TaxTMI 
TaxTMI 
2024 (5) TMI 281
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....,86,95,000/- (Rupees five crores eighty six lakhs and ninety five thousands only) not only of the single current shipping bill but also of the 53 earlier shipping bills which have already been utilized, were also rejected and ordered to be recovered from the appellant u/s. 28(4) of the Customs Act, 1962 alongwith interest and penalties under various provisions of Customs Act, 1962. 2. The appellant was exporting "Lamda Cyhalothrin Technical" vide shipping bill No. 8838574 dated 9.12.2019 by classifying them under CTH 38089199 and availing MEIS benefit of Rs.14,14,000/- @ 2% of FOB value of the said export of Rs.7,07,00,000/-. During the course of export, the Docks Officer raised the objection about the aforesaid classification by the appellant and sought to re-classify the same under RITC/CTH 38086900 by resorting to sub-heading notes 2 of chapter 3808, for which no MEIS benefit is available to the exporter. Later on the goods under that particular shipping bill were provisionally released after the appellant (exporter) submitted requisite bond and bank guarantee. After investigation, a show-cause notice dated 31.3.2022 was issued to the appellant u/s. 124 ibid for rejecting the....
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....ction 114AA of the Customs Act, 1962 for misclassification of export goods. (ix) The Bond and Bank Guarantee submitted by them at the time of provisional release of the goods should not be enforced against the demand of export benefits, interest & penalty as adjudged, herein. 3. The learned Commissioner vide impugned order dated 12.08.2022 rejected the appellant's classification by upholding the classification under CTH 38086900 made by the customs department, ordered for confiscation of the goods covered not only under the shipping bill dated 9.12.2019 but also the goods already exported in the past i.e. earlier 53 shipping bills and imposed redemption fine on the goods covered under all the 54 shipping bills. The learned Commissioner also rejected the MEIS benefit on the 54 (1 current+53 earlier) shipping bills and ordered for recovery MEIS benefit of Rs.5,86,95,000/- (Rupees five crores eighty six lakhs and ninety five thousands only) u/s. 28(4) ibid alongwith interest and penalties under various provisions of Customs Act, 1962. 4. We have heard learned counsel for the appellant and learned Authorised Representative on behalf of respondent and perused the case rec....
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....s is clear example of non-application of mind and hope the authorities concerned will be more careful while adjudicating or deciding any appeal. We do not propose to draw any inference, adverse or otherwise, about causes of this discrepancy. 5. Now coming to the merits of the appeal. The whole issue arises due to re-classification of already exported and to be exported goods by the customs department and also because of cancellation of MEIS scrips by the said department. The allegation against the appellant is mis-classification on the ground that goods in issue i.e. 'Lambda Cyhalothrin Technical' have been wrongly classified under CTH 38089199 in order to avail MEIS benefits as, according to the customs department, the same is appropriately classifiable under the heading 38086900 [in which heading no MEIS benefit is available] and the sub-heading 380891 covers the 'others' of main heading 3808 in which sub-heading note 2 of Chapter 38 clearly list the names of the goods which can be classified under the subheading 380861 to 380869 wherein name of item in issue 'lambda cyhalothrin (ISO)' has been specifically mentioned. According to learned counsel for the appellant, the goods i....
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.... bills. These scrips can be utilized to pay customs duties or anti-dumping duties or it can also be transferred to other persons. The entitlement to MEIS benefits is governed by the Chapter-III of the said Policy. In other words, the substantive rights and obligations are created by the MEIS Scheme under Chapter-III of the FTP. According to Para 3.04 of the said Policy once the notified goods are exported to a notified market, the exporter becomes entitled to the MEIS benefits. Thus, entitlement, restriction thereof and conditions, if any, have to be looked into within Chapter-III of the FTP 2015-20. The exporter becomes entitled to the MEIS benefits once it exported the notified goods to the notified market and this benefit cannot be deprived except by cancellation of the said scrips by the DGFT itself after following due procedure. A detailed procedure for cancellation of the scrips has been set out under Section 9(4) of the Foreign Trade (Development & Regulation) Act, 1992 (in short "FTDR') which is extracted as under:- "9 (4) The Director General or the officer authorised under sub-section (2) may, subject to such conditions as may be prescribed, for good and sufficie....
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....Z units. (ii) Export of imported goods covered under paragraph 2.46 of FTP; (iii) Exports through trans-shipment, meaning thereby exports that are originating in third country but transshipped through India; (iv) Deemed Exports; (v) SEZ/EOU/EHTP/BTP/FTWZ products exported through DTA units; (vi) Export products which are subject to Minimum export price or export duty. (vii) Exports made by units in FTWZ. The department failed to point out under which of the abovementioned ineligible categories as enumerated in clause 3.06 of the Scheme the case in hand falls. 10. These proceedings have been initiated by the customs authorities u/s. 28(4) of Customs Act, 1962 for recovery of alleged fraudulently availed MEIS duty credits utilized by the appellant for the payment of customs duty at the time of import alongwith interest u/s. 28AA ibid. In these proceedings, initiated by the customs authorities, everything including confiscation of the goods is revolving around the re-classification of the exported goods by the customs. 11. It has also been noticed by us that the details of MEIS Scrips issued against aforesaid 54 shipping b....
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.... appropriate authority could only be the authority which issued the license i.e. DGFT and not the customs authorities. This Tribunal also in the matter of Axiom Cordages Ltd. vs. CC, Nhava Sheva-II; (2023) 4 Centax 120 (Tri-Bom) has held that the allegation with regard to MEIS benefits wrongly availed by the appellant does not have an independent nexus to the Customs Act, 1962 inasmuch as such scheme, designed for the Merchant Exporter, are dealt with under the Foreign Trade Policy (2015- 20) and Foreign Trade (Development & Regulation) Act, 1992 and thus the administration of MEIS squarely falls within the jurisdiction of the office of the DGFT and not the customs authority. It further held that the division of exercise of authorities between the DGFT and customs authorities is well recognized judicially and should be respected to prevent abuse of due process of law. 13. We deem it proper to address a very pertinent issue which arises in situation we are dealing with and it is about the role of customs authorities. Merchandise Exports from India Scheme (MEIS) is intended to offer incentives to eligible exporters on the basis of their export performance in a given year. Thus, th....
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....tances such as the requirement of the item, the amount of foreign exchange involved, permissibility and the relevant factors. If satisfied about the feasibility and permissibility the licensing authority grants license and, at times, may impose such conditions as they find necessary. This granting of licence may be dependant upon a policy enunciated in advance by the Government or may even be made to depend on the individual judgment of the licensing authority. As against this, the function of customs authorities start only after the goods are imported and brought into the territorial water of the country. Customs authorities are concerned with the recovery of Customs duty and to check evasion of payment of duty and with the prevention of entry of goods which are prohibited goods as defined by the Customs Act. It is not for the customs authorities to interpret licensing policy or to enforce the same once a valid licence is produced or to dissect the license granted. This function is of the licensing authority. If this bifurcation of function is not adhered to, there is every likelihood of utter confusion. The licensing authority may interpret the policy one way and the customs auth....