| SERVICE TAX
2020-TIOL-1316-CESTAT-MUM Arval India Pvt Ltd Vs Pr CST
ST - Appellant provides motor vehicles, identified by their corporate customers, on lease for specified periods and which may, on exercise of option by the lessee, incorporate maintenance and repair (denominated as 'fleet management') during the tenor of the agreement - The consideration, to be paid at regular intervals specified in the lease agreement, is sought to be brought within the authority to levy service tax under Finance Act, 1994 - The impugned order has upheld the taxability while discarding the proposal to invoke the extended period - There is no dispute that the tax liability on 'fleet management' has been discharged as provider of 'management, maintenance or repair service' and on commission received from insurance companies as provider of 'business auxiliary services' while, claiming the transaction to be 'deemed sale', the 'lease rental' was not offered up as consideration for rendering taxable service - Revenue challenges the discarding of tax liability for the extended period as well as the grant of abatement of sixty percent available under notification no.1/2006-ST dated 1st March 2006.
Held: Impliedly, neither did the taxing powers vested in the Union extend either to 'sale' or 'deemed sale' nor did all of the several 'deemed sales' incorporated in the constitutional amendment include some component that was not 'deemed sale' outside the pale of taxation in List II in the Constitution of India - The impugned order has erred in presuming so - Agreements/contracts of 'lease' are, acknowledgedly, taxable as 'deemed sale'; it is not the case of Revenue that any portion of the consideration for 'lease' is not 'deemed sale' - As the entire rental is subject to tax as 'deemed sale', there is no scope for any portion thereof to be leviable to tax by the Union and, thereby, under Finance Act, 1994 - In the above circumstances, and in the light of discharge of tax liability under Finance Act, 1994 on some of the consideration earned by the assessee, the scope for subjecting 'lease rental' to tax, as proposed in the show cause notice, cannot sustain in the absence of a valid machinery provision recognized in the taxing statute - Accordingly, the impugned orders are set aside and appeal of assessee allowed while appeal of Revenue stands dismissed: CESTAT [para 13, 14]
- Assessee appeal allowed/Revenue appeal dismissed: MUMBAI CESTAT
2020-TIOL-1315-CESTAT-DEL
Asian Hotels Ltd Vs CST
ST - The assessee is the owner of a hotel by the name and style M/s Hyatt Regency - The impugned order has confirmed the demand of Service Tax on various services - As regards to the demand of Service Tax on the amount paid by assessee to Hyatt International as fees under the category of 'management consultant' as a service recipient, it is clear that Hyatt International carries out the operation and management of hotel for the assessee under the agreement - It is not engaged in providing any service in connection with the management of the hotel - Hyatt International also does not render any advice, consultancy or technical assistance to the assessee - It needs to be noted that actual running or managing an organization cannot be the same as providing any service in connection with the management of the organization - It has to be held that Hyatt International is not providing any service of a 'management consultant' to the assessee - The confirmation of demand under the head, therefore, cannot be sustained - As regards to the demand of Service Tax on the expenses reimbursed to Hyatt International under the category of 'business auxiliary service' as a service recipient, Sub-section (1) of Section 67 provides that where service tax is chargeable on any taxable service with reference to its value, then such value shall, where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by the service provider - It is, therefore, clear that only such amount is subject to service tax which represents consideration for provision of service and any other amount which is not a consideration for provision of service cannot be subjected to service tax - The expenses which are reimbursed, cannot be subjected to levy of Service Tax under 'business auxiliary service' - The confirmation of the demand under the head, therefore, cannot be sustained - As regards to the demand of Service Tax on conversion charges of currency received from hotel guests under 'business auxiliary services', these charges are stated to have been received from the hotel guests towards conversion of currency and the service said to have been rendered by assessee is independent and not on behalf of anybody or in the capacity of an agent - In M/s Marudhara Motors , a Division Bench of Tribunal examined whether document processing charges received from the buyer of the vehicle could be subjected to levy of