TaxTMI 
TaxTMI 
2022 (6) TMI 1226
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....mport documents as received from the foreign supplier such as invoices, Bill of Lading and Country of Origin Certificate(COO), etc. were filed by the Appellant along with the aforesaid Bills of Entry under Section 46 of Customs Act, 1962 (‗the Act"). The Appellant admittedly have not availed any duty benefit on the basis of the said COO or otherwise and was willing to pay duty at appropriate rate. 4. During the course of physical examination of the goods imported under the Bills of Entry, it was observed by the assessing officer that the said goods appear to be of Iran origin and not Zambia and on the basis of the said observation, Inspector Customs, ICD, Tumb under the instruction of the Respondents issued Detention Memo dated 20.01.2022 informing the Appellant not to remove, sale or part with or deal with, in any other manner without permission of competent authority of Customs, ICD Tumb. 5. Based on the above, an inquiry was initiated against the Appellant, and statements of officials were recorded under Section 108 of the Act. While the investigation was ongoing, seizure memo dated 02.02.2022 was issued by the Deputy Commissioner of Customs, ICD Tumb under S....
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....ny misclassification or undervaluation of the imported goods. Looking at the submissions made by both the sides, this Tribunal vide Final Order No. A/1041/2022 dated 01.05.2022 was pleased to modify the provisional release order dated 06.04.2022 by directing the Appellant to provide a bond for full value of the seized imported goods and furnish a bank guarantee of 1 crore. 13. The department challenged the aforesaid order before the Hon'ble Gujarat High Court on the ground that the Competent Authority in the matter who had passed the provisional order was the Additional Commissioner of Customs and therefore the Tribunal had no jurisdiction to decide the matter. The appeal filed by the department was registered as Tax Appeal No. 237/2022. 14. The Hon'ble Gujarat High Court vide Order 20.05.2022 was pleased to set aside the final order dated 10.05.2022 on the ground of jurisdiction and directed the Appellant herein to file an appeal before the Commissioner of Customs (Appeals) Ahmedabad and on such appeal being filed, the Commissioner of Customs (Appeals) Ahmedabad was directed to dispose off the same within a period of 10 days from the date of filing. 15. An app....
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....ad [2020 (35) G.S.T.L. 78 (Ker.)] (x) Deenanath Maurya vs. Commissioner of Customs, Lucknow [2021 (378) E.L.T. 626 (Tri. - All.)] 17.1 Without prejudice to the aforesaid and in any event, admittedly, vide letter dated 04.02.2022, the department had permitted clearance of the goods imported vide impugned Bills of Entry by furnishing a bank guarantee equivalent to 15% of the duty payable. The said order was wrongly withdrawn by the Additional Commissioner of Customs through the office of Commissioner of Customs, Ahmedabad, inasmuch as once the provisional release order was passed on 04.02.2022, the office of the Commissioner of Customs became functus officio and had no jurisdiction to review its order. 17.2 There is no provision under the Customs Act which gives power to the department to review the order passed under Section 110A of the Customs Act. Reliance in this regard is placed on the decision: (i) Dharampal Satyapal Limited vs. Union of India - 2010 (257) E.L.T 194 (Gau.) (ii) Tarun Castings Pvt. Limited vs. Commissioner of C. Ex., Jaipur - 2002 (142) E.L.T. 400 (Tri. - Del) 17.3 The Commissioner (Appeals) has erred in holding that ....
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.... 17.8 On the issue of Country of Origin certificate, it is submitted that while the investigation is ongoing, there is no evidence so far to show that the said Country of Origin certificate is forged and/or false and therefore keeping in mind the facts of the case, the order directing furnishing of bank guarantee to extent of 15% of the value of the seized goods is incorrect more so when the entire duty is being paid. 17.9 The issue is settled in their case insasmuch as for the consignment of similar goods valued at around 35 crores, the Mumbai Bench of this Tribunal vide order no. A/85566/2022 dated 17.06.2022 has allowed provisional release on furnishing Bank Guarantee of Rs. 50,00,000/-. It is submitted that the issue being identical in nature, the order of the Hon'ble Mumbai bench is applicable to the facts of the present case as well. 17.10 Since the Appellants have already incurred cost toward heavy demurrage and detention charges, submissions were made for early disposal of Appeal. 18. Shri Dinesh Prithiani, learned Assistant Commissioner, Authorised Representative appearing on behalf of the revenue, during the hearing, reiterates the finding in th....
