Custom, Excise & Service Tax Tribunal
Usms Saffron Co. Inc vs Commissioner Of Customs (Acc & Export) ... on 30 September, 2015
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. C/86807/2015-Mum (Arising out of Order-in-Appeal No. MUM-CUSTM-AXP-APP/368/15-16 dated 09.09.2015 passed by the Commissioner of Customs (Appeal), Mumbai III ) For approval and signature: Honble Mr. P.S.Pruthi, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
=============================================================
USMS Saffron Co. Inc.
:
Appellant
VS
Commissioner of Customs (ACC & Export) Mumbai
:
Respondent
Appearance
Shri Prasad Paranjape, Advocate for Appellant
Shri D.K. Sinha, Assistant Commissioner (A.R) for respondent
CORAM:
Mr. P.S.Pruthi, Member (Technical)
Mr. Ramesh Nair, Member (Judicial)
Date of hearing : 30/09/2015
Date of pronouncement : 8/10/2015
ORDER NO.
Per : P.S. Pruthi
This appeal arises from Order-in-Appeal No. MUM-CUSTM-AXP-APP/368/15-16 dated 09.09.2015 passed by the Commissioner of Customs (Appeal), Mumbai III confirming the Order of DC Customs directing the appellant to furnish PD Bond of 100% value of the goods and Bank Guarantee of 100% of the duty foregone for clearance of their consignment provisionally.
2. The facts are that an import consignment of 25 Kgs. of Saffron was sought to be Ex Bonded duty free under Notification No. 98/2009-Cus. dt. 11-09-2009 vide Bill of Entry No. 2135531 dated 15.05.2013 as Food Flavours under a DFIA License 0310630718 dated 11.05.2011 transferred in appellants name. This DFIA was issued against SION norm E-1 for the export of assorted confectionary products. The benefit of DFIA notification was denied by adjudicating authority vide Order No. CAO/DC/882/SKM/2013/ADJ/ACC dated 27.05.2013 on the basis that the import of saffron as food flavour is permissible only if the same is utilized in the export product which was not established. In appeal, the Commissioner (Appeals) rejected their case. On appeal before it, CESTAT vide order dated 20.01.2014 allowed appellant the liberty to produce an appropriate license for release of the goods, before the Customs. The appellant thereafter produced a fresh DFIA License No. 0310682293 dated 15.05.2013 transferred in their name. The said DFIA was issued against export of Biscuits issued as per SION E-5 for the export of Biscuits under the description of Food Flavour as mentioned in the DFIA. In this license there was no actual user condition. However the DC vide letter dated 06.07.2015 directed the appellant to furnish 100% PD Bond for the value of the goods and 100% Bank Guarantee for the duty foregone for the release of the goods on provisional basis. The appellant filed appeal before the Commissioner (Appeals) who rejected the same vide Order dated 09.09.2015. The appellant are in appeal before us against this order.
3. Heard both sides and considered the submissions.
4. The opening contention of the learned counsel is that the CESTAT order dated 20.1.2014 being a remand order, no appeal could have been filed against the same. Further he submitted that since the fresh DFIA did not have any actual user condition in the DFIA or the SION, there was no ground for ordering provisional assessment on submission of bank guarantee 100% of the duty foregone. Further in their own case, which was identical in facts, CESTAT vide order dated 1.5.2015 set aside the duty demand and penalty relying on the judgment of Mumbai High Court in the case of A. V. Industries 2005 (187) ELT (BOM).
4.1 The next contention of the learned counsel is that the Commissioner (appeals) under order-in-appeal dated 27.10.2010 had allowed the import of saffron under the description of food flavour against the export of biscuits under the DFIA License. And the said order has been accepted by the Committee of Commissioners.
4.2 The third contention is that the Tribunal in a similar case vide order number A/11572/2014 dated 03.09. 2014 set aside the decision of Commissioner Ahmedabad to release the goods provisionally on submission of a Bank Guarantee for 20% of the duty leviable and Bank Guarantee of 5% to cover redemption fine and personal penalty and directed the Customs officers at Mumbai and Nava Sheva to release the goods within three days of the production of the Tribunals order by excepting the DFIA license.
