TaxTMI 
TaxTMI 
2024 (7) TMI 73
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....ms Act, 1962 to give effect to such schemes, was leviable, 'proper officer' under Customs Act, 1962 was empowered to specify the article of import even in the absence of such details in the said notification and despite the scheme confining itself to generic descriptions. In the framework of this dispute, cavil is about the conclusion that, absence of specific exclusion from the product group in 'standard input output norms (SION)' in the Handbook of Procedures (HoP) appended to the Foreign Trade Policy (FTP) notwithstanding, empowerment to decide that 'dietary fibre' permitted to be imported for manufacture of 'biscuits' did not include 'inshell walnuts' was vested in customs authorities responsible for assessing liability to duty on imports effected under the said scheme; that the assessing officer not having so done at time of import sufficed to empower the Commissioner of Customs to make amends in the impugned proceedings. In effect, it is the recovery of Rs. 26,82,71,059 as differential duty under section 28 of Customs Act, 1964, along with applicable interest under section 28AA of Customs Act, 1962, the appending of Rs. 2,00,00,000 as fine under section 125 of Customs Act, 19....
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....bre and it is relatively much expensive vis-à-vis the other sources of dietary fibre viz wheat bran, barley bran, oat bran etc., no prudent/sensible manufacturer would use walnut to provide dietary fibre in the biscuit and doing so would not make commercial and practical business sense. 26.2......Allowing the import of all primary food articles other than oils and fat against the import item of 'Dietary Fibre under the DFIA scheme, in terms of Notification No. 98 of 2009-Cus, dated 11.09.2009, does not appear to be as per the legislative intention behind the whole DFIA scheme.' thus setting forth the proposition supra of 'prudent and/or sensible' as inhering in the scheme as well as suggesting that customs notification had not manumitted the eligible inputs from mandate, that admittedly restricts usage when imported prior to exports, of use in manufacture of outputs even after export obligation has been fulfilled to attend upon the secondary proposition of 'end use' being entailed forever on imports against scrips. It was also posited that the remaining inputs, viz., cocoa powder and fruit, as well as food flavours, did also not provide for fitment as the two for....
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....ce Act, 2018, brooked no ground for delay except in circumstances embodied therein. He contended that the privilege of exclusion of time, contemplated in section 28(9A) of Customs Act, 1962, was not available in these proceedings as the legal pre-requisite of notice from 'proper officer' of intendment to call 'time out' had been ignored and even the communication, such as it was, citing instruction no. 04/2021-Customs dated 17th March 2021 of Central Board of Indirect Taxes & Customs (CBIC) enjoining such cases of doubtful consequence to be transferred to 'call book' had long since ceased to subsist when the impugned order was issued. He submitted that an officialdom displaying such scant regard for enacted law was barred from the protection of that very law in service of its 'unpublic interest' for unjustified demand of duty. 5. It was further contended by Learned Counsel that eligibility for import was no longer in dispute in view of decision of the Hon'ble High Court of Bombay in Commissioner of Customs, Nhava Sheva-V v. VKC Nuts Pvt Ltd [2022 (9) TMI 26 - BOMBAY HIGH COURT] which has dealt with all the issues in contention and which, despite specific directions to the appell....
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....export nor the licencing authority endorsing transferability identified any confining sphere for 'dietary fibre' by use in manufacture of the biscuits or from the cost of production of biscuits. On the finding of the adjudicating authority in the illogic of business sense in use of 'walnuts' for the manufacture of biscuits, Learned Counsel relied upon the decision of the Tribunal in Commissioner of Customs, New Delhi v. Uttam Singh Manohar Singh [2013 (295) ELT 409 (Tri-Del)] to demonstrate that, in imposing detriment, circumstances had been inappropriately appreciated. He submitted that it cannot be denied that 'inshell walnuts' did comprise 'dietary fibre' and that the report of Central Revenue Control Laboratory (CRCL) favoured this view while the adjudication order, in contrast and absent legal authority to do so, held the 'dietary fibre' in 'inshell walnuts' to be not sufficient for viable acceptance in a business proposition. 7. According to Learned Authorized Representative, the appellant had produced amendment sheet pertaining to only one licence whereas several had been utilised for imports and the licencing authority had been unable to confirm those to have also been s....
