RECENT CASES RELATED TO CUSTOM

CHAPTER 1: Levy Of And Exemptions From Customs Duty

1. Remission of duty under section 23 is only permissible when imported goods have been lost or destroyed at any time before clearance for home consumption. The expression “at any time before clearance for home consumption” would mean the time period as per the initial order during which the goods are warehoused or before the expiry of the extended date.

In the instant case, assessee did not remove goods from the warehouse and subsequently applied for remission on the ground that the said goods had become unfit for use. The High court thus held that Section 23 is not applicable in present case.

CHAPTER 2: Classification Of Goods

2. If a product undergoes some change after importation till the time it is actually used, it is immaterial, provided it is used for the same purpose specified in the classification. Thus it is the end use that matters

CHAPTER 3: Warehousing

3. The entire premises (and not just per say “warehouse”) of a 100% EOU has to be treated as a warehouse if the licence granted under section 58 to the unit is in respect of the entire premises.

Imported goods warehoused in the premises of a 100% EOU and used/ issued by the EOU within the EOU premises for the purpose of manufacturing as authorized under section 65 of the Customs Act, 1962, cannot be treated to have been removed for home consumption. Hence no duty is payable – Paras Fab International (Tribunal)

CHAPTER 4: Demands and Appeals

4. The Tribunal based on representation of Revenue decided that the Revenue authorities re-compute the duty payable. However when Revenue authorities appealed against the order, Tribunal held that appeal is not maintainable against a consent order.
Note: A consent order is a judicial decree expressing a voluntary agreement between parties to a suit, especially an agreement by a defendant to cease activities alleged by the Government to be illegal in return for an end to the charges.

CHAPTER 5: Refunds (Section 27)

5. Assessee himself paid duty at higher rate in ignorance of a concession notification and then claimed refund of it. Refund was challenged by Revenue on the ground that no appeal for refund can be filed in the absence of an assessment order.
High Court held that refund under Section 27 can be claimed either pursuant to an assessment order OR if assessee has borne the burden of duty. Since in the instant case, later is satisfied, refund is sustainable

6. Assessee cannot be denied the refund claim only on the basis that he had produced attested/ certified copy of TR-6 challan and not the original of the TR-6 challan because as per CBEC circular a simple letter from the person who made the deposit, requesting for return of the amount, along with the appellate order and attested Xerox copy of the Challan in Form TR-6* would suffice for processing the refund application.

CHAPTER 6: Provisions Relating To Illegal Import, Illegal Export, Confiscation, Penalty & Allied Provisions

7. Section 125(1) deals with two situations:-

- Importation and exportation of prohibited goods: In this case the officer has the option/ discretion to release the goods

- Importation and exportation of any other goods: In this case the officer has/ is bound to release the goods.

8. In case the imported goods are confiscated, and goods are not redeemed by paying fine, the importer is bound to pay the customs duty. The fine under section 125 is payable by the person who seeks redemption of the goods. If the goods are not redeemed, then they vest in the State. The person however, who had imported the goods, does not cease to have liability for payment of duty because he continues to be the person who had imported the goods and claims title of the goods. (Section 111 and 125 – Bombay High Court in the case of Poona Health Services)

9. The question of confiscating the goods/ redeeming the goods would not arise if there are no goods available for confiscation. Once goods cannot be redeemed, no fine can be imposed. (Section 111 & 125)

10. In case of seizure of goods from the custody of person other than importer, notice & hearing must also be given to person from whose custody goods were seized. (Section 110 & 124)

CHAPTER 6: Settlement Commission

11. the appellant isn’t permitted to dissect the Settlement Commission's order with a view to accept what is favourable to them and reject what is not (Section 127B)

12. The order of the settlement commission is considered as a judicial proceeding (section 127M)

13. The Settlement Commission have jurisdiction to settle cases relating to the recovery of drawback erroneously paid by the Revenue. This is because, drawback is nothing but remission of duty on account of statutory provisions in the Act and Scheme framed by the Government of India. (section 127A)