS has an explicit clause whereas the DTA was not excluded from claiming exemption under clause 3.8.2.2 related to Yojna - Since the appellant is a purchaser from 100% export-oriented unit, therefore, the medium of the appellant cannot be used to avoid the intended purport of the policy for the year 2006- 07 - the export-oriented units cannot use the appellant for export under the Scheme and to claim benefit of export when it is not permissible for them directly - no merit in the appeal, hence the same is dismissed: Supreme Court [para 8, 13, 15, 16, 19]
++ Circular dated 21st January, 2009 does not modify or amend the Scheme notified for the year 2006-07 but only clarifies that 100% export-oriented units which are not entitled to seek exemption cannot avail benefit indirectly through the purchasers from them - It is modification or amendment of the Scheme which is required to be carried out by publication in the official gazette but not the clarifications to remove ambiguity in the existing Scheme - In terms of Clause 3.8.5 of the Scheme, the Government has reserved the right to specify from time to time the export products which shall not be eligible for calculation of entitlement - Since the Government has reserved right in public interest in terms of the Scheme notified under the Act, therefore, the Circular dated 21st January, 2009 cannot be said to be illegal in any manner: Supreme Court [para 12]
Civil Appeal No. 10637 of 2010
Cus - Appellant is 100% export-oriented unit and such export-oriented unit stands specifically excluded from the Scheme in Para 3.8.2.2, therefore, Bench does not find any merit in the present appeal, therefore, same is dismissed: Supreme Court [para 17, 19]
Civil Appeal Nos. 7233 of 2009 and 7257 of 2009
Cus - Appellant challenged the change in the Policy "Vishesh Krishi Upaj Yojna" wherein 100% export units were denied the benefit of exemption on the ground that the policy binds the respondents for a period of five years and that such policy is discriminatory as direct tariff areas were excluded - Bench does not find any error in the findings recorded by the High Court where it is observed that - "After hearing the counsel for the petitioners, we do not find any illegality in the impugned Notification dated 7.4.2006 (Annexure P-7) as by the said Notification the Government has taken a policy decision to withdraw the aforesaid benefit as the Export Oriented Units enjoy special status for tax exemptions and permission to source various requirements including the one in agricultural sector, duty free. They also enjoy income tax benefits and have been set up primarily for exports, therefore, they cannot be treated at par with DTA Units which do not enjoy all these benefits. Therefore, the benefit under the said Policy has not been extended to Special Economic Zone Units and Export Oriented Units." - appeals are, therefore, dismissed: Supreme Court [para 18, 19]
- Appeals dismissed: SUPREME COURT OF INDIA
2020-TIOL-52-SC-CUS-LB
UoI Vs Associated Container Terminal Ltd
Cus - Custom duty has to be paid on the basis of sale proceeds realised from the sale of the goods kept in a warehouse and not on the basis of the custom duty payable at the time of filing the Bill of Entry or on the date of expiry of permitted period of warehouse - appeal is disposed of with directions to ascertain the customs duty keeping in mind the dispensation indicated in the enabling provisions of the Customs Act, 1962 and Chapter 21 of CBEC Manual read with Circular 71/2001-Cus dated 28th November, 2011 and adjust the same as per the priority specified in Section 150(2) of the Customs Act - if the bank guarantee in the sum of Rs. 27,47,146/- has already been invoked by the appellants, the said amount shall be made over to the respondent in terms of the directions given by the High Court within three months after making due adjustments of the proceeds of sale as indicated hitherto - Appeal disposed of: Supreme Court Larger Bench [para 18, 19]
Cus - Circular 71/2001-Cus of the Board is binding on the Revenue: SC LB [para 18]
- Appeal disposed of: SUPREME COURT OF INDIA
2020-TIOL-295-CESTAT-BANG
Agarwal Industrial Corporation Ltd Vs CC
Cus - Appeal is directed against the order passed by the Commissioner of Customs, Mangalore, whereby the Commissioner has imposed redemption fine and penalty on the appellant on the ground that the 'country of origin' has been mis-declared in the bills of entry by the appellant-importer by using doctored documents - it is submitted that Section 111(d) can be invoked only where the goods imported are contrary to any prohibition imposed either under the Customs Act or any other law, for the time being is in force; that the case of the Revenue is that the appellant has violated the provisions of RBI Circular No. 31 dated 27/12/2010 read with Foreign Exchange Management (Manner of Receipt and Payment) Regulations, 2000 in terms of which the trade transactions with Iran should be settled in any permitted currency from outside ACU mechanism (Asian Clearing Union); that the appellant had made payment to the overseas supplier located in Dubai through proper banking channels on a bona fide belief that the country of origin of the impugned import consignments are of "UAE"; that the Revenue failed to establish by way of any documentary evidence in the show cause notice as well as in the impugned order that the appellants are connected with the manipulation of the import documents; that as per the procedure provided by the Central Board of Excise and Customs in the Customs Manual, 2015, the 'country of origin' becomes relevant to be mentioned in the bill of entry if preferential rate of duty is claimed by the importer where as in the present case the importer did not claim any preferential rate of duty and mentioned the 'country of origin' in the bills of entry as per the documents given to him by the supplier based at Dubai.
Held: There is no dispute that the impugned goods i.e., bitumen is not prohibited goods either under the Customs Act or Foreign Trade Policy or any other law in force at the time of importation of goods and the Customs authorities in the SCN have admitted this fact - It is also a fact that there is no prohibition of impugned goods from Iran either under the Customs Act or Foreign Trade Policy - Bench notes that nobody has spoken against the appellant that the appellant is in any way involved in the manipulation of changing the 'country of origin' documents - The appellant has filed the bill of entry and showed the 'country of origin' as "UAE" on the basis of documents supplied to him by the supplier based at UAE - Further no document has been produced by Revenue on record to show the involvement of appellant in any way in the said mis-declaration - moreover, the appellant has not claimed any preferential rate of duty - After examining the provisions of Section 111(d) and 111(m), Bench finds that both the provisions are not applicable in the fact and circumstances of this case - also no mala fides have been brought on record on the part of appellant so as to impose penalties on the appellant under Section 112(a) and Section 114AA of the Customs Act, 1962 - impugned order is not sustainable in law, therefore, same is set aside and appeal is allowed with consequential relief: CESTAT [para 6, 6.2]
- Appeal allowed: BANGALORE CESTAT
