TaxTMI 
TaxTMI 
2026 (1) TMI 435
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....tion in this appeal is whether the appellant is justified in availing exemption of customs duty under Notification No. 96/2008-Cus dated 13.08.2008 [the 2008 Exemption Notification] on import of gold dore bars from Tanzania in terms of the Import License dated 22.12.2020 issued by the Directorate General of Foreign Trade [DGFT] permitting imports subject to Notification No. 12/2012-Cus dated 17.03.2012 [the 2012 Notification]. 3. In the Doha Ministerial Order of the World Trade Conference held in 2001, the member countries, including India, committed to consider providing duty free, quota free market access for Least Developed Countries products and to consider additional measures to improve market excess to such countries. In the Hong Kong Ministerial Declaration held in 2005, the World Trade Organisation countries agreed to provide duty free and quota free market access on a lasting basis on all products originating from Least Developed Countries. The Government of India, in 2008, extended duty free tariff preference scheme for the Least Developed Countries. 4. Accordingly, the 2008 Exemption Notification was issued on 13.08.2008 in exercise of the powers conferred by secti....
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....mport gold dore bars with purity upto 95%. The Conditions contained in the License are as follows: 2. CONDITION SHEET 1 The licence is issued with actual user conditions besides other usual conditions of Import Authorization 2 The import is subject to Custom Notification no. 12/2012 dated 17.03.2012 and RBI notifications issued from time to time 8. The appellant filed a Bill of Entry for import of gold dore bars from Tanzania and claimed exemption of duty under the 2008 Exemption Notification. The appellant also filed the country of origin certificate. Investigation was carried out and it was revealed that the appellant had wrongly claimed exemption under the 2008 Exemption Notification since the Condition of the Import License issued by the DGFT specifically mentioned that the goods shall be cleared under the 2012 Notification later superseded by the 2017 Notification. 9. However, a show cause notice dated 24.04.2024 was issued to the appellant alleging violation of the Import License Condition and raising a demand under section 28(1) of the Customs Act. The show cause notice alleged that gold dore bars are restricted items for import and import is allow....
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....e Customs Duties and Agriculture Infrastructure and Development Cess (AIDC) under Notification No. 96/2008-Cus dt 13.08.2008, though the conditions of their Import license issued by DGFT specifically mentioned that goods shall be cleared under Notification No. 12/2012-Cus dated 17.03.2012 (later superseded by the Notification No 50/2017 - Cus dated 30.06.2017). Non-payment of duty as prescribed in the said notification which is mentioned as a condition for import in the license makes the goods ineligible to be imported against the said license. Thus, the importer has wrongly used the notification no. 96/2008-Cus dt 13.08.2008 for the import of impugned goods as the importer can only claim exemption notification at a time in respect of a component of Customs Duty in consonance with the license and availing notification No. 12/2012-Cus dated 17.03.2012 (later superseded by the notification no 50/2017 - Cus dated 30.06.2017) was a precondition as per license issued by DGFT. 24. ***** As already observed, the import license in the present case explicitly stipulates that it is subject to the provisions of Notification No. 12/2012-Cus, with a specific rider. Therefore, I am of t....
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....n under license, resulting into short payment of the legitimate duty payable in respect of the subject goods. In view of the above, I hold that this violation of the license condition has rendered the goods liable for confiscation under section 111(d) and 111(o) of the Customs Act, 1962. ***** 32. I find that in the regime of self-assessment it is the assessee himself who has to ensure correct computation of duty of imported goods and as per Section 17 of the Act, an importer is himself required to determine duty liability on the goods imported by him and discharge the same in the authorised manner. The importer is a regular importer and hence the plea that he did not know the provisions also does not come to his rescue. The importer by the act of misdeclaration of value has rendered themselves liable to penalty under section 114A of the Act. I further, note that Section 114A & Section 112 of Custom Act, 1962 are mutually exclusive, therefore, no penalty is warranted under section 114A of Custom Act, 1962 on the Noticee." (emphasis supplied) 12. Shri Kishore Kunal, learned counsel for the appellant assisted by Ms. Runjhun Pare and Shri Govind Gupta mad....
