TaxTMI 
TaxTMI 
2017 (4) TMI 542
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.... M/s. Prachi Silks 10 C/42745/2014 CC, (Sea Port-Export), Chennai-IV Kalpesh Patel 11 C/42746/2014 CC, (Sea Port-Export), Chennai-IV Vishal Janak Agarwal 12 C/42747/2014 CC, (Sea Port-Export), Chennai-IV M/s. Navabharat Silk 13 C/42748/2014 CC, (Sea Port-Export), Chennai-IV M/s. Maharaja Impex 14 C/42749/2014 CC, (Sea Port-Export), Chennai-IV M/s. Jiju Silk Mills 15 c/42750/2014 CC, (Sea Port-Export), Chennai-IV M/s. Balaji International 16 C/42751/2014 CC, (Sea Port-Export), Chennai-IV Ramanand Surekha 17 C/42752/2014 CC, (Sea Port-Export), Chennai-IV Rajesh Bangawala 18 C/40026/2015 M/s. Shreepal Silks & Sarees CC (Exports), Chennai 19 C/40027/2015 M/s. M. Jiju Silks CC Ex orts Chennai 20 C/40030/2015 R. Senthil Kumar CC (Sea Port-Export), Chennai 21 C/40033/2015 M/s. Manjunatha Shipping Services P. Ltd; CC (Sea Port-Export), ....
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.... None for the Assessee -do- 12 C/42747/2014 CC, (Sea Port-Export), Chennai-IV M/s. Navabharat Silk None for the Assessee -do- 13 C/42748/2014 CC, (Sea Port-Export), Chennai-IV M/s. Maharaja Impex None for the Assessee -do- 14 C/42749/2014 CC, (Sea Port-Export), Chennai-IV M/s. Jiju Silk Mills Shri Hari Radhakrishnan Shri Derrick Sam -do- 15 C/42750/2014 CC, (Sea Port-Export), Chennai-IV M/s. Balaji International Shri Sathish Sundar -do- 16 C/42751/2014 CC, (Sea Port-Export), Chennai-IV Ramanand Surekha None for the Assessee -do- 17 C/42752/2014 CC, (Sea Port-Export), Chennai-IV Rajesh Bangawala None for the Assessee -do- 18 C/40026/2015 M/s. Shreepal Silks & Sarees CC (Exports), Chennai Shri Hari Radhakrishnan Shri Derrick Sam -do- 19 C/40027/2015 M/s. M. Jiju Silks CC (Exports), Chennai Shri Hari Radhakrishnan Shri Derri....
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....the Tribunal as above, passed the re-adjudication order No.29138/14 on 28.08.2014 with the consequences appearing in para 6 thereof such consequences are under appeal in this batch of appeals. (iv) M/s. Maruti Impex (refer para 3.7 of the order dated 22.01.2014 of the Tribunal) who was in appeal no.C/42068/2013 before Tribunal against order of adjudication No.20685/2013, dated 13.06.2013 in the batch of appeals disposed vide final order No.40545 to 40557/2014, dated 24/07/2014 of the Tribunal, has not come in the present batch of appeals. Therefore, Tribunal in this batch of appeal, is concerned only in respect of the matters, dealt by readjudication order dated 28.08.2014. (v) The readjudication relates to the live consignments as well as past consignments. The authority in para 28 of the impugned order dated 28.02.2014 has held that M/s. Ravi Enterprises is the importer of the seized goods covered by live consignments and in so far as the past consignments are concerned, in para 36 of his order he held that there shall be joint liability of M/s. Ravi Enterprises and others. (iv) So far as provisional release of the live consignments is concerned, the parties were before ....
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....o. The second direction to that authority was to determine duty liability, interest and penalty. But he failed to act in such sequence. Accordingly, the impugned readjudication order dated 28.08.2014 was passed arbitrarily and has become unsustainable. 3. Shri Narayan R. Panicker, learned Advocate appearing on behalf of the respondent M/s. Ravi Enterprises submitted that his client supports the re-adjudication order dated 28.08.2014 and prayed for leave of absence against Revenue appeals, He expressed that, he having difficulty to represent on 11^th August, 2016, his attendance may be dispensed. Against such proposition, he was categorically enquired as to whether he is under instruction of his client for no representation further against appeals of Revenue since Revenue had not commenced its argument, his reply was that he is under instruction of his client to only support readjudication order for which his attendance on other days may be dispensed. 4. Record revealed that there was no high sea sale agreement filed by any of the parties and following deficiencies were also noticed:- (i) O-I-O No.15130/2010, dated 08.02.2010 was not on record. (ii) The application and o....