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...., 'dietary fibre' under notification no. 98/2009-Cus dated 11th September 2009 without payment of duty and that, even if these did comprise 'dietary fibre', the composition thereof was insufficient to pass muster as commercially acceptable. It is not the case of the adjudicating authority that the impugned notification, administered by 'proper officer' in pursuance of empowerment to assess such imports to duty, excluded 'inshell walnuts' but that jurisdiction to interpret notification, concomitant to such empowerment, conferred authority to restrict entitlement to such 'dietary fibre' as was actually used by exporter. Even assuming that to be, the lack of identification of the eligible article that could be imported has, by recourse to post-clearance empowerment under section 28 of Customs Act, 1962, erased the entitlement in toto which is tantamount to altering the rubric of the export promotion scheme designed by authority that is neither subject to the jurisdiction of the Commissioner of Customs nor drawing empowerment from a statute subordinate to Customs Act, 1962. To arrive at the impugned conclusion, the adjudicating authority also withheld acknowledgement that 'scrips' did ....
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....th entrusted with the economic management of the State - are devoid of wherewithal to communicate with each other. This unfilled gap suffices to set aside the presumption contrived in the impugned order against validity of the imports. 11. The adjudicating authority ventured to rule out commercial feasibility of usage by adverting to the limited 'dietary fibre' content in 'inshell walnuts' as well as the disparity of chapters of First Schedule to Customs Tariff Act, 1975 covering 'inshell walnuts' and the generic expressions deployed in the 'standard input output norms (SION)' appended to the Foreign Trade Policy (FTP). While reason and logic have their place in communication, the authority to rely upon commercial feasibility for determining assessment or importability is not evident in the law and the impugned order too has not chosen to enunciate. The tariff has a purpose which is set out in section 12 of Customs Act, 1962; while it may be useful in classification of the impugned goods, its relevance to nomenclature deployed in 'standard input output norms (SION)' appended to the Foreign Trade Policy (FTP) is also neither self-evident nor was conjectured upon in the impugned o....
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....e not brought to the notice of the Hon'ble Courts and Tribunals in the above cited judgements. It is well settled position of law that such sub silentio judgement has no precedence value for future cases....' in the impugned order. Thus it was that the findings of the Hon'ble High Court of Bombay on the impugned goods at the stage of 'provisional release' came to be discountenanced by the adjudicating authority as also the decision of the Hon'ble High Court of Bombay in Union of India v. Shah Nanji Nagsi Exports Pvt Ltd [2019 (367) ELT 335 (Bom)] which held that 'actual use' condition is not built into the export promotion scheme. 13. In re VKC Nuts Ltd, the observations of the Hon'ble High Court of Bombay on aspects of impugned goods being in compliance with the scheme of import were particularly relevant as the substantial point of law arising from decision of the Tribunal to release the goods unconditionally, which was carried to the Hon'ble High Court by the Commissioner of Customs only to be rejected thereupon, emanated from the finding that the goods could not be subjected to conditions for provisional release as settled law would not sanction confiscation itself; the c....
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....ently emphasised that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject-matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent Court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws.' and the present adjudicating authority would do well to take to heart its place in the judicial hierarchy before venturing to criticize High Courts and Tribunals for having been mi....
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....or completion of adjudication, the proceedings will have to be deemed as having been concluded well before the impugned order was issued. This stands confirmed by the decision of the Hon'ble High Court of Delhi in Gautam Spinners v. Commissioner of Customs (Import), New Delhi [2023 (386) ELT 62 (Del)] thus '13. Undisputedly, the SCNs' which had been issued against Anil Aggarwal and 11 other individuals did not stand on the same pedestal as the SCNs' impugned here since the former, undisputedly, had been issued by the officials of the DRI. In fact, it was those SCNs' which formed the primary subject matter of the Board's directives dated 17 March 2021 and 16 April 2021. As was noticed hereinbefore, the SCNs' which stand impugned in these petitions had admittedly been issued post the promulgation of those directives by the Board and admittedly by the competent jurisdictional Commissionerates. 14. We thus find ourselves unable to accept the position of any legal impediment which could be recognised to have either fettered the jurisdiction or restrained the concerned jurisdictional Commissionerates from proceeding to finalize the SCNs' in accor....
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....uld be potential to use but not necessary to be used. The scheme itself is of transferable authorisation and therefore in that context different interpretation cannot be made. Moreover, Clause 4.27(iv) conveys that wherever SION prescribes 'Actual User' condition, it will prevail. Herein, no such actual user condition is specifically prescribed by SION for relevant entry. Chapter 9 of the FTP, 2015-20 specifically defines the term 'actual user' as a person who utilizes imported goods for manufacturing in his own unit. It means that actual user condition relates to a person and not to a product. Therefore, the argument advanced by the petitioner regarding actual user condition would not sustain. 25..... The scheme never conveys that there is actual user condition attached to the import against the export obligation. It amounts to adding some conditions in the FTP when they never exist. Moreover, when the authorisation is made transferable under the scheme there is no question of actual user condition. 26. It reveals that DFIA scheme is distinct than Advance Authorization Scheme where raw material is to be imported on authorization and to be used for manufacturing p....