|
SERVICE TAX
2020-TIOL-812-CESTAT-HYD
Crystal Marketing Corporation Vs CCT
ST - Demand of service tax is raised on the expenses which are reimbursed by the principal to the appellant - It is undisputed that the appellants have discharged service tax on the entire commission received by them - Apart from such commission, they are also receiving amounts in the nature of reimbursement of expenses - Such amount is not in the nature of consideration for any services provided by the appellant - These are the expenses incurred by the appellant and have been reimbursed by the principal pursuant to the agreement - Such reimbursable expenses cannot form part of the assessable value during the relevant period because service tax can only be levied on the gross amount charged for rendering services as has been held by the Apex Court in the case of UOI Vs Intercontinental Consultants and Technocrats - 2018-TIOL-76-SC-ST – impugned orders are, therefore, set aside and appeals are allowed: CESTAT [para 7, 8]
- Appeals allowed: HYDERBAD CESTAT
2020-TIOL-811-CESTAT-BANG
United Telecoms Ltd Vs CST
ST - The assessee have been awarded a contract by Government of Maharashtra for setting up of computerized facilities in their Road Transport office for issue of Smart Car Driving Licence and also paper learning licences - The activity undertaken by assessee was to capture the data and photograph of applicants for the driving licences as well as learning licences and to prepare a smart card/paper licence and to submit to the RTO for further issuance to the applicant - The assessee is allowed to collect a consideration for the same - Revenue opining that the services undertaken by assessee fall under the category of BAS, issued a SCN demanding service tax - Assessee also relies upon the clarification issued by CBEC vide Circular 89/7/2006-ST - The assessee is only assisting a statutory authority in the discharge of statutory functions and by no stretch of imagination they are rendering any BAS to the Road Transport Authorities - From the facts of the case, it is apparent that the Road Transport Authority has outsourced part of their work to the assessee and thereby they have in fact assisted the statutory functions of the authorities and have not in any case supported any business activity - In view of the same, appeal is allowed with consequential relief: CESTAT
- Appeal allowed: BANGALORE CESTAT
CENTRAL EXCISE
2020-TIOL-810-CESTAT-AHM
Rajashree Polyfil Vs CCE & ST
CX - Appellant has entered into contract with M/s. PR Ecoenergy Pvt. Ltd. for supply of steam which is used in the manufacture of final product by the appellant - there is a clause in the agreement that in case of short fall in minimum guaranteed offtake of steam, the appellant is required to compensate the same - On one occasion, there was a short fall in minimum guaranteed off take of steam for which the appellant was issued a debit note for the compensation amount along with service tax of Rs.2,18,000/- - and which service tax amount was availed as CENVAT credit by appellant - Audit objected to this availment and issued demand notice and pursuant thereto appellant reversed the credit along with interest - Subsequently, when they realized that they were not required to reverse the credit, they filed refund claim of the amounts paid - SCN was issued to the appellant for denial of refund on the ground that the compensation amount paid by the appellant to M/s. PR Ecoenergy Pvt. Ltd. is not towards any service used in the manufacture of final product; that the claim is hit by unjust enrichment as the appellant had not established that the incidence of ST had not been passed on to the buyer - since claim rejected by lower authorities, appeal to CESTAT.