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....nce is placed on the decision of Gauhati High court in the case of Dharampal Satyapal Limited (supra) Which reads as under: "26. It is well settled that a Court or Tribunal or adjudicating authority becomes functus officio (ceases to have control over the matter) once a judgment is pronounced or the order is made. Such judgment and order, when becomes final, cannot be altered, changed, varied or modified unless the statute, where under the Court, Tribunal or the adjudicating authority functions, so permit. There can also be no doubt that the power of review is not an inherent power. The right to seek review of an order is neither natural nor fundamental right of an aggrieved party. Such power must be conferred by law. If there is no power of review, the order cannot be reviewed. However, a Court, having plenary power, is not affected by any statutory restrictions in reviewing its own order. In Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji, reported in (1971) 3 SCC 844, the Supreme Court, while dealing with the provisions of Saurashtra Land Reforms Act, 1951, and referring to Order 47 Rule 1 of the CPC, held that there is no inherent power of review with the adjudicating....
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....the provision. 47. In view of our above findings the reference is answered as follows : An appeal lies before this Tribunal against an order passed by Commissioner of Customs under Section 110A of the Customs Act, 1962 for provisional release of the goods." 25. The aforesaid decision of Larger Bench has been upheld by the Hon'ble Punjab and Haryana High court in the case of Commissioner vs. Gaurav Pharma Limited - 2020 (373) ELT 233 (P & H) wherein it is held as under: "14. It cannot be disputed that the powers vested with the adjudicating authority to be exercised for considering the prayer for provisional release of goods is circumscribed with well-settled principles of law governing the same. Such an order is not based on any policy, rather on settled principles of law. These orders cannot be issued mechanically, rather many factors are required to be considered such as the nature of goods, seriousness of offence, whether the goods being imported are prohibited, etc. etc. Any such order passed has civil consequences, hence, it cannot be opined that the same is passed by the adjudicating authority in exercise of its administrative powers rathe....
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....he condition of furnishing the bank guarantee to the extent of 15% of the value of goods or 15% of the duty value itself requires to tested in terms of the law delivered on the issue in the case of T.G. Enterprises (Supra) and various other decisions cited before this Hon'ble Tribunal. 28. In T.G. Enterprise, the Hon'ble Gujarat High court, in a case relating to alleged mis-declaration of country of Origin, was looking into the challenge to the provisional release condition by which the Petitioner was directed to furnish a Bank Guarantee to the extent of 25% of differential duty amount. The High court was pleased to set aside the said condition by observing as under: "These petitions arise in common background. Petitioners attempted to import areca nuts and black pepper claiming Sri Lanka as a point of origination. It is not in dispute that on such goods, as long as the point of origination is Sri Lanka, there are substantial concessions in customs duty. The customs duty is either nil or at heavily reduced rate as compared to the normal duty if the origination of goods is not from any of the neighbouring country with which India has entered into the treaty for such prefere....
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....ies and protecting the interest of the revenue is often times considered by the Courts. The trend during the period of time that has emerged is unless there are special facts, to release the goods on bank guarantee of a certain percentage of the probable differential duty of customs and securing the rest of the amount through personal bond. In this context, we had examined the prima facie material at the command of the department more minutely. What appears is that the department relies heavily on various statements of the petitioners and other persons including Sarfaraz Pathan to contend two things. Firstly, that the goods were not of the origination of Sri Lanka and secondly, that the real importer behind the scene is Sarfaraz Pathan, the present petitioners being mere fronts. We also record that these statements were subsequently, retracted but many of the retractions were themselves retracted. 7. In view of such facts and circumstances of the case and for the reasons noted above, we permit provisional release of the goods in question upon fulfilling following conditions : (i) The petitioners shall give unconditional bank guarantee in favour of the department of ....
