Department Cannot Decide Title Of The Goods When No One Disputes Ownership: CESTAT

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the department cannot self-assign to itself the duty of declaring bad in law the certificate issued to the importer by the Ministry of Renewable Energy or decide the title to the goods, even when no one is disputing ownership.

The bench of Somesh Arora (Judicial Member) and Raju (Technical Member) has observed that the existence or otherwise of a high-seas sales agreement makes no difference under Section 2 (26), of the Customs Act, 1962, regarding documented and claimed "importers.".

The appellant/assessee filed a bill of entry and claimed exemption applies to all items of machinery and apparatus required for setting up a solar power generation project when imported into India. The relevant certificate claim exemption from the Ministry of New and Renewable Energy was duly produced to claim such exemption. The Department, however, made investigations against them on the ground that a certificate was obtained and an exemption claimed. Even when they were not owners of the goods, and the High Sea Sale Agreement was shown just for the sake of exemption.

The department was of the view that the High Seas Sale Agreement was not genuine, and it undertook an investigation by recording various statements to show that the exemption had been wrongfully claimed. Whereas the underlying EPC contract provided that it was the duty of M/s PESL to procure all the equipment and to pay customs duty.

The appellant argued that for the purpose of Section 2(26) of the Customs Act, 1962, the importer is one who holds himself as an importer for the purposes of importation by filing a bill of entry, etc. The department has not brought anything on record that the certificate produced by them from the Ministry of New and Renewable Energy was at any stage withdrawn or cancelled by it. In the absence of any claim by anyone of being an owner in the transaction, the department is precluded from determining ownership for the purposes of Section 2(26).

The court found that terming import as improper, even when there is no contest to ownership and the person claiming to be an importer continues to hold himself as an importer and the Ministry issuing the certificate continues to treat the appellant as the importer, is not maintainable.

The court declared that Frustra Probatur Quod Probatum Non-Relevant (that what is proved in vain when proved is not relevant) in light of the inapplicability of high seas sales agreements in view of the requirements of Section 2(26).

Case Title: Apca Power Private Limited Versus C.C.-Kandla

Case No.: Customs Appeal No. 10569 of 2013-DB

Date: 02.05.2023

Counsel For Appellant: Amal Dave

Counsel For Respondent: G. Kirupanandan

Click Here To Read The Order