Held: Appellant have filed refund claim in respect of Cenvat Credit reversed by them which is related to a compensation charges towards the short lifting of steam - compensation paid by the appellant to M/s. PR Ecoenergy Pvt. Ltd. is related to supply of steam which is used in the manufacture of final product by the appellant therefore, this expense is directly in relation to the manufacture of final product, hence, same is admissible input service - insofar as regard allegation of unjust enrichment, Bench finds that the appellant have accounted for the amount of refund in their ledger as recoverable dues, therefore, the amount was not included in any of the amount which was recovered or recoverable from the buyer, therefore, appellant has passed the test of unjust enrichment - On both count, appellant is entitled for the refund - impugned order is set aside and appeal is allowed with consequential relief: CESTAT [para 6, 7]
- Appeal allowed: AHMEDABAD CESTAT
2020-TIOL-809-CESTAT-HYD
Rashtriya Ispat Nigam Ltd Vs CC, CE & ST
CX - Appellant availed CENVAT Credit on the services used in relation to setting up of Seamless Tube Mill Project which was abandoned without even producing one ounce of product - Under these circumstances, by no stretch of imagination can the services on which CENVAT Credit has been availed, be related to the manufactured final products either directly or indirectly or any business related to such manufactured products - A plain reading of CENVAT Credit Rules, 2004 does not show that they are so entitled to this credit in abandoned project - The statutes must be read and interpreted and there cannot be any intendment in taxing statute - In the absence of any explicit provision for allowing CENVAT Credit for the abandoned projects from which no goods were ever manufactured and no services were ever rendered, appellant assessee is not entitled to CENVAT Credit - Credit was taken between February 2007 and April 2008 and there is nothing to show that after they have decided to abandon the project in February-March 2008, they have either reversed the CENVAT Credit or informed the department - In the regime of self assessment, the assessee is required to take reasonable precautions to take credit and pay duty etc. as per law - When there is no explicit provision which entitles them to continue using CENVAT Credit on the abandoned project, the least that could have been expected from the assessee was to inform the Department that they have abandoned the project even if they were under the impression that they were entitled to CENVAT Credit - The assessee cannot also plead ignorance - They are a very large Public Sector Undertaking in operation for several decades and have been handling the matters of indirect taxation - Under these circumstances, assessee has suppressed the information that they have abandoned the Seemless Tube Mill Project on which they have already availed the CENVAT Credit - The extended period of limitation has been rightly invoked in this case and penalty has been correctly imposed - impugned order is correct and calls for no interference - appeal is rejected: CESTAT [para 5 to 7]
- Appeal rejected: HYDERABAD CESTAT
CUSTOMS
2020-TIOL-991-HC-DEL-CUS
Additional Director General Vs Its My Name Pvt Ltd
Cus - Gold Jewellery - Notification 18/2015-Cus - Advance Authorisation - ADG, DRI has assailed the CESTAT order dated 13 th November 2019 - 2019-TIOL-3519-CESTAT-DEL passed by the CESTAT granting provisional release of seized goods subject to fulfilment of stipulated conditions - appeal was admitted on the following substantial questions of law: (i)Whether the CESTAT can substitute its view for the discretion of the Adjudicating Authority U/S 110A?; (ii) Whether the appellate jurisdiction of the CESTAT against an order passed u/s 110A is restricted to examining whether such an order has been passed after duly considering the law in respect of provisional release and not pass arbitrarily? And (iii) Whether the appellant is entitled to provisional release of the seized gold in question in view of the facts and circumstances of this case?
Held: [para 35, 36, 37, 38, 43, 44, 45, 48, 51, 52, 65, 73, 74, 75, 76, 79, 84, 85, 86, 87]
+ It would be entirely inappropriate, on the part of the Bench, to express any opinion, even tentative, regarding the allegations in the Show Cause Notice, save and except to the extent such expression is absolutely indispensable, for the purposes of deciding the present appeal.
+ Bench cannot allow the present appeal to be converted into an appellate proceeding, against an adjudication order, which is yet to be passed, consequent on adjudication of the Show Cause Notice dated 26th September, 2019.
+ The present appeal is directed against an order, passed by the Tribunal, permitting provisional release, of the gold, gold jewellery and silver, seized from the respondent at the Airport, and from its workshop premises, on certain terms.
+ Our brief, therefore, it is only to adjudicate on whether the said decision, of the Tribunal, to permit provisional release, and the terms fixed by the Tribunal in that regard, call for interference, by us, in exercise of the appellate jurisdiction, conferred on us by Section 130 of the Act.
+ While exercising appellate jurisdiction under Section 130 of the Act, the High Court does not sit as an appellate authority on issues of fact.
+ An appeal, therefore, lies, to this Court, under Section 130 of the Act, only on "substantial questions of law".
+ No such final determination of the liability of the respondent, qua any part of the seized goods, has taken place in the present case.
+ While deciding whether to release, or not release, the seized goods provisionally, the Tribunal was not called upon to adjudicate, either finally or tentatively, on the alleged infractions committed by the respondent, or the consequent liability, if any, of the seized goods to confiscation under the Act.
+ In the absence of any such adjudicatory exercise having taken place at the hands of the authority below, the question of whether any "substantial question of law", relatable to the infractions alleged to have been committed by the respondent, at all arises before us at this stage, becomes seriously questionable.
+ Perversityis a ground on which the High Court could, in exercise of its jurisdiction under Section 130 of the Act, interfere with findings of fact, returned by the Tribunal. A finding is treated as "perverse" when no reasonable person should have arrived at such a finding.
