Case BriefsTribunals/Commissions/Regulatory Bodies

Customs, Excise and Service Tax Tribunal (CESTAT): Justice P. Dinesha (Judicial Member) allowed the appeal filed by a shipping company against the Commissioner of Customs. He further decided that the impugned penalties stand set aside.

The authorities filed allegations against the appellant under Sections 112(d) and 114AA of the Customs Act, 1962. A show-cause notice was issued against the appellant herein under Sections 28 and 124 of the Customs Act stating that he did not inform the Revenue that the importer did not possess licence for import of Chlorodifluoromethane (R-22 Gas); he did not present the imported goods for examination; and thus he was liable for penalty under Section 112(a) of the Act for abetting smuggling of R-22 gas, for non-compliance of Regulations 11(d) and 11(n) of the Customs Broker Licensing Regulations, 2013 (CBLR).

Issue: Whether the Revenue was justified in imposing a penalty under Sections 112 (d) and 114AA of the Customs Act, 1962 on the appellant who was only a Customs Broker and not the importer.

J.V. Niranjan, Advocate for the appellant, contended that the Revenue had not established mens rea for levying penalty and that the authorities did not conduct any investigation, filed an appeal against the above allegations. L. Nandakumar, Advocate for the Respondent, prayed for sustaining the penalty contending that the Bill-of-Entry did not contain sufficient details of the goods sought to be imported and the appellant did not bother to ascertain whether the importer had the required licence, constituting a serious lapse covered under Regulations 11(d) and 11(n) of the CBLR.

The Tribunal opined that the Revenue was not able to clearly establish either active or passive role or any deliberate or mala fide act; and the appellant had advised the importer as to the requirement of import licence, being sufficient compliance insofar as Regulation 11(d) is concerned. It was further held that the allegations were not sufficient to fasten with the penalty of the nature impugned as it was not established that appellant handled the work of clearance with mala fide motive and Sections 112(a) and 114AA of the Customs Act include an intentional or deliberate act or omission and even the motive is attributable to the act of abetment to do any act or omit to do any act.

The appeal was allowed stating that Section 114AA could be invoked only on the establishment of the fact that the declaration, statement or document submitted in the transaction of any business for the purpose of the act is false or incorrect. The penalties and impugned order confirming the penalties questioned herein was set aside. [Sea Queen Shipping Services (P) Ltd. v. Commr. of Customs, 2019 SCC OnLine CESTAT 1483, decided on 05-12-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

Custom, Excise and Service Tax Appellant Tribunal (CESTAT), Chennai: These appeals were preferred by the assessee before a Coram of P. Dinesha (Judicial Member), for waiver of penal charges, levied for belated filing of Bills-of-Entry.

The adjudicating authority had informed the appellant who was the Customs Broker that their request for waiver of penal charges for late filing of Bills-of-Entry was rejected. Appellant had filed an appeal before the first appellate authority but the same on being rejected this second appeal before this Tribunal was filed.

The dispute before the forum was with respect to the eligibility of the appellant for waiver of late filing fees, in terms of Section 46 (3) of the Customs Act, 1962 which deals with the entry of goods being imported with time limit of filing the same but states nothing related to the consequences on failure to adhere to the time limit. It was submitted that in the impugned order the bona fides of the appellant was not questioned as the cause shown were not rejected as insufficient, wrong or improper. Section 46 authorizes the proper officer to collect late fees unless he is dissatisfied with the cause shown for delay.

Tribunal was of the view that appellant was not the first importer and Revenue after collecting requisite fees allowed amendment in IGM on record which are developed after imports due to goods being perishable. Since, Revenue did not find any malafide intention in the development aforementioned it can be assumed that Revenue was satisfied with the ‘sufficient cause’. Therefore, the impugned order rejecting the request for waiver of penal charges for late filing of Bills-of-Entry was set aside. [Blueleaf Trading Co. v. Commissioner (GST), Customs Appeal No. 42670 of 2018, Order dated 08-05-2019]

Case BriefsHigh Courts

Delhi High Court: A Division Bench comprising of S. Ravindra Bhat and A.K. Chawla, JJ. allowed a writ petition filed against the notice of re-assessment issued by the revenue under Section 147 and 148 of Income Tax Act, 1961.

The case relates to assessment for the year 2004-05. The original return filed by the petitioner was not accepted and re-assessment notice was issued. After repeated requests, the reasons to believe recorded by the Assessment Officer were furnished to the petitioner-assessee. The petitioner filed objections to the said notice which were turned down. Consequently, he approached the High Court for relief.

The High Court perused the notice impugned and found that the reasons to believe were recorded subsequent to the issuing of such notice. This was contrary to the mandate of Section 148(2), according to which the reasons to believe have to be recorded prior to the issuing of notice. Further, it was also found that new page numbers were assigned to old pages in order to manipulate the placement of documents. Also, the font of the text on pages did not match. In such circumstances, it was held that the Revenue played a subterfuge in ante dating the record. Investigation for the same was directed. Resultantly, the petition was allowed and the notice impugned was quashed. [Prabhat Agarwal v. CIT,2018 SCC OnLine Del 10598, dated 16-8-2018]


Case BriefsHigh Courts

Bombay High Court: A Division Bench comprising of M.S. Sanklecha and Sandeep K. Shinde, JJ., allowed a writ petition filed against the assessment order passed by the Revenue against the petitioner for the year 2011-12.

The petitioner was a foreign company and as such an eligible assessee as defined in Section 144-C(15) of the Income Tax Act, 1961. The Revenue passed the impugned assessment order under Section 144(3) read Section 144-C(13) read with Section 254. The petitioner challenged the said order contending that it was passed without following the procedure as mandated by Section 144-C. It is pertinent to note that the said section provides that a draft assessment order has to be made before the final order for certain assessees that also include a foreign company.

The High Court observed that passing a draft assessment order wherever provided for by Section 144-C is mandatory. The object being to ensure that the disputes of foreign companies are resolved expeditiously, as the eligible assessees are given an opportunity to submit objections prior to passing the final order. The said procedure not being complied with by the Revenue in present case where the petitioner – a foreign company – was an eligible assessee, the High Court held that the final order passed was sans jurisdiction. Accordingly, the impugned order was set aside while allowing the petition. The Revenue was given liberty to take steps as available to it in law. [Dimension Data Asia Pacific PTE Ltd. v. CIT,2018 SCC OnLine Bom 2111, dated 06-07-2018]