Custom, Excise & Service Tax Tribunal
Ce & Cgst Noida vs M K Overseas P Ltd on 9 October, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT No. I
Customs Cross Application No.51685 of 2014
With
Customs Appeal No.60072 of 2013
(Arising out of Order-in-Original No.07/COMMISSIONER/NOIDA/2013-14
dated 31.05.2013 passed by Commissioner of Customs, Central Excise &
Service Tax, Noida)
Commissioner of Customs &
Central Excise, Noida .....Appellant
(C-56/42, Sector-62, Noida)
VERSUS
M/s M. K. Overseas (P) Ltd., ....Respondent
(39/5864, Basti Harphool Singh, Sadar Bazar, New Delhi) APPEARANCE:
Shri A. K. Choudhary, Authorized Representative for the Revenue Absent on Call, for the Respondent CORAM:
MISCELLANEOUS ORDER NO.- 70294/2024 FINAL ORDER NO.- 70658/2024 DATE OF HEARING : 09.10.2024 DATE OF DECISION : 09.10.2024 SANJIV SRIVASTAVA:
This appeal has been filed by the Revenue against Order- in-Original No.07/COMMISSIONER/NOIDA/2013-14 dated 31.05.2013 of the Commissioner Customs, Central Excise & Service Tax, Noida. By the impugned order following has been held as under:-
"ORDER (1) I hold that the export of frozen Sheep Meat quantity of 31,70,499 Kgs, valued at Rs.42,22,09,895/-2
Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 (Forty Two crores, twenty two lakhs, nine thousand, eight hundred ninety five only), made from Sahibabad plant, by M/s M. K. Overseas Pvt. Ltd., through ICD, Dadri, Noida, Uttar Pradesh ICD Dapper, Derabassi Punjab/ICD Loni, Ghaziabad, Uttar Pradesh/IGI Airport New Delhi/JNPT, Nhava Sheva, Raigad, Maharashtra, were made in contravention to the ITC(HS) and the provisions of the Customs Act. I therefore, hold that these exported frozen sheep meat as prohibited under Section 11 of the Customs Act, 1962 and liable to confiscation in terms of the provisions of Section 113 (d) of the Customs Act, 1962. As the above goods are not available for confiscation / redemption, I do not propose any fine in lieu of confiscation, under section 125 of the Customs Act, 1962;
(2) I confirm the demand for recovery of the drawback amounting to Rs.24,96,862/- (Rs, twenty four lakhs, ninety six thousands, eight hundred sixty two only) and recovery of applicable interest thereon, in respect of the exports of Sheep meat made from Sahibabad, through ICD Port, Dadri, Noida, Uttar Pradesh, under provisions of Rules 16 of the Customs, Central Excise duties and Service Tax Drawback Rules, 1995.
(3) I impose a penalty of Rs 1,00,00,000/-(Rupees one crore) only, on M/s M. K. Overseas (Pvt.) Ltd., having its Registered Office located at 39/5864, Basti Harphool Singh, Sadar Bazaar, Delhi-110006, in terms of provision of Sections 114(1) read with Section 114AA of the Customs Act, 1962;
(4) I impose a penalty of Rs50,00,000/-(Rupees fifty lakhs) only on Shri Chaudhry Md. Kamil Qureshi, Managing Director, M/s M. K. Overseas (Pvt.) Ltd., in terms of provision of Sections 114(i) read with Section 114AAof the Customs Act, 1962;
(5) I impose a penalty of Rs.40,00,000/- (Rupees Forty Lakhs) only on Shri Nadeem Ahmed, General Manager, M/s M. K. Overseas (Pvt.) Ltd., under provisions of Sections 114(i) read with Section 114AA of the Customs Act, 1962;
(6) Based on the discussion and findings as detailed above, the rest of the proceedings initiated against the Noticees, vide all the five Show Cause Notices, are hereby dropped."
2. Revenue has filed this appeal stating following grounds:-
➢ The Adjudicating Authority in his findings has stated as under - "I refrain from deciding these issues. The reluctance is ascribed not account of facts having 3 Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 been found so rather it is on the basis of being outside the purview and powers conferred upon him under on various statutes namely the Export (Quality, Control and Inspection) Act, 1963 and rules notified thereunder.
➢ As the proceedings before him were under Customs Act and there is no offence under Customs Act, without offence/ contravention under said Acts. ➢ There is no offence is not correct inasmuch as there is a clear violation of the ITC(HS).
➢ There are a number of other grounds raised in the appeal which we are not reproducing the same for brevity. No doubt all the grounds are vis-à-vis certificate issued by the certifying authority with regards to the quality of the exported goods. ➢ Revenue contends that these certificates were issued without due verification or assessment of the quality by the concerned person issuing the certificate.
3.1 We have heard Shri A. K. Choudhary learned departmental Authorized Representative appearing for the Appellant - Revenue and none appeared on behalf of the Respondent. 3.2 The records suggest that the Respondents have not been appearing in the matter since long. It is also observed from the records that notices were sent to the Respondent which has been received back with a remark of the Postal Authority "काफी समय से ताला बंद". In term of Rule 20 of CESTAT Procedure Rules, 1982 which provides as under:-
"RULE 20. Action on appeal for appellant's default.
