Case BriefsTribunals/Commissions/Regulatory Bodies

Customs Excise & Service Tax Appellate Tribunal (CESTAT): This appeal was filed before V. Padmanabhan, Member (Technical) against the decision of Commissioner of Customs who upheld the order of Adjudicating Authority imposing duty on the appellants.

Facts of the case are such that a search was conducted during which Departmental Officer found and seized goods i.e. automobile parts as specified in the 3rd Schedule of the Central Excise Act with brand name ‘VIKING’ and “VIZA’ from both appellant’s premise. Show cause notices were issued by the adjudicating Authority to the appellants after the investigation were concluded. They were alleged with manufacture of goods which did not belong to them and thus were not entitled to the benefit of the Small Scale Exemption. It was stated that they were supposed to pay duty along with interests and penalties. Adjudicating officer’s order was challenged before the Commissioner where it was upheld and hence this appeal before the Tribunal was filed.

Appellants showed their respective trademark registration document that ‘VIKING’ and ‘VIZA’ were registered trademarks of the appellants hence they were entitled to SSI benefit. Appellants contended that respondent seized both the appellants’ goods in a consolidated way which was later denied by respondent. Respondent while negating the contentions of appellants stated that appellant were liable to pay duty as they were involved in activity of packing and affixing brand name which amounts to manufacture of a good and thus they cannot seek the benefit of SSI. They submitted that appellants need to pay duty for goods belonging to other appellant which was found on their premises.

 Tribunal was of the view that appellants were liable to pay duty for those goods labeled with other appellant’s trademark. Both the appellants were given benefit of SSI with respect to the goods under their respective brand names and for goods having brand names of the other appellant they were liable to pay duty. Tribunal ordered Adjudicating authority to requantify the duty demanded. [Vee Kay Enterprises v. Comrr. of Excise, 2018 SCC OnLine CESTAT 870, decided on 24-09-2018]


Case BriefsSupreme Court

Supreme Court: The Bench comprising of R.F. Nariman and Indu Malhotra, JJ. dismissed writ petitions filed by army personnel — Major, Lieutenant, and Sepoy — against their transfer from Army Service Corps. to operational units.

The petitioners challenged the transfer as violative of their fundamental rights under Article 14 and 21. They relied on the Supreme Court decision in Union of India v. P.K. Choudhury, (2016) 4 SCC 236. They submitted that in the case mentioned, the Court held that ASC is a non-operational unit based on the stand taken by Union of India. While the respondent-Union of India and Military Secretary Branch — assailed the maintainability of the petition. Furthermore, it was contended that an employee has no legal right, much less a fundamental right, to be posted in a particular place or to be transferred to a place of his choice.

The Supreme Court gave due consideration to the submissions made by the parties. It referred to the composition of Army to understand the contextual matrix of the case. It was seen that the ASC is a vital stream primarily responsible for ensuring the provisioning, procurement, and distribution of supplies. The Court held that the petitioners had failed to show how their fundamental rights were violated. Posting and transfers are a necessary incident of service. The case of P.K. Choudhury was distinguished as it was concerned only with promotions and not transfer. The petitioners did not make any submission that the posting was in violation of any statutory rule, executive policy or instruction. Furthermore, the Court referred to the Oath administered to all army personnel alike at the time of commissioning the relevant portion of which reads — “I hereby solemnly swear that I will … go wherever ordered, by land, sea or air…”.  The Court thus held that army personnel are duty bound to serve wherever they are ordered to. In view of the above, the petitions were dismissed. [Amod Kumar v.  Union of India, 2018 SCC OnLine SC 1372, decided on 06-09-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

Central Information Commission (CIC): The CIC recently directed Public Information Officers to abstain from forwarding information received from their subordinates to the RTI applicant without perusing the same for errors, in order to uphold the duty enjoined on them by the RTI Act.

The appellant had filed an RTI application addressed to the respondent CPIO to be given information regarding the progress of the insurance claim made by him. He alleged in the district consumer forum that he received no reply from the respondent and the district forum held in the appellant’s favour.

