TaxTMI 
TaxTMI 
2008 (10) TMI 535
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....CDM-124/2005 and its Director Shri Naresh Juneja in Cus. Appeal Case No. CDM-126/2005 claimed seized goods valued at Rs. 27,07,516/-, for which an option to redeem the same was given on payment of Redemption Fine amounting to Rs. 7.5 lakhs only (Rupees seven lakhs fifty thousand only) along with appropriate duty. (3) M/s. J.C.I. Chemicals India (P) Ltd. in Customs Appeal Case No. CDM-125/2005 Ltd. and its Director Shri T.P. Ghosh in Customs Appeal Case No. CDM-127/2005 claimed seized goods valued at Rs. 8,14,800/- for which an option to redeem the same was given on payment of Redemption Fine amounting to Rs. 2.5 lakhs (Rupees two lakhs fifty thousand only) along with appropriate duty. (4) Shri Naresh Juneja in Cus. Appeal Case No. CDM-126/2005 Director of M/s. Juneja Chemical Industries (P) Ltd. and Shri T.P. Ghosh, Director of M/s. Juneja Chemicals India (P) Ltd. in Cus. Appeal Case No. CDM-127/2005 were held to be guilty of illicit import and made liable to Personal Penalty under Section 112(a) and (b) of the Customs Act, 1962. (5) Shri Naresh Juneja in Cus. Appeal Case No. CDM-125/2005 was found to ....
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.... FSEZ, South 24 Parganas in Falta Special Economic Zone having their Head Office in Gitanjali Building, 8B, Middleton Street, 9th Floor, Suite 9F, Kolkata, and such chemicals were dumped in the godown premises of first Appellant M/s. Juneja Chemical Industries P. Ltd. at 5, Matheshwaouala Road, Kolkata - 46. Search to different premises located at different places was done on 23-3-04, 24-3-04 & 25-3-04 by the Investigating Officers on the basis of Search Authorisation and various persons were examined under summon on different dates to ascertain character of the transaction and also to examine duty liability under Customs Act, 1962 (hereinafter referred to as "the Act") as well as to find whether there was any violation of law. 3.2 The search team found 2296 drums and 308 bags of leather chemicals in the searched premises and believing that to be of foreign origin and having been illegally removed from Falta Special Economic Zone, they viewed that such goods were liable to be confiscated. Accordingly, seizure of such goods was made. However, finding difficult to remove such goods for custody, an order was passed on 25-3-04 under Section 110 of the Act, giving custody of suc....
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....bsp; 28 drums of 150 kg., each with markings "Excel Technologie, Italy" were believed to contain Sulphonated fish oil for which Chemical test report of two different samples gave the result as" (1) Light brown colorless liquid containing amide type of organic product in aqueous medium and (2) White thick liquid containing polyoxythelene type of compound in aqueous medium" collectively valued at Rs. 2,52,000/- ; (ii) 3 drums of 150 kg. each of SOFT 2395/60/FE (Sulphonated Fish Oil) with markings Batch-186 dt. 2-9-03 Excel Technoligie, to Nirvik Exports, Falta SEZ, Made In Italy, collectively valued at Rs. 27,000/- were not covered by any legal duty payment documents, (iii) 2 drums of 45 kg each of COVER N-10 (Casein Binder) with the foreign markings value at Rs. 11,700/- were not covered by licit duty payment documents as claimed by Mr. Juneja. (iv) 3 drums of 30 kg each of Binder IK 611, valued at Rs.9,450/- were not covered by licit duty payment documents as claimed by Mr. Juneja. (v) 1 drum of Primax IP 52 N (Resin binder) weighing 50 kg valued at Rs. 5,750/- was not covere....
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....a Road, after release of Indian goods on 2-6-04) was claimed to be purchased from Juneja Chemical vide Bill No. 80. Bill No. 80 does not bear any co-relation with the quantity of goods seized (i.e. 1 drum of 120 kg). Moreover, no duty payment documents were submitted for subject drum with clear foreign origin valued Rs. 7,200/-. (iii) 1 drum of Syntal CT-9 weighing 50 kg with foreign markings "Excel Technologie, Made In Italy" and marks "To Devi Chemicals Rifle Range Road (mentioned at Sl. No. 72 of list of goods lying under detention at 5 matheshwartala road, after release of Indian goods on 2-6-04) is claimed by Mr. Juneja to have been imported by M/s. Devi Chemicals and purchased by Juneja Chemical Indus. Pvt. Ltd. vide Devi Chemical's Bill No. D/42/03-04 dt. 27-8-03. But Mr. S.K. Sachdeva of M/s. Devi Chemical Enterprise Pvt. Ltd. failed to provide legible copy of Bill of entry under which consignment covering above drum was cleared on payment of duty by M/s. Devi Chemicals. Thus subject one drum valued Rs. 6500/- is not covered by any licit duty payment documents. (B) Basis for 88 (35 + 25 + 28) drums appearing in page 23 of O-I-O ques....
