|
2023-TIOL-1027-CESTAT-MUM
Atlantic Customs Brokers Vs CC
Cus - The Appellant is a Customs Broker holding a regular CB license issued by the Mumbai Customs under Regulation 7(2) of Customs Brokers Licensing Regulations (CBLR), 2018 - A specific information was received by Customs Air Preventive Unit (APU) of R&I Division of the office of the Principal Commissioner of Customs (Preventive), New Custom House, Mumbai on 04.03.2017 regarding mis-declaration of description of goods and its value in import of 'Button Tips' covered under MAWB No. 21756155842 and HAWB No. TSI 1702084 dated 01.03.2017 by M/s V.B. Exports, Bhayander-East, Thane for which corresponding Bill of Entry (B/E) No. 8726253 dated 01.03.2017 was filed by one Customs Broker M/s P.Cawasji & Co. - Accordingly, the imported goods were subjected to detailed examination by a chartered engineer and representative samples were drawn on 07.03.2017 for ascertaining the composition of the goods - The test report dated 10.03.2017 indicated that the main ingredient of the imported goods namely 'Button Tips' are "Tugsten-W" which is a rare metal having higher economic value. The chartered engineer's report also suggested that the minimum average price of imported goods, purchased in bulk, would be USD 35 per Kg. indicating that there is undervaluation of imported goods as the said minimum average price of Tungsten is 7.7 times more of the declared value of imported goods - During investigation, the Customs APU, R&I found that similar consignment of the same importer covered under MAWB No. 217-56155875 and HAWB No. TSI 1703004 is arriving near future at the same customs port and thus those goods were also examined on 11.04.2017 and similar modus of mis-declaration and under valuation was found in such imports - Further examination of past imports by the said importer by Customs APU, R&I Division revealed that they had imported 14 such consignments by declaring the goods as 'Button Tips' and cleared the same out of Customs under Risk Management System (RMS) facilitation - Upon completion of above investigation by Customs APU, R&I Division, appropriate Show Cause Notice was issued proposing demand of differential duty of Customs on seized goods covered under present imports as well as on the past imports from the importer/IEC holder under Section 28 of the Customs Act, 1962 along with applicable interest, along with confiscation of imported goods under present imports; imposition of penalty on importer, commission agent under Sections 112(a), 114A, 14AA ibid and imposition of penalty for failure to fulfill obligations under CBLR, 2013/2018 on the three Customs Brokers under Section 112(a), 114AA - On the basis of such offence report/letter SCN received from Customs APU, R&I Division, Mumbai, the jurisdictional Commissioner of Customs (General), Mumbai-I had concluded that there is a prima facie case against the appellants for having contravened Regulations 10 (a), 10(d), 10(f) and 10(n) of CBLR, 2018. Accordingly, the said Commissioner of Customs, had suspended the CB license of the appellants under CBLR, 2018 vide Order - Moreover, SCN was issued to the Appellant for initiating inquiry as per Regulation 17 of CBLR 2018 against violations of CBLR, 2018 due to failure of the appellants to comply with Regulations 10 (a), 10(d), 10(f) and 10(n) of CBLR, 2018 and to appear before the Inquiry Authority - Upon completion of the inquiry, a report was submitted on 14.11.2019, and the Commissioner of Customs (General), Mumbai-I, being the licensing authority under Regulations 14 ibid had passed the impugned order dated 28.08. 2020 for revoking CB License of the appellants and, at the same time, forfeited the entire amount of security deposit and imposed penalty of Rs.50,000/- on the Appellants. Held - There is definitely delay in adjudication and that for the import transaction that occurred in August, 2016, the order of revocation of Appellant's CB license has been passed on 28.08. 2020 - Revenue is unable to explain why there was such a long delay in taking action against Appellants, when the information about under valuation of import through Customs APU, R&I Division was received vide SCN dated 27.09.2017 - There are no reasons recorded in detail justifying the delay in passing the impugned order by the Commissioner except a mention of 'unavoidable administrative delay' - In terms of the 'Link Officer system' followed under the CBIC's HR policy in respect of administration, if one particular officer being 'inquiry officer' or 'jurisdictional review/licensing authority', is not available for completion of inquiry proceedings, then under the above arrangement, different officer who is a 'link officer' could take up the duties as authorised on him - In this case, we find that at the time of issue of SCN under CBLR, 2018, the inquiry officer was appointed - However, he did not complete the inquiry proceedings, and the Commissioner of Customs (General) appointed another officer on 08.01.2019 who submitted the inquiry report dated 14.11.2019 - The prescribed time under CBLR for timely completion of inquiry proceedings right from the beginning i.e., issue of SCN within a period of 90 days from the date of receipt of offence report, submission of inquiry report within 90 days of issue of SCN, passing of order by the Commissioner of Customs within 90 days of receipt of inquiry report was neither followed nor given credence to - It appears that the specific reasons thereof having been not specified and that even for argument sake, if it had existed; then the same having not been explained as cause for undue delay, and thus the inordinate delay shown on account of 'administrative reasons' in the background of the above detailed discussion, cannot be accepted as reasonable grounds in terms of the test laid down by the High Court of Bombay: CESTAT + The records of the case indicate that the appellants had obtained a written authorization letter dated 15.05.2016 from the importer M/s V.B. Imports, Thane mentioning that they authorize the appellants for clearance of import/export consignment on their behalf from Customs JNPT/Nhava Sheva/Mumbai. The importers also gave a declaration that they would be responsible for any discrepancy or mis-declaration found in their documents or goods, in the said authorization letter to the appellants. The letter also enclosed self-certified copies of Import Export Code Number (IEC) of importer, KYC documents and shipment documents. The conclusion of the Commissioner of Customs (General) in respect of sub-regulation 10(a) ibid is on the basis of the statement dated 20.05.2017 given by Shri Naresh Jay Kumar Udeshi, Proprietor of appellants CB firm, which state that on being shown the GATT declaration annexed with the docket of B/E No.6447009 dated 22.08.2006 he stated that the signature of the importer in the GATT value declaration did not tally with that in the authorization letter obtained by the appellants. Thus, on this basis the Commissioner of Customs (General) had held that the authorization is null and void, thereby violating the obligation under sub-regulation 10(a) ibid. It is also on record that Shri Soni Bipin Damodar Jinadra, IEC holder of M/s V.B. Exports, Thane had let out his IEC to various persons such as S/Shri. Mohan Singh Fartiyal alias Mannu Bhai, Deepak Sharma, for monetary benefits. However, these facts were brought to fore only during detailed investigation of the case conducted subsequently by the Customs APU, R&I Division. Hence, at the relevant time of imports under two B/Es, the appellants were not aware of this; (P 14.1) + we also find that the Directorate General of Foreign Trade (DGFT), in its Policy Circular No.6 (RE-2013)/ 2009-2014 dated 16.09.2013 had clarified that use of IEC by the person other than IEC holder himself is a violation of Section 7 of the Foreign Trade (Development and Regulation) Act, 1992 (FTDR) and Rule 12 of Foreign Trade (Regulation) Rules, 1993 and would attract action under Section 8 and 11 of FTDR Act, except in case importers or exporters who are exempted from obtaining IEC and who use permanent (common) IEC Numbers under Para 2.8 of Handbook of Procedure, Vol.1, 2009-14. Thus, in harmonious reading of the above order of the Tribunal in accepting the documents from the importer directly or through intermediary and at the same time ensuring that the IEC is not being misused by any person other than IEC holder, we are of the considered view that the responsibility of a Customs Broker is to play a crucial role in protecting the interest of Revenue and at the same time he is expected to facilitate expeditious clearance of import/export cargo by complying with all legal requirements. + on the basis of the judgement of the Supreme Court in the case of K.M.Ganatra (supra), we find that the appellants could have been proactive in fulfilling their obligation as Customs Broker for exercising due diligence, particularly when the import documents were obtained from the importer through an intermediary logistics operator in ensuring that all documents are genuine, the signatures affixed in the documents given by the importer are also genuine and that these are not fake or fabricated. Thus, to this extent we find that the appellants CB are found to have not complied with the requirement of subregulation 10(a) and thus imposition of penalty for failure in not being proactive for fulfilling of regulation 10(a) of CBLR, 2018 alone, is appropriate and justifiable; (P 14.4) + in view of the foregoing discussions, we do not find any merits in the impugned order passed by the Commissioner of Customs (General), Mumbai in revoking the license of the appellants; for forfeiture of security deposit; and for imposition of penalty, inasmuch as there is no violation of regulations 10(d), 10(f) and 10(n) ibid, and the findings in the impugned order is contrary to the facts on record. However, in view of the failure of the appellants to have acted in a proactive manner in fulfillment of the obligation under sub-regulation 10(a) ibid, particularly when they have received the documents from importer through intermediary logistics operator, we find that it is justifiable to impose a penalty of Rs.10,000/- against the appellants, which would be reasonable and would be in line with the judgement of the Supreme Court in the case of K.M.Ganatra (supra) , in bringing out the importance of crucial role played by a Customs Broker. (P 15)
