TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 696
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....1 of 2022, Custom Appeal No. 2 of 2022 and Custom Appeal No. 3 of 2022 filed by M/s Deepu Jewellers Llc Dubai, Kishore Ratilal Dhakan and M/s Samrah Gold Factory Limited; respectively, are arising out of the order dated 29.8.2019 passed in three defective Custom Appeals filed by the aforesaid appellants, by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad, whereby the appeals have been dismissed as non-maintainable being defective. The defect in three appeals was with respect to the mandatory pre-deposit in terms of Section 129E of the Customs Act, 1962. The order impugned records that despite adjournment granted on the request of the learned Advocates appearing for the appellants therein, nothing had been deposited towards the mandatory pre-deposit. The remaining two connected Custom Appeal No. 4 of 2022 and Custom Appeal No. 5 of 2022 filed by M/s Samrah Gold Factory Limited and M/s Deepu Jewellers Ltd; respectively, are directed against the order dated 31.1.2022 passed in Customs Appeal No. 70243 of 2021 (M/s Ajit Exports vs. Commissioner of Customs, Customs House, NOIDA) by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad, whereb....
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....to the appellants namely M/s Deepu Jewellers and M/s Samrah Gold Factory Limited, by following the procedure prescribed in law. It is an admitted fact of the matter that the entire confiscated quantity of gold items were exported by two appellant companies herein namely M/s Deepu Jewellers and M/s Samrah Gold Factory to M/s Ajit Exports at NOIDA having its factory at Special Economic Zone and the goods (gold jewellery) were cleared from Customs, New Delhi in favour of M/s Ajit Exports, the importer, without payment of Customs duty. 7. It is sought to be submitted by the learned counsel for the appellants that the Custom Authority at NOIDA cleared the bills of entry, the documents prepared by the importer by checking the consignment through machines. A copy of the register maintained by the Customs Authority, NOIDA had been sent to the Development Commissioner, NOIDA as the consignment had been sent to the SEZ unit, NOIDA. It is contended that during this whole process approximately ten officers involved in the operation had verified the consignment received from other countries through airlines. The bills of entry prepared by M/s Ajit Exports had been verified by the Customs Autho....
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....o be seen. 10. The submission, thus, is that neither the goods exported by the appellants could be confiscated by the Customs Authority for any violation in the importation of the same by M/s Ajit Exports nor penalty can be levied upon the exporters namely the appellants herein under the provisions of the Customs Act. Section 1 of the Customs Act, 1962 which provided for the territorial jurisdiction of the Act has been placed before us to argue that a Foreign National or a Non-resident Indian cannot be held liable for any offence or contravention of the provisions of the Act. 11. In support of his argument, Sri Arvind Srivastava learned Advocate appearing for the appellants has placed reliance on a decision of the two Member Bench of CESTAT in M/s Seville Products Limited vs. Commissioner of Customs, New Delhi 2021 (3) TMI 775- CESTAT New Delhi decided on 18.3.2021 wherein the Tribunal has decided the issue as to whether penalty under Section 112(a) of the Customs Act, 1962 can be imposed prior to the amendments brought in Section 1(2) of the Customs Act, 1962, upon an Exporter who has mis-declared the goods located in Dubai, UAE. Placing the said decision, it was argued that Se....
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....ole of India and not beyond its territorial jurisdiction. The penalty, therefore, could not have been imposed upon the appellant therein under Section 112(a) of the Customs Act. 13. In the second limb of arguments to challenge the order passed by the CESTAT, Allahabad in dismissing the appeals as not maintainable, for non-compliance of the condition of mandatory pre-deposit under Section 129E of the Customs Act, it was argued by the learned counsel for the appellants that once the appellants herein made out a case of lack of jurisdiction of the Customs Authority over the appellants companies incorporated in Dubai and Kishore Ratilal Dhakan being a non-resident Indian between 1982-2010, the appeals filed by them challenging the order in original of imposition of penalty could not have been rejected as not maintainable, inasmuch as, the initial show cause notices issued on 12.11.2013 were required to be quashed being wholly without jurisdiction. 14. In addition to the above, the appellants have also demonstrated before the CESTAT that they were facing acute financial distress and there was high probability of the appeals being allowed for the show cause notices being without jurisd....
