TaxTMI 
TaxTMI 
2019 (10) TMI 1114
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....nds cancelled ab initio. iii. I confirm the demand of duty amounting to Rs. 78,81,61,176/- (Rupees Seventy Eight Crores Eighty One Lakhs Sixty One Thousand One Hundred and Seventy Six only), Rs. 3,59,418/- (Rupees Three Lakhs Fifty Nine Thousand Four Hundred and Eighteen only) and Rs. 1,28,025 (Rupees One Lakhs Twenty Eight Thousand and Twenty Five only) under Section 28 of the Customs Act, 1962 along with the applicable interest under Section 28AB of the Customs Act, 1962 (Section 28AA w.e.f. 08.04.2011) on the importer M/s GTIL in respect of the three SCN's dated 02.11.2006, 22.012007 and 29.01.2007. iv. The EPCG license (i) 033000831 dated 31.03.2005, (ii) 0330009232 dated 21,07.2005, (iii) 0330009814 dated 23.09.2005, (iv) 0330010231 dated 16.11.2005 and (v) 0330010407 dated 05.12.2005 of year 2005 issued to the importer and deemed to be valid by the EPCG committee and the new EPCG Licenses to be issued by the Regional Authority can be used for debiting so much of the duty as is in excess of the amount calculated at the rate of 5.1 ad valorem for the capital goods and spares already cleared under EOU scheme as per the notification No 97/2004-Cus dated 17.09.20....
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....ts) should not be recovered from them as per Section 28 of the Customs Act, 1962 read with para 11 of Customs Notification No 52/2003-Cus dated 31.03.2003 2.5 After considering the submissions made by the Appellants, Commissioner has by the impugned order adjudicated the three Show Cause Notices. Aggrieved by the impugned order appellants are in appeal. 3.1 We have heard Shri Vikram Nankani, Advocate for the Appellant and Shri R K Dwivedy, Additional Commissioner, Authorized Representative for the revenue. 3.2 Arguing for the Appellants learned Counsel submitted that- • The issue in respect of the cancellation of EOU Registration and subsequently permitting to discharge the duty that is in excess of 5.1% advalorem is settled by the EPCG Committee's decision dated 19.09.2014. Commissioner has in his order given effect to the decision of EPCG Committee, by permitting the debit of duty demanded in respect of the goods initially imported claiming the benefit of Notification No 52/2003-Cus against the various EPCG Licenses issued to them in 2005. • They are entitled to debit remaining amount of duty i.e. 5.1% ad-valorem, by utilizing the SFIS Scrips av....
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....nfirmed by the adjudicating authority under Section 28, the demand for interest under Section 28, is natural consequence of the confirmation of demand under Section 28, hence the impugned order cannot be faulted with; • Further the case law relied upon by the appellant are in respect of warehousing interest and not in respect of the duty demanded and confirmed under Section 28, for the duty short paid or not paid on the due date, these decisions will not apply to the facts of the present case and are distinguishable. In a series of the decisions including the decision of Bombay High Court in case of Valecha Engineers Ltd., it has been held that demand of interest under Section 28AA of Customs Act, 1962, is in respect of duty short paid or not paid and hence cannot be set aside or waived. • Since during the period of imports the Foreign Trade Policy as it existed then did not permitted the debits from the SFIS Scrips/ License against the imports made under EPCG Scheme, Commissioner was absolutely justified in denying such permission. 4.1 We have considered the impugned order with the submissions made in appeal and during the course of arguments on appeal....
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....R:37(2005): SEEPZ: EOU:82/05-06/2245 dated 29.03.2006 and the agreement dated 13.04.2006 entered into by M/s. GTIL with the Development Commissioner, SEEPZ SEZ, Mumbai for setting up of the 100% EOU. Thus, it is evident that the customs bonding licence was issued to M/s. GTIL only for the purpose of permitting the in-bond port handling services under EOU scheme and therefore the EOU registration dated 09.06.2006 and customs bonding licence dated 26.05.2006 issued to M/s GTIL needs to be seen as inter-linked for giving effect to the 100% EOD scheme. Thus the customs bonding licence issued to M/s GTIL does not have independent existence. Consequent to the ab-initio cancellation of EOD status by the BoA vide order dated 13.11.2007, the EOD registration dated 09.06.2006 and the customs bonding licence dated 26.05.2006 issued to the importer become null and void and stand cancelled ab-initio. The post facto application dated 15.02.2013 of the importer for renewal of the customs bonding licence therefore does not merit consideration. Accordingly, the imported goods are not eligible for duty exemption under the notification no. 52/2003-Cus dated 1.03.2003 and the domestically pro....
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.... only vide para 5.1 of the FTP 2009-14. xi. The instant case does not warrant any academic discussion about the differentiation between levy and assessment. The liability to pay the duty and applicable interest stands finalized as already discussed in the para vii-ix above. xii. Though the customs bonded warehousing licence was valid for 3 years but the EOU ceased to exist ab-initio and consequently the imported goods and the duty free domestically procured goods become liable to interest as already discussed in the para vii-ix above. xiii. Though the EPCG Committee vide the minutes of the meeting dated 19.09.2014 had recommended for waiver of interest as a special case, the same was contested by the CBEC vide letter F. No. 605/53/2014-DBK dated 05.11.2014 stating that the same had been done without tile concurrence from the Department of Revenue and it was requested that the same be expunged from the minutes of the meeting dated 19.09.2014 as it would not be proper to decide on the issue of interest beforehand under the para 2.5 of the FTP as the issues of interest related to the chargeability of customs duty and the date on which the duty becomes due we....
