Custom, Excise & Service Tax Tribunal
Principal Commissioner, Customs -New ... vs Dish Tv India Ltd on 13 October, 2021
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
Customs Appeal No. 50891 of 2020
[Arising out of Order-in-Original No. 12/VKP(12) ADG (Adj)/DRI/N.Delhi/2020-21
dated 27.04.2020 passed by the Additional Director General (Adjudication), DRI, New
Customs House, Near IGI Airport, New Delhi]
Principal Commissioner, Customs, Appellant
ACC Import Commissionerate
New Customs House,
New Delhi-110037.
VERSUS
Dish TV India Limited Respondent
1st Floor, FC-9, Film City, Sector 16 A, NOIDA, UP 201301.
Appearance Shri Hardeep Singh, Special Counsel and Shri Sunil Kumar, DR - for the Department/Revenue Shri Mukund Rao and Shri Tushar Joshi, Advocates - for the Respondent.
WITH Customs Appeal No. 50904 of 2020 with Customs Misc. Application No. 50166 of 2021 and Customs Early Hearing Application No. 50233 of 2021 [Arising out of Order-in-Original No.01/VKP(01) ADG (Adj)/DRI/N.Delhi/2020-21 dated 27.04.2020 passed by the Additional Director General (Adjudication), DRI, New Customs House, Near IGI Airport, New Delhi] Dish TV India Limited Appellant 1st Floor, FC-9, Film City, Sector 16 A, NOIDA, UP 201301.
VERSUS Additional Director General Respondent (Adjudication) DRI, New Customs House, New Delhi WITH C/50891/2020 Customs Appeal No. 50916 of 2020 with Customs Misc. Application No. 50432 of 2021 [Arising out of Order-in-Original No. 01/VKP(01) ADG (Adj)/DRI/N.Delhi/2020-21 dated 27.04.2020 passed by the Additional Director General (Adjudication), DRI, New Customs House, Near IGI Airport, New Delhi] Rajeev Dalmia Appellant Chief Financial Officer of M/s Dish TV India Ltd.
VERSUS Additional Director General Respondent (Adjudication) DRI, New Customs House, New Delhi AND Customs Appeal No. 50917 of 2020 with Customs Misc. Application No. 50433 of 2021 [Arising out of Order-in-Original No. 01/VKP(01) ADG (Adj)/DRI/N.Delhi/2020-21 dated 27.04.2020 passed by the Additional Director General (Adjudication), DRI, New Customs House, Near IGI Airport, New Delhi] Virender Kumar Tagra Appellant Vice President of M/s Dish TV India Ltd.
VERSUS Additional Director General Respondent (Adjudication) DRI, New Customs House, New Delhi Appearance Shri Mukund Rao and Shri Tushar Joshi, Advocates - for the Appellant Shri Hardeep Singh, Special Counsel and Shri Sunil Kumar, DR - for the Department/Revenue CORAM :
HON'BLE MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) 2 C/50891/2020 DATE OF HEARING : September 08, 2021 DATE OF DECISION: 13.10. 2021 FINAL ORDER NO. 51879-51882/2021 PER P.V. SUBBA RAO These four appeals have been filed by the Revenue, M/s. Dish TV India Ltd. 1, Shri Rajeev Dalmia 2, Chief Financial officer of the importer and Shri Virender Kumar Targra 3, Vice President of the importer assailing the same Order in Original 4dated 27.4.2020 passed by the Additional Director General (Adjudication) of Directorate of Revenue Intelligence 5. Hence all these four appealsare being disposed of together.
2. Appeal No. 50904/2020 is filed by the importer. Appeal no. 50891/2020 is filed by the Revenue. Appeal number 50916 /2020 is filed by Shri Dalmia while Appeal No. 50917 was filed by Shri Tagra.
3. A show cause notice dated 10.1.2019 was issued by DRI answerable to (a) Principal Commissioner of Customs (Air Cargo Complex), New Delhi; (b)Principal Commissioner of Customs, Inland Container Depot, Tughlakabad, New Delhi; (c) Principal Commissioner of Customs, Inland Container Depot,Kanakpura, Jaipur; and (d) Principal Commissioner of Customs, Nhava Sheva -V, Raigarh in respect of the goods imported through the respective ports. Central Board of Excise and Customs 6has appointed Additional Director General (Adjudication), DRI as the common Adjudicating Authority to adjudicate upon the matters in the SCN by Notification No. 4/2009-Cus(NT) dated 1.2.2019 read with 11/2020 Cus (NT) dated 2.1.2020. Accordingly, the impugned order was passed.
1Importer 2 Dalmia 3 Tagra 4 Impugned order 5 DRI 6 CBEC 3 C/50891/2020
4. The factual matrix which led to issue of the SCN is that the importer is in the business of providing Direct to Home 7 television channel services to its subscribers for which purpose, it imported Set top boxes 8and Transmission Dishes and viewing cards. DRI received information according to which,firstly, the importer imported Viewing Cards fortheir STBs mis-declaring them as "Smart Cards (CO22)U2.1"
and misclassifying them under Customs Tariff Heading 985235290 and wrongly availing ineligible duty exemption. Secondly,the royalty/licence fee paid on these cards was not included in the price declaredby the importer thereby undervaluing them. Thirdly, the importer was paying Licence fees in relation to the STBs but was not including it in the prices declared in their Bills of Entry resulting in under valuation of the STBs. In all these cases, the Bills of Entry were already filed, assessed by the jurisdictional officers and the goods were cleared. After conducting searches, seizures and recording statements, the SCN dated 10.2019 was issued by ADG DRI proposing to reclassify the Viewing Cards under CTH 85287100 (instead of 85235290), enhance the assessable value, consequently, recover the alleged short paid duty under Section 28(4) along with interest under section 28AA, confiscate the imported goods (which were not available) under section 111(m), impose penalty on the importer under section 112 and/or 114A, and 114AA and impose penalties upon Shri Dalmia and Shri Tagra under sections 112 and 114AA in respect of the imports made through each of the ports mentioned above.
