2022-TIOL-03-SC-CUS-LB
Sandoz Pvt Ltd Vs UoI
CIVIL APPEAL NO. 3358, 3359 OF 2020
Cus - A policy circular bearing No.16 (RE-2012/2009-14) dated 15.03.2013 came to be issued by the Director General of Foreign Trade to clarify that no refund of Terminal Excise Duty (TED) should be provided by the Office of DGFT/Development Commissioners, as supplies made by DTA Unit to EOU are ab initio exempted from payment of excise duty - The Development Commissioner eventually rejected the refund claim - Bombay High Court negatived the challenge to the stated policy circular as well as the order passed by the Development Commissioner and thus, dismissed the writ petition vide impugned judgment and order dated 01.08.2016 - Bombay High Court also noted that although in the past the regional authority had accepted refund request of EOUs, that cannot bestow any right much less vested right in EOUs so as to issue mandamus to the statutory authorities concerned to act contrary to the provisions of the FTP - As a matter of fact, to dispel the doubt entertained by EOUs, the position was restated by the Government vide notification dated 18.04.2013 issued in exercise of power conferred under Section 5 of the 1992 Act - In substance, the Bombay High Court observed that the impugned circular was only to restate and clarify that the regional authority of DGFT was not competent to entertain the refund application; and if EOU or the supplier so desired, were free to pursue refund claim before the competent excise authorities where amount towards duty had been deposited or paid.
CIVIL APPEAL NO.3360 OF 2020
This appeal by the Union of India assails the judgment and order dated 08.10.2018 passed by the Division Bench of the High Court of Delhi - The High Court of Delhi essentially relied upon its earlier decision in Kandoi Metal Powders Manufacturing Company Private Limited = 2014-TIOL-230-HC-DEL-EXIM to reinforce the view taken by it that the impugned circular invoked by the Department had prospective effect only - It was held that the view taken by DGFT that the respondent could avail of the refund under the provisions of the 1944 Act (CEA, 1944) and the Rules framed thereunder, was untenable in law - On facts, it noted that since the supply of excisable goods was prior to 15.03.2013, the question of invoking circular against the respondent-Company did not arise - Instead, the High Court held that refund application ought to have been processed by the DGFT in terms of para 8.3(c) of the FTP, as it stood prior to 15.03.2013.
CIVIL APPEAL NO.3705 OF 2020
This appeal by Union of India is against the decision dated 09.12.2019 of the Division Bench of the High Court of Karnataka in Writ Appeal No.286 of 2019 (T-TAR).
The Division Bench whilst dealing with the appeal filed by the Department, vide impugned judgment noted that the respondent Company had supplied computer systems to EOU on payment of TED from June 2009 till October 2009, which in terms of the FTP, in particular para 8.2(b), was deemed export - entitling the respondent-Company to claim refund of TED from the regional authority of DGFT in terms of para 8.3(c) of the FTP - The Division Bench of the High Court of Karnataka opined that there was no infirmity in the view taken by the Single Judge holding that the appellant cannot be heard to retain the amount which was not payable by way of tax being a case of deemed export.
Held:
+ Since the entitlement of exemption and refund of TED flows from the provisions of 1992 Act and FTP framed thereunder by the Central Government, which is an independent dispensation than the one provided in the 1944 Act and the rules framed thereunder, with the avowed purpose of promoting export and earning foreign exchange, it is the obligation of Authority responsible to implement the subject FTP, to deal with refund claim of the concerned entities. For, it is not a case of refund under the 1944 Act or 2002 Rules or 2004 Rules as such, but under the applicable FTP.
+ EOU entities, who had procured and imported specified goods from DTA supplier, are entitled to do so without payment of duty [as in para 6.2(b)] having been ab initio exempted from such liability under para 6.11(c)(ii) of the FTP, being deemed exports.
