TaxTMI 
TaxTMI 
TaxTMI 
2005 (10) TMI 535
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.... M/Ts of man-made fibres and 2963408, dated 4-6-84 for 2050 M/Ts of man-made fibres with duty exemption benefit within the overall limits of 550 and 2200 M/Ts respectively. One of the conditions of these licences was that the licence holders should export 500 M.T. of man-made spun yarn of Rs. 75 lakhs of fob value and 2000 M.Ts. of man made spun yarn valued at US $ 29,00,000/- as envisaged by the DEEC Scheme. Against the first import licence M/s. L.D. Textile Industries Limited imported 2050 bales of manmade fibres of net weight 512.50 M.Ts. valued at Rs. 82,71,459/- under Bill of Entry No. 63, dated 30-3-84 per M.T. Stratjfyne at Veraval Customs House and cleared the same for home consumption. The representative sample of the goods from the consignment was drawn by the Veraval Custom House and was tested in the Custom House Laboratory at Kandla which gave the result that the goods were wholly manmade fibres of cellulosic origin (viscose). The consignments were cleared free of duty under Customs Notification No. 117/8, dated 9-6-78 as amended. For availing of exemption under this Notification, the importers were issued the Duty Exemption Entitlement Certificate (DEEC) Book No. 5088....
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.... fibre was leaving Ankleshwar for Ahmedabad. Thereafter, the truck driver was given fictitious documents describing 40 bales as non-cellulosic synthetic waste and he was directed to take the lot to Bhiwandi via Bombay and hand over the goods near a petrol pump to a person who would produce a copy of the said consignment note. This was done and the said 40 bales were handed over and transferred to another truck having Kerala registration. 5. These facts confirmed the information received against M/s. L.D. Textile Industries Limited that they were selling the goods imported by them under the advance licence scheme. Accordingly, the Headquarters Preventive party was sent to Ankleshwar on 14-3-85 to check the stock and accounts of M/s. L.D. Textile Industries Limited of the fibre imported by them in terms of the Duty Execution Export entitlement scheme. The check of the accounts revealed that their books of accounts showed Nil balance of the raw materials imported by them. Therefore, their godown was searched and the search yielded 2275 bales of polyester fibre of different makes. These bales included 365 bales of polyester staple fibre imported by M/s. L.D. Textile Industries Limited....
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...., dated 30-10-84 for 3100 polyester fibre bales with interest at 18% on this amount from the date of clearance of the goods through Veraval Customs House till the date of actual payment of duty. In addition, the Collector of Customs, demanded Customs duty amounting to Rs. 6,32,60,298.30 in respect of Bill of Entry No. 23, dated 30-10-84 covering 3000 bales of Polyester Staple fibre bales with 18% interest on the amount from the date of clearance of the goods till the date of payment of duty. 7. The Collector further held that the interest was determined with reference to para 21 of Appendix 19 of the Import Policy for 1984-85. He observed that the duty figures as shown in the show cause notice had not been challenged in the proceedings. He further held that the demands had been ordered under Section 28 as well as under Section 143A of the Customs Act. The demands for the duty in respect of Bills of Entry Nos. 22 and 23, dated 30-10-84 were made after the provisional assessments of the goods covered by these two Bills of Entry was finalized by the Collector under his impugned order. The order of confiscation and levy of duty was made as part adjudication without prejudice to the ac....
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....he case. It is however not argued that the Collector has no jurisdiction to issue a show cause notice asking the appellants to show cause to him as to why so and so punishments should not be inflicted on them and why such and such demands should not be raised against them. Show cause notice issued thus, appears to be fine; the consequent adjudication is not. The ld. Advocate filed considerable case law to suggest that show cause notices issued by the officers not competent to issue are not valid. Indeed. But it is difficult to comprehend how these learned legal pronouncements are relevant when the appellants do not question the validity of the show cause notice issued by the Collector of Customs, Gujarat. We may let if pass. 14. The Central Government by virtue of powers conferred on it under Section 4 of the Customs Act, 1962 installed, the Collector of Customs, Gujarat under Notification No. 250-Cus., dated 27-8-83 under the said Notification whose empire extended to whole of State of Gujarat, the territories of Daman and Diu of the Union Territory (U.T.) of the Goa, Daman and Diu and the UT of Dadra and Nagar Haveli. The Central Government, however, kept KFTZ and the area withi....