5. The ld. AR appearing on behalf of Revenue reiterated the findings of the lower authorities. He submitted that the benefit of duty free concession cannot be given as SION clearly restricts the import of saffron to only when it is used in the export product. He submitted that the condition sheet attached to the License clearly requires that the exempt goods imported against the DFIA shall be utilized in accordance with the provisions of para 4.2.2 of the FTP and other relevant provisions. He submitted that the Order appealed against only confirms the Order of provisional assessment.
6. We have carefully considered the submissions made by both sides.
We find that this Tribunal had given detailed findings on this very issue on identical set of facts in Order no. A/1134-1136/15/CB dated 01.05.2015 and proceeded to set aside the duty demand and penalty imposed sought to be demanded by denying the benefit of Notification No. 98/2009. CESTAT relied upon the judgement of Bombay High Court in the matter of A.V. Industries(supra) which held that when the import is in accordance with the import license issued to the petitioner, the respondents cannot take shelter under the import policy and purport to take action against the petitioner. Therefore, if the deletion was a bona fide error or misconstruction of the import policy by the officers of the department the petitioners cannot be made to suffer. We note that in the present case the License did not bear any condition after discharge of the export obligation and its transfer to the appellant. Further wherever the Licensing Authority wanted to impose any condition at the time of transfer, it did so in respect of certain items. But no condition was imposed in respect of saffron as food flavour.
6.1. The appellants contention is that duty exemption criterion is only the description (and quantity) mentioned in the SION norms which is described in the DFIA as ITC heading 0900000. But even ITC(HS) Code is not a criterion to get the benefit under the FTP and Customs provisions as long as the item imported falls under the description of goods mentioned in the DFIA. We accept this contention as the goods mentioned in the DFIA are food flavour. It is therefore undisputed that the appellant is entitled to import saffron as a food flavour irrespective of ITC (HS) heading mentioned in the DFIA.
6.2. Para 4.2.2 of the FTP authorizes issue of DFIA and license was transferred after the discharge of export obligation. The License being freely transferable, no actual user condition can be imposed on the transferee who has purchased the License from the open market. The importer therefore is not required to establish the actual user condition in terms of DGFT Policy Circular 50/2008 and CBEC Circular No. 46/2007. We note that in similar cases of same goods i.e. Saffron the Orders of Commissioner Appeals allowing such import at Mumbai and Nava Sheva were accepted by the Department and the imports under relevant B/Es such as B/E No 5551749 filed at ACC Mumbai bear the remarks Assessed as per Commissioner (Appeal) order accepted by Committee of Commissioner of Customs vide F.No. S/3-Misc-18/2010 DFI ACC. No appeal having been filed in view of acceptance of this Order, the acceptance by the Committee of Commissioners is binding on officers and any contrary decision amounts to defiance of the decision taken by Committee of Commissioners.
Therefore department cannot now impose strict conditions for provisional release when there are Orders of the Tribunal and the Commissioner (Appeals) in favour of the appellant. Therefore the Order imposing 100% Bank Guarantee is not sustainable.
6.3. In our view, the adjudicating authority does not have the authority to impose such conditions for provisional release. This exercise of the power is very arbitrary and suffers from lack of reasonableness in view of the judicial pronouncements in appellants favour. We further find that the letter of DC date 06.07.2015 stating that appeal has been filed against said Order has no meaning because CESTAT in the Order dated 20.01.2014 only remanded the matter allowing the appellant to submit a fresh License. The Commissioner Appeals has also not appreciated the issue in proper perspective the context of various decisions but has only upheld the right of adjudicating authority to resort to provisional assessment.
6.4. In view of the above it is our considered view that in the light of the various decisions of higher authorities and the Tribunal and Courts cited above, the Order directing the appellant to submit Bond and Bank Guarantee for 100% of the duty amount deserves to be set aside and we do so. We direct the Customs to release the consignment within three days of the receipt of this Order by accepting the DFIA in question.
7. Order be given Dasti (Pronounced in court on 8/10/2015) (Ramesh Nair) Member (Judicial) (P.S.Pruthi) Member (Technical) SM.
7Appeal No. C/86807/2015-Mum