+ It would not be a case of entitlement of EOU, but only a benefit passed on to EOU for having paid such amount to the DTA supplier, which was otherwise ab initio exempted in terms of para 6.11(c)(ii) of the FTP coupled with the obligation to import the same without payment of duty under para 6.2(b).
+ If the DTA supplier as well as EOU had utilized its CENVAT credit for importing goods in question, the refund would be in the form of reversal of commensurate amount of CENVAT credit to the account of the concerned entity. However, if TED has been paid in cash by the EOU, the EOU may get refund of that amount from Authority implementing the applicable FTP in cash with simple interest at the rate of 6% per annum for the delayed refund of duty (para 8.5.1) on condition that it would not pass on that benefit to the DTA supplier owing to such refund/rebate.
+ As regards DTA supplier of goods to EOU, it is entitled to receive the refund of TED in terms of para 8.3(c) read with paras 8.4.2 and 8.5 of the applicable FTP subject to complying necessary formalities and stipulations provided therein, being a case of deemed exports.
+ Even, in the case of DTA supplier of goods to EOU, if TED has been paid by utilizing CENVAT credit, the refund would be in the form of reversal of commensurate amount in its CENVAT credit account. And if the amount towards TED has been paid in cash by the DTA supplier to the Authorities under the 1944 Act, the refund of TED amount would be made by the Authority implementing the applicable FTP in cash with simple interest at the rate of 6% per annum for the delay in refund of TED as per para 8.5.1.
+ In both cases, as aforesaid, responsibility of refund of TED in reference to applicable FTP would be that of the Authority responsible to implement the FTP under the 1992 Act, which has had consciously accorded such entitlements/benefits for promoting export and earning foreign exchange.
+ Further, the fact that the concerned entity had unsuccessfully applied for refund to the Authorities under the 1944 Act and the rules made thereunder, that would not denude it of its entitlement to get refund of TED under the FTP, as may be applicable being mutually exclusive remedies. It is so because it is well settled that the assessee is free to take benefit of more beneficial regime.
+ Appeals filed by the assessee (EOU) against the decision of the Bombay High Court partly succeed in the above terms; and the appeals filed by the Department against the decision of the High Court of Delhi and High Court of Karnataka are also partly allowed in the aforementioned terms. [para 41 to 45, 47]
- Appeals partly allowed: SUPREME COURT OF INDIA
2022-TIOL-26-HC-DEL-CUS
Air Customs Vs Begaim Akynova
Cus - Smuggling of Gold - Writ petition is directed against Order on sentence dated 24.09.2021, passed by the ACMM-01, Patiala House Courts, New Delhi sentencing the Respondent herein to undergo imprisonment for a period already undergone and pay a fine of Rs. 50,000/- for offences under Sections 132 and 135(1)(a) and (b) of the Customs Act, 1962, and Orders dated 27.09.2021 and 29.09.2021, passed by the CMM, Patiala House Courts, New Delhi, in C.C. No. 2193/2020 directing Customs/Petitioner herein to release the passport of the Respondent herein - Counsel for the Petitioner Revenue submits that the instant case relates to socio-economic offences and, therefore, the option of plea bargaining is not available as per Section 265-A Cr.P.C ; that the Trial Court could not have proceeded with the application for plea bargaining without the consent of the Customs Department, i.e. the Petitioner - Respondent argues that the consent for plea bargaining had been categorically given by the Office of Commissioner of Customs as well as the Special Public Prosecutor for Customs, and that the procedure for plea bargaining has been duly followed; that after consenting to plea bargaining, the Customs Department cannot now state that the Air Customs Officer and the SPP were not authorized to give their consent; that the proper procedure under Chapter XXIA of the Cr.P.C . has been followed and the Respondent has already deposited the fine that has been imposed on her by the Trial Court.
Held:
+ The concept of plea bargaining was introduced in Indian criminal jurisprudence by way of amendment Act of 2005 in the Code of Criminal Procedure under Chapter XXIA. Chapter XXIA delineates the guidelines for a Mutually Satisfactory Disposition (MSD).
