TaxTMI 
TaxTMI 
2025 (7) TMI 230
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....hdrawn from the project which was in violation of the condition of the aforesaid Notification. Hence Show Cause Notice dated 25.7.2013 was issued to the appellant. After due process of law, the Ld. Adjudicating Authority denied the benefit of exemption under Notification No. 84/97-Cus dated 11.11.1997 and confirmed the demand of Rs.84,61,636/- along with interest and the amount already paid during investigation was also appropriated towards duty demand. The Ld. Adjudicating Authority also imposed equal penalty under sec. 114A of the Customs Act, 1962 on the appellant-company and Rs.2,00,000/- under sec. 112(a) and Rs.5,00,000/- under sec. 114AA of the Customs Act, 1962 on Shri C.K. Singh, Senior Vice President of the appellant-company. Hence this appeal. 3. Shri Prakash Shah, Ld. Senior Advocate appeared for the appellant and Shri Anoop Singh, Ld. Authorized Representative appeared for the respondent-department. 3.1 Shri Prakash Shah the Ld. Senior Advocate for the appellant submitted that the Appellant 1 is engaged in construction of various infrastructure project across. The Appellant no. 2 was the Senior Vice President of the Appellant no. 1 at the relevant time. Submissio....
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.... 4. Without prejudice and in any event and assuming without admitting that the appellant is not entitled to exemption under Notification No. 84/97-Cus, the appellant is entitled to full exemption under Sr. No. 230 of Notification No. 21/2002-cus. 5. No interest can be recovered from the appellant under subsection 4 of Section 28 read with Section 28AA of the customs Act 1962. 6. The case is premature. There was no suppression of facts at the time of filing of the BE. The Appellant had admittedly complied with all the condition of the notification at the time of clearance of the goods for home consumption. Hence section 28(4) of the Act has no application and at the highest, is covered by Section 28(1) of the Act. 7. In any event, imposition of penalty on the appellant is liable to be set aside. He prayed that the impugned order be set aside. 3.2 Shri Anoop Singh the Ld. Authorized Representative for the respondent stated that this is a case of suppression and mis-representation of facts and amounts to a fraud on the exchequer. The appellants officials in their statements have admitted that the impugned goods were not supplied to the project an....
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.... Patel Engineering that the impugned goods had not been withdrawn from the project yet appeared misleading in view of their specific admission that the said goods had not been intended to be brought into the project on a permanent basis i.e. the fact remained that the goods would be withdrawn from the project after completion of work for which the goods are deployed. 7. Enquiries were further made with the project authority viz, Karnataka State Highways Improvement Project, Bangalore. The project authority after making the necessary enquiries at their end issued an order vide KSHIP-II:WB:EPC-PAC Cancellation:2012-13/2410 dated 20.11.2012 inter-alia cancelling the project certificate to M/s Patel Engineering issued for Asphalt Batch Mix Plant DG 2000 (160TPH), Langfang DG Machinery Technology Co Ltd China. The project authority in their order at Para No.3 has specifically mentioned that the certificate was issued on the specific request of the contractor. Evidently the project authority cancelled the said certificate procured by M/s. Patel Engineering based on their specific request on finding that the said machinery was intended to be withdrawn from the project in violatio....
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.... of the project. 5.2 We find that Explanation 2 was inserted in Notfn. 84/97-Cus. On 01.03.2008. Much before the import of the goods and filing of BE on 26.03.2012. The same is reproduced below; "Explanation 2. - For the removal of doubts, it is hereby clarified that the benefit under this notification, in the case of goods supplied to the projects financed by the United Nations or an international organisation, is available when the goods brought into the project are not withdrawn by the supplier or contractor and the expression "goods are required for the execution of the project" shall be construed accordingly." (emphasis added) The word to withdraw is commonly understood to means to remove something or take something away. When the word is not defined in the Act or notification it may be permissible to refer to the dictionary to find out the meaning of that word as it is understood in the common parlance. Black's Law Dictionary Ninth Edition defines 'withdraw' as; "withdraw, vb. 1. (vt.) To take back (something presented, granted, enjoyed, possessed, or allowed) < withdraw blame >.. 2. (vt.) To retract (one's words) < withdraw t....