However, the respondent argued in front of the CIC saying that although it was correct that the appellant had received no reply from him, the said RTI application was received and processed by the bank which received the application. The bank, though not authorised to respond to RTIs anyway went ahead and answered the queries raised by the appellant, hence the appellant’s contention that he received no reply was incorrect. He further informed the CIC that he had issued an unconditional apology to the appellant for the lapse on his part.

The appellant submitted that the authority from which the reply was received was not one which was authorized by the RTI Act to do so and hence the CPIO was responsible for not furnishing the information in the prescribed manner.

The CIC referred to J.P. Agrawal v. Union of India, 2011 SCC OnLine Del 3245, where the Delhi High Court held:

“The PIO is expected to apply his/her mind, duly analyse the material before him/her and then either disclose the information sought or give grounds for non-disclosure. A responsible officer cannot escape his responsibility by saying that he depends on the work of his subordinates. The PIO has to apply his own mind independently and take the appropriate decision and cannot blindly approve/forward what his subordinates have done.”

In the J.P. Agrawal case, the Delhi HC referred to its previous judgment in Vivek Mittal v B.P. Srivastava, 2009 SCC OnLine Del 2555 had observed as follows:

“[A] PIO cannot escape his obligations and duties by stating that persons appointed under him had failed to collect documents and information; that the Act as framed casts obligation upon the PIO to ensure that the provisions of the Act are fully complied. Even otherwise, the settled position in law is that an officer entrusted with the duty is not to act mechanically.”

The CIC hence was of the view that the respondent CPIO’s argument that the appellant did, in fact, receive the desired information, though through an unauthorised source is not tenable as it is the duty of the CPIO to provide such information himself and not blindly delegate this work to his subordinates. The CPIO was directed to furnish a point-by-point reply to the appellant’s application and exercise care in the future and the appeal was accordingly disposed of. [Jaydrath Prasad v. Branch Manager and CPIO, Oriental Insurance Company Ltd., Chaibasa,2018 SCC OnLine CIC 356, decided on 18-05-2018]

Case BriefsHigh Courts

Madras High Court: The Court recently addressed a writ petition filed under Article 226 of the Constitution wherein the petitioners asked for quashment of the impugned order and for waiver of the detention charges incurred on the subject goods on the basis of Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009.

The facts of the case are that the petitioner had filed this petition challenging the original order which was passed by the respondent, in respect of an import made by the petitioner on a certain date for clearance of the imported goods under a certain Customs Tariff heading with a specific IGST rate assigned to it. The petitioner contended that after carrying out a self- assessment of the duty, as specified under Section 17(1) of the Customs Act, 1962, the assessable value came up to a different amount of money from the one that was pronounced by the petitioner. This was because the petitioner argued that to avail the concessional duty, the IGST rate needed to be calculated at 0% based on a previous notification. The respondent argued that the rate had to be calculated at a 5% rate on the basis of a different notification. The respondent thus was of the prima facie view that the exemption claimed by the petitioner for the imported goods did not appear to be correct.

The Court noticed that the respondent while passing the impugned order did not restrict himself only to the life consignment covered under Bill of Entry in question but also in respect of earlier import in Bill of Entry and proceeded to invoke his powers under Section 111(m) of the Customs Act, in the sense that the imported goods were liable to be confiscated.

The Bemch of T. S. Sivagnanam J., held that the respondent could not invoke Section 111(m) of the Customs Act as there appeared to be no allegation that the goods did not correspond in respect of the value or in any other particular with the entry made under the Act. In the impugned order, the respondent had accepted that there was no dispute in the classification of the goods. But the Court pointed out that no adjudication was needed on this matter since the petitioner only sought liberty to approach the appellate authority on this matter. Hence, along with granting liberty to file an appeal, the Court also directed the petitioner to pay the differential duty amount in respect of the earlier Bill of Entry and the duty on the Bill of Entry in question that the respondent had laid down following which the respondent would have to provisionally release the cargo within a period of seven days from the date of remittance for both Bills of Entry. [Priyanka Enterprises v. The Joint Commissioner of Customs; 2017 SCC OnLine Mad 9942, order dated 23.11.2017]