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2022-TIOL-20-SC-CUS
Chandra Sekhar Jha Vs UoI
Cus - Smuggling of gold - Commissioner of Customs (Preventive) West Bengal, Kolkata passed a common order, wherein the appellant came to be visited with penalty in a sum of Rs.75 lakhs - High Court has rejected the appeal carried by the appellant against the order passed by the Tribunal since the appellant has not complied with the requirement under Section 129E of the Act, as regards, the pre-deposit - Specific argument of the appellant is that in view of the fact that the act relates to the year 2013 (namely on 28.2.2013), the appellant must be governed by Section 129E prior to the substitution; that under Section 129E, as it stood prior to the substitution there was a power available with the Appellate Authority in the matter of demand of pre-deposit; that the amount for pre-deposit in his case is harsh and onerous.
Held: While under Section 129E, as it stood prior to the substitution, the appellant was to deposit the entire duty and the interest demanded or the penalty levied, in the present regime, the appeal is maintainable upon the appellant depositing seven and the half percent of the amount - Under the new regime, on the one hand, the amount to be deposited to maintain the appeal has been reduced from 100% to 7.5% but the discretion which was made available to the appellate body to scale down the pre-deposit has been taken away - Law giver has purported to grant relief to an appellant - Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision - What the appellant is called upon to pay is not the full amount as is contemplated in Section 129(E) before the substitution - The order passed by the Commissioner is dated 23.11.2015 which is after the substitution of Section 129E and the appellant filed the appeal in 2017 - What the appellant is called upon to pay is the amount in terms of Section 129E after the substitution, namely, a far lesser amount in terms of the fixed percentage as provided in section 129E - The appellant, however, would wish to have the benefit of the proviso which, in fact, appropriately would apply only to a case where the appellant is maintaining the appeal and he is called upon to pay the full amount under Section 129E under the earlier avatar - When the appellant is not being called upon to pay the full amount but is only asked to pay the amount which is fixed under the substituted provision, Bench does not find any merit in the contention of the appellant - However, in the interest of justice Bench extends the period for complying with Section 129E by a period of two months - Subject to the same, the appeal will stand dismissed - Petition disposed of: Supreme Court [para 6, 8, 9, 10]
- Petition disposed of: SUPREME COURT OF INDIA
2022-TIOL-327-HC-MUM-CUS
Dinesh Bhabootmal Salecha Vs UoI
Cus - Settlement - On 2nd February 2022, the Superintendent, Additional Bench, Settlement Commission informed the petitioners that on scrutiny of the purported application, it could not be treated as an application under Section 127B(1) of the Customs Act, 1962 as the same did not meet the eligibility criteria as prescribed therein - Inasmuch as no Show Cause Notice had been issued in the instant case which was a statutory requirement for filing an application before the Custom and Central Excise Settlement Commission as envisaged under proviso (a) to clause (1) of Section 127B of the Customs Act, 1962 - Commissioner (Investigation) by communication dated 16th February 2022, once again referred to the previous correspondence exchanged between the parties and informed that in view of defects/deficiencies, it could not be treated as an application under Section 127B(1) of the Customs Act, 1962 and is accordingly returned in original as the same did not meet the eligibility criteria as prescribed therein and hence was not maintainable - Petition filed against this communication.
