TaxTMI 
TaxTMI 
TaxTMI 
2010 (3) TMI 24
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....the godowns situated at Khasra No.421, Village Hiran Kudna, Rohtak Road, Delhi and 11/16, Kavita Colony, Nangloi, Delhi after taking a bond. 2. Writ Petition (Civil) No. 8243 of 2008 is by Mr. Pradeep Kumar, the Proprietor of Rakesh Paper Company (RPC) for a direction to the Respondents to release the consignments of the Petitioner lying at the godowns situated in Khasra No.421, Village Hiran Kudna, Rohtak Road, Nangloi, Delhi without any preconditions. 3. NIPL is an importer of newsprint and facilitator of newspaper/magazines. It is also an importer and indenting agent for certain consignments of Light Weight Coated Paper (LWC), GNP and SNP papers on behalf of the RNI registered publishers as per their entitlements and requirements for printing of newspaper. Mr. Praveen Goel, s/o Mr. K.C. Goel is a Director of NIPL and Petitioner No.2 in Writ Petition (Civil) No.2228 of 2008. 4. As far as Mr. Pradeep Kumar, the Sole Proprietor of RPC [Petitioner in W.P.(C) No. 8243 of 2008] is concerned, he was an earlier importer of newsprint, who states that he has now stopped dealing in import of goods for almost last seven years. 5. On 22nd December 2006, a show cause notice was issued by....
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....NI holders. All the imports were through the International Container Depot at Tughlakabad, New Delhi. The import consignments after customs clearance used to be offloaded in these four godowns situated near Palla More, Alipur, Delhi from where he used to sell the imported newsprint to different parties. Mr. Garg stated that in the invoice raised by the overseas supplier, the description of the imported paper used to be mentioned as paper roll. The invoice used to be scanned and then description would be changed as newspaper paper roll, and thereafter filed before the customs authorities. The modus operandi was that the description in the Bill of Lading would not be changed but only in the Bill of Entry. A sum of Rs.25,000/- per container was paid to the CHA for getting the consignment cleared. The imported newsprint paper would not be physically supplied to the RNI holder. Debit notes used to be raised and the newspapers would give him the payment against the debit notes. An equivalent amount in cash would be returned to the RNI holder to whom a small quantity of newsprint would be supplied. The rest used to be sold in the open market. 8. Mr. Prakash Garg stated that he was using ....
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....otice recorded that Mr. Praveen Kumar Goel was arrested under the Act on 2nd March 2006 and was remanded to judicial custody. The godowns of NIPL at Kavita Colony in Nangloi, Delhi in Khasra No.421, Village Hiran Kundli, New Delhi was sealed under separate panchnamas both dated 3rd March 2006. 11. The show cause notice sets out the analysis of the documents gathered during the searches and the statements recorded of said persons under Section 108 of the Act. The modus operandi was explained as under:- "The consignments imported in the guise of newsprint and LWC were not newsprint/LWC but were actually different kinds of paper with higher GSM, much more than 65 GSM and 72 GSM respectively, and were cleared at concessional rate of duty in the name of RNI holder. Such consignments have been fraudulently cleared by misdeclaring them newsprint which were actually chargeable to full rate of duty. The overseas supplier used to mention and change the description of goods in the import documents on the directions of Prakash Garg. The description of the imported paper on the bill of lading used to be Paper in Roll whereas, in the invoices and packing list, the description used to ment....
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..... In the said show cause notice it was noted that a letter had been received on 8th July 2006 from the Advocate for NIPL, alleging that the DRI had taken away all the documents from the office of the NIPL without preparing any panchnama and that no documents have been provided till that date. It was further mentioned in the letter dated 12th July 2006 by the advocate of NIPL that it was not possible to get the inventorization done due to the indisposition of Mr. Praveen Kumar Goel. In para 40D, it was mentioned that by a letter dated 4th August 2006 the DRI clarified to Mr. Praveen Goel that the search of premises of NIPL was conducted under a proper search authorisation issued under Section 105 of the Act and that the documents have been seized by drawing up a proper panchnama. He was directed to be present in the DRI office on any working day for inspection of documents. However, Mr. Praveen Goel did not turn up or cooperate in the investigation. 14. The addendum to the show cause notice added further paragraphs 63A, 63B, 63C and 63D in which it was noted that although Mr. Praveen Goel appeared in the DRI office on 3rd October 2006 and informed them that he would accompany the ....
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....s. The details of the papers seized in both the godowns were as under:- Sl. No. Godown Quantity seized (Paper Rolls and Paper Sheets) Value of the paper seized 1. 11/16, Kavita Colony, Nangloi, Delhi 353.535 MTs Rs.1,59,09,098/- 2. Khasra No.421, Village Hiran Kudna, Rohtak Road, Nangloi, Delhi 142.225 MTs Rs.64,00,125/- TOTAL 495.76 MTs Rs.2,23,09,223/- 17. Finally the addendum dated 2nd March 2007 to the show cause notice dated 22nd December 2006 noted that apart from the 1905.45 MTS of paper mis-declared as SNP and NIPL had also imported as under:- "…. including 495.76 MTs of imported paper valued at Rs.22309223/- seized vide two separate panchnamas dated 1.3.07 from the godown premises situated at 11/16, Kavita Colony, Nangloi, Delhi and at Khasra no.421, Village Hirankudna, Rohtak Road, Delhi." 18. In response to a letter dated 5th March 2007 written by the Petitioner to the DRI, the DRI by a letter dated 15th March 2007 asked him to approach the adjudicating authority, i.e., the Commissioner of Customs for release of the seized goods lying in the two godowns. This was reiterated by a letter dated 24th April 2007. The Petitioners, howe....
