Telangana High Court
Principal Commissioner Of Customs vs Mr Rahul Gupta on 22 November, 2024
THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
AND
THE HON'BLE SRI JUSTICE J.SREENIVAS RAO
CENTRAL EXCISE APPEAL Nos.23, 27, 29, 31 and
32 of 2024
COMMON JUDGMENT:
(Per the Hon'ble the Chief Justice Alok Aradhe)
Mr. Dominic Fernandes, learned Senior Standing
Counsel for the Central Board of Indirect Taxes and
Customs appears for the appellants.
Mr. M.Arjun Raghavendra assisted by Mr. Piyush
Deshpande, learned counsel appears for Ms. Sneha Bhogle,
learned counsel for the respondent in CEA.No.23 of 2024.
Mr. S.Muralidhar, learned Senior Counsel appears for
Mr. Trichnopoly Ravi Kanth Shivani, learned counsel for
the respondent in CEA.Nos.27 and 31 of 2024.
Mr. P.Sri Raghu Ram, learned Senior Counsel
appears for Mr. Trichnopoly Ravi Kanth Shivani, learned
counsel for the respondent in CEA.Nos.29 and 32
of 2024.
2. These appeals under Section 130 of the Customs Act,
1962 (hereinafter referred to as, "the Act"), emanate from
the common order dated 08.02.2024 passed by the
Customs, Excise and Service Tax Appellate Tribunal,
Regional Bench at Hyderabad (hereinafter referred to as,
"the Tribunal"). As the proposed substantial questions of
law are similar and the appeals arise out of the common
order, the same were heard analogously and are being
decided by this common judgment. For the facility of
reference, the facts from C.E.A.No.23 of 2024 are being
referred to.
3. The respondent is engaged in the business of import
of rough diamond, gold and silver. The respondent
imported gold and silver as nominated agency in terms of
DGFT Notification No.88/2008 dated 26.02.2009 and as
per para 4.41(ii) of Foreign Trade Policy 2015-20 (FTP). The
respondent also imported duty free gold claiming
exemption from duty for supply to jewellery exporters
under various schemes as provided in the Foreign Trade
Policy.
4. One M/s.Bullionline LLP having registered office at
Delhi and a branch office at Hyderabad was engaged in
trading of bullion and manufacture and export of gold
jewellery. The aforesaid LLP was one of the exporters, to
whom duty free gold had been issued under replenishment
scheme by the respondent.
5. The Intelligence gathered by the officers of the
Directorate of Revenue Intelligence, Hyderabad indicated
that M/s.Bullionline LLP had fraudulently
obtained/purchased duty free gold bars from the
respondent under replenishment scheme, against exports
of jewellery by them by resorting to mis-declaration of
description of export goods and value addition in the export
documents and without complying with the norms
specified in Foreign Trade Policy. Thus, the aforesaid LLP
indulged in evasion of applicable customs duty on gold
obtained/purchased from the respondent under the
replenishment scheme. Thereupon, search proceedings
were conducted on the premises of the aforesaid LLP for
recovery of evidence in connection with the intelligence
received and to further investigation.
6. On the basis of the documents recovered during
search operations, show cause notice dated 31.08.2018
was issued, inter alia, on the grounds mentioned therein to
the respondent proposing demand of duty on the quantum
of gold given under replenishment scheme received from
the aforesaid LLP and the penalty was proposed on both
the exporters, namely Bullionline LLP as well as its
partner. The Additional Director General (Adjudication) by
order dated 26.08.2020 confirmed the demand against the
respondent that penalty was imposed on LLP and its
partners. Being aggrieved, the respondent filed Appeal
before the Tribunal.
7. The Tribunal by a common order dated 08.02.2024,
inter alia, held that no case of violation of conditions of
Notification No.57/2000-Customs is made out. The
Tribunal further held that the jewellery in question, which
was exported was manufactured by the job worker by fully
mechanised process. The Tribunal also recorded a finding
that calculation of value addition by the Adjudicating
Authority is wholly erroneous and palpably wrong and
since the process of manufacturing of jewellery is fully
mechanised, the value addition would be 2% and not 3.5%.
The Tribunal concluded that the provisions of Section
113(i) of the Act for confiscation are not attracted as the
case is not one of mis-declaration. The Tribunal kept open
the issue whether the order has been passed in violation of
Section 28(9) of the Act inasmuch as, after the issuance of
show cause notice, the proceeding was not concluded
within a period of one year. The Tribunal allowed the
appeals preferred by the respondent. In the aforesaid
factual background, these appeals arise for our
consideration.
8. Learned Senior Standing Counsel for the appellants,
at the outset, contended that the issue involved in these
appeals is with regard to interpretation of the policy
circular, notifications as well as Foreign Trade Policy and is
not confined to value of goods alone for the purposes of
assessment, therefore the appeals filed before this Court
under Section 130 of the Act are maintainable. It is further
submitted that the Tribunal ought to have appreciated that
the process adopted by job worker while manufacturing the
jewellery was not fully mechanised process and therefore,
the value addition ought to have been done at 3.5% instead
of 2%. It is also submitted that the Tribunal ought to have
appreciated that the importer had violated the provisions of
the Notification No.57/2000-Customs, dated 08.05.2000,
and the Circular No.27/206-Customs, dated 10.06.2016,
issued by the Central Board of Excise & Customs read with
Foreign Trade Policy 2015-20 as well as the Handbook of
Procedures. It is contended that the Tribunal ought to
have appreciated that there was a mis-declaration on
account of process of manufacture and value addition and
therefore the Tribunal ought to have appreciated that the
provisions of Section 113(i) of the Act are attracted. Our
attention has also been invited to the circular dated
27.09.2019 issued by the Directorate General of Foreign
Trade.
