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2023-TIOL-1740-HC-MUM-CUS
Leyla Mohmoodi Vs Addl.CC
Cus - Whether the action of the respondents to sell / dispose of the gold jewellery of the ownership of the petitioners, as seized from them, without notice to the petitioners, and before an order of confiscation under Section 111 of the Customs Act, 1962 can be said to be legal and valid - In pursuance of the orders passed by the Revisional Authority, the petitioners approached the Principal Commissioner of Customs vide letter dated 23 January, 2022 requesting that the Revisional Authority, having granted redemption of gold jewellery in question 1028 grams valued on payment of Rs.5,25,000/- for re-export, requested that necessary directions be issued to the concerned authority to inform the petitioners as to whether the gold jewellery is available with the Department for redemption to the petitioners - As no response was received, the petitioners have filed the present petition - Significantly, the order-in-original does not record that the gold jewellery belonging to the petitioner was already sold and disposed of.
Held : Mere issuance of a notification under sub-section (1A) of Section 110 of the Customs Act would not suffice and enable the proper officer to have instant disposal of the goods unless a subjective satisfaction is eminently present on any of the eventualities for such action to be resorted and the owner of the goods is informed in that regard - Even after recourse to the provisions of sub-sections (1A) to (1D) is to be taken, the same would be required to be taken only after a subjective satisfaction is reached by the Customs officers and the same is brought to the knowledge of the owners of the goods that the goods are required to be disposed of - Failing this, the action to dispose of the goods would be unilateral action leading to an unguided and arbitrary exercise of powers by the customs officials - Such is not intention of Section 110 read with its sub-sections - It is well settled that any action of the government officials is required to be supported by cogent reasons, as borne out by record, failing which it would be arbitrary and illegal and more so when it deals with the property of persons - No reasons, whatsoever are placed on record, much less brought to our notice, as to why it was felt necessary by the proper officer that the petitioners' gold was required to be disposed of hurriedly on 1 June, 2018 even prior to the issuance of show cause notice, which was issued on 6 July, 2018, i.e. one month and 5 days after the disposal order - Seizure having taken place on 14 January, 2018, six months period was to end on 14 July, 2018, however, what is significant is that a show cause notice for confiscation of such gold came to be issued to the petitioners on 6 July, 2018, however, the same was never served on the petitioners in a manner known to law - Once the gold itself was not available for confiscation, it is surprising as to what was the need and purpose for issuing such notice - Show cause notice, in effect, was meaningless as the gold jewellery itself was not available for confiscation - Knowing well that the petitioners are foreign nationals, no attempt was made to serve show cause notice on the petitioners through the Consulate General of the Islamic Republic of Iran, when the respondents were fully aware that the petitioners were not available in India - Now, the proceedings which had arisen under the show cause notice dated 6 July, 2018 issued to the petitioners have attained finality in view of the Revisional Authority passing an order on 19 September, 2022, whereby it has been held that absolute confiscation was not justified in the present case and the petitioners be permitted to re-export the gold jewellery on payment of a redemption fine - Such order is incapable of compliance, inasmuch as, the gold jewellery itself is not available for the petitioners to re-export it - Assistant Commissioner who disposed of the gold never informed either the Appellate Authority or the Revisional Authority that the seized gold jewellery of the petitioners itself was not available and was disposed of - Disposal of the property belonging to the persons like the petitioners and / or to sell the seized goods at the ipse dixit of the officers, is not what the law would recognise - The procedure to dispose of such valuable commodities is required to withstand the test of law and more particularly, the constitutional requirement of reasonableness, non-arbitrariness, fairness and transparency as enshrined under Article 14 of the Constitution coupled with safeguarding the valuable rights of property recognized by the Constitution, under Article 300A - Once the property of the ownership of the petitioners was being disposed of and / or sold, certainly the provisions of Article 300A of the Constitution would stand attracted - Once such action