2021-TIOL-590-HC-MUM-NDPS

State Of Maharashtra Vs Sou Rita ankush indrekar

NDPS - State of Maharashtra has filed the appeal impugning an order and judgment dated 3rd May 2006 passed by Special Judge, Pune acquitting respondent (accused) of offence punishable under Section 20(b)(ii)(A) of the Narcotic Drugs And Psychotropic Substances Act, 1985.

Held: Two primary issues were framed by the Trial Court viz. a) Whether prosecution is vitiated for want of compliance under Section 42(1) and 42(2) of the NDPS Act ? and b) Whether prosecution proved that accused was possessing contraband in contravention of the provisions of the NDPS Act? - Trial Court answered both these issues and acquitted accused - Bench is in total agreement with the judgment of the Trial Court - Bombay High Court has in the case of Gangaram Rama Gundkar & Anr . Vs. The State of Maharashtra 2002 ALL MR (CRI) 1356 has held that the provisions of Section 42 are mandatory and non-compliance is fatal to prosecution; that even wireless message sent by Investigating Officer to immediate official superior in respect of the information entered by him in the station diary for showing compliance of Section 42(2) of the Act was not sufficient compliance with the mandatory provisions of Section 42(2) of the Act and a wireless message would be on the same footing as an oral information; in the case of Sayed Yusuf Syed Noor Vs. State of Maharashtra 2016 (1) Bom.C.R . (Cri) 270, High Court has held that the officer should not only reduce information received to writing but also record reasons for the belief while carrying out arrest or search as provided under the proviso to Section 42(1) and to that extent, they are mandatory; that failure to comply with these requirements would affect the prosecution's case and vitiate the trial; that entry in the station diary was also not in compliance with provisions of Section 42 - Since this mandatory provision of Section 42 of the NDPS Act has not been followed in the instant case, the trial itself is vitiated: High Court [para 10, 11]

NDPS - Contraband was found not on the search of accused but in the house of accused - Nothing has come on record in evidence to show that accused was in conscious possession of the bag containing contraband and, therefore, Trial Court has rightly concluded that prosecution has failed to establish that accused was possessing contraband Ganja weighing 900 grams - Electricity bill and house tax bill, are in the name of one Ankush Indrekar and not in the name of accused - Prosecution has not explained why Ankush Indrekar was not prosecuted - That also indicates that accused was not the sole occupier of the house or being in sole possession of the house - Bench does not find anything palpably wrong, manifestly erroneous or demonstrably unsustainable in the impugned judgment - From the evidence available on record, there is nothing to substantiate the charge levelled against accused - Opinion of the Trial Court cannot be held to be illegal or improper or contrary to law - The order of acquittal need not be interfered with - Appeal dismissed: High Court [para 13, 14, 16, 17]

NDPS - There is an acquittal and therefore, there is double presumption in favour of accused - Firstly, the presumption of innocence available to the accused under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law - Secondly, accused having secured their acquittal, the presumption of their innocence is further reinforced, reaffirmed and strengthened by the Trial Court - For acquitting accused, the Trial Court rightly observed that the prosecution had failed to prove its case: High Court [para 15]

- Appeal dismissed :BOMBAY HIGH COURT

2021-TIOL-589-HC-MUM-CUS

Supreme Industries Ltd Vs Central Board Of Indirect Taxes And Customs

Cus - Petitioner had issued notice to respondent Nos. 6,7,9,10 and 11 on 11th November, 2020 calling upon the said officers to issue detention certificate(s) or such other proceedings that are valid and are in accordance with Regulation 10 of the Sea Cargo Manifest and Transhipment Regulations, 2018 and Regulation 6 of the Handling of Cargo in Customs Areas Regulations, 2009 by directing the shipping line and the container freight station under whose custody the imported goods of the petitioner were lying not to charge any rent or demurrage on the said goods for the period from 7th August, 2020 to the date of issuance of the detention certificate(s) - Accordingly, respondent No. 3 issued detention cum demurrage waiver certificates dated 16th November, 2020 addressed to respondent Nos. 4 and 5 - The two authorities were informed that the imported goods are detained goods and, therefore, it was clarified that they should not demand any rent or detention charges or demurrage charges for the containers laden with the goods - Specific direction was issued not to charge any rent or detention charges or demurrage charges and thus to facilitate clearance of the goods immediately - Notwithstanding issuance of the above certificates, respondent Nos. 4 and 5 did not release the goods of the petitioner which compelled the petitioner to serve upon them pleader's notice dated 23rd November, 2020 and also file the present writ petition.