-- Where on the day fixed for the hearing of the appeal or on any other day to which such hearing may be adjourned, the appellant does not appear when the appeal is called on for hearing, the Tribunal may, in its discretion, either dismiss the appeal for default or hear and decide it on merits:
3.3 Matter is thus taken up for decision ex parte after hearing the Authorized Representative appearing for the Revenue.4
Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 4.1 We have considered the impugned order along with the submissions made in the appeal and during the course of arguments.
4.2 We find that in respect of the Veterinary Doctor's certificate certifying the quality of exported sheep and buffalo meat, we find that the certificates were issued by the duly notified Veterinary Doctors who were authorized to do so. The Commissioner has given specific findings to this effect in the impugned order. Said findings are reproduced below:-
"(f) On the basis of foregoing it is evident that all the VHC in respect of Derabassi Plant were issued by Designated Dr. Rajkumar of the Department of Animal Husbandry, State of Punjab. There is no evidence that the VHC were issued by any person other than Designated Authority Once VHC, have been issued by the designated authority of the State Government, the condition as per ITC (HS) regarding VHC stands fulfilled The certificates issued by the Designated Authority cannot be treated as invalid. M/s MKO in their reply has submitted copy of the letter dated 21.03.2006 of the Additional Secretary to Government of Punjab, Animal Husbandry, Fisheries and Dairy Development Department, Punjab to the Director, Animal Husbandry, Punjab, Chandigarh on the subject of issuance of Veterinary Health Certificate(VHC) to meat plant in the state. In the said letter it has been conveyed that keeping in view acute shortage of Veterinary Officers in the state Government cannot depute whole time veterinary officers with these meat plants for carrying out ante mortem and post mortem inspections instead the private veterinarians employed at these plants are authorized to carry out these inspections. The local Veterinary officer or any other Veterinary officer specifically designated in this behalf by the Director Animal Husbandry would supervise and monitor the working of the private vets. He has been allowed to draw random meat samples of the consignments meant for export purposes and send the same to Regional Disease Diagnostic Laboratory Jallandhar. A VHC is required to be issued by the Designated Veterinary authority after satisfying himself with ante mortem and post mortem reports of private vets and labs reports of RDDL, Jallandhar. It is a case where the VHC have been issued by the designated authority for issuance under a statute. On the basis of procedural 5 Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 violations if any, it cannot be concluded that the provisions of ITC(HS) have been contravened leading to violation of section 11 of the Customs Act, 1962. Once the certificate(VHC) has been issued by the designated veterinary officer and the genuineness of the same has been accepted I have no reasons for challenging VHC issued by the Designated Veterinary authority. Thus, I refrain from conclusion that provisions of ITC(HS) have been violated in respect of Derabassi Plant. The note 3 of the Chapter 2 of the ITC(HS) /Export Policy also provides that laboratories duly recognized by APEDA, as well as in-
house laboratories attached under the abattoirs cum meat processing plant registered with APEDA and Agency approved labs, may also be used to conduct the necessary tests for confirmation of quality under the supervision of the designated veterinary authority of the state. On the basis of these tests and inspections carried out by veterinarians duly registered under the Indian Veterinary Council Act, 1984, employed by the exporting unit and supervised by the designated veterinary authority of the state, Veterinary Health Certificate are required to be issued by the designated authorities of the state. Accordingly, VHC have been issued by designated authority of the state Dr Rajkumar and I find no ground or justification to challenge the same. Moreover the issue relating to procurement of raw material etc. in form of dressed carcasses by APEDA approved Derabassi plant has also been settled with the issuance of Notification No.82(RE2010)2009-14 dated 31.10.2011 by DGFT. In terms of the said notification the Note 6 of the ITC (HS) has been substituted as under:-
"Note 6 Export of meat and meat products will be allowed subject to the exporter furnishing a declaration, attached with copies of valid APEDA Plant Registration Certificate(s) to the customs at the time of exports that the above items have been obtained/sourced from an APEDA registered integrated abattoir or from APEDA registered meat processing plant which sources raw material exclusively from APEDA registered integrated abattoir/abattoir."
The erstwhile note 6 under ITC (HS) before the aforesaid notification read as under:-
"Note 6 Export of meat and meat products will be allowed subject to the exporter furnishing a certificate to the customs at the time of export that the above items have 6 Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 been obtained/sourced from an abattoir/meat processing plant registered with Agricultural and Processed Foods Products Export Development Authority (APEDA)."
In the said notification effect of the notification has been explained as under:-
"Effect of this notification:
(i) All the amendments/changes made in chapter 2 between August 2009 and September 2011 have been incorporated in this notification to make it comprehensive.
(ii) Exporters would now be required to certify both
(a) that items have been obtained /sourced from an APEDA registered integrated abattoir or from APEDA registered meat processing plant and (b) that the raw material have been sourced exclusively from APEDA registered integrated abattoir/abattoir.