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....t? In our opinion 'No'. 20. The point is that Notification Nos. 250/83 and 252/83 empowered both the Collectors (Collector of Customs, Gujarat and Collector of Rajkot) act as Collectors of Customs with concurrent jurisdiction over Veraval a port through which the impugned goods were imported and brought to Baruch. Both could have exercised the powers of Customs Collector and both the them did at different points of time in respect of the same goods, when the goods were imported later when they were confiscated. We see no infirmity insofar as Collector of Customs, Gujarat action to adjudicate the case, which were seized in his jurisdiction. 21. The ld. Advocate relied on the decision of the Tribunal in the case of Orient Arts & Crafts - 2003 (155) E.L.T. 168, wherein the Tribunal held that when Officers have concurrent jurisdiction the Officer who is seized of the matter first, will have ousted the other officers jurisdiction in regard to that particular matter. Fair enough. It is argued that the goods were cleared through Veraval Port (Out of three Bills of Entry presented for clearance two were provisionally assessed and one finally at that Port and further the bonds etc. were e....
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....We are in agreement with him. 25. On the subject of jurisdiction we may observe that there is no gainsaying the fact that Collector of Customs (Prev.) had jurisdiction over the Veraval port at the relevant time. The contention that the Collector (Prev.) did not have administrative contra over the officer at Veraval is unleviable so long as the Collector (Prev.) had jurisdiction over Veraval port. 26. The ld. Advocate for the appellants then argued that Section 28 of the Customs Act is not invokable when the assessments were provisional. It is a fact that out of three Bills of Entry presented at Veraval, two were provisionally assessed. The show cause notice issued by Collector of Customs, Gujarat seeks to demand duty under Section 28. 27. A similar question arose in the case of Reliance Industries Limited v. Union of India - 1988 (36) E.L.T. 49 (Bom.). M/s. RIL cleared goods under Project Import Regulations, which were assessed provisionally. Without finalizing the Bills of Entry a show cause notice was issued alleging misdeclaration and demanding differential duty. This was challenged before the Hon'ble Bombay High Court. It was argued before the court that once the goods were ....
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....ncan Agro are in the context of provisional assessments made under Central Excise Act. We have merely referred to these decisions to indicate that both in the Customs Act as well as in the Central Excise Act, action to proceed against the offending goods can be started and concluded even when the assessments were provisional. In the present case two Bills of Entry were provisionally assessed and one finally. 29. Much has been made out by the ld. Advocate that the Collector invoked Section 143A of the Customs Act while demanding duty in addition to Section 28 of the Customs Act. Section 143A even though was printed in bold letters in all the texts of Customs Act, it was not gazetted by way of issuing a notification at the relevant time. It is beyond anyone's comprehension why it was not done. The fact remains that it was not. Fortunately, the Collector invoked Section 28 of the Customs Act as well while demanding duty. The fact that in addition he relied on a non-existing Section (143A) should not vitiate the whole proceedings which are in order otherwise. There are decisions of this Tribunal as well as the Court to suggest that wrong quoting of a Section does not vitiate the proce....
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..... Notification No. 117/78 as amended has several conditions. For the purpose of our discussion on whether or not there is misdeclaration we may quote condition (a) "The materials imported are covered by a DEEC (Certificate) granted by the Committee in the form specified in the Second Schedule of this Notification in respect of value, quantity, quality description as specified in Part C of the said Certificate". 34. The Certificate which consists of two parts, one for filling in details of imports made and the other for filling in details of exports, has to be presented along with the Bill of Entry for claiming exemption. We have perused the certificate in Part C. MMF it is mentioned therein. Part D consists of particulars of imports. The importer described the goods as MMF. In the next column the tariff heading under which the goods fall was furnished along with the Notification 215/80 under which viscose staple fibre was accorded a concessional rate of duty of 40% ad valorem whereas polyester staple fibre attracts 145% ad valorem plus Rs. 9/- per Kg. under Notification 33/83-Cus., dated 1-3-1983. The importer also indicated that the duty involved on the said goods is Rs. 62,84,45....
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....rt material and thus their declaration that the imported goods were meant for export itself was a false declaration. He argued that it is immaterial whether others involved in the fraud/collusion are proceeded against or not; that the importers attempted to defraud the Government by stating that they imported Viscose while all along they were aware that what was under import were polyester fibre. 39. We examined the rival contentions. 40. The appellants imported goods under Advance Licence scheme claiming duty free clearance under Notification 117/78 as amended. Any claim for duty free import under this Notification is valid only when DEEC (certificate) is produced. The particulars given by the importer in part 'D' of the said certificate also form part of declaration made in the Bill of Entry. This is because exemption under Notification 117/78 as amended, can be granted only when DEEC is granted by the licensing authority. The appellants were aware, as they themselves admit, that they imported polyester fibre. However, in part D of the certificate submitted along with the B/E the appellant claimed the benefit of Notification 215/80 which is meant for viscose fibre. Thus what wa....
