TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 1008
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....ner No. 1. The Petitioner No. 3 is presently employed with the petitioner No. 1 at its office at NSCBI Airport, Kolkata. 3. Case no. C-163 of 2016, has been initiated on the basis of complaint filed by the opposite party before the Court of the Learned Additional Chief Judicial Magistrate, Barrackpore, North 24 Parganas, alleging commission of offences by the petitioners punishable under Section 36 (1) the Legal Metrology Act, 2009 read with Rule 32 (3) of the Legal Metrology (Packaged Commodities) Rules, 2011. 4. The allegations leveled in the said petition of complaint are to the effect that:- a) That the Complainant visited the retail premises of the petitioner No. 1 on 30th October 2015 at N.S.C.B.I. Airport (S.H.A. International) PS N.S.C.B.I. Airport, Kolkata - 700 052, Security Hold Area, International Departure Zone and disclosed his identity to the petitioner no. 2 who was present there. b) The Petitioner No. 2 was asked to produce five numbers of group package of Marlboro cigarettes for inspection. c) On inspection of the five packages produced by the petitioner No. 2, the complainant detected deficiency/defects in the packages as follows:- i. Name and address o....
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....tate that the goods imported by the Petitioner are stored in the special warehousing licenses from where the goods are brought for sale to the custom area for sale to the eligible person i.e. international passenger arriving or departing from India. The goods brought in by Petitioner No. 1 and sold at the Duty Free Shops do not qualify as imports for home consumption and are for the purpose of export only. These goods do not attract any customs duty. 12. The Petitioners state that the relevant customs regime and its business operations can be summarized as follows:- a) The Products which are destined to be sold at duty free shop at International Airports and Seaports are not "imported" into the Indian Market. The products sold in the duty free shops which are situated outside the custom frontiers of India and are not meant for domestic sale i.e. home consumption. Further, the access to duty free shop is restricted to bona fide international passengers only, having valid travel documents departing from India or arriving into India. b) Sales to international passengers are generally made against payment in foreign currency. Every sale is covered by a sales voucher, which is dee....
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....ble to goods imported into India and sold in India. The Petitioner No. 1 is not indulging in the act of importation of any goods into India as the goods sold by the petitioner No. 1 do not cross the customs frontier prior to being sold at the duty free shops. When the goods are lying at the bonded warehouse, they are deemed to have been kept outside the customs frontiers of India. These goods are then sold at the duty free shops which are also deemed to be outside the customs frontier of India. 14. The Petition of Complaint filed by the State before the trial Court states that the complainant is a legal Metrology Officer (in the rank of Inspector of Legal Metrology) of unit No. 26B having his jurisdiction over Nimta, Dumdum, Airport and N.S.C.B.I. Airport Police Station. 15. That in course of an Inspection Program on 30.10.15 at 3.40 p.m., the complainant above named entered into the retail premises of M/s. Flemingo Duty Free Shop Pvt. Ltd. at N.S.C.B.I. Airport (S.H.A. International) P.S. N.S.C.B.I. Airport, Kolkata - 700 052 in Security Hold Area International Departure Zone, and disclosed his identity to Sri Bishal Sarkar, location cum Retail Manager of M/s Flemingo Duty Free ....
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....f any offence punishable under the provisions of the said Act, which has evident relevance in the instant case. c) That the present Petitioners are involved in the retail sale of goods imported by them to international passengers, whereas Rule 18 of the Legal Metrology (Packaged Commodities) Rules, 2011 (hereinafter referred to as "the said Rules") clearly imposes a restriction upon every wholesale dealer or retail dealer or importer from selling, distributing, delivering displaying or storing for sale any commodity in the packaged form unless the said package complies with in all respects, the different provisions of the said Act and the Rules, infringement of which is punishable under the various provisions of the said Act and the corresponding Rules. d) That although the present Petitioners have intently endeavoured to insinuate that the various products sold by them are "not imported into the Indian market", yet the very document marked as "Annexure - P-6" to the said Petition, purportedly documenting „Bill of Entry for Warehousing' clearly describes the Petitioner No. 1 herein as the "Importer" under the heading of "Importer's Name", which in turn goes on to entirely....
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....ty upon all wholesale dealers or retail dealers or importers to sell, distribute, deliver, display or store for sale any commodity in such packaged form, which complies with in all respects, the provisions of the said Act and the corresponding Rules, which are mandatory and binding and hence, must be strictly adhered to while conducting its business. h) That additionally, contrary to the various affirmations made in the said Petition, Rule 2 (m) of the said Rules clearly defines "retail sale price" to mean the maximum price at which the commodity in packaged form may be sold to the consumer and the price shall be printed on the package in the following manner : Maximum or Max. Retail Price: Rs/ inclusive of all taxes or in the form MRP: Rs/... inclusive of all taxes, after taking into account the fraction of less than 50 paise to be rounded off to the preceding rupees and fraction of above 50 paise and up to 95 paise to be rounded off to 50 paise and Rule 18 (6) of the said Rules, clearly specifies that the manufacturer or packer or the importer shall not alter the price on the wrapper once printed and used for packing. i) That although the term "Customs Frontier" has been recu....
