Case Law Details
lLouis Dreyfus Company India Pvt Ltd Vs Commissioner of Customs-Kandla Customs (CESTAT Ahmedabad)
Conclusion: When the EDI system itself permitted assessee to pay the cess using the scrip, there could not have been suppression of facts etc. Therefore, a penalty under Section 114A of the Act is unsustainable, especially when the duty demand was otherwise time-barred. Cess based on ‘Nil’ total duty had to be ‘Nil’ if machinery provision are clothed in such language and do not make levy an independent ad velorem duty. But same needs to be examined in detail to the specifics of the case including for C.V.D/ I.G.S.T component, if any during impugned period and language of the statutory provision relied upon by assessee. CHA was not required to advise on assessment aspects to its clients unless solicited. Again there was nothing on record to show that he had been subjected to action under C.B.L.R, 2018.
Held: Assessee-company had imported goods against duty-free scrips issued under the MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme). On importation, assessee had paid the customs duties, consisting of BCD, Education Cess (EC ), Secondary and Higher Education Cess ( SHEC ) and Social Welfare Surcharge ( SWS ) by debiting them in the duty scrip tendered at the time of import. The import of goods against MEIS and SEIS were governed by Notification No.24/2015-Cus, dated 08.04.15 and Notification No. 25/2015-Cus dated 08.04.2015 respectively. Department contended the basic customs duty, other duties namely EC, SHEC and SWS ought not to have been debited in the duty credit scrips ought to have been paid in cash. The department invoked the extended period, that assessee had deliberately debited these duties from the duty-free scrips with an ulterior motive to evade the payment of duties. Assessee had also not informed the department above the debits made in the scrips, of these duties. It was held that in respect of duty demand about EC and SHEC, in the assessee’s case involving identical factual matrix, CESTAT, Mumbai, vide Final Order No. 87149/2023 dated 16.11.2023 observed that any cess collectable as a percentage of duty liability could not be computed in the absence of duty liability. When aggregate of customs duty was ‘Nil’, Cess etc based on such aggregated duty would also be ‘Nil’ and could not have been collected. However, on the preposition whether such Cess could not have been debited from scrips and was require to be discharged by paying in cash, the decision of GEMINI EDIBLES AND FATA INDIA PVT. LTD VS. UNION OF INDIA, as reported in 2020 (1) TMI 2012 – MADRA HIGH COURT, disallowed such debiting to be done. Same appears justified, as various export schemes were contested under W.T.O laws, if subsidies enter in exports even under the garb of saving interest factor. Therefore specific provision to allow such dispensation was warranted. Cess based on ‘Nil’ total duty had to be ‘Nil’ if machinery provision are clothed in such language and do not make levy an independent ad velorem duty. But same needs to be examined in detail to the specifics of the case including for C.V.D/ I.G.S.T component, if any during impugned period and language of the statutory provision relied upon by assessee. Same therefore was remanded back. Commissioner would need to thoroughly consider on remand the aspect of cess coming into play only if aggregate of customs duty is not ‘Nil’ as is the requirement of statutory provision. Other question relating to limitation and penalty shall be decided accordingly, considering quantum, legality of issues and malicious intention objectively. Section 47 of the Act, out-of-charge for these bills of entry was granted after the proper officer was satisfied that the importer had paid import duties. Passing of an order under Section 47 is not an empty formality. That being said, there is no case for the invocation of an extended period in the present case. The entire duty demand in all the SCNs has been confirmed by invocation of the extended period. No part of the duty demand falls within the normal period of limitation. The imposition of penalty under Section 114 A was confirmed observing that the cesses were paid by debiting the MEIS scrips were recoverable under Section 28 (4) of the Act. Assessee submitted that when the EDI system itself permitted assessee to pay the cess using the scrip, there could not have been suppression of facts etc. Therefore, a penalty under Section 114A of the Act is unsustainable, especially when the duty demand was otherwise time-barred. Regarding the breach of sub-regulation of Regulation 10 has not been mentioned, CHA was not required to advise on assessment aspects to its clients unless solicited. Again there was nothing on record to show that he had been subjected to action under C.B.L.R, 2018. The Tribunal held that “when specific penalty under C.B.L.R for violation of any Regulation exists, same could not be relegated to residual provisions of penalty under Section 117 of the Customs Act, 1962. Same was therefore set aside.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
Appellants have filed the present appeal against a common Order-in-Original KND-CUSTM-000-COM-01-2023-24 dated 30.05.2023 (read with Corrigendum dated 13.07.2023) passed by the Ld. Commissioner of Customs, Kandla, being a common adjudicating authority appointed for a number of show cause notices issued from various customs houses. The appellants had imported goods against duty free scrips issued under the MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme). On importation, the appellants have paid the customs duties, consisting of BCD, Education Cess (EC), Secondary and Higher Education Cess (SHEC) and Social Welfare Surcharge (SWS) by debiting them in the duty scrip tendered at the time of import. The import of goods against MEIS and SEIS are governed by Notification No.24/2015-Cus, dated 08.04.15 and Notification No. 25/2015 – Cus dated 08.04.2015 respectively.
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