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....ment of Customs duty in SEZ unit, NOIDA. The material on record clearly indicated that the appellants herein had been benefited illegally from the import made by M/s Ajit Exports and M/s Vee ESS Jewellers Private Limited, two Indian companies located in the Special Economic Zone, NOIDA. The sale proceeds of the transactions made by Indian SEZ units were transmitted to the appellant companies and its Director Kishore Ratilal Dhakan. In case the appellant companies are spared only because of being incorporated abroad, i.e. in Dubai, the very purpose of import and export would be frustrated. For any illegal benefits derived by the appellant companies, incorporated outside India, out of any transaction or offence committed within the territory of India, they are liable to penalty, for contravention of the provisions of the Customs Act. All arguments raised by the counsel for the appellants on the plea of lack of jurisdiction are, thus, wholly unsustainable. 18. On the second point, with regard to the financial distress faced by the appellant companies seeking to condone the requisite pre-deposits, it was argued that the said contentions are not open to agitate with the amendment broug....
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....allenge the penalty imposed under the Act. 20. Having heard learned counsels for the parties and perused the record, it is pertinent to note at this juncture that the main challenge by three appellants herein is to the order of the CESTAT, Allahabad in dismissing their appeals as non-maintainable on account of the defect, for non-compliance of mandatory pre-deposit in terms of Section 129E of the Customs Act. Three appeals filed by the appellants herein namely M/s Samrah Gold Factory Limited and M/s Deepu Jewellers and Kishore Ratilal Dhakan have, thus, been dismissed being defective. The requirement of pre-deposit as per Section 129E(ii) is mandatory with the amendment brought in Section 129E w.e.f. 1.10.2014. Under the amended provision, to maintain an appeal before the Appellate Tribunal against a decision or order passed by the Adjudicating Authority as referred in clause (a) of Sub-section (1) of Section 129A, the deposit of 7-½ % of the duty demanded or penalty imposed or both, in pursuant to the said decision or order, became mandatory. The discretion provided to the Appellate Tribunal as per the first proviso to the unamended Section 129E has expressly been taken aw....
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....e appellant therein that he must be given the benefit of powers available under the unamended Section 129E for the incident having taken place in the year 2013, prior to the amendment, was turned down. It was held therein that the legislative intention clearly was not to allow the appellant therein to avail the benefit of discretionary power available under the first proviso to the unamended provision of Section 129E as the order was passed by the Commissioner in levying duty/penalty was subsequent to the amendment and the appeal was filed in the year 2017. 21. On the same principle, the Division Bench of this Court in Ganesh Yadav (supra) dealing with the amendment brought in Section 35F of the Central Excise Act, 1944 corresponding to Section 129E of the Customs Act, 1962 has held that the requirement of mandatory pre-deposit under the amendment would be applicable to appeals filed on or after the date of enforcement of the amended provision, even if the show cause notice was issued prior to the amendment. The challenge to the constitutional validity of amendment of Section 35F of the Central Excise Act, 1944, corresponding to Section 129E of Customs Act, 1962 was turned down on....
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.... order of the Commissioner of Customs (Export), the dismissal of appeal by the CESTAT cannot be interfered. 23. In light of the above discussion, we are of the considered view that as the appellants herein have failed to fulfill the pre-condition of 7.5% of the demanded duty/penalty as per the order of the Commissioner of Customs, NOIDA dated 18.10.2018, this had to necessarily result in dismissal of their appeals by the CESTAT. There was no discretion with the tribunal to condone the pre-condition of mandatory deposits on the ground of undue hardship. As far as lack of jurisdiction to issue show cause notice is concerned, the said issue could have been considered once the appellants were able to maintain their appeals by making mandatory pre-deposits before the CESTAT. The appeals before us challenging the orders of the CESTAT dated 29.8.2009 in dismissing three appeals as not maintainable on account of defect of mandatory pre-deposit under Section 129E, therefore, deserve dismissal. 24. However, in view of the submissions of the learned counsel for the appellants about the jurisdiction of the Customs Authority in imposing penalty upon the appellants herein, we are required to a....