Service Tax under 'business auxiliary services' - The Tribunal found that service was being provided to a client for and on behalf of the financial institutions or banks - It was for providing documentation that charges were claimed from the customers and since there was no involvement of any third party on whose behalf service could be said to have been provided to the customers, Service Tax could not have been demanded under 'business auxiliary services' - The Commissioner was not justified in confirming the demand under this head - As regards to the demand of Service Tax on the income from Business Centre on the ground that it is part and parcel of 'convention' service as a service provider, it is more than apparent that the aforesaid charges collected by assessee from the hotel guests do not in any manner whatsoever relate to holding of a convention - Convention means a formal meeting or assembly which is not open to the general public - The levy of charges under this head, therefore, cannot be sustained: CESTAT
- Appeal allowed: DELHI CESTAT
CENTRAL EXCISE
2020-TIOL-1314-CESTAT-DEL
Sarthak Ispat Pvt Ltd Vs CC & CE
CX - Assessee is the manufacturer of MS ingots - Acting upon specific information that M/s. PIL is indulged in clandestine procurement of raw-material production and clearance of MS ingots and TMT Bars, flats and challans, the Central Excise Officers visited their premises and verified the documents and stock of raw-material as well as the finished goods - Shortage of M.S. Ingots, TMT Bar and Sponge Iron was noticed - The incriminating documents were recovered vide Panchnama - Statement of Director of M/s.PIL, namely, Shri Pankaj Agrawal, was recorded under Section 14 of CEA, 1944 - The Scrutiny of documents and further investigation revealed that the suppliers of unaccounted raw-material to M/s.PIL and their customers of finished goods included manufacturers /dealers and commission agents, who all were alleged to have evaded payment of Central Excise Duty while facilitating M/s. PIL to remove the finished goods clandestinely - Since the sole challenge to the order is its reliance upon third party evidence, it is necessary to check their evidentiary value - There is no other evidence or document in the form of stock verification of raw material of assessee and the material supplied to M/s. PIL nor any evidence about usage of any transportation by the assessee for transporting the alleged quantity of raw-material to M/s.PIL - In absence thereof, the documents recovered from M/s.PIL cannot be held against the assessee - It is well settled law that there has to be some concrete evidence which would show clandestine manufacture of goods, as was reiterated by Tribunal in the case of P.D. Industries Pvt. Ltd. - T h e order confirming the recovery has no legal basis to sustain: CESTAT
- Appeals allowed: DELHI HIGH COURT
CUSTOMS
2020-TIOL-146-SC-CUS-LB
Designated Authority Vs Andhra Petrochemicals Ltd
Cus - Anti-dumping duty - Action of Designated Authority (DA) in directing applicant to furnish relatively contemporary data cannot be termed as arbitrary - impugned orders of the High Court were plainly erroneous in chastising the DA, and even directing his replacement, for what appears to be his adherence to prescribed procedure - barring exceptional features necessitating intervention in an ongoing investigation triggered by a complaint by the concerned domestic industry, judicial review should not be exercised virtually as a continuous oversight of the DA's functions - Supreme Court has cautioned more than once, that judicial review is to be exercised in a circumspect manner, especially where final findings are rendered by the DA - Orders of High Court set aside: Supreme Court Larger Bench [para 29 to 33]
Facts:
+ Andhra Petrochemicals Ltd. applied to the Central Government, seeking impos ition of anti-dumping duty on imports of normal Butanol or N-butyl alcohol originating in and exported into India from Saudi Arabia.
+ This application resulted in the initiation of investigation by the designated authority into the import of the subject articles from Saudi Arabia, by notification dated 02.09.2016.
+ The Designated Authority recorded the following findings by notification 28.11.2017:
(i) Period of last 3 months of POI of exports of subject goods from Saudi Arabia was insufficient to evaluate injury to the domestic industry as material injury determination would require data on imports and domestic industry's sales for a longer duration.
(ii) The short period of production especially commercial production of just one month also constrained determination of a representative and realistic normal value for cooperating producers/exporters.
(iii) Causal link between imports from Saudi Arabia and injury to the domestic industry could not be conclusively established on the basis of three months of export period.
