TaxTMI 
TaxTMI 
2023 (12) TMI 697
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.... of considering the prayers as made it would be apposite to notice the following essential facts. 2. The petitioner is stated to be engaged in the business of import and trading of assorted gold jewellery and holds a valid Importer Exporter Code [IEC]. On 13 August 2009, the Agreement on Trade in Goods under the Framework Agreement on the Comprehensive Economic Cooperation [FTA] with the Association of Southeast Asian Nations [ASEAN], including Indonesia was entered into with India granting preferential treatment to goods imported from ASEAN countries. For purposes of implementing the terms of the FTA, the Customs Tariff [Determination of Origin of Goods under Preferential Trade Agreement between the Government of Members States of the Association of South-East Asian Nations (ASEAN) and the Republic of India] Rules, 2009 [2009 Rules] came to be notified on 31 December 2009. 3. As per the provisions made in the 2009 Rules, the Certificate of Country of Origin [COO Certificate] was to constitute the principal basis for the purposes of extension of preferential treatment. In extension of the FTA, the respondents proceeded to issue Exemption Notifications dated 01 June 2011 and 7....
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....ications have been enclosed along with the writ petition. Ultimately, and in terms of a communication dated 27 January 2021, the fourth respondent apprised the petitioner that the COO Certificates had been submitted for verification and that the aforesaid request addressed to the Directorate of Revenue Intelligence [DRI] was ultimately received on 17 September 2020 and which body had apprised the said respondent of the verification request having been duly forwarded. The fourth respondent thus stated that the provisional assessment proceedings would be finalized only upon receipt of the verification report from the DRI. 8. However, and as would be evident from the record even after the issuance of this communication, no further steps were taken by the respondents for finalizing the pending assessment. This led to the petitioner preferring an appeal assailing the communication of 27 January 2021 and for appropriate directions being framed commanding the third respondent to finalize the pending assessment. The aforesaid appeal ultimately came to be disposed of by the Commissioner in terms of an order dated 09 February, 2023 directing the respondents to finalize the provisional ass....
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....se of goods cleared for home consumption or exportation, the amount paid shall be adjusted against the duty ^78[finally assessed or re-assessed, as the case may be] and if the amount so paid falls short of, or is in excess of, ^79[the duty 80[finally assessed or re-assessed, as the case may be]], the importer or the exporter of the goods shall pay the deficiency or be entitled to a refund, as the case may be; (b) in the case of warehoused goods, the proper officer may, where the duty 81[finally assessed or re-assessed, as the case may be] is in the excess of the duty provisionally assessed, require the importer to execute a bond, binding himself in a sum equal to twice the amount of the excess duty. [(3) The importer or exporter shall be liable to pay interest, on any amount payable to the Central Government, consequent to the final assessment order ^83[or re-assessment order] under subsection (2), at the rate fixed by the Central Government under Section [28-AA] from the first day of the month in which the duty is provisionally assessed till the date of payment thereof. (4) Subject to sub-section (5), if any refundable amount referred to in clause (a) of....
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....he date of such order of provisional assessment, inform the importer or the exporter, in writing, the specific details of the information to be furnished or the documents to be produced. (3) The proper officer may, for reasons to be recorded in writing, allow a further period not exceeding three months, on his own or at the request of the importer or the exporter, in case the documents or information are not made available within the time period specified in sub-regulation (1). (4) The Additional Commissioner or Joint Commissioner of Customs, may further extend the time period referred for another three months, in case the documents or the information required to be submitted by the importer or the exporter or requisitioned by the proper officer have not been made available within the period as allowed above by the proper officer. (5) The Commissioner of Customs, may extend the time period further as deemed fit, in case the documents or the information required to be submitted by the importer or the exporter or requisitioned by the proper officer have not been made available even after the extension of time under sub-regulation (4). (6) The docum....
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....to keep that pending. REGULATION 6. Manner of finalisation of provisional assessment.- (1) The provisional assessment shall be finalised as per the provisions of section 18 of the Act. Provided that if the amount so paid at the time of provisional assessment or after adjustment under clause (a) to subsection (2) of section 18 of the Act, falls short of the duty finally assessed or re-assessed, as the case may be, and the importer or the exporter has not paid the deficiency, the shortfall shall be adjusted from the security, if any, obtained at the time of provisional assessment, under intimation to the importer or the exporter,: Provided further that, if the amount so adjusted or paid falls short of the duty finally assessed or re-assessed, as the case may be, the importer or exporter of the goods shall pay the shortfall in terms of the provisions of section 18. (2) The Bond executed at the time of provisional assessment with security, if any, shall be cancelled after finalisation of provisional assessment and the security shall also be returned, if there are no pending dues. (3) Where the final assessment is contrary to the provisional ....