Held:

+ Respondent Nos. 2,3 and 6 to 11 have taken the stand that they have done their part under the law and therefore, they cannot be faulted for non-release of the goods of the petitioner. According to them, customs had already given out of charge to the consignment on 9th November, 2020. Respondent No. 5, the container freight station, has assured compliance. Since the shipping line was not complying with the detention cum demurrage waiver certificate dated 16th November, 2020 show cause notice dated 1st January, 2021 was issued to the shipping line i.e. respondent No. 4 to show cause as to why the registration of approval should not be revoked and as to why penalty should not be imposed. [para 63]

+ On the other hand, respondent No. 4 has taken the stand that petitioner had entered into a contract of carriage with its principal by way of the bill of lading. Being a shipping line, provisions of the 2009 Regulations are not applicable to it as it is not a customs cargo service provider. Further, being bound by the contract petitioner is liable to pay detention and other charges levied. In so far the detention cum demurrage waiver certificate dated 16th November, 2020 is concerned, stand of respondent No. 4 is that the said certificate is not in terms of Regulation 10(1)(l) of the 2018 Regulations and therefore, is not binding upon respondent No. 4. In fact, respondent No. 4 has taken the specific stand that being bound by the contract, it will not comply with the above certificate. [para 64]

+ Unlike Mumbai Port Trust, shipping line in this case is a private entity espousing its contractual right and not a statutory right. In case of Mumbai Port Trust, it has the statutory authority under section 47A of the Major Port Trusts Act, 1963 to levy various rates exercise of which power cannot be affected because of section 160(9) of the Customs Act. Even otherwise also, the 2009 Regulations being a subordinate legislation cannot in any manner affect the power and authority of the Mumbai Port Trust statutorily vested in it. [para 78]

+ Fact that needs to be highlighted is that unlike Regulation 6(1)(l) of the 2009 Regulations, Regulation 10(1) (l) of the 2018 Regulations is not subject to any other law for the time being in force. [para 79]

+ 2018 Regulations have come into force on and from 01.08.2019. Regulation 10(l) makes it abundantly clear that an authorised carrier shall not demand any container detention charges for the containers laden with goods detained by the customs for the purpose of verifying the entries made under section 46 or section 50 of the Customs Act which deal with entry of goods on importation and entry of goods for exportation respectively if the entries are found to be correct though as per the proviso, the authorised carrier may demand container detention charges after sixty days. Regulation 10(1)(m) makes it incumbent upon an authorised carrier to abide by all the provisions of the Customs Act and the rules, regulations, notifications and orders issued thereunder. [para 80]

+ 2018 Regulations is a piece of subordinate legislation having the force of law. Since it has been framed by the Board in exercise of the powers conferred by section 157 read with sections 30, 30A, 41, 41A, 53, 54, 56, 98(3) and 158(2) of the Customs Act, certainly the 2018 Regulations have statutory force. [para 81]

+ In the ultimate analysis, the issue boils down to a conflict between the 2018 Regulations which is a subordinate legislation having the force of law on the one hand and the contractual right of the shipping line, on the other hand. [para 82]

+ The question as to whether in the event of a conflict between provisions of a subordinate legislation and provisions of a contract which one would prevail is no longer res integra. [para 83]

+ Bench has no hesitation to hold that objection of respondent No. 4 is not legally tenable. The detention cum demurrage waiver certificate dated 16th November, 2020 has been validly issued as it can be traced to Regulation 10(1)(l) of the 2018 Regulations and under Regulation 10(1)(m) thereof, respondent No. 4 i.e., the shipping line is under a legal obligation to comply with the certificate. Thus, the detention cum demurrage certificate dated 16th November, 2020 is binding on respondent No. 4. That apart, holding on to the goods of the petitioner by respondent No. 4 post the detention cum demurrage waiver certificate dated 16th November, 2020 and levying detention charges thereafter would be illegal and thus unlawful. [para 87]

+ It is nobody's case that the 2018 Regulations have not been validly made. It has, therefore, the full force and effect of a statute. A conjoint reading of Regulations 10(1)(l) and 10(1)(m) makes it abundantly clear that the 2018 Regulations are fully binding on the shipping line and it is not open to the latter relying on a contractual provision to contend that it will not comply with a direction or certificate issued under Regulation 10(1)(l).

