TaxTMI 
TaxTMI 
2025 (11) TMI 878
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.... the bills of entry No. 7960728 dated 07.09.2018 and 8712607 dated 02.11.2018 filed by them. A proposal to demand differential duty of Rs. 6,82,50,033/- under Section 28(4) along with interest under Section 28AA of the Customs Act, 1962 was also made in the SCN besides confiscation of the imported goods under Section 111(o) along with penalties under Section 112(a),112(b), 114A, 114AA and 117 of the said Act. Separate penalty under Section 112(a), 112(b), 114AA and 117 was proposed on Shri Umesh Kale, Technical Administrator of the appellant. 1.1 The matter was adjudicated by the Principal Commissioner wherein he disallowed benefit of Notification No.72/2017- Cus. dated 16.08.2017 confirmed customs duty of Rs.6,82,50,033/- under Section 28(4) along-with interest under Section 28 AA of the Customs Act,1962. He imposed redemption fine of Rs. 6.5Crs in lieu of confiscation of the seized goods. He imposed equal penalty on the appellant under Section 114AA and a penalty of Rs.5 Lakhs under Section 114A of the Act but dropped the proposal to impose penalty on the appellant under Section 112(a), 112(b) and 117 of the Customs Act, 1962. He also imposed a penalty of Rs. 5 Lakhs on Shri U....
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....eported at 1983 (13)ELT 1566 (SC). g) The words "Machinery, Equipment or Tools" mentioned in Notification No.72/2017-Cus. dated 16.08.2017 have not been defined in the said notification or is Customs Act or the Rules made thereunder and so, these are required to be classified as understood in trade or commercial parlance, depending on their functions as known in the industry. As per literature provided by the International Association of Dredging Companies, 'Tugs' come within the meaning of 'Auxiliary Equipment' being crucial to the smooth functioning of a dredging operation. Auxiliary Equipments include a wide variety of equipments that are not dredgers but are integral to support dredging operation. A number of floating Auxiliary Equipment are multicast, heavy lifting crane vessels, workboats, tenders, towboats, tugboats, stationary or self-propelled barges, anchor pontoons, floating line pontoons, booster stations, crew boats and survey vessels. Being auxiliary equipment's, these are entitled to exemption under above notification. h) Extended period of limitation cannot be invoked as Bills of Entry were self-attested which were verified/examined and cleared for....
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....y on the decision in the case of Shipping Corporation of India Vs. Commissioner of Customs (Import), Mumbai (cited supra) and also on the decision in the case of Abaris Healthcare vs CCE & ST, Chandigarh reported at 2018 (362) ELT 153, (Tri-Chan) wherein it was held that though the appellant have claimed benefit under a notification and the department failed to issue show cause notice within one year of claiming the benefit, extended period of limitation is not invokable. k) Completed assessment cannot be re-opened unless order of assessment is challenged. They rely on the decision in the case of ITC Ltd. Vs. CCE reported at 2019 (368) ELT 216 (SC), decision of Punjab and Haryana High Court in the case of Jairath International Vs. UOI reported at 2019 (370) ELT 116 (P&H). In a series of decisions as mentioned below, same ratio has been followed:- * M.K. Shah and Co. Vs. Commissioner of Customs (Airport &Acc), Kolkata - (2023) 2 Centax 34 (Tri.-Cal) * Final Order No. 76465-76466/2023 dated 24.08.2023 of Kolkata Tribunal in the case of Rajib Saha Vs. CC (Preventive), Shillong, * Final Order No.A/85925-85934/2024 in the case of Bimal P. Shah & Other....
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....r decisions were given in the following cases:- * Associate Marketing Service Vs. CC, Airport -2006 (195) ELT 287 (Tri.- Chennai) * Shiwalayan Spinning & Weaving Mills P. Ltd. v. CC, Amritsar- 2002 (146) ELT 610 (T) * Prudential Pharmaceuticals Ltd. v. CC-2001 (136) ELT 1057 (T) * Shilpa Trading Co. V. CC, Bangalore- 2008 (224) ELT 453 (Tri. -Ban.) n) Demand of interest and penalties imposed cannot be sustained as they have very strong case both on merits as well as on limitations. 2.1 Shri Umesh Kale, Technical Administrator/ Logistic Executive of the appellant pleaded that being an employee of the company, he carries out routine and regular functions as assigned to him relating to customs clearances which he discharges based on his limited experience and knowledge. Statements given by him were answers to the pointed questions and nowhere, he has admitted the benefit of ineligible exemption of Notification either knowingly or intentionally. The benefit was claimed as per industry practice and as per advise of the customs broker. Thus, he pleads that he cannot be penalized under Section 112(a)(ii) and 114 AA of the Act on the charges ....
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....ishri Engineering Co P Ltd Vs. CCE * 1996 (87) ELT 321 (SC) - Purewal Assocaites Ltd Vs. CCE * 1983 (13) ELT 1566 (SC) - Dunlop India Ltd & Madras Rubber Factory Ltd Vs. Union of India 5. We have heard the rival submissions and also gone through the written submissions made by both the sides. The issue to be decided in this case is whether two tugs viz. "Coaster Rambler" and "Coaster Voyager" imported by the appellant are "Machinery, Equipment or Tools" for availing benefit of Notification No.72/2017- Cus. dated 16.08.2017? The appellant contends that two tugs were imported by them for execution of ONGC dredging project at Hazira port. It is also their contention that these are "Auxiliary Equipment" and hence, covered within the definition of "Machinery, Equipment or Tools" which entitles them the benefit of above notification. Another plea is that as all things were in the knowledge of the department, extended period is not invokable in this case. They also assailed penalties imposed on the appellant as well as on their employee on Shri Umesh Kale. Their alternate argument is that in case duty demand is sustained against them, they are entitled to the benefit ....