+ Absent perversity, or any of the other inhibiting factors, findings of fact returned by the Tribunal, are to be treated as final, and are not amenable to interference, in exercise of the powers conferred by Section 130 of the Act.
+ This Court is not sitting in appeal, consequent to an adjudicatory exercise, determining the correctness of the allegations in the Show Cause Notice dated 26th September, 2019, having been completed, and carried in appeal before the learned Tribunal.
+ The present appeal is directed against an order of provisional release. No final determination, of the liability of the imported gold, gold jewellery, or silver, to confiscation, has taken place; nor has the Tribunal accorded its imprimatur to any such decision. The Tribunal has directed provisional release of the seized gold, gold jewellery and silver. An order of provisional release is, at all times, an interlocutory exercise, and does not finally adjudicate on any liability.
+ The exercise of power, to release imported goods on a provisional basis, under Section 110A of the Act is, essentially and fundamentally, discretionary in nature.
+ Clearly, provisional release may be allowed, under Section 110A of the Act, of "any goods, documents or things seized". The Court, as the interpreter of the legislation, cannot profess to greater wisdom than the legislator. Where the legislature has not thought it appropriate to limit, in any manner, the nature of goods, documents or things which may be provisionally released, under Section 110A, in our view, it is no part of the function of a court to read, into the said statutory provision, any artificial limitation, not to be found therein.
+ It is only in exceptional situations, where there is an apparent legislative lacuna, which, if left unfilled, would result in manifest injustice, or frustrate the object of the legislation, that a Court can step in and fill the lacuna and, to that limited extent, perform a quasi-legislative function. Else, the Court must rest content with being an interpreter of existing legislation, and has to accept the legislation for what it is.
+ Bench is not concerned, in the present case, with Section 125, directly, as the issue of liability to confiscation is still at large before the adjudicatory authority; reference to the said provision has been made only to indicate that, even in the case of prohibited goods, the Act permits release thereof, on payment of redemption fine.
+ Bench is, therefore, unable to subscribe to the submission, of the ASG, relying on Om Prakash Bhatia1, that , by virtue of their having been imported in contravention of the Act, the gold, gold jewellery and silver, which were seized, had acquired the character of "prohibited goods" and had, consequently, become ineligible for provisional release.
+ It is not the case of the Revenue that the gold, gold jewellery or silver, forming subject matter of controversy, was prohibited for import per se, in that there was any provision, in the Foreign Trade Policy, or any other statutory instrument, absolutely prohibiting import thereof.
+ Even if, for the sake of argument, the gold, gold jewellery and silver were to be treated as "prohibited", that, by itself, would not render them ineligible for provisional release, under Section 110A of the Act, for the simple reason that Section 110A does not except its application in the case of "prohibited" goods. Rather, it indicates, unequivocally, to the contrary, by using the omnibus expression "any goods, documents or things".
+ Goods, which are eligible for provisional release under Section 110A of the Act, cannot be rendered ineligible for provisional release by virtue of the Circular.
+ Para 2 of Circular 35/2017 -Cus, therefore, effectively seeks to supplant Section 110A, to that extent, and has, therefore, to be regarded as void and unenforceable at law.
+ An executive instruction, which runs contrary to the parent statute and is, therefore, void and unenforceable and, in view thereof, need not be challenged. It is stillborn ab initio , faultily conceived; its evisceration, by legal process, is entirely unnecessary.
+ Bench is convinced that the jurisdiction, of the Tribunal, to "confirm, modify or annul" the order dated 4th October, 2019, was wide enough to encompass the power to direct provisional release, and fix the terms thereof.
+ Where, therefore, the Tribunal is in a position to decide the appeal, it would be well advised to do so, rather than merely remand the matter to the authority below.
+ On principle, therefore, Bench is unable to discern any apparent illegality, or want of propriety, on the part of the Tribunal, in directing provisional release and fixing the terms thereof, rather than remand the matter to the ADG, to undertake the said exercise.
+ The decision, of the Tribunal, to permit provisional release of the gold, gold jewellery and silver, seized at the workshop premises of the respondent, being consequent on the afore-extracted findings, which have not been traversed in the appeal of the ADG, DRI, we find no reason to interfere therewith.
+ Provisional release of the gold jewellery does not, in any manner, inhibit the adjudicating authority from holding that the jewellery was, in fact, liable to confiscation, or passing appropriate orders in that regard. It is precisely for this reason that, at the time of provisional release, the importer is required to furnish a bond, covering the full value of the imported goods, along with security, in accordance with law.
