HIGH COURT RULING. Directorate Of Revenue Intelligence Vs Moni & Anr (Dated: December 2, 2009)

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1 HIGH COURT RULING 2009-TIOL-664-HC-DEL-CUS Directorate Of Revenue Intelligence Vs Moni & Anr (Dated: December 2, 2009) Customs If the case of the prosecution is based solely on the statement of the accused, which is retracted, there can be no conviction: if the case of the prosecution whether launched by Custom Authorities, FERA Authorities or by Directorate of Revenue Intelligence is solely based upon the statement of the accused recorded by the Department pursuant to issuance of a notice given by them only, which stands retracted and there is no corroboration of the same, then the said statement cannot be the basis of conviction of the accused whether it is a statement recorded under Section 40 of the Foreign Exchange Regulation Act or under Section 67 of the NDPS Act or under Section 108 of the Customs Act. In the present case, no recovery has been affected from the respondents. The car from where some seizure of contraband has taken place does not belong to either of the respondents. The case of the petitioners is solely rest upon the statement of the accused recorded under Section 108 of the Customs Act which stands retracted and which is not supported by any other evidence led by the prosecution. When two views are possible, the accused should get the benefit: when two views are possible, the view which favours the accused persons is required to be adopted in terms of the legal position which stands well settled TIOL-661-HC-MUM-CUS M/s Greenways Shipping Agencies Pvt Ltd Vs UoI (Dated: March 18, 2009) Customs - The consignment did not arrive in the ship it was shown in the IGM, but arrived in another ship IGM amended Customs imposes penalty of about Rs. 15 lakhs When the IGM was amended no question of discharging cargo under that IGM : Thus, in view of the fact that the IGM is amended, the very basis of the Order dated 19/3/2002 would not survive and consequently imposing penalty for non-discharge of the cargo would not survive. In other words, on cancellation of Item No.29 of the IGM, there is no question of discharging the cargo under Item No.29 of the IGM and consequently the question of penalising the petitioners for not discharging the cargo set out in Item No.29 of the IGM does not arise. In such a situation, the penalty imposed would become unenforceable TIOL-656-HC-MUM-CUS

2 M/s Mulji Devshi & Co Vs UoI (Dated: September 18, 2009) Customs exports drawback once one exporter in respect of same goods has been allowed drawback facility, it would not be open to the Department to deny similar benefits to another exporter: once one exporter in respect of same goods has been allowed drawback facility may be on the fact that the rates had been fixed in his case for the period to it would not be open to the respondents in respect of another exporter to deny similar benefits. In our opinion, therefore, these petitioners will also be entitled to duty drawback for exports done between the period to 31st May, TIOL-655-HC-MUM-CUS CC (Import), Mumbai Vs Finesse Creation Inc (Dated: August 25, 2009) Customs No redemption fine if goods are not available for confiscation: the concept of redemption fine arises in the event the goods are available and are to be redeemed. If the goods are not available, there is no question of redemption of the goods. Under Section 125 a power is conferred on the Customs Authorities in case import of goods becoming prohibited on account of breach of the provisions of the Act, rules or notification, to order confiscation of the goods with a discretion in the authorities on passing the order of confiscation, to release the goods on payment of redemption fine. Such an order can only be passed if the goods are available, for redemption. The question of confiscating the goods would not arise if there are no goods available for confiscation nor consequently redemption. Once goods cannot be redeemed no fine can be imposed. The fine is in the nature of computation to the state for the wrong done by the importer/exporter TIOL-651-HC-MUM-CUS A S Vasan & Sons Vs UoI (Dated: September 9, 2009) Customs CHA Licence cancellation of licence based on retracted statement and adjudication order set aside by CESTAT Giving visiting card as CHA, even if it is misconduct, too insignificant to cancel licence: there was no material on record, that for except giving of the visiting card to the respondent no.2 himself at the time of hearing that the petitioner was using the visiting cards anywhere else and/or misrepresenting that they were still possessing CHA licence. Giving of the visiting card to respondent no.2 was even assuming if amounted to misconduct was too insignificant a thing warranting cancellation of the licence or its refusal of its renewal TIOL-640-HC-MUM-CUS

3 Skoda Auto India Pvt Ltd Vs UoI (Dated: October 16, 2009) Customs- Extra Duty Deposit cannot be demanded when provisional assessment could not be completed in four months. The reasons for failure by the proper officer in finalising the assessment is immaterial; Admittedly, in the instant case, the provisional assessment has not been finalised. The contention of the respondent is that investigations are still going on. The further contention is that investigations could not be completed for reasons beyond their control and therefore, it was open to the proper officer to demand the extra duty deposit as demanded. The reasons for failure by the proper officer in finalising the assessment is immaterial, as that is no ground to discontinue the extra duty deposit. Board Circulars binding on Customs officers: The Board regulation restricts the amount of revenue deposit at 1 per cent. This was within the jurisdiction of the Board. As per the law declared by the Supreme Court, the Board circulars are binding on the officer including the proper officer of customs. The discretion of such officer is now limited by the said Board circular. It is not open to claim more than one per cent. This demand of one per cent is further subject to paragraph no.9 of the circular which sets out that if the final assessment is not completed within four months then the respondents are to discontinue the extra duty deposit. The Board circular therefore in so far as the proper officer is concerned, is clear. It sets out when the proper officer will demand the duty and when such proper officer is to withdraw the demand for extra duty deposit. Once there is a circular issued by the Board in exercise of the powers, that circular has to be followed. It is not within the jurisdiction of the proper officer to deviate from the said circular 2009-TIOL-636-HC-DEL-CUS Directorate Of Revenue Intelligence Vs Harsh Vasant & Anr (Dated: November 16, 2009) Customs Offence Bail - an order granting bail cannot be disturbed except for compelling reasons: A bail would normally be cancelled if the accused tries to interfere with the course of justice by influencing the witnesses or he evades the process of the Court by remaining absent during investigation or otherwise tries to abuse the concession of bail granted to him. But, an order granting bail cannot be disturbed except for compelling reasons and the superior Court ought to interfere only in a case where gross injustice has been done on account of grant of bail. The superior Court will not be justified in setting aside an order of bail merely because had it been the Court concerned, it would not have granted bail in the case before it. The petitioner seeking cancellation of bail or setting aside of an order granting bail must make out a strong case and must show that the order granting bail was manifestly illegal, unjust or improper TIOL-634-HC-MUM-CUS