(iv) The Authority did not consider it appropriate to recommend levy of Anti-Dumping Duty on the subject goods from Saudi Arabia and terminated the investigation under Rule 14(b) of Anti-Dumping Rules.
+ Andhra Petro approached the Telangana High Court, complaining that its two applications, dated 18.10.2016 and 02.12.2016 had not been duly considered in accordance with provisions of the Customs Tariff Act, 1975, especially Rules 2(b) and 2(d) of the Rules of 1995. This writ petition was allowed by order dated 09.02.2018, directing the Designated Authority to consider the applications dated 18.10.2016 and 02.12.2016 afresh, after evaluation of the entire information placed before him in accordance with the provisions of the Customs Tariff Act, 1975 and the Rules of 1995, more particularly Rules 2(b) and 2(d) of the Rules of 1995 and pass appropriate orders within a time frame.
+ Further to these directions, the Designated Authority passed an order dated 05.03.2018 declining to initiate anti-dumping investigation.
+ This order was impugned by Andhra Petro in another writ petition (WP 11116/2018, hereafter "the second writ petition") before the Telangana High Court.
+ Before the High Court, Andhra Petro now contended that it was a producer of 2-EH which is a "like article" (as defined under Rule 2(d) of the Rules of 1995), to 2-PH and INA. It contended that it satisfied the criteria under Rule 2(b) read with Rule 2(d) of the Rules of 1995 to file a petition for imposition of anti- dumping duty concerning imports of the said alcohols on behalf of the domestic industry. It was further contended that in spite of a specific direction of this Court dated 09.02.2018 passed in WP 25988/2017, the Designated Authority did not determine whether the dumped products cause injury to the domestic industry in the commercial competition with like articles made in India and passed the impugned order declining to initiate anti-dumping investigation.
+ Pursuant to the High Court's directions, the DA issued notices on 28.09.2018, 24.10.2018 and 03.12.2018. After noticing that Andhra Petro's initial application was in 2016 (i.e. 18.10.2016 and 02.12.2016), the DA issued letters seeking updated data from Andhra Petro.
+ However, Andhra Petro filed WP No. 2639/2019 before the High Court against the DA's letters of 28.09.2018, 24.10.2018 and 03.12.2018. The DA filed its reply before the High Court, contending inter alia that first, the High Court's order dated 28.8.2018 did not prohibit it from calling for updated data and had directed it (DA) to initiate investigation in accordance with law; second, that it sought updated data to evaluate and comply with the High Court's order fairly; and lastly that Andhra Petro was silent on the fact that the data filed by it was 30 months old.
+ High Court initiated suo motu contempt proceedings [order dated 22.07.2019] after recounting the previous litigation and its directions, in those petitions. It noted that the DA, after disposal of the first petition, undertook the exercise only in relation to the period of investigation sought by Andhra Petro without enlarging it (i.e. the period); this led to the order of the DA rejecting the application on 5 March, 2018, and the filing of the second writ petition, which led to the second remand. The High Court said that the notification (dated 09-07-2019) therefore, "cannot be countenanced" and also made certain observations.
+ High Court, by the second impugned order disposed of the writ petition [W.P.(C) 2639/2019].
Against these orders, the Designated Authority is before the Supreme Court.
Held:
+ Section 9A of the Customs Tariff Act and the procedure prescribed by the Rules of 1995, clearly disclose an intent that investigations should be completed within pre-determined time limits and the levy itself (which can be specific to foreign exporter or country - or combination of both) cannot be more than five years - which may, after due review in accordance with prescribed procedure, before expiry of the said period, be extended by another period not more than five years. These timelines are crucial; the DA is duty bound to follow them.
+ The analysis of the particular market behavior by the allegedly offending foreign exporters, involves sifting of a great deal of evidence, such as manufacturing capacity, financial abilities, overall capacity of the country in the like field, prices, and the margin of acceptable delinquent behavior, as well as domestic capacity, efficiency, etc., while determining if an injury exists, the margin of such injury and its likely duration.