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....an importer or exporter, as the case may be, is liable to be accepted except "where the proper officer deems it necessary to make further inquiries", or "where it is deemed necessary to subject any imported or exported goods to any chemical analysis or other tests". 13. We note that in the present case the Customs authorities have also not asserted that the petitioner had failed to submit the necessary documentation or furnished complete information. The detention of the goods and the initiation of provisional assessment proceedings thus appear to have been commenced solely for the purposes of the Customs authorities verifying the COO Certificates. The respondents have also failed to place for our consideration any material which may have been viewed in support of them doubting the COO Certificates which had been submitted by the petitioner. The record would reflect that although the imported goods were subjected to provisional assessment in January, 2016 those assessment proceedings had not been concluded till the time the writ petition was finally heard. It is thus manifest that the respondents have failed to conclude the assessment proceedings despite more than seven years ha....
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....erred to it by Kolkata Customs vide letter bearing reference no. S60(Misc)-221/2015CC dated July 22, 2015. 4. Further, it was stated by FTA Cell that verification requests for the representative CoOs along with Questionnaire were forwarded for causing verification from the Issuing Authorities in Indonesia vide D.O. letter dated October 20, 2015 and in response to Board's D.O. Letter dated October 20, 2015, verification reports were provided by the Issuing Authorities in Indonesia and the same were duly shared with field formations vide letter dated March 17, 2016 in response to the DRI Hqrs.'s aforementioned letter dated July 28, 2015. 5. This is for you information and necessary action in this regard. As above Heera Lal Copy to: The Assistant Commissioner, Provisional Assessment Finalization Cell, Air Cargo Complex, N.S.C.B.I. Airport, Kolkata 700052 for information please." 16. As is manifest from the aforenoted communication, it is evident that the DRI had forwarded the verification request to the Competent Authority in Indonesia on 20 October 2015 and the issuing authorities had reverted back affirming the COO ....
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....C) and a decision dated 19th August, 2010 of the Division Bench of this Court in LPA No. 146/2010 (Directorate of Revenue Intelligence v. Laxman Overseas). Mr. Aggarwala adds that despite hearing being fixed in the adjudication proceedings on 20th December and 27th December 2018, the Petitioner's representative failed to appear. He accordingly complains of non-cooperation by the Petitioner in completion of the adjudication proceedings. While not being able to point out any provision in the Act which permits the issuance of such 'instructions' to the MMTC to withhold the BG/security amount, Mr. Aggarwala submitted, on the strength of the above decisions, that the Petitioner should nevertheless be asked to furnish some form of security to the DRI if it were to withdraw the instructions given to the MMTC. 15. The above submissions have been considered by the Court. At the outset, it requires to be noticed that this Court in its order dated 13th April, 2018 itself made it very clear to the DRI that it had not stayed the proceedings pursuant to the SCN. This Court also required the Petitioner to cooperate in those proceedings. Although according to Mr. Aggarwala, the Petiti....
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....king to justify the impugned instructions to the MMTC as a 'seizure' in terms of Section 110(3) of the Act. 19. In any event, the Court fails to understand as to how the instructions to the MMTC by the DRI that it should not release to the Petitioner the BG/security deposited by the Petitioner with the MMTC, could amount to a 'seizure'. The Court is unable to find any legal justification for issuance of such instructions. Section 110(3) of the Act cannot be invoked for such purpose and there is no other provision of the Act referred to by the DRI in its counter affidavit, as providing a legal basis for such instructions. xxxx xxxx xxxx 24. For the aforementioned reasons, the Court finds no justification in law for continuation of the impugned instructions of the DRI to the MMTC by its letters dated 29th October, 2015 and 17th December, 2015. The said instructions are hereby quashed. MMTC will now proceed in the matter as if the two instructions dated 29th October, 2015 and 17th December, 2015 of the DRI are no longer operational. MMTC shall release the security/BG amount to the Petitioner, to the extent it is entitled in accordance with law, forthwith and....