+ Allowing provisional release of the seized gold jewellery does not, therefore, interfere, in any manner, with due adjudication of the Show Cause Notice, or with the jurisdiction, of the adjudicating authority, to hold the gold jewellery liable to confiscation. The mere fact that imported goods, consequent on adjudication may, possibly, be held to be liable to confiscation at a later stage, cannot be a ground to refuse provisional release. Else, Section 110A of the Act would, in our view, be largely rendered nugatory and otiose.
+ Seizure of goods is, in nearly every case, bound to invite, in its inevitable wake, a Show Cause Notice, proposing confiscation thereof. If the mere fact of issuance of such a Show Cause Notice, and the allegations therein, are to be treated as sufficient to justify rejection of the prayer for provisional release, Section 110A would be reduced to a dead letter.
+ Allegations in a Show Cause Notice are merely allegations, till proved, in adjudication.
+ Statements, under Section 108 of the Act, though admissible in evidence, acquire relevance only when they are, in fact, admitted in evidence, by the adjudicating authority and, if the affected assessee so chooses, tested by cross-examination.
+ The quantity of 25299.68 grams of gold jewellery, being not covered by any registered, signed or apprised Bill of Entry, bearing the signature either of the importer or of the Customs Import Clerk, could not, in our view, have been provisionally released, as the import was invalid and irregular ab initio.
+ The exercise of discretion by the Tribunal, in respect of this quantity of gold, therefore, in our view, suffers from perversity in law, and cannot sustain.
+ In the present case, the gold was imported, seeking exemption from payment of duty under the Advance Authorisation scheme and the Exhibition Export scheme. The Show Cause Notice, dated 26th September, 2019, issued to the respondent by the ADG, DRI, to, does not propose any duty demand, but seeks, instead, to confiscate the seized gold, gold jewellery and silver.
+ The total value of the said gold, gold jewellery and silver has been reckoned, in the Show Cause Notice, to be Rs. 28,23,82,357/-.
+ The learned ASG submits that, given the value of the gold seized, the condition of furnishing of a Bank Guarantee for Rs. 1.25 crores, is woefully inadequate.
+ In the view of the Bench, therefore, the interests of justice would justify modification, of the terms fixed by the Tribunal for provisional release of the seized gold, gold jewellery and silver, by requiring the respondent to furnish a bond, for the full value of the seized goods, along with a Bank Guarantee, containing an auto-renewal clause, for Rs. 10 crores, which works out to over 30% of the value of the seized gold (including the gold of which provisional release is not being permitted).
Conclusion:
(I) Questions (i) and (ii) are answered by holding that the power and jurisdiction of the Tribunal, hearing an appeal against an order of provisional release, is coequal with the power exercised by the adjudicating authority.
Bench agrees with the decision of the Tribunal and upholds the quashing of the order, dated 4th October, 2019, of the learned ADG, DRI.
(II) Question (iii) is answered by upholding the decision, of the Tribunal, to release, provisionally, and forthwith, the gold, gold jewellery and silver, seized from the warehouse premises of the respondent, as well as 25400.06 grams of gold jewellery, covered by Bill of Entry No. 107190 dated 17th April, 2019, on furnishing of a bond, by the respondent, covering the entire value of the said goods, along with a Bank Guarantee for Rs. 10 crores, containing an auto-renewal clause. However, the direction for release of 25299.68 grams of gold jewellery, the Bill of Entry in respect of which was unsigned by the respondent as well as by the Customs Import Clerk, unregistered and unaccompanied by any Job ID No., is quashed and set aside.
The appeal is disposed of accordingly.