on the part of the respondents is being regarded as a brazen illegality, the mandate of law would be to restore to status quo ante which is the legitimate corollary to remedy such illegality - It is difficult to imagine as to what could be the reason for the Customs Officers to dispose of the goods hurriedly and with such lightning speed and by throwing to the wind the norms of fairness and reasonableness - Petition needs to succeed - The question, however, is as to what can be the relief which can be granted to the petitioners in these circumstances, when there is no iota of doubt, in regard to illegality which has been committed by the respondents in depriving the petitioners of their valuable rights to property - In such circumstances, in our considered opinion, the principles of law which would be required to be applied, is that once the action of the respondents is held to be void, ab initio , illegal and unconstitutional, there can be no second opinion that the rights of the petitioners in regard to illegal seizure would be required to be restituted - Respondents are directed, to restore to the petitioners, equivalent amount of gold namely 1028 grams and/or to compensate the petitioners by making payment of amounts equivalent to the market value of the said gold, as on date - directions be complied by the respondents within a period of three weeks - Amount of redemption fine and penalty as directed by the Revisional Authority in its order, be deducted : High Court [para 33, 34, 36, 37, 40, 41, 42, 45, 47, 55, 57, 58]
- Petition allowed: BOMBAY HIGH COURT
2023-TIOL-1739-HC-P&H-ST
State of Punjab Vs UoI
ST - Renting of immovable property - Authorities have imposed service tax of Rs.4,82,14,665/- alongwith interest against the Department of Health and Family Welfare, Government of Punjab - Challenge is to this order dated 31.10.2022 - The issue in question was of the running of two hospitals on the land given by the petitioner to MAX Super Speciality Hospital at Mohali and at Bathinda - The notice was based on the ground that 5% of the revenue was being received under the fixed cost of the hospitals on account of the concessionaire agreements which are stated to be dated 05.08.2009 - The authorities came to the conclusion that 5% of the gross revenue was being received as concessionaire fees for running the operations of the hospital and only the revenue generated from the hospital was being shared by the authorities and no losses/expenses/liabilities were being shared by the parties. Held : Bench is of the considered opinion that no such hardship will be caused to the State of Punjab if an appeal is to be filed under Section 86 of the Finance Act - Bench is of the considered opinion that it is a matter of how the agreement is to be construed as such and whether the State was contributing in any manner in the running of the hospital - This is a matter of fact which has to be analyzed by the statutory authorities in appeal and to be summarized - The right of the petitioner thereafter to challenge the order in case the same is decided against it would always be available - The issue of extended period of limitation, whether it has been rightly invoked or not, is a matter which the Appellate Authority can go into since the impugned order records the fact that the consideration was being received at 5% of the gross revenue and as per the provisions of the concessionaire agreement - Apparently from the show cause notice, it would be clear that it was only when the revenue had started investigation against Max Super Speciality Hospital, Mohali regarding non-payment of service tax, it had come to their notice about the arrangement which has been made with the petitioner and thereafter the proceedings had been initiated and, therefore, the issue of jurisdiction is also based on a factual matrix - In such circumstances, it would also be a matter of fact which would be within the jurisdiction of the Appellate Authority as to whether the notices as such issued were within the prescribed period and whether the action of the Revenue in extending the period of limitation is justified or not in the facts and circumstances - Therefore, Bench feels that it is not a fit case for exercise of our extra ordinary writ jurisdiction - Writ petition is disposed of and the petitioners are relegated to the remedy of appeal: High Court [para 6 to 9]
- Petition disposed of: PUNJAB AND HARYANA HIGH COURT
2023-TIOL-1158-CESTAT-DEL
Samsung India Electronics Pvt Ltd Vs CC