Held : Court in case of Union of India Vs. K. Amishkumar Trading Pvt. Ltd. has held that in the absence of a notice to show cause a mandatory jurisdictional requirement is not fulfilled - That in absence of a notice to show cause, the Settlement Commission cannot assume jurisdiction - That issuance of a notice to show cause is an important stage and when it is made a jurisdictional requirement in the absence of which even an application cannot be made; that an applicant cannot set up a waiver of such a condition - Parliament has legislated by requiring that no application under Section 127B(1) can be made unless a notice to show cause has been issued - An assessee cannot by his own act of waiving the issuance of a notice to show cause confer jurisdiction upon the Settlement Commission - Admittedly in this case, no show cause notice has been issued by the respondents under any of the provisions of the Customs Act, 1962 for adjudication - There is no provision under the Customs Act providing for a deemed written show cause notice which could be considered as show cause notice which is condition precedent for filing an application for settlement under Section 127B(1) of the Customs Act, 1962 - Since the petitioners had not complied with the mandatory requirement, the application for settlement under Section 127B of the Customs Act filed prior to issuance of show cause notice by the respondents, the said application filed by the petitioners was not an application which could be adjudicated upon by the Settlement Commission under Section 127B of the Customs Act, 1962 - The said application thus could not be treated as an application under Section 127B(1) of the Customs Act, 1962 and was rightly returned in original to the petitioners - Respondents were justified in returning the application for settlement in view of the petitioners having filed the said application though no show cause notice was issued by the respondents and no proceedings were pending within the meaning of definition of "case" under the provision of Section 127B of the Customs Act, 1962 - The respondents have not rejected the said application for settlement but have returned the said application in original - Return of defective application or an application which is premature would not prevent the petitioners from filing proper application under Section 127B as and when occasion arises after complying with all the mandatory requirements under the said provisions - Petitioners on their own could not have assessed the duty payable on the goods which are the subject matter of two Bills of Entry and could not have paid the duty on its own to contend that the said application was maintainable - If the arguments of the petitioners are accepted, any assessee would file an application for settlement by considering even the correspondence exchanged between the parties or affidavit-in-reply filed by the Revenue in another proceedings as show cause notice and based on such show cause notice, would compute the duty and other levy as may be leviable according to the self-assessment of the petitioners so as to claim immunity from prosecution and penalty - Writ petition is totally devoid of merit, hence dismissed: High Court [para 43, 44, 47, 53, 68, 69, 70]
- Petition dismissed: BOMBAY HIGH COURT
2022-TIOL-326-HC-CHHATTISGARH -CUS
Vijay Baid Vs UoI
Cus -Petitioner challenges seizure proceeding initiated by the Respondents whereby certain Gold and Silver were seized from the office and residential premises -Primary contention is that, the Respondents i.e. the Directorate of Revenue Intelligence are not authorized for initiating proceeding against the Petitioner under the provisions of the Customs Act, 1962 -Petitioner relies on the Larger Bench decision of the Supreme Court in the case of Canon India Ltd. [ 2021-TIOL-123-SC-CUS-LB ].
Held: Court is forced to infer that in fact in the instant case there is no Notification issued under Section 6 of the Customs Act entrusting the functions under the Customs Act also upon the Officers of the DRI - Admittedly, the proceeding initiated against the Petitioner is by the DRI - From the documents enclosed also, there is no dispute to the fact that the proceeding is not by the Customs Department or the officials of the Customs Department - Merely because one of the Officers in the search and seizure proceeding belongs to the Customs Department does not mean that the proceeding has been drawn by the Customs Department - All the proceedings in the instant case have been from the office of the DRI - It was never the case of the Respondents that the proceeding not being from the Department of DRI or for that matter the proceedings being drawn by the Customs Department - Court is inclined to allow the present Writ Petition and to hold that the issuance of Notice dated 29.10.2021 under Section 110(2) of the Customs Act, 1962 and the subsequent Notices/Summons issued to the Petitioner are all without any authority of law and are, therefore, not sustainable - Notices/Summons issued to the Petitioner by the Respondents deserve to be and are accordingly quashed/set aside including the seizure and the Panchnama, with consequences to follow - Writ Petition is allowed: High Court [para 20, 26, 28]
- Petition allowed: CHHATTISGARH HIGH COURT