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....n for confiscation of goods. The said judgments cannot apply to every case of detention. Mere allegation of liability to confiscation is not enough. Circumstances and grounds justifying opinion about liability to confiscation is open to judicial scrutiny. 12. Power of detention of goods is a drastic power and exercise of such power has to be hedged by safeguards to check its abuse and limit its exercise only to situation where it is intended by law to be exercised. Existence of power and exercise of power are independent. Mere fact that there is a power to confiscate does not mean that such power could be exercised mechanically or arbitrarily. The authority exercising such power must strictly justify the same. Balance has to be maintained between the need for exercise of such power for the purpose for which the same has been conferred and adverse effects on rights of a citizen. 13. As held in Mapsa Tapes Pvt. Limited, power of search and seizure to check evasion of tax has been upheld as temporary interference with the right of a citizen. At the same time, seizure is not only invasion of right of property but also right of privacy. Such right can be affected only by....
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....re prescribed does not satisfy the requirement of Article 14 it would be no procedure at all within the meaning of Article 21." 14. Reasonableness being part of fundamental right under Article 14, doctrine of proportionality can be invoked so that unequals are not treated as equals. The exercise of discretion has to be proportionate to the wrong which has led to the action. The doctrine of proportionality has been explained in Om Kumar v. Union of India, AIR 2000 SC 3689, wherein it was observed :- "28. By "proportionality", we mean the question whether, while regulating exercise of fundamental rights, the appropriate or least-restrictive choice of measures has been made by the legislature or the administrator so as to achieve the object of the legislation or the purpose of the administrative order, as the case may be. Under the principle, the court will see that the legislature and the administrative authority "maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve". The legislature and the administrative....
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....nsel for importer has submitted that they have no objection to comply with all the above conditions except the condition to furnish Bank Guarantee equivalent to 30% of the value of the goods. It is submitted by him that they have paid the entire duty on the declared value and also willing to pay the differential duty if any assessed by the department. We find that when the importer has made such payments and the goods having been mutilated to render them as scrap so as not to be reused as such for any purpose, the condition to furnish BG in addition to bond is not warranted or justified. 30. The commissioner (Appeals) has relied on the judgments in the case of Bhaiya Fibre Ltd (supra) and Max Enterprises vs. Dy. Commissioner of Custom, Chennai 2019 (367) ELT 753 (Mad.) in these decisions, the Hon'ble High Courts have not imposed condition to furnish Bank Guarantee. In para 12 of the decision in the case of Bhaiya Fibre Ltd, the Hon'ble High Court observed as under: 12. Under the circumstances, we have to go by the principles laid down by the Customs (Provisional Duty Assessment) Regulations, 1963.We, therefore, direct the Respondent to provisionally clear the goods formin....
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....tee was set aside. 33. We find that in the present case as well, as discussed above and evident from the Bills of entry, the appellant was always willing to deposit the entire duty of BCD + IGST which is over 25 crores and therefore, the condition to direct the appellant to furnish a bank guarantee of 15% of the value of the goods which is over 100 crores is excessive and arbitrary more importantly when the appellant is willing to deposit the duty payable on the seized goods. There is no dispute on the valuation or classification of the goods as is clear from the impugned provisional order. The provisional release order dated 06.04.2022 and the seizure memo dated 02.02.2022 does not mention anything about undervaluation as has been argued by the department before the Commissioner (Appeals). The Commissioner (appeals) instead of verbatim copying the notes of arguments furnished by the department ought to have considered the seizure Memo which clearly state in Para 5 read with Para 8 that the case of the department against the Appellant is limited to mis-declaration of country of origin certificate. Even letter dated 09.02.2022 which was issued by the Additional Commissioner o....
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....interim order and was passed by the Hon'ble High Court keeping in mind the peculiar facts of that case. In the case before the Hon'ble High Court on the date of hearing, 50% of the goods was on the verge of being exported and keeping the said fact in mind as an interim measure, the High Court was pleased to direct the assessee to provide bank guarantee of Rs. 15 crores. While it is a settled law that interim orders have no binding precedent even then the order passed in the Hazel Mercantile (supra) was passed in the peculiar facts of that case. Ultimately the Petition was disposed off without deciding the merits of the case as the goods were exported and investigation was ongoing. We also find that the Commissioner of Customs (Appeals) has not appreciated the order dated 21.04.2022 passed by the Hon'ble Gujarat High Court in the same case reducing the bank guarantee amount from 15 crores to 7 crores. Even in the said order the matter was not discussed on merits and the writ application was disposed off on the ground that the goods had been exported and the investigation in the matter was ongoing. In view thereof, considering the fact that the decision in the case of Hazel (supra) w....