TaxTMI 
TaxTMI 
TaxTMI 
2010 (7) TMI 346
X X X X Extracts X X X X
X X X X Extracts X X X X
.... data, it was observed that the appellants had availed export benefits as below :- Year Numbers of shipping bills filed FOB value of exported goods (Rs. in crores) DEPB benefit claimed/availed (Rs. in crores) Drawback benefit claimed/availed (Rs. in crores) 2007 1076 55.42 0.02 6.08 2008 1555 101.02 0.13 7.86 2009 976 91.00 1.13 7.86 Total 3607 247.44 1.28 21.86 The declared business premises of the appellants were located at Amina House, 130-136, J.B. Shah Marg, Gr. Floor, 1st Chinch Bunder Road, Mumbai-9 comprising of 300 Sq. ft. office and one staff and two unskilled labourers were working there. The department to protect its own property and or money which were discovered to have been handed over to and collected by the exporter wrongly and the same was required to be recovered in accordance with law and with the reasonable belief that the said exporter had fraudulently availed huge amount of export benefits from the Government by inflating the value of goods exported by them. The foreign remittance received into the account of the said firm against such exports and the exports incentives received by the exporter by sale of such illegal DEPB/ineligi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... chat the genuineness of the export benefit claimed by the could be verified. But the exporter has failed to produce such documents and the exporter is under obligation to co-operate with the investigation as per the direction of the Hon'ble Delhi High Court by its order dated 3-6-2010. The investigation could not be completed within six months from the seizure of the goods i.e. Bank account of the exporter in this case. The Commissioner (Exports) extended the time limit for issuance of the show-cause notice under the proviso of 110(2) of the Customs Act, 1962. Aggrieved from the said order of extending time to seize the Bank account by six months to issue the show-cause notice, the appellants are before me. 4. Shri Sanjay Agarwal, learned Advocate appearing on behalf of the appellants submitted that the show-cause notice dated 9-6-2010 was issued to the appellants purportedly under Section 110(2) read with Section 124 of the Act proposing such extension alleging the freezed Bank account as 'seized goods'. 4.1 He also submitted that as per para 1.4 of the impugned order, the amount lying in the Bank account is foreign remittances against the exports and has been depos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the officers of the DRI do not have power to freeze bank account in the following cases : - (a) Vikas Gumbar v. UOI - 2009 (234) E.L.T. 439 (Del.); (b) Raghuram Grah Pvt. Ltd. v. CCE - 2005 (186) E.L.T. 50 Allahabad; (c) Anil Kumar Mehensaria v. C.C. Port - 2003 (155) E.L.T. 18 Calcutta 4.3 The Ld. Commissioner also failed to consider that if the amount lying in the bank is sale proceeds of the goods exported, thus there is no charge of over-valuation be confirmed as the appellants have not received any extra amount apart from lying in the Bank. He also submitted that if the goods are over-valued then the amounts lying in the Bank, which has been seized by the DRI are not the sale proceeds of the goods, the DRI has no power to freeze the same. He also relied on the ratio laid down by this Tribunal in the case of Sharp Menthol India Ltd. v. CCE, Delhi-1, 2007 (214) E.L.T. 59 (Tri-Del), wherein it was held that no seizure shall be made so as to disrupt the delivery schedule of export goods. In exceptional cases where seizure is made, the same should be lifted within 7 days and 'undertaking' can be ask....
