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Judgment
Issue notice. Mr.K.Venkatesh, accepts notice on behalf of the
respondent. With the consent of counsels for the parties, the writ petition is
taken up for hearing and final disposal.
The petitioner, before me, is a Customs House Clearing and Forwarding
Agent (in short ''the agent''), who has filed a writ petition to impugn the Goods
Detention Notice dated 29.12.2016 and consequential Compounding Notice
dated 31.12.2016.
2.1. Having regard to the aforesaid circumstance, I would have ordinarily
returned the Writ Petition with a liberty to the Principal, i.e., Suzlon Energy
Limited (in short ''SEL''), on whose behalf, the petitioner had acted, which led to
the respondent passing the impugned orders to file a petition.
2.2. I have, however, allowed the prosecution of the Writ Petition, in
view of the respondent''s own conduct, to which I have made a brief reference
hereafter.
2.3. In this behalf, one, notes, that the goods detention notice dated
29.12.2016 has been marked by the respondent only to the driver of the concerned vehicle, while the compounding notice dated 31.12.2016 has been
directed, not only to the driver, but also to the petitioner and its principal,
i.e., SEL.
2.4. Therefore, I am inclined, as indicated above, to entertain the
present Writ Petition, on behalf of the agent, as it is equally aggrieved, if not
more, by the impugned orders, while recognising the fact that the ultimate
liability, if at all, under the TNVAT Act, 2006, would fall on the dealer, i.e.,
SEL.
Given the preface, briefly, the facts, which are required to be noticed
for adjudication of the writ petition are as follows:
3.1 The petitioner i.e., the agent was acting for and behalf of an entity,
by the name, SEL, which has one of its offices located at Thiruvandarkoil,
Pondicherry-605 107.
3.2.It is the petitioner''s case that the principal i.e., SEL had imported
parts of wind operated electricity generators, which are known as "Hub Body",
and that, in the course of movement of goods from the Chennai Port to
Pondicherry, they were detained by the respondent.
3.3 Furthermore, the petitioner avers that this detention took place, on
account of inconsistency in values reflected in Form KK and that which got
mentioned in Form LL qua one lot.
3.4. As per the petitioner''s version, four (4) KK Forms of even date i.e.,
28.12.2016 had been filed. Each form was required to reflect the basic price
amounting to Rs.37,01,648/- and the duty component, equivalent to
Rs.2,85,952/-.
3.5. It is the petitioner''s case that in one of the Forms i.e., Form bearing
No.FKK28121600008657019, dated 28.12.2016, pertaining to trailer
No.TN28AC9002, inadvertently, the basic price got reflected as Rs.27,01,648/-
as against Rs.37,01,648/-. The table below will bring to fore the discrepancy,
if, one were to compare the basic price given against Serial No.1, with that of
which is set out vis-a-vis sernial Nos.2,3 and 4.
Sl.No.
Form KK No.
Date
Trailer
Basic Price
Duty
Total
1
FKK28121600008657019
28-12-2016
TN28AC9002
27,01,648
2,85,952
29,87,600
2
FKK2812160000656259
28-12-2016
TN21AU3672
37,01,648
2,85,952
39,87,600
3
FKK28121600008655964
28-12-2016
TN20AK3556
37,01,648
2,85,952
39,87,600
4
FKK28121600008655619
28-12-2016
TN28E1110
37,01,648
2,85,952
39,87,600
3.6. It is, thus, the petitioner''s case, that because of the discrepancy,
the subject goods, i.e., Hub Body was detained.
3.7. In support of the stand taken above, the petitioner relied upon the
following documents:
i) The purchase order raised by SEL on its supplier i.e., Jiangsu Sinojit
Wind Energy Technology Company Limited, China (in short ''JSL''), dated
24.10.2016.
ii) The Commercial Invoice bearing No.16JXMC041, dated 22.11.2016,
raised on SEL.
iii) The Bill of Entry bearing No.: 7895234, dated 20.12.2016.
iv) Exemption Certificate, dated 13.12.2016, issued by the Ministry of
New and Renewable Energy, Government of India.
v) The relevant Form KK bearing No.FKK28121600008657019, dated
28.12.2016, in which, the discrepancy has, apparently, crept in.