+ The judgment of this court in Union of India v. Kumho Petrochemicals has noticed that as a signatory to GATT and the Marrakesh Agreement, the Anti-Dumping Rules (ADA) are to be assimilated into domestic laws. The provision of Article 5.10 of the Marrakesh Agreement is strict with respect to the timeline for taking up and conclusion of investigation. Article 10 empowers states to levy duties, with retrospective effect, only for a limited period (90 days subject to fulfillment of prescribed conditions) "prior to the date of application of provisional measures, when the authorities determine for the dumped product in question that:.." This has been given effect to by Rules 17 and 20 of the Rules of 1995.
+ Keeping the imperative of completion of investigation within a pre-determined timeline, the guidelines contained in the Manual of Operation for Trade Remedy Investigations (Period of Investigation and Injury Investigation period) as to the contemporaneousness of the data necessary to carry out the investigation, assume importance.
+ The rationale for these guidelines is self-evident: any investigation carried out for past periods would in all likelihood, result in minimal levy. For instance, if in 2020, investigation is initiated for the period 2013-14, with the object of determining anti-dumping, even if injurious behavior is found, the levy can be only of limited duration. Further, to levy duty for the period after findings are rendered, the POI would yield stale results, and cannot justify levy for later periods. Keeping this in mind, the DA, apparently in the present case, having regard to Para 5.9, required Andhra Petro to furnish relatively contemporary data. Such an action cannot be termed as arbitrary. In this court's opinion, the impugned orders were plainly erroneous in chastising the DA, and even directing his replacement, for what appears to be his adherence to prescribed procedure.
+ Access to judicial review is a valuable right conferred upon citizens and persons aggrieved; the Constitution arms the High Courts and this court with powers under Articles 226 and 32. At the same time, barring exceptional features necessitating intervention in an ongoing investigation triggered by a complaint by the concerned domestic industry, judicial review should not be exercised virtually as a continuous oversight of the DA's functions. This court has cautioned more than once, that judicial review is to be exercised in a circumspect manner, especially where final findings are rendered by the DA.
+ For the foregoing reasons, this court is of the opinion that the impugned orders, i.e., the order dated 28.08.2018 issuing specific directions for anti-dumping investigation into articles imported from EU; the order dated 22.07.2019 (initiating contempt proceedings against the DA) and the order dated 05.08.2019 have to be set aside. The first two orders are accordingly set aside.
+ The third order (dated 05.08.2019), to the extent that it directs the replacement of the incumbent DA, is set aside. [para 29 to 33]
- Appeals allowed: SUPREME COURT OF INDIA
2020-TIOL-145-SC-CUS
LR Brothers Indo Flora Ltd Vs CCE
Cus - Customs duty levied upon the appellant on the sale of cut flowers within the Domestic Tariff Area has been confirmed by the Tribunal, therefore, assessee is in appeal before the Supreme Court - CESTAT has inter alia held that irrespective of whether the DTA clearances of cut-flowers were, in contravention of the EXIM Policy or otherwise, the cut-flowers being non-excisable goods, their DTA clearance would attract, in terms of the provisions of para 3(a) of the exemption Notification No. 126/94-CUS., only the Custom Duty involved on the inputs used in the production of the cut-flowers; that the point of dispute is as to whether the Custom Duty payable on the inputs used in the production of the cut-flowers which had been cleared to DTA, is to be taken as an amount equal to Custom Duty chargeable on the import of cut-flowers, as such, or it should be the actual Custom Duty on the inputs used in the production of cut-flowers cleared to DTA; that from reading of para 3(a) of the Notification No. 126/94-Cus as it existed during the period of dispute i.e. during the period prior to 18.5.01 - and as it existed during period w.e.f. 18.05.01, it is clear that during the period of dispute, the notification contained a machinery provisions for determining, the Custom Duty chargeable on the inputs used in the production of non-excisable goods cleared to DTA and as per this machinery provision, the duty was to be in an amount equal to the Custom Duty chargeable on the finished goods, as if imported, as such; that, however, after the amendment of this Notification w.e.f. 18.5.01 by notification 56/2001-Cus, the duty on the inputs used in the production of non-excisable goods cleared to the DTA was to be calculated on actual basis; that the amendment to the Notification No. 126/94-Cus. w.e.f. 18.5.01 by the Notification No. 56/01 can have only