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....; Basis of 79 drums was : (i) 1 drum Binder IC/E of 150 kg valued at Rs. 12,750/- was not covered by licit documents showing duty payment on the same; (ii) 30 drums of Plast AC/FE of 150 kg valued at Rs. 2,70,000/- with the markings Fenasia Overseas Pvt. Ltd. were not covered by licit duty payment documents; (iii) 6 drums valued at Rs. 1,54,000/- were not covered by the documents submitted by the party and as such remain without any licit duty payment documents. (iv) 9 drums valued at Rs. 81,000/- were not covered by licit duty payment documents. (v) 11 drums valued at Rs. 99,000/- were not covered by licit duty payment documents. (vi) 5 drums valued at Rs. 75,000/- were not covered by licit duty payment documents. (vii) 6 drums valued at Rs. 76,500/- were not covered by licit duty payment documents. (viii) 4 drums valued at Rs. 17,000/- were not covered by licit duty payment documents. (ix) 3 drums valued at Rs. 18,750/- were not covered by licit duty payment documen....
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....ills and challans as claimed by Mr. Naresh Juneja. 6.1 All the Appellants were heard by ld. Assessing Authority who dealt reply of the Appellants in paras from 24 to 30 of the Order of Adjudication. Written submissions of the Appellants were elaborately dealt in paras from 52 to 64 of the impugned order. Ld. Assessing Authority in paras from 77 to 93 of the Order of Adjudication appearing at pages from 36 to 42 of the said order, made her finding on paras from 28 to 44 of the show-cause notice. While passing the impugned order, that Authority relied on the judgment of the Hon'ble Supreme Court in the case of Collector of Customs v. D. Bhoormull ref. 1983 (13) E.L.T. 1546 (S.C.) and the order of adjudication resulted with the consequences aforesaid. 6.2 Ld. Assessing Authority while deciding the matter observed as under and concluded against the Appellants which resulted with the consequences as aforesaid : (A) M/s. J.C.I. Chemical India Pvt. Ltd., the 1st Appellant was created with the help of Shri Naresh Juneja. Mr. T.P. Ghosh, the 4th Appellant confirmed that M/s. J.C.I. Chemical India Pvt. Ltd. which is the 2nd Appellant does not import or ex....
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.... Industries Pvt. Ltd. subsequently. (G) Considering statements recorded from Shri T.P. Ghosh, the 4th Appellant, Shri Shymal Ghosh of M/s. S. G. International, Shri R. N. Mitra of R. M. International, Shri Falguni Mukherjee of M/s. S. F. Overseas, Shri S.K. Sachdeva of M/s. Devi Chemicals, Shri Afroz Alam of M/s. Alam Tanneries Ltd., the ld. Adjudicating Authority was of the view that all the units were related to each other having a common fulcrum i.e. Sri Naresh Juneja of M/s. Juneja Chemical Industries Pvt. Ltd. and that too by companies clearly related and linked with each other and finally goods coming back through different factions to M/s. Juneja Chemical Industries Pvt. Ltd. at an enhanced cost since M/s. Juneja Chemical Industries Pvt. Ltd. and its related companies were the original importer of the goods. M/s. Alam Tannery Ltd. which was in the chain of deal in turn had sold the questioned goods to M/s. Fenasia Overseas Pvt. Ltd. Such goods did not move between the companies. But only documents were generated to cover the illicit movement of goods. (H) Doubts existed about the mode of payment by M/s. S. S. Enterprise Ltd. to whom D. T. ....
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....ould not produce duty paying documents in respect thereof and they were, therefore, liable to confiscation under Section 111(d) of the Act. JCIL and JCICI were, therefore, called upon to show-cause to the Commissioner as to why the said goods seized/detained from their respective premises should not be confiscated under Section 111(d) of the Act. Naresh Juneja, a Director of JCIL and T.P. Ghosh, a Director of JCICI were also required to show-cause as to why penalty should not be imposed upon them under the provisions of Section 112 of the Act. November 18, 2004 : Order passed by the Commissioner releasing the balance 698 drums and 58 bags of leather chemicals, upon observation that "no case has been made out of in respect of the 698 drums and 58 bags, as the same are covered by the licit documents". Hence, 1847 drums and 58 bags out of the detained 2296 drums and 336 bags stood released. December 13, 2004 : Reply to show-cause filed by the appellants. The reply of JCIL and Naresh Juneja are at pages 112 to 209 of the Appeal Petition CDM-124/2005. Reply of JCICI and T.P. Ghosh are at pages 63 to 68 of the Appeal No. CDM-126/2005. December 29, 2004 and December 30, 200....