As against this, Mr.Venkatesh, relied upon the compounding notice,
dated 31.12.2016, to demonstrate that the stand taken by the petitioner was
not tenable.
4.1 Learned counsel submitted that, according to the respondent, there
was not only a discrepancy in the value of the subject goods, but also there was
a serious doubt with regard to the assertion that the subject goods had been
sourced from China.
4.2 It was emphasized by the learned counsel that the subject goods had
been under-valued, as their value had been pegged at Rs.29,87,599.50 as
against a sum of Rs.39,87,599.50. Furthermore, it was submitted that an
observation had been made in the impugned order with regard to the identity
of the consignment as well.
4.3 This apart, my attention was drawn to the fact that the respondent
had also observed in the impugned order that the subject goods were not
covered in the declaration made in Form M M by the driver, as required under
Rule 15(19)(b) of TNVAT Rules, 2007.
4.4 Mr.Venkatesh, thus, submitted that the conclusion reached in the
impugned compounding notice were sound and sustainable.
I have heard the learned counsel for the parties for some time and
perused the records.
What has clearly emerged and to that extent it is conceded, even by
the petitioner, is that, in one of the Forms, i.e., Form
No.FKK28121600008657019, dated 28.12.2016, the basic price was indicated as
Rs.27,01,648/-. Therefore, the respondent is right in contending, that,
inadvertently or deliberately, the value was understated.
This apart, there is material on record, which prima facie, does
indicate that the subject goods were imported by SEL from JSL and that, in
respect of the subject goods, a certificate has been issued by the Government
of India, Ministry of New and Renewable Energy, granting exemption to SEL
from payment of additional duty.
Therefore, the contention of the petitioner that the subject goods
were detained, while they were being moved in the course of import, may
perhaps, be right, subject, though, to further enquiry being made in that
behalf.
Moreover, even if, the petitioner is held liable to pay tax under the
provisions of TNVAT Act, 2006, on the ground that local sale was effected, the
tax, if at all can, perhaps, be imposed only at the rate of 5%, being a part of a
"Wind Mill used for generation of electricity". As per the provision obtaining in
entry 150, Part B of the First Schedule of the TNVAT Act, 2006 read with
Section 3(2) of the very same Act, the tax qua such goods can be levied only at
the rate of 5%.
The impugned notice, however, seeks to levy the tax on the entire
value of the subject goods i.e., Rs.39,87,600/-, which includes an element of
duty, equivalent to Rs.2,85,982/-. The tax, in the impugned compounding
notice, has been calculated at the rate of 14.5% and is, accordingly, pegged at
Rs.7,07,720/-. In addition thereto, compounding fee has also been levied at
twice the rate of tax imposed, i.e., Rs.14,15,440/-.
Having regard to the fact that even according to the respondent, the
value of the subject goods was understated by Rs.10,00,000/-, to my mind,
interest of Revenue can be secured in the given facts and circumstances, if, the
subject goods are directed to be released by imposing tax, for the moment, at
the rate of 5% of understated value i.e., Rs.10,00,000/-, with a personal bond,
being furnished for the balance amount of tax claimed, albeit, without
prejudice to the rights and contentions of the petitioner.
11.1. It is ordered accordingly.
11.2. Thus, having regard to the circumstances indicated above and the
submissions made by the counsels, I am inclined to direct the release of the
subject goods, on deposit of tax, equivalent to 5% of Rs.10,00,000/-. This
payment will be accepted by the respondent to the credit of the dealer i.e.,
SEL. In addition, a personal bond will be furnished by the authorised
representative of the dealer i.e., SEL. On the fulfilment of the aforesaid
conditions, the subject goods will be released to the petitioner.
11.3 Needless to say, the petitioner and/or dealer viz., SEL would have
the right to raise all the contentions before the concerned adjudicating
authority.
11.4 It is made clear that any observations made herein above, will not
impact the consideration of the matter on merits by the Adjudicating Authority
as and when steps are taken in that behalf by the petitioner and/or the dealer,
i.e., SEL.
The writ petition is, accordingly, disposed of. Resultantly, the
connected pending application is closed. There shall, however, be no order as
to costs.