TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 1198
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.... IGI airport (Terminal 2) New Delhi in arrival as well as departure areas since March 2007. For this purpose they obtained a Private Bonded Warehouse License (PBWL) and agreed to abide by various conditions associated with the same. As per the licenses issued, M/s. Alpha were permitted to import goods such as liquor, chocolates, cigarettes, etc. duty free, to be sold only to International passengers arriving or departing from / to foreign destinations. They were required to collect the sale proceeds in foreign exchange and were also required to maintain various records as prescribed. In particular, every sale was required to be recorded and details of passenger name, passport number, flight number and other relevant details were required to be recorded and sale vouchers to be issued. The procedure required to be followed for operation of DFS were prescribed by customs vide public notice no. 5/2006. Show cause notices dated 01.04.2009, 02.07.2010 as well as 26.03.2012 have been issued to M/s. Alpha, alleging that they have made sales of liquor from the stock of duty free imports in contravention of various conditions which are required to be adhered to by M/s. Alpha as a duty free s....
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.... to the very same period - 27.03.2007 to 08.10.2008. It is well settled legal position that more than one show cause notices cannot be issued for the same period. Consequently, the orders in original confirming the demand of customs duty and penalties based on the second and third show cause notices are required to be set aside in toto. In this regard, they relied on the following decisions: a) CCE Vs. Siddharth Tubes ltd. 2004 (170) ELT 331 b) Shreeji Colourchem Industries Vs. CCE 2013 (294) ELT 615 c) Paro Food Products vs. CCE 2005 (184) ELT 50 iv) It has been held by the Hon'ble Supreme Court in the case of Hotel Ashoka Vs. AICT 2012 (276) ELT 433 (SC) that a DFS is located beyond the customs frontier of India and, therefore, goods sold by a DFS must be considered to have been sold before the goods cross the Customs frontiers of India and are thereby imported to India. Accordingly, it was submitted that no duty demand can be made against M/s. Alpha who was a DFS but it has to be effected on the passenger who is the importer and hence liable to pay customs duty. v) It is well settled legal position that where customs violation have been committed by employees without the....
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....notice number 5/2006 dated 27.02.2006 issued by the Commissioner (Customs) which govern the procedure for the operation of duty free shops at the IGI airport. The public notice inter alia prescribed that M/s. Alpha will maintain stock register for the goods imported duty free, and their further disposal in particular. 10. The imported or indigenous non-duty paid goods permitted to be received and stocked in the DFS shall be sold by the License only to International passengers and on obtaining from them payment in approved foreign currency or Indian currency as per the notification issued by CBEC from time to time. Every sale shall be covered by a sale voucher (which shall be deemed to be a shipping bill or bill of entry under section 69 or 68 as the case may be) which, inter-alia, shall show, the name of the passenger to whom the sales are effected, the passport number identity of passenger, the no. and date, description of goods and flight details. The passenger shall append his signature on the bill as per his signature in the passport. The sale voucher should be serially numbered and prepared in duplicate, the original for the passenger and the duplicate for the duty free shop.....
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....001 was violated. The discussons in above paragraphs showed that the goods covered thereby were not sold to international passengers and evasion of customs duty was made making false entries on record. 15. Further scrutiny of sales bills of the duty free shop operated by appellant in departure area of IGI Airport revealed that a large number of sales bills were issued in the name of and Mr. Manish who was an Indian National. Passport No. A-1425369 was mentioned against sales made to such person which was found to be fake and with change of one or more digits of that number, other fake numbers appeared in several bills. It was also found that the bills issued in the name of Mr. Manish stating the passport number as above, appeared against other names as detailed in RUD-No.-25. That proved unrealistic situation and making of fake sales entries on record. Such material fact came to record proving falsification and commitment of fraud against Revenue. 16. Enquiry further revealed that sale of goods of Rs. US $ 1790 made on 01.09.2008 issuing 47 sale bills exhibited name of Shri Manish mentioning departure from Airport different flights No. VS-301, JO-472, AI-310, AI-III and EK-511 as....
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....violating the conditions of PBWL by selling the goods regularly to domestic passengers and other persons who were not international passengers at the relevant time. Further, it emerged that M/s. Alpha were issuing fake sale bills without details or with false passenger details from the DFS and thereby concealed and suppressed the facts that imported duty free liquor were being unlawfully removed from PBWL in the guise of sale to international passengers. The customs authorities further obtained various details such as bills of entry under which liquor was imported for the PBWL and other details and worked out the value of imported liquor diverted clandestinely. The above investigation resulted in issue of show cause notice dated 02.07.2010 in which customs duty amounting to Rs. 6,30,38,783/- was demanded along with proposals to impose penalty under various section of the customs act. 20. Further, investigations were conducted to ascertain the authenticity of the bills generated by M/s. Alpha at the DFS for the period March 2007 to October 2008, other than those covered under the SCN dated 02.07.2008. The details of the passengers whose names appeared on the bills and purported to ....
