TaxTMI 
TaxTMI 
2015 (12) TMI 4
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....ue in the course of investigation seized some container wherein by mis-declaration Red Sanders were attempted to be smuggled out of the country, in July, 2013. In the course of further investigation, the Revenue felt that the appellant is also one of the person involved in the smuggling of the consignment seized in July, 2013 as well as in some previous consignments. Search was conducted in the premises of the appellant on 6.12.2013 and the following assets found were detained and taken custody by the Revenue: - (i) One BMW 525 D Car bearing No. HR-26-BQ-1600; (ii) One Jaguar XJ Car bearing No. CH-23-T-3631; (iii) 20 (Twenty) used Luxury Wrist Watches; (iv) Indian Currency amounting to Rs. 9,78,500/- (v) Assorted jewellery of yellow metal purported to be of gold. (vi) Three pieces of fur of wild animals. Pursuant to search, the appellant was arrested by the Revenue authorities on 7.12.2013 and on the same date, his statement was also recorded under Section 108 of the Customs Act. 2.1 So far the appellant is concerned, the Revenue has alleged at para 53.1(iii) of the show-cause notice dat....
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....ers of DRI moved Miscellaneous Application before the Honble High Court seeking imposition of an additional condition of surrender of appellant's passport to the Customs Department till disposal of the trial. The said application was disposed of without granting any relief as claimed by the Revenue. 2.3 A show-cause notice dated 2.6.2014 in terms of proviso to Section 110(2) of the Act was issued by the DRI stating therein that the department requires time for ascertaining the genuine nature of the documents submitted by the appellant and the various accounts operated by him and his family members as well as in the name of the company/firm under their management, wherein it is revealed that large amount of cash deposits have been made on regularly basis. It was further stated that details of such deposit have been sought and therefore in such circumstances the order was sought from the competent authority for extension of further time to issue show-cause notice in connection with the goods detained under the Panchanama dated 6.12.2013 from the premises and Bank Locker of the appellant and his family members. 2.4 The Commissioner has recorded the finding to the effect tha....
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....explanation have been made to the investigating officers vide representation dated 2.2.2014, 3.3.2014 and 10.3.2014 along with prayer for return of the detained/seized assets. In spite of the submission of the supporting bills and details regarding the assets, no further investigation were carried out by the DRI. It is further stated that for failure of the investigating agency to inquire or investigate the stand taken by the appellant in Feb- March, 2014, with regards to the assets, the investigating officers were under the provisions of Section 102, were required to complete the inquiry within six months and issue show-cause notice, if deemed fit. It was further urged that the request for extension of time by the Revenue/ DRI is mischievious and is only aimed to legalize the illegality committed by Revenue. It is further urged that prayer of DRI for extension of time for issue of show-cause notice is a colourable exercise of power as it is only after the appellant moved before the Court of Metropolitan Magistrate for release of the detained articles, they further inquired by resorting to and ascertaining further documents collected from the appellant including recording of statem....
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....ils have been provided much earlier in Feb/March, 2014, the ld. Commissioner found with reference to sale invoice for four wrist watches and invoices of the two cars along with two separate payments schedule by HDFC Bank, no other document was submitted by the appellant. Further, no document was submitted with respect to the jewelry found and detained. Thus, the appellant again requested the department to accept the licit ownership of the goods and jewelry, in absence of any document to the contrary in support of the said case. 2.8 As regards the allegation of colourable exercise of power based on the facts that further investigation were taken up prior to extension of time for show-cause notice in question, the ld. Commissioner observed that the show-cause notice clearly states that notice in respect of the detained goods was almost ready and as the appellant have submitted large number of documents, time is required for going through the same. It was further observed that it is not clear why the appellant have not submitted the documents, which are now submitted at the earlier stage of the investigation. 2.9 As regards the issue raised that the DRI failed to include detaine....
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....ailed to appreciate that the passport of the appellant was seized and taken charge of by the officers of DRI, which amounts to impounding and such right is vested only on the Passport Officers under the Passport Act. As such, the seizure of passport is ab initio void and is against the ruling of the Honble Supreme Court as held by the Honble Bombay High Court in the case of Avinash Bhonsale Vs. Enforcement Directorate. The detention of the two cars in question owned by M/s Acer Logistics Pvt. Ltd. in which the appellant is Director, and the said cars are admittedly financed by the Bank, the detention is bad and without application of mind. Further, the 20 wrist watches found and detained during the course of search is also bad as no reasonable belief have been recorded that same are required for further investigation under the Customs Act. (iv) That the ld. Commissioner failed to appreciate that no nexus of any nature, direct or indirect have been established or even remotely averred by the DRI neither in the Panchanama in respect of the detention/retention of these articles nor in the show-cause notice dated 13.1.2014. (v) Ld. Commissioner also failed to apprec....