Cus - Preliminary objection/defect is as to whether the appellant is liable to pay the court fees on all the 4191 appeals in terms of section 129A(6) of the Customs Act, 1962 – Facts are that the Appellant is a regular importer of battery cover, front cover, middle cover and back cover ("phone cover") and had classified phone cover under tariff item CTI 85177090 (erstwhile) / 85177990 (prevailing) of First Schedule to Custom Tariff Act, 1975 (CETA) - The appellant discharged higher duty assessed by the Assessing Officer in respect of 4191 Bills of Entry as assessed under CTI 3920 9999 of Customs Tariff - Being aggrieved by such reassessment, the appellant filed 4191 appeals before Commissioner of Customs (Appeals) who confirmed the assessments in respect of the said bills of entry by the impugned order dated 22.09.2023 - The appellant has challenged the said order in the instant appeals before this Tribunal. Held: Challenge in the present appeal relates to classification and consequent demand of duty due to denial of exemption benefits - The appellant had chosen to pay the enhanced duty as assessed by the assessing officer at the time of clearance “under protest" - It cannot be said that the present appeals are not relating to demand and, therefore, no court fees is payable by the appellant - As the appellant had paid in advance the enhanced duty, the department was not required to issue the "Show Cause Notice cum Demand" - Bench agrees with the submissions made by the AR that quantum of duty assessed, demand of duty and payment of duty are all interrelated and once the amount of duty paid is challenged by a party at the time of payment itself or subsequently, it proves that there was a demand and that the party has acceded to pay the demanded duty at the time of clearance of goods for one or the other reason and the party generally registers dissent against such demand of duty by paying it “under protest" - In other words, once the duty is paid “under protest" and the party challenges the same by filing an appeal, it necessarily implies that demand of duty is disputed and consequently the case would fall under section 129A (6) of the Act and the party would be liable to pay the court fees on such appeal being filed - The reasoning adopted by the appellant that it is not a case of demand of duty is basically frivolous as had it not been so there was no scope to file the present appeals challenging the impugned order - The objection raised by the Registry of the deficit court fees in filing the present appeals is justified - The appellant is, accordingly directed to deposit the requisite court fees within two weeks: CESTAT [para 12, 14]
- Interim order passed: DELHI CESTAT
2023-TIOL-1157-CESTAT-DEL
Rahul Jewels Vs CC
Cus - Appellant has assailed the order affirming absolute confiscation of the seized gold of foreign marking and penalty under Section 112(b) of the Customs Act, 1062 - The basic challenge by the appellant is that the gold is not a 'prohibited item' and is not liable to be confiscated absolutely, more so when there was no proposal in the show cause notice. Held : In terms of the definition of 'prohibited goods' in Section 2(33), even prohibited goods could be imported or exported, subject to compliance with the terms and conditions as prescribed but if import is not done lawfully as per the procedure prescribed under the Customs Act or any other law for the time being in force, in that event the said goods would fall under the definition of 'prohibited goods' - The necessary corollary is that goods being imported if not subjected to check up at the customs on their arrival and are cleared without payment of customs duty are treated as 'smuggled goods' - The appellant in the present case has not been able to produce any documents to show that the gold in question (foreign origin) recovered was validly imported by paying requisite customs duty as gold falls in the category of 'dutiable goods', that is goods chargeable to duty and on which duty has been paid - Since the conditions for import of gold as per the notification issued by DGFT and the restrictions imposed by RBI have been violated, the gold in question has to be treated as 'prohibited goods' under Section 2(33) - Consequently, it would fall within the definition of 'smuggling' under Section 2(39) which will render such goods liable to confiscation under Section 111 or Section 113 of the Act - Also absolute confiscation is justified in the facts of the present case where the trail of events show that the appellant is engaged in procuring gold of foreign origin in illegal manner and the multiple stands taken by him on the face of it were false as the alleged supplier M/s. Sai Buillion had denied having supplied any gold to the appellant - Authorities below have rightly exercised the discretion in not granting provisional release of the seized goods in terms of Section 110A read with Section 125 of the Act - Appellant during his life time had never asked for cross examination and hence no such plea can be raised at this stage - It is a basic and settled law that what has been admitted need not be proved - Findings of the authorities below are confirmed and appeal is dismissed: CESTAT [para 14, 15, 17, 18, 19, 23]
- Appeal dismissed: DELHI CESTAT |
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