- Appeal allowed: MUMBAI CESTAT
2023-TIOL-1026-CESTAT-CHD
CCE & ST Vs Ind-Swift Laboratories
CX - The Assessee obtained Central Excise registration for manufacturing medicines - It availed Cenvat credit on capital goods, inputs and input services - Later on, they obtained registration for payment of Service Tax on Scientific and Technical Consultancy Services on 02.02.2007 - During audit of the Assessee, it was noticed that for the relevant period, the Assessee had not undertaken manufacturing activity but were exclusively engaged in Research and Development activity - It was also revealed that after developing any drugs, the technology was transferred to their own manufacturing unit - It was observed that the Cenvat credit availed was utilized for payment of Service Tax on Scientific and Technical Consultancy Services - It was alleged that the Respondent was not entitled to avail CENVAT credit as they were not involved in any manufacturing activity - On such allegations, a Show Cause Notice was issued proposing to cancel the Central Excise registration and for recovery of wrongly availed credit - On adjudication, the Commissioner dropped the demand on merits and on limitation - Hence the Revenue's appeal. Held - The Assessee is registered with the Central Excise Department and has taken cenvat credit on capital goods as well as inputs - Though the Revenue has alleged that the Assessee does not have the facility of manufacturing of Pharmaceutical Products and is only doing research and development activity for which cenvat credit on input and capital goods is not permissible under Rule 3 of Cenvat Credit Rules, 2004; Revenue in order to deny the cenvat credit has only relied upon the statement of one Senior Scientist of the Respondent but the said statement of the respondent has not been brought on record and the copy of which has not been given to the respondent even on asking by the Assessee - In the pharmaceutical industry before a drug is manufactured and supplied in the market, a lot of research has to be undergone and a number of tests are to be conducted before releasing in the market - In view of these facts, the Assessee is engaged in the manufacturing of drug also - Commissioner has also come to the conclusion that even for conducting research and development, the Assessee is registered under the service tax and is paying service tax and therefore the Assessee is entitled to cenvat credit - The revenue has failed to bring any evidence on record to prove that the Assessee is not capable of carrying out the manufacturing activity - Thus, the cenvat credit on inputs and capital goods have been rightly availed by the Assessee - Hence there is no infirmity in the impugned order which is thus upheld: CESTAT
- Appeal dismissed: CHANDIGARH CESTAT
2023-TIOL-1025-CESTAT-AHM
Adani Power Ltd Vs CST
ST - The issue at hand in the present appeal is whether the sponsorship service received by the Appellant can be considered as wholly consumed by the SEZ in their SEZ unit and consequently, entitled for exemption Notification No. 04/2004-ST dated 31.03.2004 or otherwise. Held - There is no dispute that even though the service was provided from outside SEZ but the same was received by the Appellant in relation to their overall operation of SEZ unit - It is also undisputed that the Appellant did not have any operation outside their SEZ unit - Therefore, the sponsorship service even though provided from outside SEZ but the same was used exclusively for the operation of SEZ unit - The term 'wholly consumed in SEZ' means the service should not be used for SEZ as well as in any SEZ unit - It does not mean that service should be provided within the SEZ - Therefore, even if the sponsorship service is provided from outside the SEZ but the recipient is SEZ unit and the said service was used exclusively by the SEZ unit, the term 'wholly consumed in the SEZ' is satisfied - Accordingly the Notification No. 4/2004- ST is clearly available to the Appellant - This Tribunal in the case of identical service though provided outside SEZ i.e. event management service in the case of VisionPro Event Management vs. Commissioner of C.Ex & ST - In view of the Tribunal's decision in the case of Vision Pro Event Management (Supra) , the Appellant is eligible for the exemption in respect of the sponsorship service received from outside SEZ: CESTAT
- Appeal allowed: AHMEDABAD CESTAT |
|