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.... common. He brought out in that para that the goods were seized from M/s. Ravi Enterprises. Therefore, high sea sellers, who are the appellants, namely, M/s. S.R. & Co. and M/s. Balaji International cannot be held to be the importers under any circumstances in respect of both live and past consignments. 5.5 Placing para 36 of the readjudication orders, he submitted that when the adjudicating authority relied on the finding of the previous adjudicator made in his order dated 12.06.2013, he erred in law without application of his independent mind. This is also apparent from Para 20 of the impugned order. The same M/s. Ravi Enterprises, who was found to be importer for live consignments on plea of money trail of the high sea seller, was held otherwise in respect of past consignments. 5.6 Challenging the maintainability of the appeal, learned counsel submitted that the adjudication has been based on the show-cause notice issued by DRI prior to 08.04.2011. That authority had no jurisdiction to do so, following the ratio laid down by the apex court in the case of Syed Ali reported in 2011 (265) ELT 17 (SC). Such ratio was applied by Tribunal in the case of Hemachand Gupta & Sons Vs....
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....bsence of their conscious or deliberate involvement brought to record. Therefore No penalty on them is imposable under section 112 (a) of the Customs Act, 1962. There is no positive finding as to their culpability before imposing penalty. That being absent, penalty is not imposable. They have neither acted malafide nor made breach of law. He further submitted that appeals of the two CHAs have also arisen out of SCNs issued without jurisdiction for which, the readjudication order against them is liable to be set aside. 5.9 Learned counsel further submitted that the jurisdiction issue in respect of the notice issued by DRI before 08.04.2011 has been resolved by the Hon'ble High Court of Delhi in Mangli impex Vs. Union of Inida-2016 (335) E.L.T. 605 (Del.) following the ratio laid down in Syed Ali's case. Even though Mangli impex judgment has been stayed by the apex court by order dt. 01.08.2016, the ratio thereof is not stayed. Accordingly decision in mangli impex holds the field. 6.1 Arguing on Jurisdiction issue, on behalf of Subham Enterprises in Appeal No.C/42616/2014, Shreepal Silks Appeal No.C/40026/2015 and one Jiju Silks Appeal No.C/40027/2015 learned counsels S....
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....y of the customs. That is contrary to law. When the goods were confiscated under section 111 (d), (n) and (o) of the Customs Act, 1962, the authority should have brought out that there was a prohibition or mis-declaration as well as violation of the law. Without any such element, being present, invoking of all the three sub-clauses of section 111 is unwarranted and un-called for. The authority mechanically imposed penalty in gross violation of rule of justice. 6.5 So far as penalty on the high sea sellers is concerned, Revenue failed to show violation of law made by them causing prejudice to Revenue. Therefore, the penalty levied on them is without any basis. Further the joint and several liability concept of the adjudicating authority in the re-adjudication order is contrary to the following decisions of the Tribunal :- 1. Shiv Kumar Agarwal & 2 Ors. Vs Commissioner of Customs (Preventive), Mumbai vide Final Order No.A/626-628/13/CSTB/C-I dated 09.04.2013 in Appeal Nos.c/759,806 & 904/03 2. J.K. Pharma Vs. Commissioner of Customs(Imports), Mumbai [2004(166) E.L.T. 407 (Tri-Mum) 3. Bajaj Trading Vs. Commissioner of Customs (E.P), Mumbai [2006 (206) E.L.T. 537 (....
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....signments and past consignments, who are as under:- TABLE - 3 SI.No. Name of the part Appeal Nos. 01 M/s. Subham Enterprises C/42616/2013 02 M/s. Shreepal Silks & Sarees C/40026/2015 03 M/s. M. Jiju Silk Mills C/40027/2015 04 M/s. S.R. & co. C/40034/2015 05 M/s. Balaji International C/40035/2015 06 M/s. Navbharat Silk C/42747/2014 07 M/s. Maharaja Impex C/42748/2014 08 M/s. Prachi Silks C/42744/2014 09 M/s. Trimurti International C/42742/2014 7.4 All the parties mentioned in Sl.No.1 to 7 submitted their claim, praying for release of the goods. So far as M/s. Prachi Silks and M/s. Trimurti International are concerned, when they came to the Tribunal with belated appeal, their appeals have been dismissed for no condonable delay. However, Revenue is in appeal against them for imposition of penalty under section 114A of the Customs Act, 1962 since proposal for such imposition was in the SCN. 7.5 The parties in Sl.No.1 to 5 of the Table - 3 above who are in appeal and have prayed to clear of the goods in their favour without upholding the order of readjudication passed in favour of M/s. Rav....