+ It is pertinent to note that the Central Government has not notified the Customs Act, 1962, as a statute which does not attract Chapter XXIA Cr.P.C . under Section 265-A(2). Therefore, the contention of Senior Government Standing Counsel that Chapter XXIA Cr.P.C . does not apply in the instant case does not hold any water.
+ Furthermore, the contention Senior Government Standing Counsel, that there is a provision for compounding of offences under the Customs Act, 1962, and therefore, Chapter XXIA is not applicable also does not have any merit. Had the legislature intended to exclude the applicability of Chapter XXIA Cr.P.C . to those enactments where there are provisions for compounding the offence, then it would have explicitly mentioned the same in Chapter XXIA Cr.P.C . Chapter XXIA Cr.P.C . was introduced to include all statutes, save those that were specifically excluded under Section 265-A(2). It cannot be said that the legislature was unaware of the Customs Act, 1962, while devising the chapter on plea bargaining. Therefore, the presence of Section 137(3) of the Customs Act, 1862, will not take away the applicability of Chapter XXIA Cr.P.C .
+ In the instant case, a perusal of the Application under Section 265-B Cr.P.C . filed by the Respondent herein, the Reply to the Application dated 22.09.2021, Statement of the Respondent dated 24.09.2021 as well as the Questions put to her, Statement dated 24.09.2021 of the Second Secretary, Embassy of the Republic of Kazakhstan, Statement of Senior SPP for the Customs Department dated 24.09.2021, the MSD dated 24.09.2021, and the consequent judgement dated 24.09.2021, indicates that the procedure that is to be adhered to for plea bargaining under Chapter XXIA Cr.P.C . has been astutely followed with nothing amiss.
+ Argument that the Petitioner had not consented to the procedure also cannot be countenanced. The statement of the Air Customs Officer dated 24.09.2021 categorically stating that there was no objection if the plea of guilt of the accused was accepted is on record, along with statement of Senior SPP, Satish Aggarwala , for the Customs Department dated 24.09.2021 stating that he adopts the Reply dated 22.09.2021 and that deterrent punishment should be awarded to the Respondent if her plea for plea bargaining is accepted. The consequent Mutually Satisfactory Disposition (MSD) dated 24.09.2021 has also been attested by the Senior SPP for Customs Department, the ACO, and the Respondent herein. It is egregious for the Petitioner herein to raise the argument at this juncture that consent was not given for the procedure of plea bargaining.
+ Court finds weight in the submission that the punishment that is to be i0,000/- that has already been deposited by the Respondent.
mposed on the Respondent should correspond to the gold that has solely been recovered from her. Section 34 of the Indian Penal Code, 1860, cannot be made applicable to the instant case. Each person must be made answerable to the recovery of gold found in their possession for the purpose of imposing the requisite punishment.
+ As the market value of the gold recovered from the respondent herein is Rs. 67,70,400/-, she is liable to be sentenced to imprisonment for a period that may extend to three years, or may pay a fine, or both. Vide impugned Order dated 24.09.2021, the Ld. Trial Court has directed for the Respondent to imprisonment for the term already undergone, i.e. 43 days, and to pay a fine of Rs. 5
+ A combined reading of Section 135 of the Customs Act, 1862, and Section 265-E Cr.P.C . indicates that the Respondent has, therefore, fulfilled the conditions stipulated, and that quantum of punishment awarded by the Trial Court is not contrary to Section 265-E Cr.P.C . + Co-accused of the Respondent has already been granted the permission to travel to her home country. As a consequence of the Order on sentence dated 24.09.2021, the IO is obligated to adhere to the Orders dated 27.09.2021 and 29.09.2021 directing it to release the passport of the Respondent. The government is supposed to be a fair litigant. It cannot and should not resort to such legally untenable arguments in order to challenge orders of the Court which it finds to be unfavourable.
+ Court finds no legal infirmities in the Order on sentence dated 24.09.2021.
- Petition dismissed: DELHI HIGH COURT |
