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2024 (9) TMI 127
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....d for the following reliefs. ""A. Your lordship may be pleased to allow and admit this petition. B. Your lordship may be pleased to quash and set aside the impugned common Order-in-Original No. AHA-Custm-000-COM-021-022-21 dated 20.01.2022 passed by Respondent No. 2 Principal Commissioner of Custom, Ahmedabad against Show Cause Notice No. VIII/10-12/Pr. Commr/O&A/2019 dated 19.06.2020 and Show Cause Notice No. SCN/01/CH-Dahej/2021-22 dated 23.08.2021 issued u/s. 28 (4) of the Customs Act, 1962...."" 4. Brief facts of the case are as under. 4.1 The petitioner is a Government company under section 617 of Companies Act, 1956 read with section 2 (45) of Companies Act, 2013. As per the ""Memorandum of Association"" (MOA) of the petitioner, one of the objects under clause-5 of MOA is to act as an agent of Government of India and to implement its scheme in the country. 4.2 The petitioner is availing customs duty exemption under Notification No. 12/2012-custom dated 17th March, 2012 under Entry No. 139. Subsequently, Notification 12/2012 was amended by Notification No. 36/2013 dated 22nd July, 2013 and further amended by Notification No. 30/2014 dated 20th Octobe....
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....f Customs. Thus, the exemption on LNG continued to be in place since Notification 12/2012. 4.6 Thereafter, the Principal Commissioner of Customs, Ahmedabad had issued a show-cause notice No. VIII/10-12/Pr. Commr/O&A/2019 dated 19th June, 2020 to the petitioner under Section 28 (4) of the Customs Act, 1962 (for short 'the Act') for the import period from 27th May, 2015 to 12th December, 2018 alleging following issues; (i) Raising a demand of custom duty of Rs. 1,66,62,050/-on 0.66% conversion/transit loss during re-gasification process. (ii) Raising a demand of custom duty of Rs. 2,01,71,06,450/- alleging non-submission of utilization certificate within necessary time limits by correlating with Bills of Entry. 4.7 Subsequently, another show cause notice was issued on 23rd August, 2021 under Section 28 (4) of Act for raising a demand of Rs. 03,01,376/- for the period September, 2019 to August, 2020 on account of transit loss claimed by the petitioner during conversation of LNG into RLNG. 4.8 The petitioner, filed reply to the first show-cause notice on 25th August, 2020 along with all documentary evidences. Subsequently, the petitioner had also filed reply ....
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....s as defined in clause of Section 2 (28) of the Electricity Act, 2003. 5.1 It was submitted that the respondent authorities could not have assumed the jurisdiction to issue notice invoking the extended period of limitation as the impugned show-cause notice dated 19th June, 2020 is for the period from 27th May, 2015 to 12th December, 2018 which is admittedly beyond the period of two years as provided in the said Section. 5.2 It was submitted that the respondent authorities have misinterpreted the provisions of the Notifications granting exemption from payment of duty by the petitioner for importing LNG without taking into consideration the submissions of the petitioner made along with documentary evidence placed on record to show the reconciliation of the imported LNG and supply of RLNG to the power generating companies. 5.3 It was submitted that the respondent authorities have failed to consider the fact that modalities for claiming customs duty exemption for LNG cargos imported for supply to power plants were discussed with Deputy Commissioner of Customs, Surat on 18th June, 2015 and the same was communicated to the petitioner vide letter dated 20th June, 2015 and emails ....
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....not doubted by the Adjudicating Authority. It was submitted that the impugned order is passed only on literal application of the Notification granting exemption from duty to the petitioner company for import of LNG for supply of the RNLG to the generating companies. 5.7 It was further submitted in the alternatively that as there was delay of about four-months-thirteen-days in submission of the utilisation certificate by the petitioner, the same was within the extendable period of six months and the Respondent-Department had never objected while accepting the submitted documents on the date of submission, meaning thereby that the time for submission was deemed to have been extended. 5.8 Learned senior advocate Mr. Soparkar thereafter submitted that the impugned order is passed only on the alleged violation of conditions of the Notification for non-submission of utilisation certificate and for not considering the fact that there was conversion loss of 0.66% in RLNG which is also not disputed by the respondent authorities. 5.9 Learned senior advocate Mr. Soparkar referred to and relied upon the order passed by the CESTAT, New Delhi in Service Tax Appeal No.52946 of 2016 and S....