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....ultaneous benefits available cannot be denied; (vii) Denying the benefit of the 2008 Exemption Notification violates article 51(c) of the Constitution and International obligations of India, including under GATT 1994 and the DFTP Scheme. Tariff and non-tariff barriers inconsistent with international treaties cannot be imposed; (viii) Interest under section 28AA of the Customs Act is not liable to be paid; and (ix) Penalty under section 112 is liable to be set aside. 13. Shri Ranjan Prakash and Shri Nikhil Mohan Goyal learned authorized representatives appearing for the department, however, supported the impugned order and made the following submissions: (i) The DGFT issued the Import License to the appellant for importing gold dore bars with explicit Condition that imports must comply with the 2012 Notification which was superseded by the 2017 Notification. This Condition is non-negotiable, as gold dore bars are classified as "restricted" under the Foreign Trade Policy 2015-2020 and 2023-2028, requiring strict adherence to License terms; (ii) The claim of the appellant for NIL duty rate under the 2008 Exemption Notification which prov....
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.... the DGFT on 22.12.2020 permitting the appellant to import gold dore bars. The License contained a Condition that the import of gold dore bars is subject to the 2012 Notification. 18. The impugned order passed by the Principal Commissioner holds that it was obligatory on the part of the appellant to have paid customs duty contemplated under the 2012 Notification and it was not open to the appellant to pay NIL customs duty by taking resort to the 2008 Exemption Notification. It is for this reason that the customs duty in terms of the 2012 Notification, as superseded by the 2017 Notification, has been demanded from the appellant and penalty has been imposed under section 112(a)(i) of the Customs Act as the gold dore bars were found to be liable to confiscation. 19. The issue, therefore, that arises for consideration is whether the appellant could have taken benefit of the 2008 Exemption Notification when the Condition of the License issued to the appellant provided that the import of gold dore bars is subject to the 2012 Notification. 20. A perusal of the said Condition shows that the import has been made subject to the 2012 Notification. It does not provide that the benefit....
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....ld dore bars had gold content of more than 95%. It is in this context that the Delhi High Court observed that the benefit of the 2008 Exemption Notification could not have been availed of since the description of goods in the 2012 Notification was gold dore bar having gold content not exceeding 95%. 25. It is, therefore, not possible to accept the contention advanced by the learned authorized representative appearing for the department that since gold dore bars were restricted items under the Foreign Trade Policy and could be imported only under a License issued by the DGFT, the appellant had necessarily to pay customs duty under the 2012 Notification. 26. Learned counsel for the appellant also submitted that that as the Import License issued to the appellant by the DGFT is valid and subsisting and the DGFT had not raised any allegation of violation of the Condition of the Import License, the customs authority cannot exercise power under section 28(1) of the Customs Act to determine violation of Conditions of License. According to the learned counsel for the appellant, it is the DGFT which has been conferred the power of the Central Government under section 3 of the Foreign T....
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....horities cannot be recognised to have the power or the authority to either question or go behind an instrument issued under the FTDR in law. 106. Taking any other view would result in us recognizing a parallel or a contemporaneous power inhering in two separate sets of authorities with respect to the same subject. That clearly is not the position which emerges from a reading of Section 28AAA. Quite apart from the deleterious effect which may ensue if such a position were countenanced, in our considered opinion, if the validity of an instrument issued under the FTDR Act were to be doubted on the basis of it having been obtained by collusion, wilful misstatement or concealment of facts, any action under Section 28AAA would have to be preceded by the competent authority under the FTDR Act having come to the conclusion that the instrument had come to be incorrectly issued or illegally obtained. The procedure for recovery of duties and interest would have to be preceded by the competent authority under the FTDR Act having so found and the power to recover duty being liable to be exercised only thereafter. 107. Section 28AAA would thus have to be interpreted as contempl....