Custom, Excise & Service Tax Tribunal
Shree Renuka Agriventures Ltd vs Kandla on 10 March, 2022
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
REGIONAL BENCH- COURT NO.3
Customs Appeal No.11555 of 2015
(Arising out of OIO-KDL/PCOMMR/PVRR/05/2015-16 dated 29/05/2015 passed by
Commissioner of CUSTOMS-KANDLA)
Shree Renuka Agriventures Ltd ........Appellant
Bc 105, Havelock Road, Cantonment,
Balgaum, Aamcs1841c
VERSUS
C.C.-Kandla .......Respondent
Custom House, Near Balaji Temple, Kandla, Gujarat With Customs Appeal No.11556 of 2015 Customs Cross-Objection (CO) No.10902 of 2015 (Arising out of OIO-KDL/PCOMMR/PVRR/05/2015-16 dated 29/05/2015 passed by Commissioner of CUSTOMS-KANDLA) Shree Renuka Sugars Ltd ........Appellant Plot No. 187, Ward 2b, Adipur, KUTCH, GUJARAT VERSUS C.C.-Kandla .......Respondent Custom House, Near Balaji Temple, Kandla, Gujarat And Customs Appeal No.11318 of 2015 (Arising out of OIO-KDL-PCOMMR-PVRR-05-2015-16 dated 29/05/2015 passed by Commissioner of CUSTOMS-KANDLA) C.C.-Kandla ........Appellant Custom House, Near Balaji Temple, Kandla, Gujarat VERSUS Shree Renuka Sugars Ltd .......Respondent At & Po-Bharatpar, Tal-Gandhidham, KUTCH, GUJARAT APPEARANCE:
Shri Rahul Patil, Accountant for the Appellant Shri T.G. Rathod, Additional Commissioner (AR) for the Respondent
2|Page C/11555,11556,11318/2015 CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. RAJU Final Order No. A/ 10232-10234 /2022 DATE OF HEARING: 13.09.2021 DATE OF DECISION: 10.03.2022 RAMESH NAIR The brief facts of the case are that the assesses M/s. Shree Renuka Sugars Ltd. and M/s. Shree Renuka Agriventures Ltd. filed various warehouse bills of Entry/bills for home consumption, ex-bond bills of Entry for clearance of sugar falling under CTH 1701 in bulk and claimed nil rate of duty for additional duty of Customs leviable under Sub-section (5) of Section 3 of Customs Tariff Act, 1975 as per Sr.No.12 of Notification 21/2012-Cus dated 17.03.2012. The case of the department is that the assessees have wrongly claimed the exemption notification from payment of additional duty of customs under Notification No.21/2012-Cus. As the goods namely Sugar falling under heading No.1701 & 1702 have been omitted in the First Schedule to the Additional Duty of Excise (Goods of Special Importance) Act, 1957 with effect from 08.04.2011, as per section 78 read with 13th Schedule of the Finance Act, 2011 (8 of 2011) accordingly, the goods imported by the assessees was not exempted from additional duty of customs. However, the assessees have claimed the exemption notification in their Bills of Entry thereby, committed an offence of mis-declaration and wrongfully claimed the exemption. Therefore, a show cause notice dated 20.11.2013 was issued wherein, it was proposed as under:-
a. The Bills of Entry as mentioned in Annexure-A & B attached to this notice and which have been assessed provisionally should not be assessed finally under Section 18(2) of the Customs Act, 1962 based on the test reports.
b. The benefit of duty exemption as claimed under Sr.No.12 of Notification No.21/2012-Cus dated 17.03.2012 should not be denied to them and Additional duty of customs leviable under sub-section (5) of Section 3 of the Customs Tariff Act amounting to Rs.4,18,76,670/- on 35900 MTs of imported raw sugar, should not be demanded under Section 28(4) of the Customs Act, 1962. The amount of Rs.4,18,76,670/- already paid / deposited by M/s. SRSL during investigation should not be appropriated against the demand of the Additional duty of customs leviable under sub- section (5) of Section 3 of the Customs Tariff Act.