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....Act, 1975 (51 of 1975). (1) the goods have been taken on lease by the importer for use after import; (2) the importer makes a declaration at the time of import that the goods are being imported temporarily for execution of a contract; (3) the import of such machinery, equipment or tools is covered under item (b) of clause 1 or item (f) of clause 5 of Schedule II of the Central Goods and Services Act, 2017; (4) the said goods are re-exported within three months of the date of such import or within such extended period not exceeding 18 months from the date of said import, as the Assistant Commissioner of Customs or the Deputy Commissioner of Customs, as the case may be, may allow; (5) where the Assistant Commissioner of Customs or the Deputy Commissioner of Customs, as the case may be, grants extension of the aforesaid period for re-export, the importer shall pay the difference between the duty payable under the relevant clause in column (3) and the duty already paid at the time of their import; (6) the importer executes a bond, with a bank guarantee, undertaking - (a) to pay integrated tax leviable under sub-section (1) of section 5 of the Integrated Goods....
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....ead with any notification for the time being in force in respect of the duty so chargeable. 5.2 We find that the issue in hand is squarely covered by the decision of Mumbai Tribunal in the case of Shipping Corporation of India Vs. Commissioner of Customs (Import), Mumbai and International Seaport Dredging Ltd Vs. Commissioner of Customs, Tiruchirappalli (cited supra). In both the cases, it was held that tugs fall under Chapter Heading 89.04 of Customs Tariff Act as they are designed to assist ships in distress and not for transport of persons and goods. Tugs were the goods and not merely conveyance. Therefore, these were liable to customs duty at the rate and value prevalent on the date of importation. The relevant para 6.12 of the decision in the case of Shipping Corporation of India is reproduced below:- "6.12 In the light of the above discussions, import duty demand on vessels Smit Lumba, imported by the Shipping Corporation of India and Posh Giant-1 and Salvaree imported by M/s. J.M. Baxi & Co. are sustainable in law and the appellants are liable to pay customs duty in accordance with law. The appellants have not disputed either the valuation or the duty calculation....
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....along with the boat. On the basis of above reasoning, they held that the work Boats which is termed as tugboat is classifiable under Chapter 89. 5.4 In view of the above, we hold that tugboats imported by the appellant are not machinery, equipment or tools, as these are specifically covered under Chapter Heading 8904 and therefore, two tugs imported by the appellant in this case are not entitled to the benefit of Notification No.72/2017-Cus. dated 16.08.2017. 5.5 As regards invocation of extended period, we find that the Adjudicating Authority has elaborately discussed the grounds taken for invocation of extended period. The appellant, apart from saying that they were not aware of the decision of Chennai Tribunal in the case of Internation Sea Port Dredging, have not come up with any other explanation as to why tug boats imported by them should be classified as "Machinery" for availing ineligible benefit of Notification. The issue was already decided in 2014 by Mumbai Tribunal in the case of Shipping Corporation of India. Therefore, agreeing with the view of the learned Adjudicating Authority, we hold that extended period has rightly been invoked in this case. Regarding confi....
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....f importation. In the case of Sedco Forex International Drilling Inc. v. CC, Mumbai [2001 (135) E.L.T. 625], in a similar situation, this Tribunal directed the Revenue to recompute the duty liability after taking into the drawback. Following the said decision, in the present appeals also, we direct the Revenue to work out the duty liability after taking into account the drawback that the appellants would be entitled to, after completing the necessary formalities, if any required." Respectfully agreeing with the above decision of allowing benefit of drawback on export of tug boats imported temporarily, we hold that in the instant case also, the appellant is entitled to the drawback benefit under Section 74 of the Customs Act, 1962. 5.7 Relying on the decision in the case of Shiv Kripa Ispat Pvt. Ltd. and Chinku Exports, the appellant have challenged confiscation of the imported tugs on the ground that these are not physically available as the same were re-exported. We find that this has elaborately been discussed by the Adjudicating Authority in para 20.1 and 20.2 of the impugned order. We find that Hon'ble Madras High Court in the case of Visteon Automotive Systems India Limi....
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....account while computing the interest liability on the appellant. 5.9 As regards, penalty of Rs.5 Lakhs each on both the appellants, under Section 114AA, we find that penalty under this Section can be imposed, "if a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any business for the purposes of this Act." The Adjudicating Authority has imposed penalty on the ground that the appellant knew about the decision in the case of International Sea Port Dredging but still they availed the exemption of duty. We are not convinced with this reasoning as the facts in the case do not bring out ingredients of this Section for imposition of penalty under Section 114AA. We therefore, set aside the above penalty on both the appellants. 5.10 As regards penalty of Rs.5 Lakhs on Shri Umesh Kale under Section 112(a)(ii), we find that the said Section reads as, Any person,-"(a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doi....