prospective effect and it cannot be given retrospective effect; that, therefore, during the period of dispute, customs duty on the inputs used in the production of cut-flowers cleared to DTA has to be calculated as per the provisions of the Notification, as it existed during that period - The thrust of the argument of the appellant is that according to Paragraph 3 of the exemption notification 126/94-Cus, sales made in DTA would attract excise duty and since the cut flowers sold by the appellant are non-excisable goods, no excise duty can be levied upon it - Further, according to the notification, in case of non-excisable goods, the customs duty is leviable on the imported inputs - In the present case, since the cut flowers are home grown, customs duty cannot be levied upon them and, therefore, the demand of customs duty cannot be sustained - Appellant would further urge that Section 12 of the 1962 Act being the charging section, could only be applied if the goods are imported into India and since the cut flowers are not imported, the show cause notice issued under the provisions of the 1962 Act is bad in law; that extended period of limitation can be invoked only in the case of deliberate default and that it cannot be invoked in the present case since there was no default - respondent Revenue would urge that in the fact situation of the present case, the department has correctly levied the customs duty, as the DTA sales made were in contravention of the EXIM policy and the appellant had no permission from the Development Commissioner to clear the goods in DTA.
Held:
+ Issues that arise for consideration in this appeal are: (i) Whether customs duty can be charged on the non-excisable goods produced in India and sold in DTA by an EOU?; and (ii) Whether the amendment in terms of Notification No. 56/01-Cus dated 18.05.2001, purporting to amend the criteria for determination of duty on inputs, is prospective or retrospective in its application?
(i) Whether customs duty can be charged on the non-excisable goods produced in India and sold in DTA by an EOU?
+ A bare perusal of the above notification would evince that apart from providing for duty free imports of inputs for an 100% EOU in order to export all the goods produced or manufactured by it, in addition, it also gives liberty to the 100% EOUs to clear their goods in DTA to the extent permissible by and in accordance with the EXIM policy. The EXIM policy, at paragraph 9.9 provided that for earning an entitlement to make sales in DTA, the unit has to maintain positive net foreign exchange earning. The calculation of net foreign exchange earning, as defined at paragraph 9.29, is provided for at paragraph 9.5 of the Policy, which had to be done as prescribed in Appendix I of the Policy. In case of cut flowers, it has been fixed at 20% since it would come within the category of "Products not covered above". [para 12]
+ On a combined reading of the notification with the conditions laid down in the EXIM policy, it is clear that the fulfilment of the aforesaid conditions is a condition precedent to become eligible to make DTA sales. Resultantly, if goods are cleared in DTA sales in breach of the aforesaid conditions, customs duty would be leviable, as if such goods were imported goods. [para 13]
+ Insofar as emphasis laid by appellant that the DTA sales made by an 100% EOU can only be amenable to excise duty and show cause notice under the provisions of the 1962 Act could not have been issued, Bench observes that exposition [in Vikram Ispat - 2002-TIOL-32-CESTAT-DEL-LB ] has no application to the fact situation of the present case, in as much as there had been no contravention of conditions of EXIM Policy and the issue was only about the nature of tax, in case of goods otherwise amenable to excise duty. [para 14]
+ Concededly, the DTA sales pertaining to excisable goods made in conformity with the conditions of the EXIM policy are exigible to excise duty, but once there is contravention of the condition(s) of the EXIM policy, irrespective of the goods produced being excisable or non-excisable, the benefit under the exemption notification is unavailable - In such a situation, the very goods would become liable to imposition of customs duty as if being imported goods. [para 15]
+ Assuming there was no contravention of the EXIM policy, in case of the goods cleared being non-excisable , the Paragraph 3 of the exemption notification would come into play and the duty would be leviable on the inputs used in such goods - It is clear from section 12 of the Act that the goods which are imported shall be charged as specified under the Customs Tariff Act, 1975 or "any other law", unless exempted under the 1962 Act or by "any other law". [para 16]