c.The benefit of duty exemption as claimed under Sr.No.12 of Notification No.21/2012-Cus dated 17.03.2012 should not be denied to them in respect of imported raw sugar 509467.043 MT valued at Rs.1448,01,00,081/- (cleared against warehouse Bills of Entry and respective Ex-Bond B/Es against Advance Authorizations) and 266054.533 MT having assessable
3|Page C/11555,11556,11318/2015 value of Rs.732,52,46,648/ (cleared against Bills of Entry for home consumption) against advance authorizations.
d. The interest should not be demanded and recovered at the appropriate rate under section 28AA of the Customs Act, 1962 on the duty demand at
(b) above. The amount of Rs.1,30,664/- paid / deposited towards interest by M/s. SRSL during investigation should not be appropriated against the demand of interest.
e. The imported raw sugar 35900 MTs valued at Rs.91,73,06,085/- should not be confiscated under Section 111(m) and 111(o) of the Customs Act, 1962.
f. The imported raw sugar 509467.043 MT valued at Rs.1448,01,00,081/- (cleared against warehouse Bills of Entry and respective Ex-Bond B/Es against Advance Authorizations) and 266054.533 MT having assessable value of Rs.732,52,46,648/ (cleared against Bills of Entry for home consumption) against advance authorizations should not be confiscated under Section 111(m) and 111(o) of the Customs Act, 1962.
g. Penalty should not be imposed on them under Section 112(a) and or the Customs Act, 1962.
Thus, M/s. Shree Renuka Agriventures Ltd, At & Post Bharapar, Tal. Gandhidham, Kutch, Gujarat were called upon to show cause to the Commissioner of Customs, Kandla, as to why :
a. The Bills of Entry as mentioned in Annexure-B attached to the notice and which have been assessed provisionally should not be assessed finally under Section 18(2) of the Customs Act, 1962 based on the test reports.
b. The benefit of duty exemption as claimed under Sr.No.12 of Notification No.21/2012-Cus dated 17.03.2012 should not be denied to them in respect of imported raw sugar 159535 MT valued at Rs.416,05,70,792/- (cleared against warehouse Bills of Entry and respective Ex-Bond B/Es against Advance Authorizations).
c. The quantity of imported raw sugar warehoused by M/s. SRAVL 159535 MT valued Rs.416,05,70,792/- (cleared against warehouse Bills of Entry and respective Ex Bond Bills of Entry against Advance Authorizations) should not be confiscated under Section 111(m) and 111(o) of the Customs Act, 1962.
d. Penalty should not be imposed on them under Section 112(a) and or 114A of the Customs Act, 1962.
After consideration of the submission made by the assessees, the adjudicating authority has passed the following order:-
a. The Bills of Entry as mentioned in Annexure-A & B attached to the notice which have been assessed provisionally stands assessed finally under Section 18(2) of the Customs Act, 1962 based on the test reports.
4|Page C/11555,11556,11318/2015 b. I deny the benefit of duty exemption as claimed under Sr. No.12 of Notification No.21/2012-Cus dated 17.03.2012 by Shree Renuka Sugars Ltd, At & PO Bharapar, Tal.Gandhidham, Dist. Kutch and Additional Duty of Customs is leviable under sub section (5) of Section 3 of the Customs Tariff Act and order recovery for Rs.4,18,76,670/- on 35900 MTs of imported raw sugar under Section 28(4) of the Customs Act, 1962. As the duty of Rs.4,18,76,670/- already paid deposited by them, accordingly the same is hereby appropriated and adjusted towards their duty liability.
c. C. I deny the benefit of duty exemption as claimed under Sr.No.12 of Notification No.21/2012-Cus dated 17.03.2012 by Shree Renuka Sugars Ltd in respect of imported raw sugar 509467.043 MT valued at Rs.1448,01,00,081/- (cleared against warehouse bills of entry and respective Ex-Bond Bills of Entry against Advance Authorizations) and 266054.533 MT having assessable value of Rs.732,52,46,648/ (cleared against bills of entry for home consumption) against Advance authorizations.
d. d. I order recovery of interest from M/s. Shree Renuka Sugars Ltd_at the appropriate rate under section 28AA of the Customs Act, 1962 on the duty demand at (b) above. As the interest of Rs. 1,30,664/- had already been paid / deposited by M/s. Shree Renuka Sugars Ltd accordingly the same is hereby appropriated and adjusted towards their interest liability.
