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2022-TIOL-745-HC-AP-CUS
Divine Chemtee Ltd Vs Pr. CC
Cus - Main plank of argument is that the respondent No. 2 had no jurisdiction to initiate any action against a unit situated in SEZ as the offences under the Customs Act are not yet notified to be investigated by the DRI and any offence in a SEZ unit are to be dealt with only by the Development Commissioner under the SEZ Act i.e. respondent No. 3 and hence, issuance of show cause notice is bad in law.
Held:
Maintainability - Availability of alternative remedy - From the judgment of the Supreme Court [ Radha Krishan Industries = 2021-TIOL-179-SC-GST ], it is very much clear that a Writ Petition can be entertained by this Court though an alternate remedy is available when the authority issuing the Show Cause Notice has no jurisdiction to issue the same - Hence, in the given set of circumstances, Writ Petition can be entertained. [para 10]
Jurisdiction - Having regard to the wordings used in Section 51 of the Act, it is clear that SEZ Act prevails over other enactments to the extent of special provisions being made under SEZ Act - Therefore, the SEZ Act would prevail over the Customs Act, 1962 in all aspects in view of the non-obstante clause - A reading of s.51, 53 makes it clear that the Customs authorities (DRI officials) have no power or jurisdiction to inspect or seize goods in respect of units situated in SEZ area - The power to investigate in respect of any offence committed in SEZ unit is conferred on Officers empowered under Section 22 of the SEZ Act - Further, section 52 of the Act also spells out that the Customs Act is not applicable in respect of units situated in SEZ unit - Probably for this reason, the Central Government, in exercise of powers conferred under Sections 21 and 22 of the Act issued a Notification dated 05.08.2016, authorizing the Additional Director General, Directorate of Revenue Intelligence to investigate into offences under Customs Act committed in a SEZ but the same cannot be invoked in the instant case as the alleged violation was prior to 2016: High Court [para 20, 21, 22, 24]
Cus - Goods not seized from SEZ area - Whether the property can be said to be in Special Economic Zone - Counsel for Revenue submits if the offence is committed in respect of a unit in SEZ area, assuming that the Customs authorities have no jurisdiction, but since the goods were not seized from SEZ area, the provisions of Sections 51 and 52 of the Act have no application.
Held: As the petitioner is having licence to trade, storage of goods outside the SEZ area namely in a bonded warehouse, it cannot automatically confer power on the DRI Officers to initiate proceedings under the Customs Act - The judgment of the Supreme Court in M/s. Canon India Private Limited [ 2021-TIOL-123-SC-CUS-LB ] squarely applies to the facts in issue, but however, Assistant Solicitor General would contend that a Bill is being introduced in the Parliament making suitable amendments, but no information about the same is placed before this Court - Bench holds that the DRI officials have no jurisdiction to issue the impugned show cause notice - Writ Petition is allowed, quashing the show cause notice dated 11.12.2014 and the consequential order dated 30.06.2020, passed in Order-in-Original No. VIZ-CUSTOM-000-COM-009-20-21 , dated 30.06.2020: High Court [para 26, 35, 36]
- Petition allowed: ANDHRA PRADESH HIGH COURT
2022-TIOL-744-HC-DEL-COFEPOSA
Abhishek Gupta Vs UoI
COFEPOSA - As per the case of respondent No. 3, the petitioner was engaged in smuggling activities referred to in section 3(1) of COFEPOSA Act and resorted to mis-declaration of material particulars to avail undue benefits in exporting goods under MEIS Scheme. Also, the petitioner had been involved in smuggling of goods, abetting the smuggling of goods and engaging in transporting or concealing or keeping smuggled goods - Petitioner challenges the Preventive Detention Order to detain the petitioner in custody for a period of one year.