- Appeal disposed of : DELHI HIGH COURT
2020-TIOL-990-HC-DEL-COFEPOSA
Mohd Nashruddin Khan Vs UoI
COFEPOSA - Main writ petition under Article 226 of the Constitution of India read with section 482 of Cr.P.C. is directed against the detention order No.DT-12001/03/2020-COFEPOSA dated 21.01.2020 issued by Respondent No.2, under Section 3(1) of COFEPOSA Act, 1974 - Sufficiency of the cause of action for amendment of the petition has to be evaluated by taking a holistic view of the facts and circumstances - Bench is not to decide the merits or demerits of the proposed challenge to the notification dated 17.03.2020 directing the the petitioner to appear before the Director General of Police, Government of Uttar Pradesh, Lucknow within seven days of publication of the order in the official gazette which is sought to be impugned by way of amendment to the petition - Revenue counsel contention that the challenge to the notification dated 17.03.2020 cannot be combined with the present petition which is directed against the detention order, appears to be an objection without any legal foundation - In a situation where the proposed detenu is an absconder, the Court while entertaining a petition at the pre-execution stage, would have to exercise extra caution and take his conduct into consideration - At the same time, the petitioner can demonstrate that the respondents have failed to exhibit earnestness in taking an action under section 7 of the Act - Indeed, in the present case, the petitioner has alleged that the action of the respondents is an act of malice in law - Petitioner has strongly urged that the respondents were aware that the petitioner had taken recourse to legal remedy and already filed a petition before the Supreme Court challenging the detention order whereby the Court had permitted the petitioner to approach this Court; that the fact that the notification was instead issued a day after the decision of the Supreme Court on petitioner's petition, reveals the real intent of causing prejudice and, therefore, the action qualifies to be an act of malice in law - One thing is certain - notification under Section 7 of the Act and the facts and circumstances leading to its issuance, would have a bearing on the petitioner's challenge to the detention order one way or the other - The proposed amendments would not entirely change the scope of the main petition and even if it did, it is settled law that the principle of constructive res judicata does not apply to petitions alleging violation of Article 21 of the Constitution - Petitioner would like the fruition of the proceedings to be conclusive in every sense and not in a piecemeal manner - Therefore, he should certainly be given an opportunity to demonstrate that the notification under Section 7 was indeed an act of malice in law and that there was no justification to resort to the same when the respondents were fully aware of the petitioner's action before the Supreme Court - In these circumstances, Bench would not like to deny to the petitioner an opportunity to assail the notification in question by way of addition in the prayer clause - Infact, the alternate course of action of constraining him to file an independent petition would be miscarriage of justice and be counterproductive and contrary to the intent of Section 482 of the Criminal Procedure Code - Respondent's apprehension of the inevitable resultant delay can be minimized by fast-tracking the completion of the pleadings - Accordingly, Bench allows the application and directs the petitioner to place the amended writ petition incorporating the grounds and the prayer within a period of three days - List the present writ petition for final hearing before the Roster Bench on 15.06.2020: HighCourt [para 8, 12, 13]
- Matter listed: DELHI HIGH COURT
2020-TIOL-989-HC-KAR-NDPS
Shivaraj Urs Vs UoI
NDPS - Petitioner is seeking bail under Section 439 of Cr.P.C. - Point involved in this case is whether prayer for grant of bail under Section 167(2) of Cr.P.C. can be considered after the Trial Judge takes cognizance of offences alleged in the complaint filed under Section 36A of Narcotic Drugs and Psychotropic Substances Act, 1985.
Held: Petitioner was arrested on 3rd May 2019 and NCB has filed its complaint dated 25th October 2019 - Petitioner's argument is that the investigation is still pending, therefore, the complaint which is pari materia with the chargesheet is not valid in law; that the maximum statutory period of one year has expired on 2nd May 2020 and, therefore, petitioner is entitled for default bail - Insofar as petitioner is concerned, NCB has summed up its case in paragraph No.104 and leveled allegations of contravention of various provisions of the NDPS Act - The ground with regard to completion of investigation is a matter of fact and cannot be decided on oral submissions - it is settled that once a challan is filed, an application under Section 167(2) of Cr.P.C. for grant of bail does not survive for consideration or remain enforceable - it cannot be gainsaid that the Special Judge has already taken cognizance of the offence and trial is in progress - There is no challenge to the validity of compliant nor the order of taking cognizance - Copy of NCB's complaint and documents annexed to the petition runs to about 65 pages, the relied upon documents described in Annexure-III to the complaint run to 586 pages - If the argument advanced by petitioner is accepted, then NCB's complaint and Special Judge's order taking cognizance will have to be declared illegal and such finding cannot be recorded in this proceedings under Section 439 of Cr.P.C in the absence of specific challenge - petitioner's prayer for grant of default bail must fail and it is accordingly dismissed: High Court [para 13, 22, 23]