e. e. I order confiscation of imported raw sugar 35900 MTs valued at Rs.91,73,06,085/-, imported vide Bills of Entry shown in Annexure-A to the Show Cause Notice, by Shree Renuka Sugars Ltd under Section 111(m) and 111(0) of the Customs Act, 1962 which were provisionally assessed. I impose redemption fine of Rs. 10,00,00,000/- (Rupees Ten Crores Only) on Shree Renuka Sugars Ltd under Section 125 of the Customs Act, 1962, in lieu of the confiscation for the goods provisionally assessed and cleared under Bond.
f. I order confiscation of imported raw sugar 509467.043 MT valued at Rs.1448,01,00,081/- (cleared against warehouse Bills of Entry and respective Ex Bond Bills of Entry against Advance Authorizations) and 266054.533 MT having assessable value of Rs.732,52,46,648/- (cleared against Bills of Entry for home consumption) against Advance Authorizations by M/s. Shree Renuka Sugars Ltd, under Section 111(m) and 111(o) of the Customs Act, 1962. I impose redemption fine of Rs.50,00,00,000/- (Rupees Fifty Crores Only) on M/s. Shree Renuka Sugars Ltd under Section 125 of the Customs Act, 1962, in lieu of the confiscation for the goods provisionally assessed and cleared under Bond.
g. I impose penalty of Rs.4,20,07,334/- (Rupees Four Crores Twenty Lakhs Seven Thousand Three Hundred Thirty Four only) on M/s. Shree Renuka Sugars Ltc. under Section 114A of the Customs Act, 1962. However, the benefit of reduced penalty under the first proviso shall be available subject to the condition that the amount of penalty so determined is paid within the period of thirty days referred to in that proviso of Section 114A.
h. I deny the benefit of duty exemption as claimed under Sr.No.12 of Notification No 21/2012-Cus dated 17.03.2012 by M/s. Shree Renuka Agriventures Limited in respect of imported raw sugar 159535 MT valued at Rs.416,05,70,792/- (cleared against Warehouse Bills of Entry and respective Ex-Bond B/Es against Advance Authorizations). i. I order confiscation of imported raw sugar warehoused by M/s. Shree Renuka Agventures Limited for 159535 MT valued at
5|Page C/11555,11556,11318/2015 Rs.416,05,70,792/- (cleared against warehouse Bills of Entry and respective Ex-Bond Bills of Entry against Advance Authorizations) under Section 111(m) and 111(0) of the Customs Act, 1962. I impose redemption fine of Rs.20,00,00,000/- (Rupees Twenty Crores Only) on M/s. Shree Renuka Agriventures Limited under Section 125 of the Customs Act, 1962, in lieu of he confiscation for the goods provisionally assessed and cleared under Bond.
j. I impose penalty of Rs.5,00,00,000/- (Rupees Five Crores Only) on M/s. Shree Renuka Agriventures Limited under Section 112A of the Customs Act, 1962.
k. I impose penalty of Rs.5,00,000/- (Rupees Five Lakhs Only) on M/s. J.M.Baxi & Company, Custom House Agent Under Section 112(b) of the Customs Act, 1962.
Being aggrieved by the aforesaid Order-In-Original, the assessees M/s. Renuka Sugars Ltd. & M/s. Shri Renuka Agriventures Ltd. filed appeals and the revenue also filed appeal for non-imposition of penalty under Rule 112(a) of the Customs Act, 1962.
02. Shri Rahul Patil, Accountant appeared on behalf of the assessees. He submits that while presenting the warehouse bills of Entry, the CHA of assessees has inadvertently mentioned the Sr.No.12 of Notification No.21/2012 dated 17.03.2012 under exemption head. However, while clearing duty free Raw Sugar under ex-bond bills of entry for home consumption, they availed the benefit of Notification No.96/2009-Cus dated 11.09.2009, as per the said notification all duties including Basic Customs Duty, Special Additional duty are exempted. He further submits that the Special Additional Duty is levied under Section 3(5) of Customs Tariff Act, 1975 to restrict counter balance the sales tax, value added tax, local tax, or any other charges for the time being leviable on a like articles on its sales and purchase or transportation in India however, there is no sales tax/Value Added Tax on Sugar in the Gujarat State. He submits that the assessees have not made in violation of import conditions thereby, not made any revenue loss to the Government.