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..... In regard to other two bills of entry the question of time bar does not arise as they were provisionally assessed. 42. Thus the show cause notice survives on both counts. 43. A point was made on behalf of M/s. L.D. Textiles that the Collector confiscated 4476 bales of PSF absolutely and still demanded duty on it. It is argued that under Section 125 of the Customs Act duty is liable to be paid only when goods are redeemed on payment of fine; that when no option is given to redeem the goods and goods are absolutely confiscated liability to duty does not arise; that the Collector erred in demanding duty on the confiscated goods under Section 28 of the Customs Act. On absolute confiscation, the property lies with the Government; that the Government cannot have the goods and the duty too. It is argued that goods having been imported under a valid licence are not liable to absolute confiscation under Sections 111(m) and (o) of the Customs Act. It is also argued that the Collector erred in not according an option to the importer to redeem the goods on payment of redemption fine. 44. The ld. Counsel for the Revenue argued that there is nothing in Section 125 which says that duty canno....
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....legal position in regard to goods not redeemed it is equally so in respect of goods absolutely confiscated. We apply the ratio laid down by the Hon'ble High Court to the facts of the present case. What the Hon'ble High Court has laid down is that he who possess the goods shall bear the liability to duty. In other words, if the goods are absolutely confiscated it is the Central Government who would possess the goods. Liability to pay duty on absolutely confiscated goods does not shift to the person who either imported the goods or to the person from whose possession the goods were seized. The demand for duty on 4536 bales weighing 1169.575 needs to be set aside. Their confiscation under Sections 111(m) and (o) has to be upheld as the goods in question were misdeclared and the conditions under which the goods were imported were violated. We have already discussed as to how the goods were misdeclared in regard to PSF imported under Bill of Entry No. 63. In regard to the goods cleared under Bills of Entry Nos. 22 and 23 we observe that while declaring the imported goods as MMF the appellants claimed the benefit applicable without mentioning the notification number in the same manner. T....
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....confiscated to the Bills of Entry 22 and 23 individually unlike in the case of Bill of Entry No. 63. It is possible of course to relate the balance quantity that is 4536 - 452 = 4084 to the clearance made under Advance Licence used for clearing the goods under Bills of Entry Nos. 22 and 23. 50. Under the above said Bills of Entry a total of 6100 bales were cleared free of duty. The Collector demanded Rs. 6,99,91,236/- towards duty on the goods cleared under Bill of Entry No. 22/30-10-84 and Rs. 6,32,60,298.30 on the goods cleared under Bill of Entry No. 23/30-10-84. Since a quantity of 4084 bales were absolutely confiscated out of 6100 bales cleared under the above said Bills of Entry no duty is payable on them. In other words duty applicable on polyester staple fibre is demandable on a quantity of 2016 bales, which have violated the condition under which they were allowed to be cleared without payment of duty. The demand for duty be reworked out on the above basis. Since it is not possible to apportion the quantity confiscated to each of the Bills of Entry under question from the impugned order, this exercise if it is not possible at this distant date, the total duty liability be....
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....hibited from importation under the Customs Act or any other law for the time being in force. In the present case, goods are allowed to be cleared duty free under Notification issued under Section 25 of the Customs Act under certain conditions specified in the notification. When those conditions are violated, the goods become liable to confiscation. Further misdeclaration at the time of import, either description or value, will render the goods liable to confiscation. Since we hold that the goods in question have rendered themselves liable to confiscation it is perhaps academic at this distant date in the present case whether the adjudicating authority should have given an option to redeem them on payment of duty. We are not inclined to modify the order into one of the confiscation with an option to redeem as it serves no purpose. It is not also possible to set aside the order of confiscation adjudicated by the lower authority. We therefore, leave it at that. 55. Insofar as the goods confiscated from other appellants is concerned we observe that enough evidence exists that these appellants were in possession of goods, which are liable to confiscation under the Customs Act. The fact....
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....ishwanath - 1997 (96) E.L.T. 224 (S.C.) wherein it has been recorded in Paras 2 to 4 as follows : "2. The goods imported by the respondents were cleared at the Paradip Port in the State of Orissa. The goods were then transported to Howrah in the State of West Bengal and were seized there by the Customs authorities in West Bengal on the ground that they had been imported on the strength of fictitious licences. In proceedings consequent upon the seizure it was held that the goods had been imported on fictitious licences and were liable to confiscation. The Customs, Excise and Gold (Control) Appellate Tribunal, in the order under appeal, held that the Customs authorities in West Bengal had no jurisdiction to pass such order. 3. There had also been certain proceedings in the Calcutta High Court, with which we are not here concerned, except to note that the High Court had ordered the appellants to refund the amount of Rs. 50 lakhs paid to them by the respondents in connection with the aforesaid proceedings before the West Bengal Customs authorities with interest. When leave to appeal was granted, this Court directed that the respondents would be entitled to the said refund provided ....