https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=461425 https://www.taxtmi.com/caselaws?id=461425 Evasion of Customs Duty - entering into sham agreements with a view to split the consideration for supply of imported equipments under FOB Agreement into designs & drawings and other post importation activities so as to evade customs duty - EPCG Licenses do not carry the 'H Blast' as the location - Spares have been imported under EPCG which are required only subsequent to the installation of the capital goods - Extended period of limitation - confiscation - penalties. EPCG Licenses do not carry the 'H Blast' as the location - HELD THAT:- It is observed from the documentary evidence placed before us, the appellants have sought necessary amendment for the EPCG License to include the name of 'H Blast' therein. These requests were entertained by the DGFT and on examination of the amendment letters issued by them, it clear this issue has been properly addressed by the appellant. Therefore, the confirmed demand on this account does not survive and the same is set aside. In respect of the spares imported by them under EPCG, the imported assemblies, sub-assemblies, components, sub-components are held as allowed as spares under the Foreign Trade Policy. Apart from this, Paragraph 6 of 5.1 of FTP, which defines the capital goods to include spares, meaning that the spares can be imported for pre-production purposes also. In order to obtain the Discharge Certificate for the EPCG License issued by the DGFT, the appellants have provided the details of spares imported by them and DGFT is satisfied with the imports made. Therefore, when the FTP allows such imports under the EPCG, the Customs Dept. cannot question the same and in fact have no authority to do so. Thus, the confirmed demand on this account is required to be set aside. Contract divided into several sham contracts - HELD THAT:- It is clear that right from the beginning, even at the stage of pre-first Offer dated 15.01.2003, the clear demarcation of service, purchase, scope of work was available at all stages. This was the case with all the other intervening Offer letters till the Final Offer dated 29.7.2005. Thus, it shows that proper planning was made for this project clearly demarcating the import of goods, purchase of indigenous goods, involvement of service works etc. The Final Six Agreements dated 1.8.2005 are the result of the detailed discussions and planning undertaken during the period 15.1.2003 till 1.8.2005. The Revenue has built the present case purely on presumptions and assumptions basis, without actually verifying the documentary evidence placed before them. The Adjudicating authority has failed to appreciate these documentary evidence and has confirmed the demand by simply relying the assumptions made during the issue of the SCN. Hence, the confirmed demand of Rs. 32,76,67,821 is legally not sustainable. Extended period of limitation - demand being issued for the period which is beyond even the extended period of five years - HELD THAT:- In the present case, the appellants have placed all the documents before the Appraising Officer and the goods have been cleared in the normal course. There is nothing to suggest from the present proceedings that the goods were provisionally assessed. Further, as all the transactions have been carried out with clear records for all the pre-offers and subsequent Four Offers in a transparent manner, we do not see any suppression coming out in the entire transaction. At the most, it would amount a proper taxplanning, keeping in view the best interest of the appellant company. Nothing with any substance has been brought on record that the appellant has indulged in any suppression, so as to invoke the extended period demand. Hence, the confirmed demand for the extended period is legally not sustainable on account of limitation also. Hence, the Appeal is allowed even on account of Limitation. Confiscation - penalties - HELD THAT:- The confirmed demands do not sustain both on merits as well as on account of limitation against the main appellant TISCO. Hence, the confiscation ordered and penalties imposed on them also do not survive. Conclusion - i) The confirmed demands against TISCO do not survive both on account of merit as well as on account of limitation. ii) The confiscation order stands set aside. iii) The penalties imposed against TISCO and all the other appellants stands set aside. The impugned order set aside - appeal allowed. Case-Laws Customs Thu, 19 Oct 2023 00:00:00 +0530