2022-TIOL-201-CESTAT-AHM
Anand Kumar Shankarlal Agarwal Vs CCE
CX - The issue arises is, whether the assessee is liable to pay duty on clearances of printed base papers/printed decorative paper in rolls and that too by classifying the same under Tariff Item 4811 90 99 of Central Excise Tariff - On the identical issue, in case of M/s. Matchwell 2019-TIOL-2942-CESTAT-AHM , Tribunal has passed order in favour of assessee however, Revenue has filed Tax Appeal before Supreme Court against the said order and Revenue's appeal stand admitted - Though this Tribunal is not precluded from passing order in aforesaid status of admission of appeal before Supreme Court but in the interest of justice, to avoid multiple litigations, matter to be taken up by Adjudicating Authority after the outcome of Supreme Court judgment - Accordingly, impugned order is set-aside and appeal is allowed by way of remand to the Adjudicating Authority for passing a fresh order: CESTAT
- Matter remanded: AHMEDABAD CESTAT
2022-TIOL-200-CESTAT-MAD
Best Fabrics Vs CC
Cus - Appellant is the exporter of garments - During year 1993, they had obtained five value based Advance Licences for Duty-free import of goods - A SCN was served demanding entire Duty on imports covered by licences - At that point of time, appellant chose to settle the dispute by opting for Kar Vivad Samadhan Scheme (KVSS), which was introduced then whereby, appellant got its dispute settled after paying 50% of Duty in terms of said scheme - By a letter, appellant also requested for conversion of DEEC (Advance Licence) shipping bills into drawback shipping bills - It is the case of appellant that they did not use imported materials in manufacture of exported goods since the date of Advance Licences were much later - The requirement of Section 75 of Customs Act, 1962 is the 'use' of imported materials in export of manufactured goods, which is seriously disputed by appellant, which aspect has to be properly brought on record - There is also nothing on record as to whether the imported goods under Advance Licences in question were actually seized, because the O-I-A refers to a different Advance Licence of a different date altogether - This is also relevant because it is the case of appellant that it had made exports under 69 shipping bills between November 1992 and May 1993 without using any of imported materials under disputed Advance Licences - So, the benefit of Section 75 ibid namely the drawback should be allowed of duties of Customs chargeable under Customs Act cannot be denied as the benefit of duty drawback is allowable on the imported goods used in manufacture of goods which are exported - Revenue has nowhere disputed the fact of export made by appellant - Hence, impugned order is contrary and not in accordance with the scheme of statutory provision as provided under Section 75 ibid - Further, no justification or logic found in adopting drawback for 50% of FOB value which is also not as per Section 75 ibid and by virtue of this also, impugned order is a non-speaking order - Matter is remitted back to the file of Commissioner for passing a fresh speaking order: CESTAT
- Matter remanded: CHENNAI CESTAT
2022-TIOL-199-CESTAT-MAD
Sundaram Asset Management Company Ltd Vs CCE & ST
ST - The issue arises is as to whether the brokerage charges paid to brokers/distributors by appellants are reimbursable expenses or whether is a consideration that has to be included in taxable value of appellant - As per Regulation 52 of SEBI (Mutual Funds) Regulations, 1996, Asset Management Company can collect advisory fees as prescribed therein - As per Sub-clause (4), it is stated that in addition to the fees they can also charge the mutual fund with expenses - The brokerage charges have already suffered Service Tax on reverse charge basis - To make the same amount subject to Service Tax on forward basis under Asset Management Services would be levying Service Tax on the same amount twice - The appellants have consistently contended that the said brokerage charges were recovered from M/s. SMF and these are nothing but reimbursable expenses - Appellant, being an Asset Management Company, is bound by SEBI Regulations - They have accounted the brokerage charges paid by them and reimbursed by M/s. SMF so as to make it practical for them to comply with the SEBI Regulations - Viewed from this angle, brokerage charges paid by appellant is nothing but reimbursable expenses - The period being prior to 2015, demand of Service Tax on such reimbursable expenses cannot sustain as settled by Supreme Court in case of M/s. Intercontinental Consultants and Technocrats Pvt. Ltd. 2018-TIOL-76-SC-ST - As regards to limitation, there is no evidence put forward by Department to establish that there is any element of fraud, wilful suppression or mis-statement of facts on the part of appellant - Since the entire transactions were under discussion between Department and appellant and also considering the fact that there were other litigations with regard to the credit availed on Service Tax paid on brokerage charges, there is no factual or legal basis for invoking extended period - Appellant succeeds on the ground of limitation also: CESTAT
- Appeal allowed: CHENNAI CESTAT |
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