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....vailable, cannot be a ground for extension of time as allowed by the impugned order. (ix) The ld. Commissioner failed to appreciate that the investigation has failed to give cogent reason for not proposing to confiscate the goods found and detained, in the earlier show-cause notice issued on 13.1.2014. (x) The ld. Commissioner further failed to appreciate that there is no allegation of non-cooperation on part of the appellant in investigation and as such timely completion was the duty of the investigating officers and failure to do so without any reasonable cause cannot be a ground for extension of time, as held in the impugned order. Ordinarily, the extension of time for issue of show-cause notice is to be considered only when there are certain issues which unknowingly have prevented the investigating officers for issuing show-cause notice, but it is not the case in the instant appeal. (xi) The ld. Commissioner further failed to appreciate that in the facts and circumstances, the prayer for extension by the investigating officer is only by way of colourable exercise of power amounting to harassment of the appellant and further in absence of any reasonabl....
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.... power to release of detained goods is with the Commissioner of Customs. It is further urged that in para 10 of the show-cause notice dated 2.12.2014, it is admitted by the Revenue that the appellant had applied for provisional release, filed on 7.10.2014 and in response, the Commissioner of Customs (Export) vide his letter dated 17.10.2014 granted provisional release of the two cars subject to the condition of furnishing PD Bond for Rs. 1,34,99,370/- and a cash security vide Bank Guarantee of Rs. 99,89,206/- and the same was not availed by the appellant. The Counsel urges that the condition for release of the cars is un-reasonable and accordingly could not be accepted. It is further admitted fact as it is evident from para 12.4 of the SCN dated 2.12.2014 that an amount of Rs. 10 lakhs was down payment/booking amount for purchase of Jaguar car. Rs. 10 lakhs was paid to Tata Motors by way of RTGS payment on 25.3.2013 and further Rs. 37,23,446/- was paid by cheque dated 7.5.2013 to Tata Motors issued from the Bank Account of the M/s Acer Logistics. The Revenue has further admitted in para 11.6 of the show-cause notice dated 2.12.2014 that analysis of the current account of M/s Acer L....
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.... the financial transaction, it is jurisdiction of the Income Tax Department and the officers of the investigation have only made wild allegation without any reasonable basis. It is also recorded in para 19 of the show-cause notice as per statement of the appellant, that all of the cash received during the period in consideration, by the Customs department, about 90% of the turn-over is received through Banking transaction and only 8 to 10% are received in cash, being received from walk-in customers. Further the appellant has turn-over around Rs. 25 crores per annum during the period in question under the investigation. (xvii) In para 20 of the show-cause notice dated 2.12.2014, the Revenue have recorded that although the time limit for issue of show-cause notice in respect of the goods found and detained on 6.12.2013 was getting over on 5.6.2013, but as the appellant and his family members were not forthcoming with the plausible explanation regarding various infirmity in the documents submitted by them including invoice of goods under detention and further the appellant have been seeking time for providing details and to file detail of large amount of cash deposits in vari....
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....eal with the goods except with the previous permission of such officer. 6.3 Sub-section (2) of Section 110 provides that 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 from whose possession they were seized. It is further provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Commissioner of Customs for a period not exceeding six months. 6.4 Sub-section (3) of Section 110 provides the proper officer may seize any documents or things which, in his opinion, will be useful for, or relevant to, any proceeding under this Act. 6.5 Section 110A of the Act empowers the adjudicating authority to release any goods seized under Section 110 to the owner on taking a bond from him in the proper form with such security and conditions as the adjudicating authority may require. 6.6 Section 111 of the Act provides for confiscation of improperly imported goods, etc., which have improperly been brought from outside India are liable to confiscation. 6.7 Section 113 provides f....
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....d and have failed to appreciate that there is no sufficient reason shown by the investigation officers for extension of the period for six months for issue of show-cause notice. The observation of the learned Commissioner that pursuant to recording of the statement of the appellant on 26.5.2014, wherein the appellant was asked about explanation for various cash deposit and the appellant had sought time to provide the requisite details and as such the Revenue was justified in seeking extension of time for issuing show-cause notice. It is writ large on face of the record that the investigation in spite of claiming that the proposed show cause was almost ready, while seeking extension of time vide notice dated 2.6.2014, for issue of show-cause, have issued notice for confiscation of the detained goods only on 2.12.2014, which speaks for itself. We further hold that the detention of the goods/assets in question is bad under the provisions of Section 110 as the goods/assets have only been detained and not seized as required under the scheme of the Act. We further take notice of this fact that so far the two cars in question is concerned, major part of the purchase price have been funded....