X X X X Extracts X X X X
X X X X Extracts X X X X
....expired and the Ld. Commissioner has failed to release even the freezed Drawback account and the export incentives ignoring the statements made by the Counsel for the Revenue before the Hon'ble Delhi High Court vide Order dated 3-6-2010 that - the time limits as set out in Section 110 of the Customs Act will be adhered to. He also relied on the following decisions :- (i) Asstt. Collector v. Charan Das Malhotra - 1983 (13) E.L.T. 1477. (ii) Gurmukh Singh's case - 1984 (18) E.L.T. 274 (P&H). (iii) Bhavesh Exports Pvt. Ltd. - 2002 (144) E.L.T. 50 (Bom) At last he prayed that the impugned order be set aside with consequential relief. 5. On the other hand, learned SDR submitted that there are several evidences against the appellants namely :- (a) The appellants are having their office premises in a 300 Sq. ft. area with only one office staff and two unskilled labourers, it is doubtful that the person having such type of infrastructure can export the goods worth more than Rs. 200 crores in past three years. (b) The appellants are exporting their goods to various countries li....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed, which is without any merits. 6.Heard both sides. I have carefully gone through all the submissions made by both the sides. 7.In this case, the issue is that whether order of extending the time limit for issue of show-cause notice for another period of 6 months i.e. upto 14-12-2010 in terms of proviso of Section 110(2) of the Customs Act, 1962 is legal and correct or not. 8. Before going into the issue, the relevant provisions of law are reproduced herein under for better appreciation :- The Customs Act, 1962 : SECTION 110. Seizure of goods, documents and things. - (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods : Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under clause (a) of section 124 within six months of the seizure of the goods, the goods shall be returned to the person fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of section 142 of the Customs Act, 1962 (52 of 1962). 9. In the instant case, during the course of investigation it was observed that the appellants are engaged in the business of export of ready-made garments. During last three years the exporter has exported the goods worth more than Rs. 247.44 crores. To export the said goods the appellants had filed 3607 shipping bills under DEPB benefit scheme to different countries like Dubai, Saudi Arabia, Tanzania, Sri Lanka etc. Only in one consignment at Tanzania, on verification it was revealed that in the consignment exported by the appellants under Bill of Lading No. NSA/DAR/FCL/ 20090170 dated 2-2-2009, the FOB value declared to Indian Customs was $ 2,61,835.50 while corresponding value declared to Tanzanian Customs was only $ 5223. It was alleged again....
X X X X Extracts X X X X
X X X X Extracts X X X X
....li Road Branch in current account of the appellants. In the impugned order, the Commissioner has not given any finding that, whether the amount lying in the Bank are sale-proceeds of the goods exported. If it is taken that the amount lying in the Bank is sale-proceeds of the goods, which are over-valued, the contention of the Revenue that "these are sale-proceeds of the smuggled goods" is not correct. If these are not the whole sale-proceeds of the smuggled goods, the Commissioner has to show the sufficient reason to belief to seize the Bank account. As per the version of the Revenue that the goods have been over-valued by 50 times of the actual value of the goods than in this case, the amount lying in the Bank account cannot be the sale-proceeds of the exported goods. There is no allegation against the appellants that they have received the money against the exported goods by other channels also. The amount which is lying in the bank account is against the goods exported through shipping bills filed before the Customs. With regard to excess duty drawback, the Bank account cannot be seized, because there is a separate provision in the Customs, Central Excise Duties and Service Tax ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....authority can attach such property only in accordance with law either by taking aid of necessary order through competent court or by exercise of power, if conferred upon it, by statue. There is no provision of any statute which enables Deputy Commissioner to seize any personal property of the petitioner including money lying in a bank account merely because an investigation is going on in respect of an export transaction for which drawback has been released in favour of the petitioner. Even if the Customs Authority approaches the Court for an order in the nature of attachment before judgment, in such a case, such attachment can be limited to the extent of money fraudulently obtained but not in excess of that amount. In this case, till date no final order has been passed holding that any amount received by the petitioner by way of drawback was outcome of fraudulent export. Both the Deputy Commissioner and the Bank acted illegally and without jurisdiction resulting in withholding of the amount available in the account of the petitioner and such interference on their part was unauthorized." In the case of Raghuram Grah Pvt. Ltd. v. Commissioner of Central Excise & Service Tax reporte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g and the goods were imported illegally were available. Accordingly, the facts of the said case are not relevant to this case. 12. The contention of the learned DR is absolutely correct that the Revenue has every right to safeguard their revenue. But it is pertinent to mention here that they have right to safeguard the revenue in a legal way. The action of the ld. Commissioner to extend the period to issue show-cause notice by another six months by seizing the Bank account is not correct without ascertaining the facts that whether the money lying in the Bank account is the sale-proceeds of the actual value of the goods or not. The High Court of Bombay held the same observation in the case of M/s. Bhavesh Exports Ltd. (supra). Nowhere in the impugned order the Commissioner has been able to take decision about the sale-proceeds, although the appellants have contended in their reply of the show-cause notice. The Commissioner has also failed to show that the seizure of Bank account is required for investigation. Accordingly, the Commissioner has failed to show the sufficient cause for seizure of the Bank account by extending another period of six months for issuance of the show-....