Held : Purpose of detention order is a preventive measure and if the detenu is not served or detained at the earliest possible, keeping in view the spirit of Article 22(5) of the Constitution of India, the purpose is defeated - A sense of urgency needs to be exhibited by the respondents, if the preventive detention order is to be justified - If a person against whom the preventive detention order is passed comes to the court at pre-execution stage and satisfies the court that such order is clearly illegal, there is no reason why the court should stay its hands and compel him to go to jail even though he is bound to be released subsequently because of the illegality of such order - The entire exercise for service of detention order appears to have been undertaken in a casual and cavalier manner, which is fatal to the case of the respondents - The non-placement of the vital fact that the firms had been placed in Denied Entry List (DEL) before the Detaining Authority prior to passing of detention order also vitiates the subjective satisfaction of the Detaining Authority - The said vital facts placing the firms under Denied Entry List (DEL) and not placing the same before the Detaining Authority have a significant and direct bearing on the subjective satisfaction of the Detaining Authority regarding necessity to detain as the same foreclosed any future possibility of petitioner in indulging in any prejudicial activity - As such, there appears to be lack of any genuine and real necessity to again apprehend and detain the petitioner for alleged preventive purpose and the detention order is liable to be quashed on this ground alone as the subjective satisfaction of the Detaining Authority in issuing detention order stands vitiated - No justified reasons have been disclosed by the respondent for non-service of detention order on the petitioner on 28.03.2019 and 05.04.2019 despite availability of the petitioner- In the aforesaid backdrop, despite opportunities to serve the detention order, neither the Detaining Authority nor the Executing Agency as well as Sponsoring Authority was diligent or responsible to serve the detention order on the petitioner - There is absolutely no reasonable justification for non-service of detention order dated 26.03.2019 on the petitioner, from 28.03.2019 to 05.04.2019, despite the petitioner being available to the authorities - No serious attempt appears to have been made by the respondents to serve the detention order soon after the same was made and the same is in complete defiance of constitutional mandate - The purpose of a detention order is preventive in nature and not punitive - As such, strict compliance of the procedural safeguards is fatal to the case of respondents as there was no diligent effort to serve the detention order - When there is unsatisfactory and unexplained delay between the order of detention and the date of securing the arrest of the detenu , such a delay would throw considerable doubt on the genuineness of the subjective satisfaction of the detaining authority leading to a legitimate inference that the detaining authority was not really and genuinely satisfied as regards the necessity for detaining the detenu with a view to preventing him from acting in a prejudicial manner - Detention order is quashed and the Writ petition is allowed: High Court [para 17, 20, 22, 26, 35, 36]
- Petition allowed: DELHI HIGH COURT
2022-TIOL-439-CESTAT-MUM
Technova Imaging Systems Pvt Ltd Vs CCE & ST
CX - The appellant is engaged in manufacture of Lithographics Plates and PVC Compound - They had availed cenvat credit of service tax paid on "Insurance on Business Credit Shield Policy" - Availment of cenvat credit by appellant was disputed by department on the ground that such service is not categorized as an 'input service', defined under Rule 2(l) of Cenvat Credit Rules, 2004 - The disputed service availed by appellant is in relation to post sale activities, in sense that if buyer of goods manufactured by appellant defaulted in making payment, then the insurance company as per policy requirement, should compensate the appellant for realization of sale proceeds - The policy note issued by insurance company clearly specifies that the policy offered by them to the appellant is towards realization of insured debt in respect of goods delivered to buyers - Since, the disputed service availed by appellant was not in relation to manufacture of final products and does not fall under inclusive part of definition of input service, such service cannot be considered as input service and cenvat credit of service tax paid on such service should not be available to appellant - SCN was issued by department within the normal period of limitation - Since, the irregularities in availment of cenvat credit was detected by department upon auditing the books of accounts maintained by appellant, initiation of proceedings are in conformity with cenvat statute and same cannot be held to be time barred - No infirmity found in impugned order passed by Commissioner (Appeals), same is upheld: CESTAT
- Appeal dismissed: MUMBAI CESTAT
2022-TIOL-438-CESTAT-DEL
Association of Man Made Fibre Industry of India Vs Designated Authority