4 M/s Arora Fibres Ltd Vs UoI (Dated: August 5, 2009) Settlement Commission Penalty without Notice, not valid; the powers of the Settlement Commission to pass an order must be in accordance with the provisions of the Act, in matters covered by the application and any other matter relating to the cases not covered by the application but referred to in the report of the Commissioner of Customs or the Commissioner (Investigation) under sub section (1) of section 6. Thus the orders can only be in respect of the matter covered by the application or included in the report of the Commissioner in answer to the application. Further under sub section (9) the order made under sub section(3) must make provision for the terms of settlement, manner in which any sum due under the settlement shall be paid and all other matters to make the settlement effective. No penalty for inconsistent disclosure; In the instant case, the only reason given by the Commission in imposing penalty is the purported inconsistent stand of the Petitioner. No notice was issued by the commission to the Petitioner assuming it could have done so. Because an inconsistent stand is taken before the Commission, assuming it to be so, that cannot result in imposing penalty, because no provision is made under the Act for imposing penalty on that count. Penalty could only be imposed in terms of the Act and in terms provided by the Act. There being no power and even assuming there is power, there was failure to comply with the provisions of the Act TIOL-633-HC-KOL-CUS Dinmay Exim Avenue (P) Ltd Vs UoI (Dated: October 20, 2009) Customs Drawback stopped based on a letter written by a lawyer Customs not under any statutory obligation to stop payment on such letter Ordered to pay drawback with interest: Counsel for the customs has clearly conceded that P.J. Khoshy has not issued the letter dated June 2, 2008 under any statutory provision, and hence customs were not under any statutory obligation to stop payment of balance duty drawback to the petitioner. On the basis of the letter dated June 2, 2008 written by P.J.Khoshy customs could not withhold payment of balance duty drawback to the petitioner. Within a fortnight from the date of communication of this order, customs, especially the Assistant Commissioner of Customs who wrote the letter dated July 21, 2008, shall pay the petitioner the balance duty drawback with interest payable according to law TIOL-628-HC-MUM-CUS CC (Import) Vs M/s GEM Nuts And Produce Exports Co Pvt Ltd (Dated: October 14, 2009 ) Customs attachment of property At the time of receipt of advance for property, even the Department not aware of fraud Property not attachable: the Appellate Tribunal had recorded a finding of fact that at the time the money was paid by way of

5 any earnest money deposit, the applicants themselves were not aware of the fraud and as such the respondent would not be aware that the money received was a part of the fraud. The money must have been paid by cheque or draft as the law requires such payment to be so done. Considering the ratio of the Supreme Court in State Bank of India, it is thus material to show that the respondent had knowledge of the fraud and, therefore, that money could be recoverable in the hands of the respondent. Even otherwise, what is attached is not the money but the immovable property of the respondent TIOL-612-HC-DEL-CUS UoI Vs Entrack International Trading Pvt Ltd (Dated: October 30, 2009) Customs Import of watch straps made of ostrich, calf and alligator leather. The Mississippian species of crocodile does not exist in India. Same is the position in regard to Ostrich. Since these species do not exist in India, there is no question of their protection in this country Import is free: Once we look into the matter from this angle, the irresistible conclusion is that clearance from the wild life authorities in India under the Wild Life Protection Act is not required. Under such circumstances, these kinds of matters would be covered by CITES and all the nations signatory to the said treaty agreed to bind by the provisions contained in CITES. Thus, when the country of origin has given specific certificates under the provisions of CITES allowing the export from its country on the ground that these items are not restricted, insistence upon additional certificate by the authorities under the Wild Life Protection Act is meaningless in the facts of this case TIOL-608-HC-DEL-CUS M/s Atlas Interactive India Pvt Ltd Vs UoI ( October 30, 2009) Customs - Equipment imported for supply to BSNL contract with BSNL cancelled goods detained by DRI allowed to be re-exported: Further, action in the matter is possible only after the conclusion of the proceedings in the said showcause. Therefore, at this stage, only relief that can be granted is to allow the petitioner to re-export the goods, subject to furnishing of the Bond (as that condition is not challenged) and leaving the petitioner to seek the appropriate remedy after the orders pursuant to the said show-cause notice are passed by the respondents.