TaxTMI 
TaxTMI 
2017 (2) TMI 420
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....mand for duty on the goods [4536 bales of PSF] as they were seized after custom clearance and absolutely confiscated under Section 111 [m] and 111 [o] of the Customs Act, 1962 ? [ii] Whether the Tribunal committed an error in interpreting the provisions of Section 12 of the Customs Act, 1962 by setting aside the duty on the absolutely confiscated goods which were already cleared from the customs notified area by the respondent claiming benefit of Notification No. 117/78 dated 08.06.78 ? [iii] Whether it is legally valid and correct not to charge duty when goods are absolutely confiscated, while in terms of provisions of Section 125 of the Customs Act, 1962 in the case of goods confiscated but permitted to be redeemed against fine, duty on the goods is payable in addition to fine ? [iv] Whether the liability to pay duty under Section 12 of the Customs Act, 1962 is independent of the liability under various punitive provisions of the Act, in view of the decision of Hon'ble Supreme Court reported at 1983 [13] ELT 1562 SC ?" 2. Facts leading to the present Appeal in nutshell are as under : 2.1 That, M/s. L.D Textiles Industries Limited obtained two advance licenses under the D....
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....84 and 23 dated 30.10.84 respectively. The samples were drawn from these two consignments and sent to the Kandla Customs House for test. The test reports revealed that the goods were dull whit entangled mass of short staple fibre [discontinuous] wholly made of man-made fibres of cellulosic origin [Viscose]. These two consignments were also cleared free of duty vide the Duty Exemption Entitlement Certificate Book 7003/Kandla 4.6.84 and in terms of the aforesaid Customs Notification No. 117/78 dated 9.6.78 as amended. These two imports entailed export of 2000 Mts of spun yard made out of man-made fibre valued at US $ 29 lakhs within a period of six months from the date of clearance of first consignment in India against the advance licence. 2.3 Prior to 13.3.85, the Customs Authorities of Ahmedabad Collectorate received information that M/s. L.D Textiles Industries Limited, Ankleshwar had imported large quantities of polyester staple fibres under the advance licence scheme and they were selling the same in the open market through misdeclaration of goods as non-cellulosic synthetic waste. The information further indicated that the goods sold were being sent to the truck under cover of....
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....d adjudication order dated 21.4.86 under which he ordered absolute confiscation of 4486 bales plus one bale in loose condition of polyester fibres seized on 15.3.85, 1.5.85 and 3.5.85 from the possession of M/s. L.D Textiles Industries Limited. He also confiscated absolutely 49 bales of polyester staple fibre seized from M/s. P.G Textile Mills Limited on 16.3.85 and also 171 bags of yarn seized from M/s. Arunoday Mills Limited and 6 bales of polyester fibre seized from M/s. Jayashree Textiles Limited. He demanded duty amounting Rs. 4,20,88,370.16 in respect of bill of Entry No. 63 dated 30.3.85 for 2050 bales of polyester fibre after giving the credit of the duty already deposited by M/s. L.D Textiles Industries Limited through the bank draft in favour of Veraval Customs House with their letter dated 26.2.85 and the amount of duty paid by them after the search of their premises in March, 1985. The Collector also demanded interest at 18% on this amount of duty from the date of clearance of the imported consignments through Veraval Customs House, till the actual date of payment of duty. He further demanded duty of Rs. 6,99,91,236.08 in respect of Bill of Entry No. 22 dated 30.10.84 f....
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.... Revenue has vehemently submitted that in the present case, the learned Tribunal as set-aside the demand of duty on the goods in question solely on the ground that they were seized after the customs clearance and actually confiscated under Section 111 [m] and 111 [o] of the Customs Act, 1962. It is submitted that the questions involved in the present Tax Appeal are as such squarely covered and the issue is no longer res integra in view of the decision of the Hon'ble Supreme Court in the case of Union of India & Ors. v. Security & Finance [P] Limited, reported in 1984 [13] ELT 1562 (SC). It is submitted that in the said decision, the Hon'ble Supreme Court has observed and held that the action/ proceedings under Section 111 and 125 are altogether different and they can be said to be penal provisions and despite the confiscation of goods under Section 111 of the Customs Act, the liability to pay duty on the confiscated goods still continues. It is submitted that in the present case, the demand of duty on the goods in question have been set-aside by the learned Tribunal solely on the ground that once the goods were seized, after customs clearance and they were actually confisca....
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....s, they may fall on different person. In para 7, 8 and 10 of the decision, the Apex Court has observed and held as under :- "7. Import duty has to be paid inevitably in these cases, by the importer confiscation or fine in lieu thereof is an infliction on the offender or circle of offenders falling within Section 167 Entry 8. Sometimes, the burden in both the cases falls on the same person. At other times, they may fall on different person. In some cases, the importer as well as the confiscatee may be identified and so the duty and the penalty may be imposed validly. In other cases, it may be difficult to get at the actual person who imported or was concerned in the offence of importation contrary to the prohibition or restriction clamped down by the law. In that event, only confiscation and, alternatively, fine may be imposed. 8. Viewed in this perspective, the answer to the question that arises for decision is simple. In the present case, as held by the High Court, the respondent did import auto cycles pedals outside the permit or licence. He is therefore liable to pay import duty normally leviable from pedal importers. He has admittedly transgressed the provisions of Entry 8 of....