- Petition dismissed: KARNATAKA HIGH COURT
2020-TIOL-988-HC-DEL-CUS
MD Overseas Ltd Vs UoI
Cus - Petitioner vide its application dated 24th June, 2019 had sought for Advance Authorization under Para 4.37 of the Foreign Trade Policy (2015-2020) seeking for import of Gold Bars worth over Rs. 944 crores and export of Gold Medallions & Coins worth over Rs. 958 crores – deficiency memos were issued by DGFT and which were replied to by the petitioner - On 18th September, 2019, the Petitioner preferred another application for Advance Authorization for the import of Gold Bars to the value of over Rs. 2663 crores and export of Jewellery /Articles manufactured by fully mechanized process worth over Rs. 2716 crores - DGFT, vide the impugned Public Notice dated 26th September 2019, disallowed the issue of Advance Authorization for two export items namely "Gold Medallions and Coins" or "Any Jewellery manufactured by fully mechanized process" - Petitioner addressed a letter dated 30th September, 2019, to DGFT requesting a refund of the Application money - Vide a letter dated 1st October 2019, DGFT issued a deficiency letter in regard to the aforesaid application dated 18th September, 2019, which stated the Petitioner's application could not be considered in light of the impugned Public Notice – Petitioner contends that the DGFT vide its circular dated 26th September, 2019 by having excluded items of "Gold Medallions and Coins" or "Any Jewellery manufactured by fully mechanized process" has amended the provisions of the FTP which expressly provides for the Advance Authorization in cases of these export items as per Para 4.32 of the FTP - It is averred that, since, DGFT has no powers to amend the FTP, in view of the specific exclusion of delegation of powers under Section 5 by the Central Government to DGFT, in Section 6 of the The Foreign Trade (Development & Regulation) Act, 1992, (hereinafter the "FTDR Act"), the circular is ultra vires and is liable to be quashed accordingly.
Held: It appears that by impugned public notice No. 35/2015-2020 dated 26th September, 2019 issued by respondent No.1 whereby the Director General of Foreign Trade ('DGFT'), in exercise of the powers under paragraph 1.03 of the Foreign Trade Policy 2015-2020, disallowed issuance of Advance Authorisations where item of export is "Gold Medallions and Coins" or any jewellery/articles manufactured by fully mechanized process, has in effect amended the Foreign Trade Policy, in excess of power and jurisdiction of the DGFT – In view of the decision in Kanak Exports = 2015-TIOL-275-SC-EXIM, the powers exercised by DGFT while issuing the aforesaid public notice dated 26th September, 2019 which puts restrictions upon issuance of the advance authorisation for the Gold Medallions and Coins is beyond the power, jurisdiction and authority of DGFT – Further, in view of decision in Atul Commodities Pvt. Ltd. = 2009-TIOL-24-SC-CUS, categorisation or re-categorization cannot be done by the policy circulars and such exercise has to be undertaken by specific amendment to the Foreign Trade Policy under Section 5 of the Act, hence also, the public notice No. 35/2015-2020 dated 26th September, 2019 is beyond the power, jurisdiction and authority of DGFT - power exercised by DGFT under paragraph 1.03 of the Foreign Trade Policy 2015-2020 is illegal and the same deserves to be quashed and set aside - In view of the aforesaid facts, reasons and judicial pronouncements, the public notice dated 26th September, 2019 issued by respondent No.1 is quashed and set aside and consequential letters dated 1st November, 2019 are directed to be decided by respondent No.1 as early as possible and practicable - writ petition stands allowed and disposed of: High Court [para 25, 27, 30 to 33]
- Petition allowed: DELHI HIGH COURT
2020-TIOL-987-HC-MAD-CUS
Qatar Airways Vs CC
Cus - Commissioner of Customs (first respondent) has rejected the application filed for issue of Detention Certificate to the petitioner to claim waiver of Transshipment Charges billed by the Integrated Air Cargo Complex - petitioner has challenged the impugned communication - Petitioner has been issued with Demurrages and Transshipment charges by the 3rd/4th respondent for delay in transshipping the cargo brought by them for being transshipped to Trivandrum International Airport during the period between 26.11.2009 and 13.12.2009 - It is the case of the petitioner that since it has wide-bodied cargo aircrafts and since there is no facility for landing of such aircrafts in Trivandrum, the petitioner brought the cargo in these aircrafts to the Chennai International Airport for being transshipped to Trivandrum/Calicut by road - Since there was delay in transshipment as a result of which the petitioner has been asked to pay transshipment and the demurrage by the Air Port Authority of India, Air Cargo Complex, Chennai, petitioner, therefore, requested the 1st and 2nd respondents to issue of Detention Certificate to claim waiver / remission from payment of demurrage charges from the 3rd/4th respondent at the earliest - petitioner submitted that during the same period, 9 out of 11 customs officers who were serving at the Chennai Air Cargo Complex and handling transshipment of cargo were arrested and 8 of them were middle level officials and there was a complete disruption of the activities on account of arrest; that, therefore, neither the transshipment applications were received nor processed which resulted in the late clearance of the imported cargo; that, therefore, the petitioner cannot be saddled with liability.
