TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 834
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....in] to the third parties and the third parties can use the said Scrips for the purpose of payment of import duty at the time of import of goods. 3. The contention of the respondents was that the SEIS [Service Exports from India Scheme] Scrips were obtained by the petitioner from Director General of Foreign Trade [DGFT] by wilful misstatement and suppression of facts [mis-stating that foreign exchange remittances received towards air freight and sea freight as "freight transport agency" charges] for availing duty exemption under the Notification 25/2015-Cus. Dated 08.04.2015 and such Scrips were being utilized for payment of customs duty by other persons on their imports. Hence, on receipt of source information, the respondents have conducted investigation. During the course of investigation and enquiry, according to the petitioner, the petitioner was compelled to deposit a sum of Rs. 2,67,87,180/- towards the benefit availed out of sale of the Scrips [part payment by using the SEIS Scrips sold by the petitioner]. 4. While so, the present Show Cause notice dated 24.11.2020 was issued by the second respondent in terms of the provisions of Section 28 AAA of the Customs Act, 1962. Pr....
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....toms, Hyderabad v. Pennar Industries Limited and Another and (2003) 9 SCC 133, Titan Medical Systems (P) Ltd v. Collector of Customs, New Delhi and submitted that the respondent had issued notice without any jurisdiction. 7. Per contra, Mr.V.Sundareswaran, learned counsel appearing on behalf of the second respondent would submit that the respondent will have jurisdiction to issue show cause notice to recover the duties in terms of the provisions of Section 28 AAA of the Customs Act, 1962. In the event where an instrument was obtained by means of collusion or wilful misstatement or suppression of facts, the respondent is entitled to initiate action and recover the duties. In the instant case, the SEIS [Service Exports from India Scheme] Scrips were obtained by the petitioner from Director General of Foreign Trade [DGFT] by mis-stating that foreign exchange remittances received towards air freight and sea freight as "freight transport agency" charges and therefore, action has been taken to recover the duties in terms of Section 28 AAA of the Customs Act, 1962. Learned counsel would further submit that Circular No.334/1/2012-TRU dated 01.06.2012 will not apply to the facts of the pre....
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....03.02.2021 proposing to cancel the SEIS Scrips issued to the petitioner. However, during the course of the proceedings, the Deputy Director General of Foreign Trade informed the petitioner that the 1st SCN dated 21.10.2020, Order dated 23.10.2020, 2nd and 3rd SCN dated 03.02.2021 were withdrawn in entirety by virtue of a letter dated 20.09.2021. 11. It is the contention of the petitioner that in terms of the Circular No.334/1/2012-TRU dated 01.06.2012, the second respondent can initiate recovery proceedings only in the event if the DGFT have initiated any proceedings for cancellation of license or the license was also cancelled and that no recovery proceedings can be passed until the cancellation of the instrument. At this juncture, it would be apposite to extract the relevant portion of the said circular which reads as follows: "11.2 Recovery of duty in case of instrument issued under Foreign Trade (Development and Regulation) Act: Section 28AAA has been inserted in the Customs Act through Section 122 of the Finance Act, 2012 to provide for recovery of duties from the person to whom an instrument such as credit duty scrips was issued where such instrument was obtained by mean....
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....mited and Another reported in (2015) 10 SCC 581 and Titan Medical Systems (P) Ltd v. Collector of Customs, New Delhi reported in (2003) 9 SCC 133. It is to be noted that the Hon'ble Supreme Court in the case of Pennar Industries Limited referred supra had stated that the law laid down in the case of Titan Medical Systems (P) Ltd referred supra will not be applicable to Pennar Industries Limited case wherein there was violation in notification No.30 of 1997 which provides for exemption to materials imported against advance license with actual user condition. The duty of the DGFT as per the notification was only to issue the advance license and thereafter, when the goods were imported, it is the duty of the customs department to verify whether in terms of the advance license issued, the goods are in actual user condition. In that circumstances, the customs department will assume the jurisdiction. Therefore, the Court held that the Customs Authorities can initiate appropriate legal action in terms of the provisions of the Customs Act. This is not the case under Section 28 AAA of the Customs Act. In these circumstances, the Hon'ble Supreme Court in the case of Titan Medical Sys....