9. On the other hand, learned Senior Counsel for the
respondent in CEA.Nos.27 and 31 of 2024 has raised a
preliminary objection with regard to maintainability of the
appeals. Our attention has been invited to the show cause
notice as well as the order of the Adjudicating Authority
and Section 130 of the Act and it has been contended that
the issue involved in these appeals pertains to valuation of
the goods and therefore the appeals before this Court are
not maintainable and the same ought to have been filed
before the Supreme Court. It is also contended that the
Notification No.57/2000-Customs does not deal with value
of goods. It is further submitted that no substantial
questions of law arise for determination in these appals
and the findings of fact recorded by the Tribunal have not
been assailed on the ground that the same are perverse.
10. Learned Senior Counsel for the respondent in
CEA.Nos.29 and 32 of 2024 has also taken a stand that
the appeals before this Court are not maintainable and the
same ought to have been filed before the Supreme Court.
It is contended that the findings recorded by the Tribunal
are based on appreciation of material available on record
and cannot be termed as perverse. In support of his
submission, reliance has been placed on the decision of the
Supreme Court in Chandrabhan (Deceased) Through Lrs.
v. Saraswati 1.
2022 SCC OnLine SC 1273
11. Learned counsel for the respondent in CEA.No.23 of
2024 submitted that the dispute in these appeals does not
pertain to valuation and the appeals do not pertain to
determination of valuation as envisaged under Section
14(2) of the Act. Therefore, these appeals are maintainable.
It is, however, urged that no substantial questions of law
arise for consideration in these appeals.
12. We have considered the rival submissions made on
both sides and have perused the record.
13. Before proceeding further, it is apposite to take note
of the preliminary objection urged on behalf of the
respondent with regard to maintainability of the appeals.
14. The relevant extract of Section 130 and Section
130-E of the Act are extracted below for the facility of
reference:
"130. Appeal to High Court.--(1) An appeal shall
lie to the High Court from every order passed in appeal
by the Appellate Tribunal on or after the 1st day of July,
2003 (not being an order relating, among other things,
to the determination of any question having a relation to
the rate of duty of customs or to the value of goods for
the purposes of assessment), if the High Court is
satisfied that the case involves a substantial question of
law."
130E. Appeal to Supreme Court. An appeal
shall lie to the Supreme Court from--
(a) xxx
(b) any order passed before the establishment
of the National Tax Tribunal by the Appellate
Tribunal relating, among other things, to the
determination of any question having a relation to
the rate of duty of customs or to the value of
goods for purposes of assessment."
Thus, it is evident that if an order pertains to
determination of any question having a relation to rate of
duty of customs or value of goods for the purposes of
assessment, an appeal lies before the Supreme Court.
15. In the instant case, from perusal of the show cause
notice dated 31.08.2018, it is evident that the same was
issued on the ground that the respondent has mis-declared
the description and value addition so as to wrongly claim
the benefit under the replenishment scheme. From the
order passed by the Adjudicating Authority as well as the
Tribunal, it is evident that the issue with regard to mis-
declaration as well as applicability of Notification
No.57/2000-Customs, dated 08.05.2000, and the Circular
No.27/206-Customs, dated 10.06.2016, issued by the
Central Board of Excise & Customs as well as the Foreign
Trade Policy 2015-20 was also involved. Therefore, we hold
that the appeals before this Court are maintainable.
16. Now we may advert to the facts of the case in hand.
The issue in the instant appeals pertains to demand of
duty on quantum of gold given under replenishment
scheme received from the LLP. It is not the case of the
appellant that matching quantum of gold has not been
exported as required under Notification No.57/2000-
Customs. The Tribunal, on the basis of meticulous
appreciation of evidence on record, has recorded the
following findings:
i) In the instant case, gold has been supplied by
Diamond India Limited by way of replenishment and there
is no allegation that matching quantum of gold has not
been exported as required under Notification No.57/2000-
Customs, dated 08.05.2000.
ii) It has further been found that all shipping bills along
with export invoices were approved by the proper officer of
customs on being satisfied as to the declarations and
requirements.
iii) The Diamond India Limited has not violated the
provisions of the Act read with Notification No.57/2000-
Customs, dated 08.05.2000.
iv) The Tribunal, taking into account the statement of
the job worker and the Government approved jewellery
valuers, who are experts, as well as the Chartered
Engineer, has certified the process as fully mechanized.
Therefore, the value addition would be 2% and not 3.5%.
v) The allowable wastage is 0.9%.
vi) There is neither any allegation against the
respondent that it had exported gold jewellery using less
quantum of gold than declared or made by some other
metal other than gold nor regarding the purity of gold.
Therefore, the provisions of Section 113(i) of the Act for
confiscation are not attracted.
17. The aforesaid findings of fact are recorded on the
basis of proper appreciation of material available on record.
The aforesaid findings have not even been assailed on the
ground that the same are perverse.
18. For the aforementioned reasons, no substantial
questions of law arise for consideration in these appeals.
19. The appeals fail and are hereby dismissed.
Miscellaneous applications pending, if any, shall
stand closed. However, there shall be no order as to costs.
______________________________________
ALOK ARADHE, CJ
______________________________________
J.SREENIVAS RAO, J
22.11.2024
Pln/vs
