2025 (2) TMI 427 - AT - Customs

Importer loses appeal after failing to declare Rs. 73.79 crore goods in VAT returns, SAD exemption denied

Indo China Impex and B.S. SAHNI Versus Principal Commissioner, Customs (Import) New Delhi (ICD TKD)

CESTAT New Delhi dismissed the appeal regarding denial of Special Additional Duty exemption under Notification dated 17.03.2012. The appellant imported ... Denial of benefit of exemption from payment of Special Additional Duty [SAD] availed under Serial No. 2 of Notification dated 17.03.2012 on the goods imported under various Bills of Entry during the period 01.04.2013 to 31.03.2017 - recovery of SAD with penalty - HELD THAT:- The dispute in the present appeals relate to Notification dated 17.03.2012, as amended, which exempts the goods of the description contained in the Table when imported into India from so much of the additional duty of customs, as is in excess of the amount calculated at the standard rate specified in the corresponding entry in Column No. 4 of the Table. However, the proviso stipulates that the exemption shall apply on goods imported on or after 01.05.2012 if the importer declares the State of destination namely the State where the goods are intended to be taken immediately for the first time after importation whether for sale or distribution on stock transfer basis and also declares the value added tax registration number or sales Tax registration number or Central Tax registration number, as the case may, be in the said State. By comparing the data, the goods valued at Rs. 73.79 Crores were not declared and disclosed by the appellant in the VAT return of Delhi State. The declaration made by the appellant was, therefore, false and SAD benefit would not be available, more particular when during the course of investigation, the appellant failed to provide any documentary evidence to support his claim - There is nothing in the appeal which may controvert the findings recorded by the Principal Commissioner. Penalty - HELD THAT:- VAT was not paid on the imported goods valued at Rs. 73.79 Crores. This finding recorded by the Principal Commissioner is borne out from the records and there is nothing in the appeal which may controvert this finding. Conclusion - The Principal Commissioner's findings regarding the appellant's fraudulent practices and non-compliance with notification conditions were crucial in determining the denial of the SAD exemption. There is nothing in the appeal which may controvert the findings recorded by the Principal Commissioner. Appeal dismissed. The Appellate Tribunal in the case of M/s Indo China Impex v. Principal Commissioner of Customs, ICD TKD, New Delhi heard two appeals related to the denial of exemption from payment of Special Additional Duty (SAD) on imported goods. The issues presented and considered in the judgment are as follows:1. Whether the appellant wrongly and fraudulently availed the benefit of exemption from payment of SAD under the Notification dated 17.03.2012 on imported goods.2. Whether the penalties imposed on the appellant and its partner are justified under the Customs Act, 1962.Issue-wise detailed analysis:Issue 1: The Tribunal examined whether the appellant misused the exemption from SAD under the Notification dated 17.03.2012. The Principal Commissioner found that the appellant diverted goods without proper documentation and failed to comply with the conditions of the Notification. The appellant also made false statements regarding VAT payments, leading to the conclusion that they fraudulently availed the SAD exemption.Relevant legal framework and precedents: The Customs Act, 1962 and Notification No. 21/2012-Cus dated 17.3.2012.Court's interpretation and reasoning: The Principal Commissioner's findings highlighted the appellant's non-compliance with notification conditions and fraudulent practices.Key evidence and findings: The appellant failed to provide documentary evidence supporting their claims, and discrepancies in VAT payments were identified.Application of law to facts: The Tribunal upheld the Principal Commissioner's findings based on the evidence presented.Treatment of competing arguments: The appellant did not present any evidence to contradict the Commissioner's findings.Conclusions: The Tribunal affirmed the Principal Commissioner's decision, stating that the appellant wrongly and fraudulently availed the SAD exemption, leading to the dismissal of the appeal.Issue 2: The Tribunal assessed the penalties imposed on the appellant and its partner under the Customs Act, 1962. The partner was penalized for making false statements regarding VAT payments, which were contradicted by evidence from the VAT department.Relevant legal framework and precedents: Section 112(b), Section 114A, and Section 114AA of the Customs Act, 1962.Court's interpretation and reasoning: The Tribunal upheld the penalties imposed based on the partner's false statements and non-compliance with VAT requirements.Key evidence and findings: Evidence from the VAT department contradicted the partner's claims, leading to the imposition of penalties.Application of law to facts: The Tribunal found sufficient grounds for the penalties based on the evidence presented.Treatment of competing arguments: The appellant did not provide evidence to challenge the imposition of penalties.Conclusions: The Tribunal upheld the penalties imposed on the appellant and its partner, leading to the dismissal of the appeals.Significant holdings:The Principal Commissioner's findings regarding the appellant's fraudulent practices and non-compliance with notification conditions were crucial in determining the denial of the SAD exemption.The Tribunal affirmed the penalties imposed on the appellant and its partner for false statements and non-compliance with VAT requirements under the Customs Act, 1962.In conclusion, the Tribunal dismissed both appeals, upholding the Principal Commissioner's decisions regarding the denial of the SAD exemption and the imposition of penalties on the appellant and its partner.