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2023-TIOL-991-HC-DEL-CUS
Swatch Group India Pvt Ltd Vs UoI
Cus - Petitioner is an importer and an exclusive authorised distributor of Swatch products, and distributes various brands of luxury watches, accessories, etc. - Petitioner prays for quashing the SCN dated 14.02.2018 read with the corrigendum/addendum dated 28.02.2018 issued by respondent no.2/DRI - Petitioner submits that respondent No. 2 is not a proper officer appointed under Section 2(34) of the Customs Act for the assessment and re-assessment of goods under Section 28 of the Customs Act; that the show cause notice was issued in the month of February 2018, and in terms of Section 28(9) of the Customs Act, the same having not been adjudicated within a period of 12 months, any adjudication now was time-barred.
Held: With effect from 29.03.2018, it is mandatory for the proper officer to adjudicate the Show Cause Notices that are issued after the amendment to Section 28(9) of the Customs Act within a period of six months or one year of the date of issuance as the case maybe -The same can be extended for a further period of one year by an officer senior in rank to the proper officer, after considering the circumstances under which the proper officer was prevented from passing an order within the prescribed period - It is also significant that an Explanation 4 was inserted by the Finance Act, 2018, which clarified that the show cause notices issued prior to the date on which Finance Bill, 2018 receives the assent of the President shall continue to be governed by the provisions of unamended Section 28 - The unamended Section 28(9) of the Customs Act, specifically provides that the proper officer 'shall' determine the amount of duty within six months or within one year, as the case may be, from the date of notice - It only provides certain degree of inbuilt flexibility by incorporating the words 'where it is possible to do so' - The Legislature has mandated the show cause notices to be adjudicated within six months or one year as the case may be; it has provided flexibility only to the extent that if the same is not practicable / possible the period can be extended - The same, however, cannot be an endless period without any plausible justification - In the opinion of the Bench, the benefit of extension of limitation as provided under Section 28(9A) of the Customs Act would be applicable only in those cases where the show cause notices have been issued after the enactment of the Finance Act, 2018 since, even as per the Revenue, the notice issued prior to coming into effect of Finance Act, 2018 would be governed by the unamended provisions - The mention of the words, "where it is not possible to do so", in opinion of the Bench, does not enable the Department to defer the determination of the notices for an indeterminate period of time - The legislature in its wisdom has provided a specific period for the authority to discharge its functions - The indifference of the officer concerned to complete the adjudication within the time period as mandated, cannot be condoned to the detriment of the assessee - Such indifference is not only detrimental to the interest of the taxpayer but also to the exchequer - In the absence of any ground that it was not possible for the officer to determine the amount of duty within the prescribed period, the impugned SCN has lapsed and cannot be adjudicated - Writ Petition allowed: High Court [para 24, 26, 32, 34, 45, 46, 47]
- Petition allowed: DELHI HIGH COURT
2023-TIOL-990-HC-DEL-CUS
United Sanitations Vs Addl. CC
Cus - Petitioner prays for quashing and setting aside of impugned order dated 08 July 2022 passed by the revisionary authority thereby dismissing the revision application preferred by the petitioner upholding the order of the original authority with regard to classification of goods exported and rejecting its claim of duty drawback under a different category - Petitioner is an exporter of CP Sanitary Bathroom Fitting in brass (Basin Mixer, Bath Mixer, Sink Mixer etc.), commonly known as sanitaryware - It is stated that the subject goods are made of more than 90% brass and are chrome plated and are exclusively used in bathroom, kitchen etc. - Suffice to state that after effecting the export of the consignment, the petitioner had claimed duty drawback @ 11% or Rs. 83 per kg (whichever was lower) on 07 September 2011, by classifying the goods under drawback heading No. 741902 Customs Tariff Act, 1975, as amended up to date, while on the other hand, the Department asserted that the goods would be covered under sub heading 8481 80 of the 'CTA' thereby attracting drawback @ 7.3% or Rs. 43.10 per kg. Held: Chapter 74 of the CTA is titled as "Copper and Articles thereof " and it specifically deals with the articles in the nature of bathroom sanitaryware - Further, the item 'sanitaryware' is specifically described in Section XIII of Chapter 28 vide item No. 6815 9920 - Section XVI in Chapter 84 of the CTA is titled as "Nuclear Reactor, boilers, machines and mechanical appliances; and parts thereof" - There is no denial of the fact that the consignment of goods that was exported was containing sanitaryware albeit few parts made of brass elements but nonetheless not in any manner pertaining to use or application in "nuclear reactors, boilers, machineries and appliances" - The respondent has clearly overlooked even the brochures pertaining to the items that amply demonstrates the essential features of the sanitaryware and use of brass so as to make the articles more elegant and durable for the use of end consumers - It is apparent that the respondent in a mindless manner has failed to even consider the common parlance and manner in which the articles are known, bought and sold in the marketing world - Claim of the petitioner that the duty drawback should be classified vide heading No. 7419 03A, as claimed in the prayer clause, is also misconceived since a bare perusal of the aforesaid tabulated tariff details would show that item No. 7419 02 in Chapter 74 pertains to "artware/handicraft" - By no stretch of imagination it can be said that merely because 'sanitaryware' were having premium aesthetic and sleek design that such items would fall in the category of "artwork/handicraft" - Ultimately, it is the end use of the product that is decisive and in the instant case, the items are meant for use in the kitchen, toilets or bathroom and although it may portray some art work in its designs, it is not 'artwork' or 'handicraft' item - Therefore, duty drawback could only be claimed in category of goods falling Chapter 74 vide item No. 7418 02 - Impugned order dated 08 July 2022 passed by the Revisionary Authority thereby approving the order-in-original No. 101/2013 dated 10 April 2013 by the by the ACC(E) cannot be sustained in law - Accordingly, the instant Writ Petition is allowed: High Court [para 11, 12, 16, 17, 18, 19]
- Petition allowed: DELHI HIGH COURT |
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