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....mer and the term "pre- packaged commodity" as defined in Section 2 (1)of the said Act to mean a commodity, which, without the purchaser being present, is placed in a package of whatever nature, whether sealed or not, so that the product contained therein has a predetermined quantity, leaves no doubt whatsoever that the contended nature of goods concerned, when kept for retail sale purposes, do not in any manner qualify to be "a separate class of goods", distinct from the goods sold to the general public within the territory of India. k) That Section 2(e) of the said Act along with Section 2 (23) of the Customs Act, 1962 consistently define the term "import" along with its grammatical variations and cognate expressions, to mean bringing into India from a place outside India and Section 1 of both these statutes appear to extend both their applicability to the whole of India, thereby nullifying and quashing all suggestions that the provisions of the said Act are inapplicable and incompatible in the facts and circumstances of the instant case. 21. Both parties have filed their written notes of argument. 22. The Petitioners have relied upon the following Judgments:- (i) Hotel Asho....
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.... (25), (43) and (44) of the Customs Act, 1962]. iii) The Legal Metrology Act and the rules framed thereunder are only applicable to/in India which is clear from Section 1 (2) of the Act of 2009. iv) The instant Case has been initiated in respect of goods being sold in a duty free shop at the Airport in an area beyond the territory of India. v) A seizure was made by the Opposite Party No. 1 herein, being the Inspector of Legal Metrology, Unit No. 26B, Barrackpore, North 24 Parganas for violation of Rules 6 (1) (a) and (e), Rule 6 (2) and Rule 18 (1) of the Legal Metrology (Packaged Commodities) Rules, 2011, as detected on OCTOBER 30, 2015 at their premises in the Departure Terminal. Consequently, Prosecution Case C-163 of 2016 was launched under Section 36 (1) of the Legal Metrology Act, 2009 read with Rule 32 (3) of the Legal Metrology (Packaged Commodities) Rules, 2011, before the Court of the Learned Additional Chief Judicial Magistrate at Barrackpore, North 24 Parganas. vi) As per SECTION 46 of the Customs Act, 1962, on entry of goods on importation, the importer of any goods, other than goods intended for transit or trans-shipment, inter alia shall make entry thereof by....
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....galuru were beyond the Customs Frontiers of India, i.e. they were not within the Customs Frontiers of India. Looking to the provisions of Article 286 of the Constitution, the State of Karnataka would have no right to tax any such transaction which would take place at the duty free shops owned by the Appellant which were not within the Customs Frontiers of. 12. On the other hand, learned senior counsel Shri Bhat and Shri Sharma, assisted by learned counsel Shri Qadri appearing for the respondent-State, mainly submitted that the orders passed by the learned Single Judge as well as by the Division Bench of the High Court are just and proper. They submitted that the High Court rightly did not entertain the petition as the appellant had not challenged the validity of the order before the appellate authority appointed under the Act. They submitted that the Act has set up appellate authorities and according to the provisions of the Act, an order passed by the assessing officer should be first challenged before the first appellate authority and only after all the remedies under the Act are exhausted, the appellant should have approached the High Court. As the statutory remedies had not b....
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....h the impugned order was made: Provided that the appellate authority may, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal within the said period of sixty days, permit the appellant to prefer the appeal within a further period of sixty days. (3) On receipt of any such appeal, the appellate authority shall, after giving the parties to the appeal, a reasonable opportunity of being heard and after making such inquiry as it deems proper, make such order, as it may think fit, confirming, modifying or reversing the decision or order appealed against or may send back the case with such direction as it may think fit for a fresh decision or order after taking additional evidence, if necessary. (4) Every appeal shall be preferred on payment of such fees, as may be prescribed. (5) The Central Government or the State Government, as the case may be, may on its own motion or otherwise, call for and examine the record of any proceeding including a proceeding in appeal in which any decision or order has been made, for the purpose of satisfying itself as to the correctness, legality or propriety of such decision or order and may pass such or....
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....sactions had taken place beyond or outside the custom frontiers of India. 31. In our opinion, submissions with regard to sale not taking effect by transfer of documents of title to the goods are absolutely irrelevant. Transfer of documents of title to the goods is one of the methods whereby delivery of the goods is effected. Delivery may be physical also. In the instant case, at the duty free shops, which are admittedly outside the customs frontiers of our country, the goods had been sold to the customers by giving physical delivery. It is not disputed that the goods were sold by giving physical possession at the duty free shops to the customers. Simply because the sales had not been effected by transfer of documents of title to the goods and the sales were effected by giving physical possession of the goods to the customers, it would not mean that the sales were taxable under the Act. Thus, we do not agree with the aforestated submissions made by the learned counsel appearing for the Revenue." 32. In the present case:- i. Admittedly, the goods seized were being sold in a duty free shop at an international Airport. ii. The seizure of goods being sold, in a duty free shop at ....