Held: Demurrage is collected by the Custodian of the import or export goods for the delay in removal and for occupying the space within its space beyond the time given - Detention charges on the other hand are collected by the liner or the carrier, as the case may be, when the consignee holds onto the carrier's container outside of the port, terminal, or depot beyond the free time that is allotted - Detention amount is charged when import containers have been picked up and continues to be in the possession of the consignee and is not being returned within the allotted time and this is a private arrangement/ contract between the liner and the consignee - As far as transshipment of imported cargo is concerned, as per Section 54(3) of the Customs Act, a proper officer may allow the goods to be transshipped, without payment of duty, subject to such condition as may be prescribed for the new arrival of such goods at the Customs station to which transshipment is allowed - The Airport Authority of India and Port Authorities have been appointed as custodians of imported goods under Section 45 of the Customs Act, 1962 - As far as imported cargoes which are to be transshipped by a motor vehicle, such transshipment shall be made only on the permission in writing of the Commissioner of Customs as is evident from a reading of proviso to Regulation 3 of the Goods Imported (Conditions of Transshipment) Regulations, 1995 - The procedure for transshipment of imported cargo in containers/trucks from the airports/ACCs to ICDs/CFSs/Airports/ACCs to the ICDs/CFSs/Airports/ACCs was explained in CBEC Circular No.69/99-Cus - By not filing the application, the petitioner would not have gained any advantage - There is no explanation as to why the officers refused to receive the application for transshipment and clear the cargo immediately when the petitioner addressed letter dated 11.12.2009 to the 2nd respondent - If indeed there were no officers available to receive and scrutinise the application for transshipment for the reasons stated by the petitioner, obviously there will be delay in filing of transshipment application - Therefore, in the background of the facts which have emerged, prima facie it appears the petitioner may not have been guilty of any delay in filing transshipment application - On this score, Bench is inclined to set aside the impugned communication and remit the case back to the 1st respondent to clearly state whether there was indeed mass arrest of officers who were manning the transshipment operation at the custom hold area at the Chennai Kamaraj International Air Cargo Complex during the material period - As far as the present case is concerned, since none of the circumstances noted by the Delhi High Court in Trip Communication Private Limited Vs. Union of India 2014-TIOL-468-HC-DEL-CUS are attracted, the question of the 1st respondent issuing such certificate to the petitioner for the petitioner to claim waiver does not arise, therefore, to that extent the 1st respondent was justified in denying Detention Certificate to the petitioner - Though, it is not the case of the abuse by the officers of the Customs, there are sufficient indications to show that there was a complete disruption of service at the Air Cargo Complex during the relevant period due to alleged arrest of the officers - In absence of the officers to receive the transshipment application, there could have been total disruption and no application was received which perhaps may have led to the delay - If there were no proper officers or there were only few officers to handle the workload due to alleged arrest, the delay in receiving the transshipment application for being processed by the 1st respondent should not be at the cost of the petitioner - If indeed there was a complete breakdown due to alleged arrest and resulted in disruption of the operations at the Air Cargo Complex, the petitioner should be compensated as such delay cannot be attributed by the petitioner - Therefore, this aspect would require proper verification - Issue is, therefore, left open for the petitioner to establish that Customs Department is liable to compensate the petitioner in the light of the observation of the Hon'ble Supreme Court in Mumbai Port Trust Vs. Shri Lakshmi Steels = 2017-TIOL-270-SC-CUS - The 1st respondent is, therefore, directed to pass appropriate orders within a period of three months - Meanwhile, the petitioner is directed to pay the amounts that are due to the 3rd and the 4th respondents - Writ Petition stands disposed of with the above directions: High Court [para 37, 38, 40, 49, 52, 53, 69, 84, 85, 87, 91, 92]
- Petition disposed of: MADRAS HIGH COURT
2020-TIOL-986-HC-KERALA-CUS
VKL Seasoning Pvt Ltd Vs CC
Cus – Yeast extract classified by petitioner importer under heading 2102 whereas the Customs department sought reclassification under heading 2106 9060 attracting a higher rate of duty - In the meantime, petitioner received a summons dated 20.12.2019 from the office of the Director, Revenue Intelligence, purportedly under Section 108 of the Customs Act - It is in that background of the matter, customs authorities did not release the goods despite the fact that the petitioner was willing to deposit the higher rate of duty as acceptable under item No.2106 9060 – Petitioner further submits that import was not done for the first time, but since 2011 and during all these period it was classified under 2102 on payment of the applicable rate of duty – Petitioner also submits that summoning of the Managing Director vide notice dated 21.02.2020 speaks volume of highhandedness of the DRI officials and being a supervening event, petitioner had no other option but to seek the direction of this Court for interim protection; the attention of this Court was drawn to an order dated 27.02.2020, whereby, the presence of the Managing Director of the petitioner company has been deferred to 04.03.2020, and thus urges this Court for allowing the writ petition - question involved in the present writ petition is whether the customs authorities are empowered to differ the classification as sought by the petitioner for the purpose of charging of the higher duty.