+ In the present case, the notification provides for exemption on import of inputs and at the same time prescribes for adherence of certain conditions for availing the exemption. The notification further prescribes the rate at which the customs duty on the inputs used in the production of non-excisable goods sold in DTA is to be charged. Thus, the notification, having been issued in exercise of delegated legislation under Section 25 of the 1962 Act, has to be understood as "any other law". Resultantly, the appellant, having availed exemption under the notification, cannot evade customs duty on the imported inputs at the rate prescribed by the notification. [para 17]
+ The show cause notice points out that the appellant imported raw materials like "Live Rose Plants" and consumables like fertilizers and planting materials, however, the appellant advisedly chose to confine its argument to "cut flowers", which, as contended, were grown on Indian soil and thus not amenable to customs duty. However, the demand made in the show cause notice "treating" cut flowers as deemed to have been imported was only for the purpose of quantification of the customs duty on the imported inputs and not imposition of the customs duty on the domestically grown cut flowers as such . [para 18]
+ A priori , the demand in the present case, pertaining to the non-excisable goods has rightly been made under the 1962 Act upon the imported inputs used in the production of goods sold in DTA in violation of condition(s) in the EXIM Policy. [para 20]
+ In case of excisable goods, even the present notification takes resort to Section 3 of the 1944 Act, as can be seen from the Paragraph 3 of the notification extracted above. Whereas, the provisions of the 1962 Act are invoked only when the goods are non-excisable. In the present case, since the cut flowers are non-excisable goods, the demand for payment of customs duty had rightly been made vide show cause notice under the provisions of the 1962 Act. [para 22]
(ii) Whether the amendment in terms of Notification No. 56/01-Cus dated 18.05.2001, purporting to amend the criteria for determination of duty on inputs, is prospective or retrospective in its application?
+ Show cause notice was issued to the appellant prior to the issuance of the amendment notification. [para 23]
+ Aforesaid notification posits of carrying out amendments and substituting the charging clause of the inputs used in case of non-excisable goods. The language employed in the notification does not offer any guidance on whether the amendments as made were to apply prospectively or retrospectively. It is a settled proposition of law that all laws are deemed to apply prospectively unless either expressly specified to apply retrospectively or intended to have been done so by the legislature. The latter would be a case of necessary implication and it cannot be inferred lightly. [para 24]
+ Upon a bare reading of the circular [ 31/2001-Cus dated 24.05.2001], it can be noted that it discusses the mechanism in force before the amendment, the reason for bringing in the change and the changes brought in. The circular does not mention that the earlier methodology in force was deficient or devoid of clarity in any manner. It rather says that the same was being disadvantageous to the EOU units as compared to the DTA units due to the difference in charging rates in the respective circulars. Upon considering that, the amendment has been brought in to establish parity with the excise notifications and to vindicate the disadvantage that earlier regime was causing to EOU units. Merely because an anomaly has been addressed, it cannot be passed off as an error having been rectified. Unless shown otherwise, it has to be seen as a conscious change in the dispensation, particularly concerning the fiscal subject matters. The word “anomaly” has been defined in Webster's New Twentieth Century Dictionary to mean “abnormality; irregularity; deviation from the regular arrangement, general rule or the usual method”. [para 26]
+ In the context of the subject circular, since it takes note of the previous arrangement and distinguishes it from the excise notifications, the meaning has to be taken as deviation from the regular arrangement, which by no stretch of imagination can be treated as a mere mistake. To call the amendment notification clarificatory or curative in nature, it would require that there had been an error/mistake/omission in the previous notification which is merely sought to be explained. [para 27]
+ The proviso to the charging section of the 1944 Act provides that an EOU making DTA sales shall be charged duty as if the goods were imported into India and in value equal to the customs duty chargeable thereto. No doubt, the said provision applies only in cases of excisable goods, but the exemption notification providing for similar duty by terms thereunder for non-excisable goods, can be understood to have been made to equate the duty in case of excisable as well as non-excisable goods. Therefore, it must follow that the said provision was not an error that crept in but was intentionally introduced by the Government to determine the charging rate, as discussed above. That being the position prior to amendment, the amendment brought in cannot be said to be clarificatory in nature. [para 28]