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.... covered the shortage noticed in the stock of liquor at the DFS. It stands admitted by the various employees of M/s. Alpha that 51 bottles of liquor have been sold to domestic passengers in violation of the customs notification and these goods are liable for confiscation. Further, no plausible explanation has been offered regarding shortage of goods found other than a feeble statement that IGI airport was undergoing major renovation and that the location of the appellants DFS was repeatedly changed. Evidence gathered clearly suggested the goods found short have been removed from the customs bonded warehouses in contravention of section 71 of the Customs Act. Accordingly, we have no hesitation in upholding the confiscation and demand the duty made pertaining to SCN dated 01.04.2009. 26. The demands confirmed by the Adjudicating authority pertaining to show cause notices dated 02.07.2010 and 26.03.2012 have been challenged by the appellant mainly with the argument that all the three notices are related to the very same period i.e. 27.03.2007 to 08.10.2008. It has been argued that more than one show cause notice for the same period cannot be issued. Show cause notice dated 02.07.2010....
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....authorisedly to domestic passengers and not to international passengers. 28. Further, it is seen that the various case laws relied upon by the appellant, as well as, the decision of Hon'ble Supreme Court in the case of Nizam Sugar Factory have dealt with demand made under section 11 of the Central Excise Act 1944 by invoking the extended period. However, in the present case, the show cause notice has been issued by raising the demand in terms of section 72 of the Customs Act. The appellant has been issued private bonded warehouse license under section 58. The appellant has also executed the bond under section 59 ibid. The investigation into the affairs of the appellant has categorically showed that the appellant has violated with impunity, the conditions of the issue of PBWL and Public Notice number 5/2006 which he is required to comply in the operation of DFS. The appellant was permitted to import liquor and other goods without payment of duty and store the same in the private bonded warehouses. They were allowed to sell such goods to international passengers subject to strict conditions as per the Public Notice above. It stands established that goods have been cleared by way of ....
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....s and flight. The passenger shall append his signature on the bill as per his signature in the passport. The sale voucher should be serially numbered and prepared in duplicate, the original for the passenger and the duplicate for the duty free shop. The latter copy should be available for inspection by the Customs officer at all reasonable times. Thus I find that assertions made by the notice are incorrect and not relevant. This argument of the notice is merely for the sake of it. If duty free shops are beyond Customs frontiers and therefore out of administrative control of the customs officers, then why in the first place have at all a procedure for sale of such goods from duty free shops been prescribed. In this regard, reference is invited to the law as laid down by the CESTAT in the case of Flemingo Duty Free Shops Pvt. Ltd. 2009 (248) ELT 69 (Kar.) wherein the Hon'ble Court categorized the Duty Free Shops as customs Bonded warehouses within the meaning of Section 58 of the Customs Act, 1962. These obviously cannot therefore be construed to be outside of Indian Customs Frontiers. The Hon'ble Court in the said case has noticed as: "The petitioner has obtained a licence under S....
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....utgoing passengers, such goods leave the country without becoming part of the "mass of goods within the country" and thus the import cannot be said to be completed as it does not cross the Customs Frontier, before being taken out of the country." 60.2. The Hon'ble Court's observations in para 6 of the judgment in consideration of the applicability of the provisions of Standards of Weight and Measures (packaged commodity) Rules 1977, clearly throws out the argument (Duty free shops are outside Customs Frontiers of India) of the notice to the woods." 32. We also find that the decision of the Apex Court in the case of Hotel Ashoka (Supra) has been rendered in a totally different context and has dealt with the levy of commercial taxes and not customs duty. Hence the facts of the case are not applicable in the present case. 33. The decision of the Hon'ble High Court of Karnataka in the case of Flemingo Duty Free Shops Pvt. Ltd. 2009 (248) ELT 69 (Kar.), discussed by the Adjudicating Authority has settled the issue that duty free shops are to be considered as bonded warehouses within the meaning of section 28 of the Customs Act as it is distinguishable. 34. The appellant has challeng....
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....he relevant period, usually made an addition, to the Import value, equal to 93,95% thereof, on account of profit and general expenses; and therefore, the value of the good of this category was arrived at by treating the sale price as equal to 193.95% of the import value. The sale price of item by the notice for each article has been taken at 193.95% of the import value and the import value has been worked out accordingly." Further, the rate of customs duty at which the duty has been demanded by the Department has been correctly worked out in accordance with the provisions of the Customs Act, 1962. Since, in the present case the goods have been sold unauthorisedly from the duty free shop, the rate of duty applicable on the same will be the rate prevalent on the date of imports of goods, which has been so applied. However, the notice has not furnished any breakup or working in support of his contention to dispute the department's contention." 36. After perusal of record, we find no reason to interfere with the findings of the adjudicating authority. After going through the records of both the appeals we note that M/s. Alpha were issued customs bonded warehouse license and permitted....