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....the facts and circumstances of each case. We are of the opinion that the grant of interest of 12% per annum is appropriate in the facts of this particular case. However, we are also of the opinion that since interest was not granted to the appellant along with the principal amount, the respondent should then in addition to the interest at the rate of 12% per annum also pay to the appellant interest at the same rate on the aforesaid interest from the date of payment of instalments by the appellant to the respondent till the date of refund of this amount, and the entire amount mentioned above must be paid to the appellant within two months from the date of this judgment. 9. It may be mentioned that there is misconception about interest. Interest is not a penalty or punishment at all, but it is the normal accretion on capital. For example if A had to pay B a certain amount, say 10 years ago, but he offers that amount to him today, then he has pocketed the interest on the principal amount. Had A paid that amount to B 10 years ago, B would have invested that amount somewhere and earned interest thereon, but instead of that A has kept that amount with himself and earned interest....
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....to the Gujarat High Court decision in D.J. Works case [(1992) 195 ITR 227 (Guj)] and read it as taking the same view. This supports the view of the appellant on the correct reading of the Gujarat decision. xxx xxx xxx 44. In the present context, it is pertinent to refer to the circular or trade notice issued by the Central Excise Department on the subject of refund of deposits made in terms of Section 35-F of the Central Excise Act, 1944 and Section 129-E of the Customs Act, 1962. The circular is reproduced hereunder: "Refund/Return of deposits made under Section 35-F of Central Excise Act, 1944 and Section 129-E of the Customs Act, 1962-Clarifications: 1. The issue relating to refund of pre-deposit made during the pendency of appeal was discussed in the Board meeting. It was decided that since the practice in the Department had all along been to consider such deposits as other than duty, such deposits should be returned in the event the appellant succeeds in appeal or the matter is remanded for fresh adjudication. 2. It would be pertinent to mention that the Revenue had recently filed a special leave petition against Mumbai High Court&#....
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....lar to the knowledge of their members and the trade in general. 6. Kindly acknowledge receipt. 45. A close scrutiny of the contents of the circular dated 2-1-2002 would disclose as to the modalities for return of pre-deposits. It again reiterated that in terms of the Supreme Court order such pre-deposit must be returned within three months from the date of the order passed by the tribunal, court or other fiscal authority unless there is a stay on the order of the fiscal authority, tribunal or court by a superior court. The Department has very clearly stated in the above circular that the delay beyond the period of three months in such cases will be viewed adversely and appropriate disciplinary action will be initiated against the defaulting officers concerned, a direction was also issued to all concerned to note that the defaulter will entail an interest liability if such liability accrues by reason of any orders of the tribunal/court such orders will have to be complied with and it may be recoverable from the officers concerned. All the Commissioners were advised implementation of these instructions and ensure their implementation through a suitable monitoring mechanism. ....
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....n deprived of an amount of Rs 40 lakhs for no fault of its own and exclusively because of the admittedly unlawful actions of the Income Tax Department for periods ranging up to 17 years without any compensation whatsoever from the Department. Such actions and consequences, in our opinion, seriously affected the administration of justice and the rule of law. 47. The word "compensation" has been defined in P. Ramanatha Aiyar's Advanced Law Lexicon, 3rd Edn., 2005, p. 918 as follows: "An act which a court orders to be done, or money which a court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; something given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, or in actual value otherwise conferred; a recompense in value; a recompense given for a thing received; rec....
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.... tax paid. The amount paid by the resident/deductor was retained by the Government till a direction was issued by the appellate authority to refund the same. When the said amount is refunded it should carry interest in the matter of course. As held by the Courts while awarding interest, it is a kind of compensation of use and retention of the money collected unauthorisedly by the Department. When the collection is illegal, there is corresponding obligation on the Revenue to refund such amount with interest inasmuch as they have retained and enjoyed the money deposited. Even the Department has understood the object behind insertion of Section 244-A, as that, an assessee is entitled to payment of interest for money remaining with the Government which would be refunded. There is no reason to restrict the same to an assessee only without extending the similar benefit to a resident/deductor who has deducted tax at source and deposited the same before remitting the amount payable to a non-resident/foreign company. 38. Providing for payment of interest in case of refund of amounts paid as tax or deemed tax or advance tax is a method now statutorily adopted by fiscal legislation t....