2.1 The exemption of Customs duty as has been claimed, the assessees states that the revenue neutral transaction cannot be claimed as mis- declaration to evade duty. He submits that the assessees are manufacturer/exporter and eligible to Cenvat Credit of the duty paid as per Rule 3 of Cenvat Credit Rules, 2004 and that the assessees are also eligible for refund in Customs Notification No.102/2007 dated 14.09.2007 and as per Rule 10A of Cenvat Credit Rules, 2004 the assessee is eligible for transfer of Cenvat Credit of special additional duty to their units situated at Karnataka,
6|Page C/11555,11556,11318/2015 Maharashtra & West Bengal therefore, no mis-declaration can be alleged merely because the notification was claimed in the bills of entry.
2.2 He further submits that the impugned raw sugar imported by the assessee was not available for concession nor it was cleared under bond or an undertaking. The goods appearing in the bills of entry was cleared under Advance Authorization during the period from 08.04.2011 to 30.06.2013 when goods were not available, confiscation of goods was not correct and legal.
2.3 He submits that in the present case, the department has not been able to find any collusion or willful misstatement or suppression of fact in the impugned dispute. He submits that the assessees have paid the duty with interest and no duty payment is due therefore, no penalty shall be levied if the assessee had paid duty with interest. He submits that though the show cause notice was received on 20.11.2013 whereas, the duty of Rs.4.18 Crores with interest of Rs.1.30 Lacs was paid on 10.05.2013 and 17.05.2013 despite this the show cause notice was issued and the adjudicating authority has wrongly confirmed the same. The assessees have also filed additional written submission which were taken on record and considered the same. It is the submission of the assessees that in some of the bills of entry they have paid the additional duty therefore, in such cases department should not have been issued any show cause notice. To that effect the assessees have submitted the detail chart showing in majority of Bills of Entry cases of they have paid the additional duty of Customs and in some cases they have availed the exemption notification. He placed reliance on the following judgments:-
DCM v/S. UNION OF INDIA- 1999 (109) ELT 12 (SC) RUCHI WORLDWIDE LTD v/S. UNION OF INDIA- 2002 (141) ELT 18 (Mad) AIDEK TOURISM SERVICES PVT LTD. v/S. COMMISSIONER OF CUST, NEW DELHI- 2015 (318) ELT 3 (SC) ARTEX TEXTILES PVT LTD V/s. COMMISSIONER OF CUSTOMS, NEW DELHI- 2018 (359) ELT 561 (Tri Delhi) NORTHERN PLASTIC LTD v/S. COLLECTOR OF CUSTOMS & CENTRAL EXCISE- 1998 (1010)ELT 549 (SC) COMMISSIONER OF CUSTOMS v/S. GAURAV ENTERPRISES- 2006 (193) ELT 532 (Bom) S RAJIV & CO v/S. COMMISSIONER OF CUSTOMS (CSI AIRPORT), MUMBAI- 2014 (302) ELT 412 (Tri-Mumbai)
7|Page C/11555,11556,11318/2015 COMMISSIONER OF CUSTOMS, AMRITSAR v/S. RAJA IMPEX (P) LTD-
2008 (229) ELT 185 (P & H) ARIHANT SYNTHETICS v/S. COMMISSIONER OF C.EX.SURAT- 2013 (298) ELT 278 (Tri.-Ahmd) COMMISSIONER OF CENTRAL EXCISE v/S. POLYCAB WIRES PVT LTD- 2018 (360) ELT 391 (Bom) COMMISSIONER OF CENTRAL EXCISE & S T DAMAN v/S. POLYCAB WIRES PVT. LTD.-2015 (329) ELT 841 (Tri.Ahmd) SIRTHAI SUPERWARE INDIA LTD v/S. COMMISSIONER OF CUSTOMS, NHAVA SHEVA-III- 2020 (371) ELT 324 (Tri.Mumbai) PSL LIMITED v/S. COMMISSIONER OF CUSTOMS, KANDLA- 2015 (328) ELT 177 (Tri-Ahmd) COMMISSIONER v/S. MAN INDUSTRIES INDIA LTD- 2016 (331) ELT A 90 (SC) SHREEJI SHIPPING LTD v/S. COMMISSIONER OF CUSTOMS, KANDLA- 2014 (304) ELT 139 (Tri-Ahmd) BILLY EBBY v/S. COMMISSIONER OF CUSTOMS (I), NHAVA SHEVA- 2010 (261) ELT (Tri-Mumbai) GRAPHITE INDIA LTD v/S. COMMISSIONER OF CUSTOMS, (PORT) KOLKATA- 2015 (325) ELT 777 (Tri.-Kolkata) STATE OF RAJASTHAN v/S. BASANT AGROTECH (INDIA) LTD- 2014 (302) ELT 3 (SC)
