Case Law Details
Commissioner of Customs Vs Rajkamal Industrial Pvt. Ltd. (Gujarat High Court)
Conclusion: CESTAT ignored the fact that High-Speed Diesel imported under the guise of Base Oil SN 50 was being diverted as fuel by routing such goods through the purported manufacturers who claim to manufacture Bio-Diesel B100. Thus, department had established the fact that imported Base Oil could be used as HSD / Automotive fuel in internal combustion engines.
Held: In the instant case, the officer issued a show-cause notice calling upon assessee to show cause as to why the entire consignment of the HSD should not be confiscated and penalty be imposed under Section 112(a) and (b), Section 114AA read with Section 117 reply of the Customs Act. Commissioner of Customs, had reclassified the imported goods under the CTH 27101930 as HSD and confiscated the imported goods with an option to re-export on payment of fine / penalty by assesee – company and individual Directors of the Company under Section 112(a) of the Customs Act. The order in original also imposed a penalty on the individual Directors under Section 114AA of the Act. Further, various penalties came to be imposed under Section 112(a) and Section 114AA on the foreign suppliers and their representatives.Tribunal, allowed the appeals and took the view that the goods imported were not High-Speed Diesel, but was just a Base Oil thereby setting aside the redemption fine and penalties imposed. It was held that the inquiry had revealed that the major buyers of such Base Oil were facilitating by issuing only invoices, even without physical receipt of the goods at the behest of the importer, thus evidencing that such imported goods were being clandestinely removed for use as Diesel and only fake invoices were generated to cover the goods. Thus, the modus operandi adopted thus appeared to be that High-Speed Diesel imported under the guise of Base Oil SN 50 was being diverted as fuel by routing such goods through the purported manufacturers who claim to manufacture Bio-Diesel B100. These glaring facts were ignored by CESTAT while drawing the observations that the department ought to have established that the imported Base Oil can be used as HSD / Automotive fuel in internal combustion engines.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1 Since the issues raised in all the captioned Tax Appeals are the same and the challenge is also to a common order passed by the Tribunal, those were taken up for hearing analogously and are being disposed of by this common judgement and order.
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