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....r use of a dictionary lies in choosing the appropriate meaning to the word, with reference to the context in which the word is used. We cannot mechanically apply all and every meanings given in a dictionary. Nor can we choose an inappropriate meaning that the word may carry and then try to change the context in which it is used. The context in which the word is used determines the meaning of the word. A randomly chosen meaning for the word should not change the context in which the word is used. This is the fundamental principle relating to use of words to convey a thought or explain a position or describe an event." (emphasis added) 5.4 In the case of Reserve Bank of India v. Peerless General Finance and Investment Co. Ltd.: (1987) 1 SCC 424, the Supreme Court held as under: "Interpretation must depend on the text and the context. They are the bases of interpretation. One may well say if the text is the texture, context is what gives the colour. Neither can be ignored. Both are important. That interpretation is best which makes the textual interpretation match the contextual. A statute is best interpreted when the object and purpose of its enactment is known. With t....
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....case where the Ld. Commissioner has come to a conclusion that the appellants by suppressing and mis-representing facts have sought an unfair tax advantage. The whole matter hence needs to be looked at from the angle of fraud. The Hon'ble Supreme Court in S.P. Changalvaraya Naidu Vs Jagannath [1994 (1) SCC 1], has held that a "fraud" is an act of deliberate deception with the design of securing something by taking unfair advantage of another. It is a deception in order to gain by another's loss. It is a cheating intended to get an advantage. In Ram Chandra Singh v. Savitri Devi and Ors. [2003 (8) SCC 319], the Apex Court held as under; "Fraud" as is well known vitiates every solemn act. Fraud and justice never dwell together. Fraud is a conduct either by letter or words, which includes the other person or authority to take a definite determinative stand as a response to the conduct of the former either by words or letter. It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud. A fraudulent misrepresentation is called deceit and consists in leading a man into damage by will....
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.... exemption notification and importing the equipment without payment of customs duty and if on such enquiry the authorities are satisfied that the continuing obligation are not being carried out then it would be fully open to the authority to ask the person who have availed of the benefit of exemption to pay the duty payable in respect of the equipments which have been imported without payment of customs duty. Needless to mention the government has granted exemption from payment of customs duty with the sole object that 40% of all outdoor patients and entire indoor patients of the low income group whose income is less than Rs.500/- p.m. would be able to receive free treatment in the Institute. That objective must be achieved at any cost, and the very authority who have granted such certificate of exemption would ensure that the obligation imposed on the persons availing of the exemption notification are being duly carried out and on being satisfied that the said obligations have not been discharged they can enforce realisation of the customs duty from them." (emphasis added) 6.3 Hence, we find that merely because the project authority certificate was valid on date of import co....
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.... arrive at a right decision. But the liability of a tribunal to err is an accepted phenomenon. The binding force of a decision which is arrived at by a taxing authority acting within the limits of the jurisdiction conferred upon it by law cannot be made dependent upon the question whether its decision is correct or erroneous. For, that would create an impossible situation. Therefore, though erroneous, its decision must bind the assessee. Further, if the taxing law is a valid restriction the liability to be bound by the decision of the taxing authority is a burden imposed upon a person's right to carry on trade or business. This burden is not lessened or lifted merely because the decision proceeds upon a misconstruction of a provision of the law which the taxing authority has to construe. Therefore, it makes no difference whether the decision is right or wrong so long as the error does not pertain to jurisdiction." (emphasis added) What has been stated by the Hon'ble Court in the case of a taxing authority, is also applicable in the case of any authority deciding on a dispute. It makes no difference whether the decision is perceived by a party to the dispute to be wrong. So l....
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.... was a case of deliberate deception with the design of securing something by taking unfair advantage, which is a fraud. Even in the case of retraction, it is for the person who claims retraction to prove that the statement was made under force, duress, coercion etc. [See K.P Abudul Majeed Vs. Commissioner of Customs [2014 (309) ELT 671 (Ker)]; Surjeet Singh Chhabra Vs. UOI [1997 (89) ELT 646 (SC)]; K.I. Pavuny Vs. Assistant Collector (HQ), Cochin [(1997) 3 SCC 721] Further as observed by the Hon'ble Apex Court in Avadh Kishore Das Vs Ram Gopal and Ors. [AIR (1979) SC 861], Section 31 of the Indian Evidence Act, 1872 establishes that evidentiary admissions, while not conclusive proof, create an estoppel and shift the burden of proof. Unless shown incorrect, they serve as effective proof of the facts admitted. 7.4 If the appellant was found having violated the notification conditions of using the imported goods in the project funded by World Bank and approved by the Project Authority, then not only did it violate the continuing obligation under the notification claimed but the intention showed that the attempt was to misuse the exemption and this fact was suppressed while claiming....