Cus - Anti-dumping duty - Petitioner, Association of Manmade Fibre Industry of India submits that the designated authority committed an error as there was a likelihood of continuation and recurrence of injury - DA has recommended withdrawal of anti-dumping duty on import of subject goods from the subject countries. Held: The pre-requisites for every extension of duty, whether for five years or upto five years, are the same and they are that there should be a likelihood of continuation or recurrence of dumping and injury - What is to be examined is whether the likelihood of continuation or recurrence of injury would warrant continuation of anti-dumping duty for a further period of five years - It is not possible to accept the contention of the petitioner as the finding has been recorded by the designated authority after a careful consideration and analysis of the relevant factors - It needs to be remembered that the nature of exercise to be undertaken in a 'sunset review' is different from the initial exercise that is undertaken for determining whether anti-dumping duty is to be levied or not - In a review, the focus is on whether withdrawal of anti-dumping duty would lead to continuance or recurrence of dumping as well as injury to the domestic industry - The assessment whether injury will continue or recur would entail a factual analysis of future events based on projected levels of dumped imports, prices and impact on domestic producers; that, if the anti-dumping duty is revoked, India would become the most attractive destination for dumping since it would be offering much better prices - Exporters questionnaire part-II requires the participating exporters and producers to not only provide information relating to their own production and sales but also of other producers in domestic market, however, the foreign exporters failed to provide such information - The designated authority, therefore, completely mis-directed itself in restricting the surplus capacity of the producers to those who had exported the goods during the period of investigation instead of examining the capacity of both China and Indonesia as a whole - The applicant had requested for imposition of anti-dumping duty on a narrower scope of the product under consideration and had not made any claim for enlargement of the product under consideration in the sunset review proceedings - It is the prerogative of the domestic industry to make a claim for imposition of duty on the types of product and neither section 9A(5) of the Tariff Act nor rule 23 of the Anti-Dumping Rules bars the designated authority from restricting the scope of the product under consideration in a sunset review - No prejudice can be said to have been caused to the foreign exporters if the product under consideration is restricted in a sunset review and, in fact, the foreign exporters would benefit if the anti-dumping duty is not levied on the products excluded from the scope of the product under consideration - The inevitable conclusion, therefore, that follows from the aforesaid discussion is that the designated authority should re-examine whether the cessation of anti-dumping duty would likely lead to continuation or recurrence of injury so as to warrant imposition of anti-dumping duty for a further period of five years - Thus, all that would have to be re-examined by the designated authority, on remand, is as to whether cessation of anti-dumping duty would likely lead to continuation or recurrence of injury warranting imposition of anti-dumping duty for a further period of five years - Findings recorded by the Competition Commission of India would have no relevance when the designated authority proceeds to take a decision in the context of imposition of anti-dumping duty for the reason that the Tariff Act and the Competition Act, 2002 operate in different fields: High Court [para 37, 43, 46, 52, 60, 62, 73, 74, 81, 82, 86, 89( i ), 89(ii)] Conclusion: ++ Anti-Dumping Appeal No. 51490 of 2021 is allowed to the extent that the designated authority shall re-examine and give a fresh finding. ++ Anti-Dumping Appeal Nos. 51832 of 2021, 51833 of 2021, 51834 of 2021, 51868 of 2021, 51869 of 2021, 51872 of 2021 and 50570 of 2022 are dismissed.
- Appeals partly allowed: DELHI CESTAT
2022-TIOL-437-CESTAT-BANG
Vasanth Color Laboratories Ltd Vs CST
ST - The issue to be decided is, whether the appellant's activities, i.e., processing and printing photograph from negative supplied by their client amounts to 'Photography Service' - Appellant submit that their activity is in the nature of advertisement films and not photographs as defined under Section 65(78) of the Act - They further submitted that on their activity they are discharging sales tax as evident from assessment orders issued by Commercial Tax Department for FY 2002-03 and 2003-04 - Appellant have alternatively submitted that the demand is entirely time barred for the reason that they have not suppressed any fact as the case was also made out on the basis of AG audit and the data of Profit and Loss Account and Balance Sheet - They also made submission for waiver of penalties - Demand was raised on the basis of AG's audit on scrutiny of appellant's records such as Profit and Loss Account and Balance Sheet, which revealed that they have received some income in respect of service in question - Issue involved is interpretation of definition of service viz., 'Photography Service' - The suppression of fact cannot be alleged against the appellant - The demand pertains to the period 2002-03 and 2003-04 whereas the SCN was issued on 17.7.2007 which is much after the normal period - Therefore, entire demand is time barred - Consequently, the impugned order is set aside: CESTAT
- Appeal allowed: BANGALORE CESTAT |
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