Held: There is no force in the argument of the petitioner - On a plain and simple reading of the prayer as extracted above as well as the prayer for stay of the presence/summoning of the Managing Director by the officers of the DRI cannot be conjoined in one writ petition - Even otherwise, the provisions of Section 108 only deals with recording of the statements, nothing beyond - Any apprehension can be invoked when the entire action initiated in law except that DRI officers of New Delhi do not have the territorial jurisdiction - Such an argument would not have any force to stand - judgment dated 17.10.2019 rendered in W.P. (C).No.4649/2019 relied upon – Bench refrains from commenting further as it would be taking away the legal right of the petitioner in assailing the action of the DRI in independent proceedings but close the issue for the time being - Section 110(A) leaves no manner of doubt that the petitioner is not prepared to move an application for provisional release of the goods being perishable in nature – Counsel for the customs authorities states that they would not have any objection in considering the prayer of the petitioner in case such application is made in accordance with law - In the opinion of the Bench, the alleged cause of action based only on the apprehension is not supported by any documents to make out the case warranting interference under Article 226 of the Constitution of India - Interim order dated 27.02.2020 is also ordered to be set aside - Writ petition is dismissed: High Court [para 12, 13]
- Petition dismissed: KERALA HIGH COURT
2020-TIOL-808-CESTAT-DEL
MM Logistics Vs CC
Cus - This appeal of assessee challenges the revocation of custom broker license by recourse to regulation 14 r/w Regulation 17 of CBLR, 2018 - The charges leveled against the assessee are that the mandated advise was not forthcoming, that they had filed the bill of entry without insisting upon the various prescribed clearances and that speed and efficiency prescribed by the regulations was also lacking - Neither the Inquiry Authority nor the Commissioner of Customs had taken it up on themselves to scrutinize the documentary and oral evidence for arriving at such a conclusion - Such proceedings should comply strictly within the time-lines prescribed in law - The failure to do so casts a taint on the proceedings as one that was either not motivated by public interest or lacking gravitas expected when depriving a customs broker of the means of livelihood - As submitted by assessee, the starting point for revocation proceedings, under the CBLR, 2018, is the receipt of offence report intended to bring breaches to the knowledge of licensing authority - The SCN preceded the commencement of inquiry by more than a year - Even though attempted to be justified with the explanation that the said notice was received at the office of the respondent only on 6th August 2018, Tribunal is unable to concur as the only addition thereto is a covering letter - Owing to the existence of prior intimation the notice is also an untenable alternative as the trigger that is the express requirement for commencement of proceedings under CBLR, 2018 - Hence, the SCN, even if accepted as 'offence report', cannot be considered as the point at which proceedings should have been commenced - On the other hand, the explanation inserted to define 'offence report' in the CBLR, 2013 includes prima facie framing of charges of alleged acts of commission or omission which, by no stretch, a SCN under section 124 of Customs Act, 1962 can pretend to be superior to any other communication - It would, therefore, be appropriate for the original information furnished by Inland Container Depot Commissionerate at Tughlakabad, specifically pointing out the role of the customs broker, to be the 'offence report' within the meaning of the Regulations - The said offence report dated 6th April, 2017 was not acted upon until long after proceedings under section 112 of Customs Act, 1962 were initiated against the assessee herein - The time lines prescribed in Regulation 17 of CBLR, 2018 appear to have been complied with in its breach - This is not consistent with the mandated prescription in the Regulations - The impugned order is set aside: CESTAT
- Appeal allowed: DELHI CESTAT |
|