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....(Tri.-Mumbai)] relied upon by the importer, the same are not applicable as the instant case merits ab-initio cancellation of the EOU registration and the customs bonding licence which was issued as per the LOP issued by the Development Commissioner, SEEPZ Special Economic Zone, Mumbai which renders the goods as deemed cleared for home consumption under Section 47 of the Customs Act, 1962 on the date of bonding itself." 4.3 It is admitted fact that Appellants had imported the goods covered by thirty three Bill of entries as detailed below, claiming the benefit of exemption under Notification No 52/2003-Cus. Subsequently it was determined that the appellants were not eligible to benefit of exemption under the said notification accordingly the proceedings to demand the duty short/ not paid by the Appellants were initiated under Section 28 of the Customs Act, 1962. The demands in respect of the duty short/ not paid by the appellant have been confirmed by the Commissioner along with the interest in respect of the duty short/ not paid. 4.4 The contentions raised by the Appellant in respect of the demand made under Section 28 and interest under Section 28AA have been considered by t....
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....dgment in Jagdish Cancer & Research Centre is of a Bench of three Judges vis-a-vis the Judgment in Union of India v. Security & Finance (P) Ltd., (supra) and M.J. Exports Ltd. (supra), in our opinion, in addition it would be open under Section 28 for the Competent Authority, to issue a show cause notice. Section 28 is the provision under the Act, if there has been nonpayment or short payment and the like, to adjudicate the dispute to decide whether there has been a breach and/or the like and consequently recovery of duty which has not been paid or short paid. Such an exercise would not be without jurisdiction. Once duty is payable the importer would be liable for interest on the unpaid duty under Section 28AB, as by operation of law, when duty is not paid or short paid on ascertainment of such nonpayment and ascertainment of interest under Section 28AB becomes payable. If interest is payable under a bond or notification the interest would be payable pursuant to the bond or notification. In such cases there can be no further interest under Section 28AB. 25. The judgment in Rexnord Electronics & Controls Ltd. v. Union of India, 2008 (224) E.L.T. 184 (S.C.) may now be conside....
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....n. These are notifications issued under Section 25(1) of the Customs Act. Under the Notifications in exempting the goods from the whole of duty of customs the importer has to execute a bond binding to pay an amount equal to the duty together with interest as set out in the Notification. The interest varies from time to time depending on the nature of the Notification. There are Rules also framed called Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. In terms of these Rules for failure to comply with the conditions of imports power is conferred to recover the difference of duty and interest fixed by the Notification under Section 28AB of the Customs Act. Though ultimately as can be seen considering the Notification issued under the Rules the interest is secured by a bond notwithstanding the interest is payable pursuant to an exercise in subordinate legislation. Therefore, in our opinion, what emerges is that interest payable is compensatory for failure to pay the duty. It is not penal in character in that context. The Supreme Court under the provisions of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 in....
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....e duty charged under this Act. It is no doubt true that the provisions of Customs Tariff Act themselves do not provide for interest. However, we may gainfully refer to the expression "duty" under Section 2(15) of the Customs Act, which reads as under :- ""duty" means a duty of customs leviable under this Act." A reading thereof would indicate that the provisions of the Customs Act pertaining to duty would also apply duty payable under the Customs Tariff Act. The law as now settled is that the charging Section for Customs Duty is Section 12 whereas the charging Section in so far as the Customs Tariff Act is Section 3. However, relevant for our discussion would be the Sections 3, 3A and their relevant sub-sections. Would a construction of these provisions, result in holding that interest be treated as having been incorporated under the provisions of the Customs Tariff Act, 1975. The provision for interest as now settled is a part of the machinery provisions. It by itself is not penal in character, but is compensatory in nature. In other words it recompensates the State on failure to pay duty at the rate of interest as determined by the Board. Two constructi....
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....ave now held, interest was payable. If interest was not payable under the Act the question of the Commission exercising jurisdiction, directing the refund would also not arise. This is irrespective of the fact that any issue pertaining to refund of interest would be subject to the provisions of unjust enrichment. In our opinion Rule in this Petition will have to be made absolute both on the count that interest was payable and alternatively on the ground that the Commission had no jurisdiction to direct refund of interest." 4.5 Appellants have sought to contest the demand of interest by invoking the provisions of promissory estoppel. It was there submission that once they had been allowed registration as EOU, and clearance of the goods by allowing the exemption under Notification No 52/2003- Cus, the demand made under Section 28 and demand of interest under Section28AA/ 28AB will be hit by the principles of promissory estoppel. Hon'ble Supreme Court has constantly held that there is no estoppel against the operation of law: Elson Machines Pvt Ltd [1988 (38) ELT 571(SC)] 8. The next submission on behalf of the appellant is that the Classification Lists had been a....
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....we are not in agreement with the submissions made by the appellant by invoking the principle of promissory estoppel. It is also settled law that in case of exemption, it is responsibility of the person claiming the exemption to satisfy that the said exemption is available to him. Hon'ble Supreme Court has in case of Dilip Kumar & Co [2018 (361) ELT 577 (SC)] held as follows: "52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) ......." 4.7 In view of the discussions as above we are not inclined to agree with the submissions made by the appellant's respect of the interest. We are also not inclined to agree that demand of interest should be limited to the amounts demanded in cash and not in respect of the amounts allowed to be debited from the EPCG licenses. In our view when short/ nonpayment is adjudged under Section 28, Section 28AA mandates the interest t appropriate rate on the quantum of short/ nonpayment adjudged independ....