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.....1 The appellant has stated that the Commissioner was bound in law to examine the alternate claim of the exemption as proceedings under Section 28 of the Act is to decide whether any duty is short paid or non-paid. They have submitted that it is a settled principle of law that even if an assessee has not claimed benefit of an exemption notification at the time of assessment, he is not debarred, prohibited, precluded or prevented from claiming such benefit at a later stage. The Appellant relies on the following judgements: A) Share Medical Care vs Union of India, 2007 (209) E.L.T. 321 (S.C.) B) H.C.L. Limited vs Collector of Customs, New Delhi, 2001 (130) E.L.T. 405 (S.C.) C) M/s. Neoteric Informatique Limited Versus Commissioner of Customs (Import), 2023 (9) TMI 141 - CESTAT Chennai D) Farida Shoes Pvt. Ltd. vs Commissioner of Customs (Seaport-Import), Chennai, 2024 (4) TMI 482 - CESTAT Chennai 8.2 As discussed above fraud vitiates all solemn acts. Any advantage obtained by practicing fraud is a nullity. At this stage one cannot claim the benefit of another notification to get over the problem they find themselves in. When fraud is invo....
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....others [(2007) 6 SCC 120] following the aforesaid dictum, held thus: "12. It is trite law that so as to enable the court to refuse to exercise its discretionary jurisdiction suppression must be of material fact. What would be a material fact, suppression whereof would disentitle the appellant to obtain a discretionary relief, would depend upon the facts and circumstances of each case. Material fact would mean material for the purpose of determination of the lis, the logical corollary whereof would be that whether the same was material for grant or denial of the relief. If the fact suppressed is not material for determination of the lis between the parties, the court may not refuse to exercise its discretionary jurisdiction. It is also trite that a person invoking the discretionary jurisdiction of the court cannot be allowed to approach it with a pair of dirty hands. But even if the said dirt is removed and the hands become clean, whether the relief would still be denied is the question." 30. Law is well settled that the fact suppressed must be material in the sense that it would have an effect on the merits of the case. The concept of suppression or non-disclosure....
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....ns of the Act or of Rules made thereunder with intent to evade payment of duty"; that is to say, it is intentional, deliberate and/or by deceitful means. Naturally, the cases falling in the two groups lead to different consequences and are dealt with differently. Section 11A, however allow the assessees in default in both kinds of cases to make amends, subject of course to certain terms and conditions. The cases where the non-payment or short payment etc. of duty is by reason of fraud collusion etc. are dealt with under sub-section (1A) of section 11A and the cases where the non-payment or short payment of duty is not intentional under sub-section (2B). 10. Sub-section (2B) of section 11A provides that the assessee in default may, before the notice issued under sub-section (1) is served on him, make payment of the unpaid duty on the basis of his own ascertainment or as ascertained by a Central Excise Officer and inform the Central Excise Officer in writing about the payment made by him and in that event he would not be given the demand notice under sub-section (1). But Explanation 2 to the sub-section makes it expressly clear that such payment would not be exempt from inte....
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....er Section 28 of the Act. The Project Authority Certificate was correctly issued by the Project Authority. The department was fully aware or deemed to fully aware of the fact that the imported goods were not to be permanently remain in the Project in view of its allegation that the nature of imported machinery is such that it would be removed from the project on completion of the project. The invocation of extended period is otherwise clearly not applicable in facts of the present case, which involves interpretation of exemption notification and interpretation of the Appellants is in consonance with the orders of this Tribunal. 10.2 We find that the dispute in this case as made out by revenue is one involving fraud. It is backed by the un-retracted statement made by the appellants officials and cancellation of the project certificate by the Project Authority. 10.3 The belief, knowledge and intention of the parties involved are a part of evidence. A blame worthy conduct is often shrouded in secrecy and it is at times impossible to adduce direct evidence of the same. Documentary evidences in such cases are not forth coming. Hence the belief, knowledge and intention of the parti....