+ It is relevant here to advert to a decision of Constitution Bench of this Court in Commissioner of Central Excise, New Delhi vs. Hari Chand Shri Gopal & Ors. = 2010-TIOL-95-SC-CX-CB , wherein it has been held that an exemption clause ought to be strictly construed according to the language employed therein and in case of any ambiguity, benefit must go to the State. [para 32]
+ Applying the aforequoted dictum to the present case, the appellant was obliged to comply with the conditions prescribed by the EXIM Policy, to avail the exemption under the stated notification; and failure to do so, must denude them of the exemption so granted. Further, since the charging rate prescribed under the exemption notification is under question, any ambiguity in regard to the date of application of the amendment thereto would necessarily have to be construed in favour of the State, unless shown otherwise by judicially acceptable parameters. [para 32]
Limitation:
+ Appellant was issued a show cause notice mentioning that it had suppressed the DTA sales of cut flowers to evade payment of duty. Had the appellant in good faith believed that no duty was payable upon the DTA sales of cut flowers, it would have sought prior approval of the Development Commissioner, which it failed to do. Even in the letter seeking ex-post facto approval, the appellant claimed that they had not used any imported input such as fertilizer, plant growth regulations, etc. in growing flowers sold in DTA, despite having imported green house equipment, raw materials like Live Rose Plants and consumables like planting materials and fertilizers. Therefore, it prima facie appeared that suppression by the appellant was “wilful”. The burden of proving to the contrary rested upon the appellant, which the appellant failed to discharge by failing to establish that the imported inputs were not used in the production of the cut flowers sold in DTA. In view thereof, the authorities below have rightly invoked Section 28 of the 1962 Act and allied provisions. [para 34]
+ CESTAT has rightly upheld the levy of customs duty. [para 35]
- Appeal dismissed: SUPREME COURT OF INDIA
2020-TIOL-1478-HC-DEL-CUS
KPMG Assurance And Consulting Services LLP Vs UoI
Cus - Petitioner has challenged a show cause notice dated 26th June, 2020 issued to them by the Customs authorities - The respondents have invited reply of the petitioner to the said show cause notice, as stated in para-10 therein - Respondents have the power, jurisdiction and authority to issue the aforesaid show cause notice for the alleged breach of Foreign Trade Policy and wrongly availing the benefits under 'Served from India Scheme' (SFIS), therefore, the contention about the lack of jurisdiction on the part of the respondents is not agreed with - Objections articulated by the petitioner are of a nature which can be taken before the authorities, and do not call for a departure from the general principle that a writ petition will not be entertained against issuance of a show cause notice - As the show cause notice is yet to be decided or adjudicated upon by the respondents authorities, Bench is not expressing any opinion on the merits of the case - The petitioner has to give reply of the show cause notice to the respondent authorities concerned and if the respondents decide any issue against the petitioner, the petitioner is not remediless - Suffice it is to say that this is a premature writ petition - Without entering into the merits of this case, as this is a premature writ petition, Bench is not inclined to give any relief to the petitioner - The petitioner may file a reply of the show cause notice and the respondents authorities concerned shall adjudicate upon the same in accordance with law, rules, regulations and government policies applicable to the facts of the case and after giving adequate opportunity of being heard to the petitioner - Writ petition is dismissed: High Court [para 3, 5 to 8]
- Petition dismissed :DELHI HIGH COURT
2020-TIOL-1477-HC-MAD-CUS
Vigneswara Exims Vs Assistant Commissioner
Cus - Case of the writ petitioner is that one Tobbana (GH) Ltd., of Ghana had exported Cashew Nuts to the second respondent herein and during the course of transit, the said Ghana exporter had transferred the title in favour of the petitioner herein; that goods have since arrived in India and the second respondent herein had presented the necessary papers for clearing the goods - petitioner herein lodged their contentions and contended that the goods should not be released to the second respondent herein – However, the petitioner's request was not accepted by the first respondent - Challenging the same, this writ petition came to be filed - petitioner submitted that in a case of this nature, the first respondent ought to have followed the procedure laid down in Section 149 of the Customs Act, 1962; stand of the petitioner is that he has title to the goods involved in the impugned transaction.