03. Shri T.G.Rathod, learned Additional Commissioner (AR) appearing on behalf of the revenue, as regard the revenue's appeal, he reiterates the grounds of appeal in the revenue's appeal. He submits that there was no ambiguity in the fact that the exemption notification from payment of additional duty of Customs was not available to the assessee. Despite unambiguous position, they have claimed the exemption notification which clearly shows that assessees had intention to evade the customs duty. He further submits that by declaring and claiming the exemption notification wrongly, the assessees have made themselves liable for penalty and the goods in respect of which the mis-declaration was made are liable for confiscation therefore to the extent that the adjudicating authority has confiscated the goods and imposed the penalty by denying the exemption, there is nothing wrong in the order.
3.1 He submits that the assessees' plea is only that by ignorance of law, they claimed exemption notification which has no excuse and even if there
8|Page C/11555,11556,11318/2015 is no mens rea since there is an admitted mis-declaration in the bills of entry, the assessees are liable for penalty. He also placed reliance on the following judgments:-
CC, (Export), NHAVA SHEVA v/S. MAGUS ESTATE & HOTELS PVT LTD- 2008 (222) ELT 245 (Tri.Mum) S S METALS & ALLOYS v/S. CC (EXPORT), JNCH, NHAVA SHEVA- 2014 (312) ELT 151 (Tri-Mum) MAGICAN IMPEX PVT LTD v/S. CC, (I&G), NEW DELHI- 2017 (352) ELT 63 (Tri-Del)
04. We have carefully considered the submissions made by both the sides and perused the records. We find that the entire case is based on the allegation that the assessees have claimed exemption from additional duty of customs under Notification No.21/2012-Cus wrongly in their bills of entry therefore, they were made themselves liable for penalty, confiscation, redemption fine, etc. We find that even as admitted by the assessees, there is no dispute that the sugar imported by the assessees attracts additional duty of Customs as there was no exemption from the same in terms of Notification No.21/2012-Cus dated 17.03.2012 during the relevant period. However, the revenue apart from denial of exemption also confiscated the goods, imposed redemption fine and also imposed consequential penalty. From the entire proceeding, we are unable to find whether the goods were seized and provisionally released on execution of bond for provisional release of goods. It prima facie appears that there is no seizure of goods. The adjudicating authority also in his finding stated that since the goods were provisionally assessed and cleared, the said goods can be confiscated and redemption fine was imposed. As per the judgments relied upon by the assessees, we are of prima facie view that if the imported goods were neither seized and nor released provisionally on execution of a specific bond for provisional release of goods, the confiscation of goods and consequential redemption fine cannot be confirmed in absence of availability of the imported goods.
4.1 However, since fact about the seizure of goods and provisional release of goods is not clearly coming out from the proceedings, we are of the view that the matter needs to be re-considered on the aspect of confiscation and redemption fine. Moreover, we find that in most of the bills of entry, the assessees have paid the additional duty of Customs without claiming the exemption therefore, in such cases the assessees have made strong prima facie case in their favour.
9|Page C/11555,11556,11318/2015 4.2 As per the above prima facie view expressed by us, the entire matter
needs to be re-considered for the reason that even the confiscation and redemption fine has bearing on penalties imposed by the adjudicating authority. We are therefore, of the view that the entire matter needs to be remanded to the adjudicating authority for passing a fresh order.
05. Accordingly, we set aside the impugned order and remand the matter in assessees' as well as revenue's appeals to the adjudicating authority for passing a fresh order. CO also stands disposed of.
(Pronounced in the open court on 10.03.2022) (RAMESH NAIR) MEMBER (JUDICIAL) (RAJU) MEMBER (TECHNICAL) Mehul