+ The private contract between the petitioner and the shipping line must yield to the rigours imposed by the subordinate legislation vis-a-vis the subject matter of conflict i.e. levy of detention charges for the period under consideration. That apart, Supreme Court has held that it is an implied condition of every contract that the parties will act in conformity with the law. In case of repugnancy between provisions of a subordinate legislation and provisions of a private contract, the terms of the contract will have to yield to the provisions of the subordinate legislation to the extent of repugnancy. [para 88]

+ This court while setting aside the first order-in-original vide the order dated 27th October, 2020 had directed maintenance of status-quo in respect of the goods of the petitioner till passing of the fresh order. It is a settled proposition that an order of the court can cause prejudice to none. Therefore, it would be wholly unjust, unfair and inequitable to levy detention or demurrage charges on the goods of the petitioner when the status-quo order was in operation. [para 89]

+ Insofar as investigation by respondent No. 2 into the complaint lodged by the petitioner dated 3rd November, 2020 is concerned, Bench feels that the said investigation should be taken to its logical conclusion. Custom officials are conferred vast powers under the Customs Act and under the rules and regulations made thereunder. Such powers are to be exercised in the interest of revenue alone. Therefore, it is essential that high officials of the customs having supervisory jurisdiction should ensure that personnel working in the customs department strictly follow the rule book. For this purpose, internal vigilance mechanism should be strengthened and effectively used - Directions issued to meet the ends of justice. [para 90, 92]

- Petition allowed :BOMBAY HIGH COURT

2021-TIOL-584-HC-KERALA-CUS

Mohan Govindasami Andal Alagar Vs CC

Cus - The adjudicating authority has ordered confiscation of foreign currency and imposed penalty of Rs. 1.50 lakhs on the 1st petitioner and Rs. 2 lakhs on the 2nd petitioner in exercise of the powers under Section 114 of Customs Act, 1962 r/w Section 13(1) of FEMA, 1999 by giving separate findings - The appeal is undisputedly a joint appeal filed by both petitioners - Rule 3(1) of Customs (Appeals) Rules, 1982 provides that the appeal under Section 128 is required to be filed in Form No. CA-1 provided under Chapter V of said Rules - In the light of prescribed form for appeal, it will not be proper to entertain joint appeal particularly when the consequence suffered by aggrieved persons are different - Similarly, statement of facts as well as relief claimed in appeal as stated in prescribed form can be different for each aggrieved person - Hence, though the adjudicating authority can pass a common order affecting more than one person, the affected persons are supposed to file separate appeals so as to enable the Appellate Authority to deal with the same conveniently - On this backdrop, revenue is even justified in relying on Rule 6 of CESTAT (Procedure) Rules, 1982 which deals with next appeal which lies to the Tribunal - The communication at Ext.P1 as such cannot be said to be an illegal communication - The same cannot be interfered by this Court: HC

- Writ petition dismissed: KERALA HIGH COURT

Lowes Services India Pvt Ltd Vs CCT

ST - Issue relates to the refund claim of appellant towards Health Insurance Services - In the SCN as well as in O-I-O, the refund has been rejected only on the ground that the said insurance services have not been approved by the Approval Committee of the SEZ and hence the appellants are not entitled to the refund - The Commissioner (A) in the impugned order has accepted the fact that approval is merely a procedural formality and by relying upon the decision of Tribunal in appellant's own case, he has allowed the refund but further proceeded to reject the refund by resorting to exclusion Clause (C) in the definition of "input service" as provided in Rule 2(l) of CCR, 2004 - Hence, both the impugned orders are not sustainable on this ground alone - Besides this, even on merit the said services fall in the definition of 'insurance service' and has also been approved by the Unit Approval Committee read with Ministry of Commerce & Industry letter dated 16/09/2013 and subsequent letters which includes "General Insurance Business Services" - Further, General Insurance Business Services also form part of default list of services specified by Karnataka Special Economic Zone vide Circular No. 2/2014 - Tribunal in the case of Barclays Global Service Centre Pvt. Ltd. 2018-TIOL-1970-CESTAT-MUM has held that Medical Insurance and Personal Accident Insurance are covered under the General Insurance Business - The impugned orders are not sustainable in law and therefore same are set aside: CESTAT

- Appeals allowed: BANGALORE CESTAT

Banco Products India Ltd Vs CCE & ST

CX - Whether the appellant is entitled for Cenvat Credit on Outward Transit Insurance in respect of Excisable Goods sold by them - There is no dispute that original authority has gone through the document such as sale invoices, LR copies & CA Certificate and allowed the credit considering the sale is on FOR basis - The invoices clearly mentioned a condition that the sale is on FOR basis and risk upto the destination is covered - It is also not the case of department that outward transit insurance was paid by the consignee - It is clear that the sale is on FOR basis and sale invoices itself is a kind of contract and no further contract is required to ascertain that whether the sale is on FOR basis or not - Therefore, the appellant is entitled for Cenvat Credit on the services of Outward Transit Insurance: CESTAT

- Appeal allowed: AHMEDABAD CESTAT