(iii) Designated Veterinary Authority of the State are now authorized to issue the certificate on the basis of the inspections carried out by veterinarians duly registered under the Veterinary Council Act, 1984 employed by the exporting unit in relevant laboratories."
4.3 It is settled principle that certificates issued in any proceedings would be valid until the same is declared to be void by the Competent Authority in this regard. Customs officers are not designated authority to determine and give a finding that the certificate is fraudulent, this is exactly what the Commissioner observed in the impugned order. The following decisions are supporting the same:-
⮚ Titan Medical Systems Pvt. Ltd. vs. Collector of Customs, New Delhi, 2003 (151) E.L.T. 254 (S.C.).
"13. As regards the contention that the appellants were not entitled to the benefit of the exemption notification as they had misrepresented to the licensing authority, it was fairly admitted that there was no requirement, for issuance of a licence, that an applicant set out the quantity or value of the indigenous components which would be used in the manufacture. Undoubtedly, while applying for a licence, the appellants set out the components they would use and their value. However, the value was only an estimate. It is not the respondents' case that the components were not used. The only case is that the value which had been indicated in the application was very large whereas what was actually spent was a paltry amount. To be noted that the 7 Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 licensing authority having taken no steps to cancel the licence. The licensing authority have not claimed that there was any misrepresentation. Once an advance licence was issued and not questioned by the licensing authority, the Customs authorities cannot refuse exemption on an allegation that there was misrepresentation. If there was any misrepresentation, it was for the licensing authority to take steps in that behalf."
⮚ Vadilal Chemicals Ltd. Vs. State of Andhra Pradesh, 2005 (192) E.L.T. 33 (S.C.).
"22.Furthermore, under the incentive scheme in question, there was only one method of verifying the eligibility for the various incentives granted including sales tax exemption. The procedure was for the matter to be scrutinized and recommended by the State Level Committee and District Level Committee and the certification by the Department of Industries & Commerce by issuing an Eligibility Certificate. There was no other method prescribed under the scheme for determining an industrial unit's eligibility for the benefits granted. The Department of Industries & Commerce having exercised its mind, and having granted the final eligibility certificate (which was valid at all material times), the Commercial Taxes Department could not go beyond the same. More so when the Commissioner, Sales Tax had accepted the Eligibility Certificate issued to the appellant and had separately notified the appellants eligibility for exemption under the 1993 G.O. In these circumstances the DCCT certainly could not assume that the exemption was wrongly granted nor did he have the jurisdiction under Section 20 of the State Act to go behind the eligibility certificate and embark upon a fresh enquiry with regard to the appellant's eligibility for the grant of the benefits. The counter affidavit filed by the respondents-sales tax authorities is telling. It is said that the Sales Tax Department had decided to cancel the eligibility certificates for sales tax incentives. As we have said the eligibility certificates were issued by the Department of Industries and Commerce and could not be cancelled by the Sales Tax Authorities. [See in this connection : Apollo Tyres v. CIT, Kochi, (2002) 9 SCC 1)."8
Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 ⮚Zuari Industrial Ltd. Vs. CCE & Customs, 2007 (210) E.L.T. 648 (S.C.).
"9. Firstly, on the facts we find that the assessee had given to the Sponsoring Ministry its entire Project Report. In that report they had indicated that for the expansion of the fertilizer project they needed an extra item of capital goods, namely, 6MW Captive Power Plant. In their application, the assessee had made it clear that the fertilizer project was dependant on continuous flow of electricity, which could be provided by such Captive Power Plant. Therefore, it was not open to the Revenue to reject the assessee's case for nil rate of duty on the said item, particularly when the certificate says so. In the judgment of this Court in the case of Tullow India Operations Ltd. (supra), this Court held that essentiality certificate must be treated as a proof of fulfilment of the eligibility conditions by the importer for obtaining the benefit of the exemption notification. We may add that, the essentiality certificate is also a proof that an item like Captive Power Plant in a given case could be treated as a capital goods for the fertilizer project. It would depend upon the facts of each case. If a project is to be installed in an area where there is shortage of electricity supply and if the project needs continuous flow of electricity and if that project is approved by the Sponsoring Ministry saying that such supply is needed then the Revenue cannot go behind such certificate and deny the benefit of exemption from payment of duty or deny nil rate of duty. To the said effect is the judgment of the Calcutta High Court in the case of Asiatic Oxygen Ltd. (supra) in which it was held that the object behind the specific Heading 98.01 in Customs Tariff Act, 1975 was to promote industrialization and, therefore, the heading was required to be interpreted liberally. It was further held that, once an essentiality 9 Customs Cross Application No.51685 of 2014 With Customs Appeal No.60072 of 2013 certificate was issued by the Sponsoring authority, it was mandatory for the Revenue to register the contract."
4.4 In view of the above, we do not find any merits in this appeal as not even a single instance have brought on record whereby the exported goods were returned back from the designated country importing that for the reason that it was sub- standard or not upto the mark. We do not find any merits in the appeal.
5.1 Appeal dismissed. Cross objection also gets disposed of.
(Dictated and pronounced in open court) (P. K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) LKS