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..... In the circumstances, the Commissioner has committed grave error by confiscating said non-notified chemicals under Section 111(d) of the Customs Act, 1962, more particularly because the said goods are not prohibited goods under the Customs Act, 1962 or under any other law. In the premises, the impugned order of the Commissioner confiscating the said goods under Section 111(d) of the Act is, without jurisdiction, without any authority of law, illegal, invalid and bad. (C) The true terms, scope and effect of Section 123 of the Act has been succinctly explained by the Hon'ble Bombay High Court in its decisions in Commissioner of Customs (Prev.), Mumbai v. Shri Ganesh Enterprises - 2006 (199) E.L.T. 208 (Bom.) and Commissioner of Customs (Prev.) v. Aakash Enterprises - 2006 (205) E.L.T. 23 (Bom.), wherein the High Court discussed and explained the decision of the Hon'ble Supreme Court in Commissioner of Customs, Madras v. D. Bhoormull - 1983 (13) E.L.T. 1546 (S.C.). Both these decisions have affirmed by the Hon'ble Supreme Court in Commissioner v. Shri Ganesh Enterprises - 2007 (208) E.L.T. A159 (S.C.) and Commissioner v. Aakash Enterprises - 2007 (215) E.L.T. A1....
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....ntenability of the Commissioner's findings in respect of the said 27 drums have been detailed under Sl. Nos. 1 and 2 of the chart contained in the Appeal Petition. It is submitted that from the submissions made in the "Remarks" column of the said chart, it would be ex facie evident that there can be no justifiable or legal or valid basis whatsoever for confiscation of the said 27 drums. The said goods were validly and legally procured and were not tainted goods. (E) Despite the fact that number of drums, weigh of drums country of origin etc. were co-related with the documents and joint inspection report factually matched with the appellant's contentions, the Commissioner ignored the same and purported to arrive, on mere hypothesis, assumptions and presumptions, at factually incorrect findings and confiscated the said goods on the extraneous grounds to the show-cause notice, travelling beyond the scope of the show-cause notice. (F) As regards the goods in Appeal No. CDM-124/2005, the Chart presented to authority and submissions made clearly and unambiguously establish that the order passed by the Commissioner is wholly erroneous, witho....
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....fact that the Department had no produced any positive and affirmative evidence in support of these misconceived allegations made in the show-cause notice, and as such, on this ground also, the show cause notice and the proceedings there-under were untenable, the Commissioner has deliberately failed and neglected to take into consideration this relevant and material factor. (L) The Appellant being a wholesale and retail dealer of diverse types of leather chemicals, procures such foreign origin chemicals from several importers or their resellers or their onward sellers who sale the same in open market. Such chemicals purchased by the Appellants are supplied to the Appellant either in original drums or repacked drums or in original bags or in repacked bags. The Appellant further purchases chemicals from the units located in Special Economic Zone, which are sold to the Appellant after observations of all formalities of the provisions of Domestic Tariff Area Sale. The appellant purchased said goods, non-notified leather chemicals, from various importers or from their resellers or their onward sellers. Such purchases are in original packed durms, or in repacked drums....
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....; Condition precedent laid down in Section 111(d) for confiscation of the said goods has not and/or cannot be said to have been satisfied. In the premises, the question of the Appellant being required to redeem the said goods on payment of redemption fine and also cannot and does not arise. (Q) No basis has been disclosed in the Order as to how and on what basis the purported redemption fine figure of Rs. 7.5 lakhs and Rs. 2.5 lakhs respectively have been arrived at. No materials have been disclosed, as required under the well settled principles in this regard, in support thereof. The Imposition of the aforesaid redemption fine are also, therefore, arbitrary unreasonable and thus untenable and unsustainable. (R) In so far as the imposition of the penalty of Rs. 2.00 lakhs and Rs. 1.00 lakh respectively under Sections 112(a) and (b) of the Act upon the two Directors of the two Companies, Mr. Naresh Juneja and T.P. Ghosh respectively, it was submitted that no material has been disclosed in either the show-cause notice or the said order in support of the misconceived and baseless purported conclusions contained therein that the sai....
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....n appearing in pages 22 & 23 of the order-in-original, the ld. Authority made a global assessment without assigning any reason for the questioned drum/bag. Cogent evidence against alleged drum/bag has not come forward to justify raising of the demand. Nor even the valuation met scrutiny. When the Authorities were pleased to release 1149 drums and 698 drums on 2-6-04 and 18-11-04 respectively on consideration of entire facts and circumstances, real controversy in respect of impugned drums/bags should have been resolved by a speaking order and well reasoned. The Appellant when pleads to have explained entire facts and circumstances of the case with evidence available on record, that should have been tested on the touch stone of law. 9.2 We appreciate that once material fact relating to each drumg/bag questioned in Paras 5.1 and 5.2 of this order aforesaid is examined with evidence, the Appellant may not have grievance. Absence of patient hearing is apparent from the impugned order since reasons which are heart beat of quasi judicial decision, are absent in respect of the matter in controversy. Ld. Counsel's argument that certain decisions have been mis-placed by the ld. Autho....