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....nveyed by the appellants to the SEZ units in "coded" form through Fax messages, SMS and telephonically. The sale proceeds of such high end foreign gold jewellery sold in the India were sent to the appellants Sri Kishore Ratilal Dhakan and another person namely Mahesh Kumar through illegal channels as well as through SEZ units in the form of primary gold/gold bar/Indian made jewellery processed locally by misdirecting it as refurbished foreign made gold jewellery. The appellants were found to be the direct beneficiaries of the evasion of Customs duty and Cess besides additional amount collected by them from the buyers of such foreign made gold jewellery in the form of carrying/handling charges and making/labour charges. It was, thus, held that the appellants namely Sri Kishore Rati Lal Dhakan, M/s Samrah Gold Factory, M/s Deepu Jewellers had contravened the provisions of the Customs Act, 1962, SEZ Act, 2005 and the Rules made thereunder and, thus, rendered themselves liable to penal action under Sections 112, 114, 114AA of the Customs Act, 1962. The order was passed for confiscation of gold jewellery seized under Panchnama dated 6.2.2009 from the factory premises and residential pr....
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....mendment that the provisions of the Act applies also to "any offence or contravention under the Act committed" outside India by any person, makes it clear that Section 1(2) of the Customs Act, 1962 as it originally stood, talks of "commission of offence" "by any person" "within the territory of India". The Customs Act, 1962 is principally an enactment to consolidate and amend the law relating to Customs. It provides for the levy of duties of Customs. Amendment Act No. 13 of 2018 only extended the scope of the Act by now applying it to "any offence or contravention of the Customs Act, 1962 committed outside India" "by any person". Section 2(15) defines "duty" means a duty of Customs leviable under this Act. Section 2(18) defines "export", with its grammatical variations and cognate expressions, means taking out of India to a place outside India. "Import" defines in Section 2(23) is with its grammatical variations and cognate expressions, means bringing into India from a place outside India. Section 2(25) defines "imported goods" means any goods brought into India from a place outside India excluding goods which have been cleared for home consumption. Section 2(27) defines "Indi....
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...., the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent. of the penalty so determined;] [(iii) in the case of any other goods, to a penalty not exceeding the value of the goods, as declared by the exporter or the value as determined under this Act, whichever is the greater.]" Section 114AA. Penalty for use of false and incorrect material:- If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods.]" 28. A conjoint reading of Sections 112 and 114 of the Customs Act which deal with penalty for ''improper import' and ''improper export' or attempt to export goods improperly clearly shows that the penalty can be imposed on "any person", not only such person who does or omits to do any act in relation to any goods liable to confiscation under Section 111 or 113, but would also include such person who abets the doing or omission of such an ....
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....mestically. The sale proceeds were sent to Sri Kishore Ratilal Dhakan through SEZ units in the form of primary gold/gold bar/Indian made jewellery processed locally by misdeclaring it as refurbished foreign made gold jewellery in the export documents under ''self-certification'. The appellant Sri Kishore Ratilal Dhakan was found to be the direct beneficiary of evasion of Customs duty and Cess besides the additional amount collected by him from the buyers of foreign made gold jewellery in the form of carrying/handling charges and making/labour charges. Sections 111(d), 111(j) and 111(o) of the Customs Act, 1962 are, thus, attracted. 31. Similarly Section 113(d), (i) and (l) of the Customs Act, 1962 are also attracted for confiscation of Indian Jewellery/goods attempted to be improperly exported in the garb of refurbished foreign made gold jewellery through SEZ units. The appellants herein being the conspirator/abettor of the act of improper import and attempt to improper export thus, render themselves liable to penalty for the goods confiscated under Sections 111 and 113 of the Customs Act, 1962. The penalty for the use of false and incorrect material in the form of de....