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....n certificates in different formats which did not contain any reference to the corresponding Bill. of Entry or the Invoices, thereby, making it impossible to ascertain whether the Utilisation Certificates had been produced within period of three months/twelve months from the date of import or otherwise. "" 6.2 It was submitted that as per the Notification applicable for exemption of the custom duty for import of LNG is subjected to the condition that the importer produces the invoices for sale RLNG to the generating companies before the customs authority within the period of three months from the date of import or such extended period not exceeding further period of six months and also produces utilisation certificates from the generating companies to the effect that RLNG has been utilised for generating and supplying electrical energy before the customs authority within a period of three months from the date of import. It was pointed out by learned advocate Mr. Gupta that petitioner has failed to adhere to the conditions of the Notification to avail the benefit of exemption of customs duty. By inviting attention of the Court to the details in the show-cause notice pertaining to....
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....d of eight days from today. 5. Let Notice be issued to the respondents, returnable on 23.06.2022."" 8. Considering the submissions made by learned advocates of the respective parties as well as the facts and documents placed on record, in view of the above observations made by the coordinate Bench while issuing the notice in this petition, preliminary objection of alternative remedy need not be sustained, and the petition is considered on merits. 8.1 On perusal of the impugned show-cause notices issued by the Commissioner of Customs, it appears that the same could not have been issued on the ground of suppression of material facts on part of the petitioner by invoking Section 28 (4) of the Act which reads as under. ""28. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. xxxxx (4) Where any duty has not been levied or not paid or has been short-levied or short-paid or erroneously refunded, or interest payable has not been paid, part-paid or erroneously refunded, by reason of,- (a) collusion; or (b) any wilful mis-statement; or (c) suppression of facts, by the ....
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.... namely: - 9.2 Thereafter, it appears that Notification No.52/2017 dated 30th June, 2017 was issued prescribing the effective rate of duty on goods specified in Notification being LNG and NG. The condition No. 3 of the said Notification reads as under. "102 If,- (1) the importer furnishes a self-declaration at the time of import to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be, indicating the quantity of LNG being imported for supply as Regasified Liquefied natural gas (RLNG) to generating companies as defined in clause (28) of section 2 of Electricity Act 2003; (ii) the importer produces the invoice for sale of RLNG to the generating companies before the Assistant Commissioner of Customs or Deputy Commissioner of Customs, as the case may be, within a period of three months from the date of import, or such extended period not exceeding à further period of six months as the Commissioner of Customs may allow; (iii) the importer also produces utilisation certificates from the generating companies to the effect that the RLNG has been utilised for generating and supplying electrical energy by the said generating comp....
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....therein and the duty levied at the time of import, along with the applicable interest thereon."" 9.3 It appears that in course of the audit conducted by the Respondent-Department, following issues were noticed. ""(a) The Noticee imported LNG under Sr. No. 139B of Customs Notification 31/2015-Customs dated 07.05.2015. (b) They followed a practice of submitting sale invoice and utilization certificate on completion of the period of three month from the month of import. (c) There was difference between quantity imported shown in the Bill of Entry and quantity received by the importer and the reason for difference was not forth coming from the records. Revenue foregone on the said differential quantity was calculated by CRA as Rs. 2,03,57,456/- (d) Utilization Certificate submitted was also short of actual quantity sold. Rs. 11,93,29,989/- was revenue involved on such quantity of LNG for which utilization certificate was pending. (e) There was no evidence of any sale of LNG of 68,21,849 MMBTU of Value Rs. 2,86,05,99,588/- involving duty forgone Rs. 14,73,20,888/- (f) The Noticee claimed transit loss of 0.66% of LNG actually recei....
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....ertificate was not produced within the time limit of three months and twelve months and the transit loss of LNG not supplied to the power generating companies during the gasification during the relevant period. 12. Thus, in view of the alleged allegation levelled against the petitioner, it is clear that there is no suppression or failure to disclose of the material facts on part of the petitioner because the petitioner has submitted all the documents during the course of the inquiry along with reconciliation statement and it was also made clear that it is technically impossible for the petitioner to reconcile the LNG as shown in the Bills of Entry with the quantity of regasification Natural Gas supplied to the generating companies through pipeline in a continuous manner. 13. The impugned notice and the Order-in-Original therefore are contrary to the facts available on record. The Commissioner (Appeals) in the impugned oil dated 20th January, 2022 with regard to invoking of Section 28 (4) of the Act has observed as under. ""14. It has been contended that the extended period of limitation was not applicable since there was no wilful mis-statement or suppression of fact....