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....s Authorities to seek assistance of such other parties as may be necessary for effective adjudication of the matter." 20. It appears that despite the above directions, Mr. Praveen Goel was not personally present with all the documentation before the Additional Commissioner (Adjudication) on 17th September 2007. The Petitioners have placed on record a letter dated 19th September 2007 of Mr. Praveen Goel and claim that the documents had been supplied on 17th September 2007. A further letter dated 20th September 2007 claimed that they had made an effort to have a personal hearing but that could not take place as they were informed that the Commissioner of Customs was engaged in granting personal hearings in pre-fixed matters. As a result this Court was again approached with an application. 21. It appears that ultimately on 23rd October 2007 in the presence of two panchas inventorization took place at the godown at Kavita Colony in Nangloi. It recorded that Mr. K.C. Goel, Mr.Praveen Goel and the advocate representing NIPL were present. In relation to the roll mentioned at Sl. No.1 in Annexure `A‟ of the panchnama dated 1st March 2007, Mr. K.C. Goel produced a Bill of Entry dat....
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.... 2, i.e., Bill of entry No.437233 dated 6th July 2005 and 463584 dated 8th November 2005 tallied with the documents submitted by the parties, the Bill of Entry at Sl. Nos.5 and 6 showing the names of the importers as M/s Reliant Media Pvt. Ltd. and M/s Competition Review Pvt. Ltd. were, according to the importer, not part of the investigation. There were discrepancies as regards the goods at Sl. Nos.3 and 4 as well. As regards the Hiran Kudna godown, rolls at Sl. Nos.4 and 5 had no markings describing of the suppliers. As regards the goods at Sl. Nos.15 to 29 in the panchnama dated 12th March 2007, the order no. and the gross weight per roll also differed. As regards the goods lying in godown „A‟, Mr. Praveen Goel of NIPL informed that the said godown did not belong to NIPL and hence the correlation of the goods lying in the said godown with the documents could not be conducted. After completion of the panchnama proceedings, the goods lying both in godowns `A‟ and `B‟ were handed over to Mr. Praveen Goel on superdari under supardiginama dated 12th December 2007 for safe keeping. According to the Petitioners, the Respondent No.1, i.e., the Commissioner of Custom....
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.... godown remained sealed since 31st July 2007. When it was opened much later, RPC submitted documents of purchase which mentioned „paper‟ in the description of goods. The explanation is that "when the Petitioner purchases mixed lot of paper of varying size and quality from the market and the invoice is issued only showing description as paper. This is normal trade practice due to the fact and reason the mixed lot of varying size and quality are sold". It is then contended that the RPC appeared at the personal hearing and produced documents like the rent receipt of the godown, a receipt showing that RPC is registered in the Sales Tax Department, the documents showing that the godown was insured with the United India Insurance Company. On the above basis it is stated that once NIPL disowned ownership of the goods in the said godown, the goods necessarily had to be released to RPC on provisional basis. It is stated that since no one else has claimed the goods and since there is no evidence to the contrary, the goods should be released to RPC. 28. The thrust of the submissions of Mr. T.P.S. Kang, the learned counsel appearing for both Petitioners is that the conditions imposed ....
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....hose Petitioners should not be permitted to re-agitate the correctness of the order dated 9th January 2008 of the Commissioner of Customs. He then submits that the provisions of Section 110A of the Act permits the Commissioner of Customs to impose such conditions as it deems fit. He points out that the Petitioners here have not only prima facie been found to have acquired the goods by misdescription but also by undervaluing them. Therefore, there was no merit in the contention that the Petitioners cannot be asked to pay the differential duty. Referring to an order dated 15th December 2008 passed by the Division Bench of the Punjab & Haryana High Court in Civil Writ Petition No.13914 of 2008 (M/s Kundan Rice Mills Ltd. v. Union of India), it is submitted that the High Court will not normally interfere with the determination of the appropriate conditions for provisional release of goods. 30. As regards the preliminary objection of the Respondents 2 & 3 to the maintainability of the writ petition, this court finds that the CESTAT declined to entertain the appeal filed by the Petitioner only on the ground of maintainability. There has been no finding on the merits. Consequently it ca....
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.... as under:- "110A. Provisional release of goods, documents and things seized pending adjudication. Any goods, documents or things seized under section 110, may, pending the order of the adjudication officer, be released to the owner on taking a bond from him in the proper form with such security and conditions as the Commissioner of Customs may require." The key phrase in the above provision are that "pending the order of the adjudication officer, the goods could be released to the owner" on taking a bond from him in the proper form "with such security and conditions as the Commissioner of Customs may require". Indeed, the Commissioner of Customs is in the best position to determine what should be the conditions to be imposed for provisional release of the goods. Given the details set out in the show cause notice which indicate the large-scale nature of the scam involving a very large number of persons whereby the imported newsprint was being diverted to domestic market, it cannot be said that a condition requiring execution of bank guarantee to the extent of 25% of the seizure value, is arbitrary or is unreasonable as to shock the conscience of the court. It is not possible th....