Held: Upon being asked by the Bench, the petitioner fairly submitted that he had not made any payment to the foreign exporter or to the second respondent – Petitioner submits that on the high seas, the title has been made over favour of the petitioner and that the petitioner had entered into transactions based on the commitment made by the foreign exporter; that the petitioner has been put to a huge loss which he quantifies at Rs.10,00,000/- - Bench is not persuaded by the submissions of the petitioner - Customs authorities are not concerned with the civil claims which the petitioner may have against the foreign exporter - As far as the first respondent is concerned, they have no difficulty in releasing the goods to the second respondent, as the second respondent has complied with all the formalities - Petitioner probably has been given a short shrift by the foreign exporter - It is quite possible that the petitioner has been misled by the foreign exporter, but then, that cannot be a ground for directing the first respondent to retain the goods - The first respondent cannot retain the goods, till the issue is decided by the civil Court - The petitioner cannot have any claim against the respondents - It is seen that there was transaction only between the petitioner and the foreign exporter and who is not before this Court - More than anything else, the goods are perishable commodities and keeping them in the custody of the first respondent will only make the items lose their value - Except causing loss to the second respondent, no useful purpose will be served in keeping the matter pending – Bench, therefore, finds no ground to interfere with the impugned order - Order is sustained and the writ petition is dismissed: High Court [para 10 to 12]
- Petition dismissed :MADRAS HIGH COURT
2020-TIOL-1313-CESTAT-AHM
Kaushik Granite Pvt Ltd Vs CC
Cus - The assessee filed BoE for import of certain goods - The goods were detained and provisional release would be allowed conditional uponthe assessee furnishing bond and depositing differential duty with bank guarantee - The assessee claimed that the terms of provisional release were very harsh and that the goods be allowed to be released on provisional basis, only upon furnishing of bond and payment of differential duty, without any bank guarantee.
Held - The assessee has already furnished bank guarantee, which is against some other bills of entry - But since the adjudicating is to take place combinedly in respect of all BoEs, including the two BoEs in dispute, such bank guarantee already furnished can be adjusted against overall demand of penalty and fine, if any, imposed at time of adjudication - On merits, the undervaluation of the imported goods needs to be established beyond doubt - However at the present stage, it is premature to opine on merits - Hence the interests of justice would be met if the assessee deposits the principal duty at the time of clearance of goods and furnishes bond with reduced quantum of bank guarantee: CESTAT
- Assessee's appeal partly allowed: AHMEDABAD CESTAT
2020-TIOL-1455-HC-DEL-NDPS
Sonia Shamrao Naik Gaonkar Vs NCB
NDPS - The applicant is a girl who was arrested and proceedings were initiated against her u/s 8, 21,22, 27A & 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - The applicant states to have been in custody for over two years - The NCB alleged that at the time of the arrest of the applicant, about 600 gm of Methamphetamine was recovered from her possession - The applicant seeks interim bail in view of the prevailent COVID-19 pandemic in jail - The applicant claimed that the conditions within the jail where she is lodged, had deteriorated and that there was severe spread of the pandemic there.
Held - The Senior Medical Officer of the jail admits that the applicant suffers from skin allergies - Besides, the pandemic is a serious threat and there is considerable amount of evidence regarding the spread of the COVID 19 pandemic in jails - Moreover, the conduct of the applicant has been found to be satisfactory and there are no cases pending against her - Hence the applicant is released on interim bail of 45 days subject to fulfilment of certain conditions, namely furnishing of bond and that applicant undertaking to reside at her permanent address and report to the SHO concerned, over the telephone, twice in a week: HC
- Bail application allowed: DELHI HIGH COURT |