5. Adjudicating upon the SCN, the ADG(Adjudication) DRI passed the impugned order:
i. Re-classifying the viewing Cards under CTH 85287100; ii. Enhancing the assessable value of the viewing cards and STBs as proposed in the SCN;
iii. Confirming demand of differential duty under section 28(4); iv. Ordering recovery of appropriate interest under section 28AA;7
d2h 8 STB 9 CTH 4 C/50891/2020 v. Confiscating the imported goods under section 111(m); vi. Imposing penalty on the importer under 114A but not under 112 and 114AA; and vii. Imposing penalty under section 112 on Shri Dalima and Shri Tagra but not under 114AA.
6. Revenue is aggrieved that no penalty was imposed under section 114AA either on the importer or on Shri Dalmia or ShriTagra. The importer is aggrieved by the entire order of reclassification, re- valuation, demand of duty, interest, confiscation of the goods and imposition of penalty on it. Shri Dalmia and Shri Tagra are aggrieved by the penalties imposed on them in person.
7. At the outset learned Counsel representing the appellant importer, Shri Dalmia and Shri Tagra, submitted that the SCN was issued by DRI in these matters under section 28(4) of the Customs Act demanding differential duty in respect of the goods which were assessed and thereafter cleared by 'the proper officers' of the respective Customs Houses. The differential duty was demanded under section 28(4). As per the judgment of Hon'ble Supreme Court in the case of Cannon India Ltd.vs.Commissioner of Customs 10officers of DRI are not proper officers to issue SCNs under section 28 and therefore, entire demand needs to be set aside and the appeal should be decided in favour of the importer. SCNs are issued under the Customs Act either under Section 28 (to recover duty not levied, not paid, short levied, short paid or erroneously refunded) or under Section 124 (before confiscation of goods or imposition of penalties). On a specific query from the bench, learned counsel fairly submits that some portion of the SCN is a notice under section 124 inasmuch as it proposed confiscation of the imported goods under section 111(m) and imposition of penalties but submits that the sole ground on which the confiscation and penalties were proposed is that the goods were mis-
102021 (376) ELT 3 (SC) 5 C/50891/2020 declared, mis-classified and undervalued resulting in short payment of duty. If the demand under section 28 fails on ground of lack of jurisdiction, that basis having gone, the confiscation and penalties also do not survive. Therefore, the impugned order needs to be set aside in its entirety.
8. Learned Special Counsel for the Revenue agrees that the show cause notice was issued by the DRI in this case and the case is covered by the Cannon India. He submitted that a Review petition has been filed by the Revenue against the judgment of Hon'ble Supreme Court in Cannon India which is pending before the Hon'ble Supreme Court.
9. Learned Counsel for the appellant countered and argued that mere filing of review petition before the Hon'ble Supreme Court does not nullify the ratio of the judgment already passed by the Hon'ble Supreme Court. Therefore, the matter may be decided accordingly without awaiting for outcome of the review petition. In support of his contention, he submits that the Larger Bench of Hon'ble Supreme Court has, on 29/31.8.2021, in the matter ofAgarwal Metals 11followed the ratio of the judgment of Cannon India Ltd.and dismissed Revenue's appeals holding as follows:
"Delay condoned.
In view of decision dated 09.03.2021 of three judge Bench of this Court in Civil Appeal No. 1827 of 2018 titled as "M/s. Canon India Private Ltd. vs. Commissioner of Customs reported in 2021 (3) SCALE 748. These appeals must fail as the show cause notice(s) in the present cases was also issued by Additional Director General (ADG), Directorate of Revenue Intelligence (DRI), who is not a proper officer within the meaning of Section 28 (4) read with Section 2(34) of the Customs Act, 1962.
Hence, these appeals stand dismissed."
10. He further submits that the Hon'ble High Court of Karnataka has also followed the judgment of Cannon India Ltd. in the case of 11 Commissioner of Customs Kandla vs. M/s. Agrawal Metals and Alloys [Civil Appeal No. 3411/2020] 6 C/50891/2020 Guvidivan 12and allowed the writ petition and quashed the impugned order as the show cause notice issued by officer of DRI demanding duty under section 28. He also submits that Hon'ble Madurai Bench of Madras High Court in the case of Quantum coal 13likewise,followed Cannon India Ltd. and quashed the impugned order passed by the Commissionersince the Show Cause Notice was issued by the DRI.
11. Since both sides agree that the case is covered by Cannon India, and that the SCN was issued by DRI, the impugned order arising out of the SCN cannot be sustained as per Cannon India, Agarwal Metals judgments of the Hon'ble Supreme Court, Guvidivanjudgment of the Hon'ble High Court of Karnataka and Quantum Coal judgment of the Hon'ble High Court of Madras (Madurai bench), we do not find it necessary to examine the merits of the case.
12. In view of the above, the impugned order is set aside and the appeals of the importer, Shri Dalmia and Shri Tagra are allowed.
Revenue's appeal is rejected.
(Pronounced in the open Court on 13.10. 2021 ) (SulekhaBeevi C.S.) Member (Judicial) (P.V. Subba Rao) Member (Technical) ss 12 Givaudan India Pvt Ltd. vs Principal Commissioner of Customs, Bangalore (Writ Petition no. 10773/2018 and 4628/2018) 13 Quantum Coal Energy (P) Ltd. vs The Commissioner [Writ Petition (MD) 10186 10817/2014] 7