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....of the first remand order, Tribunal intended that the real importer is to be determined by adjudicating authority. That was done by him. Therefore, there is no defiance to the Tribunal's direction. Learned Authority properly determined the liabilities of the respective parties, upon determination of the status of the importer. There is no concept of ownership in the Customs law for clearance. It is only necessity of law to determine the importer for clearance. 7.13 There was no details of payment given by the importer M/s. Ravi Enterprises to the high sea sellers. The high sea sellers were importer and they colluded with M/s. Ravi Enterprises for the purpose of clearance of the goods duty free using fake advance authoristation, defrauding customs. Their collusion rendered them to be jointly and severally liable to duty, interest and penalty under law. 7.14 Documents like amended IGM and the bills of entries came to record of Customs. Therefore M/s. Ravi Enterprises was permitted to make clearance of the live consignments. Hence the question of provisional release does not arise in respect of such consignments because of no bill of entry filed by high sea sellers. Therefor....
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....of parties have been determined in the re-adjudication, for which all pleas of the assesses fails and their appeals being devoid of merit, are liable to be dismissed. He prayed that readjudication order in so far as the live consignments is concerned, has been passed in accordance with law. Revenue being aggrieved due to no imposition penalty under section 114 A, is in appeal which may be allowed. 8. While hearing was made, survey was made to the provisions of Customs Act, 1962 to ascertain whether the concept of "ownership" has been recognized by that law. It is found that section 145 of that Act has recognized such concept and that section reads as under:- "SECTION 145. Owner, etc., to perform operations incidental to compliance with customs law. - All operations necessary for making any goods available for examination by the proper officer or for facilitating such examination shall be performed by, or at the expense of, the owner, importer or exporter of the goods, as the case may be." It is also noticed that the concept of "ownership" appears in section 12 of the Customs Act, which reads as under:- "124. Issue of show cause notice before confiscation of goods, etc.-....
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....as no return of documents by bank to any high sea seller except one supplier who was in a batch of appeals in the previous remand order dated 22.01.2014 passed by Tribunal. Therefore, the importers are high sea sellers only and M/s. Ravi Enterprises was not at all an importer. Accordingly high sea sellers are entitled to the clearance of the live consignments. Therefore penalty is not at all leviable on the high sea sellers under section 112 (a) of the Customs Act, 1962 for the reason that they had sold the goods to M/s., Ravi Enterprises and no more answerable to law after high sea sale agreement was made. 10. Heard both sides and perused the records. 11. M/s. Patel Carriers in Appeal No.C/42625/2014 and Vijay Suresh Shah, Patel Carrier Transport service in Appeal No.42626/2014, although, have filed appeal, neither appeared in person nor represented by any authorised representative. According their appeals are dismissed. 12. Two important preliminary issues arose in view of the aforesaid rivalry submissions of the parties and background of the readjudication. The first one is whether readjudication is maintainable when jurisdiction of the D.R.I to issue SCN is challenged ....
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....(b) The person chargeable with the duty or interest, may pay before service of notice under clause (a) on the basis of,- (i) his own ascertainment of such duty; or (ii) the duty ascertained by the proper officer, the amount of duty along with the interest payable thereon under section 28AA or the amount of interest which has not been so paid or part-paid. (2) The person who has paid the duty along with interest or amount of interest under clause (b) of sub-section (1) shall inform the proper officer of such payment in writing, who, on receipt of such information shall not serve any notice under clause (a) of that sub-section in respect of the duty or interest so paid or any penalty leviable under the provisions of this Act or the rules made thereunder in respect of such duty or interest. (3) Where the proper officer is of the opinion that the amount paid under clause (b) of sub-section (1) falls short of the amount actually payable, then he shall proceed to issue the notice as provided for in clause (a) of that sub-section in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period ....
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....all proceed to issue the notice as provided for in clause (a) of sub-section (1) in respect of such amount which falls short of the amount actually payable in the manner specified under that sub-section and the period of one year shall be computed from the date of receipt of information under sub-section (5). (7) In computing the period of one year referred to in clause (a) of sub-section (1) or five years referred to in sub-section (4), the period during which there was any stay by an order of a court or tribunal in respect of payment of such duty or interest shall be excluded (8) The proper officer shall, after allowing the concerned person an opportunity of being heard and after considering the representation, if any, made by such person, determine the amount of duty or interest due from such person not being in excess of the amount specified in the notice. (9) The proper officer shall determine the amount of duty or interest under sub-section (8),- (a) within six months from the date of notice in respect of cases falling under clause (a) of sub-section (1); (b) within one year from the date of notice in respect of cases falling under sub-section (4). ....
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....licable to the cases of above nature. Therefore section 28 (11) deals with cases of post 08.04.2011 only but not prior to that. Even though sub-section (11) says that the persons appointed as Officers of Customs under section 4(1) of the Act before 06.07.2011 shall be deemed to have been and always have been "proper officer" for the purpose of section 17 and 28 of the Act, the proceedings initiated by DRI officers lack jurisdiction when Para 70.1 of the judgment of the Hon'ble High Court of Delhi in Mangli Impex - 2016 (335) ELT 605 (Del.) is read. The said para reads as under: "70.1 The net result of the above discussion is that the Department cannot seek to rely upon Section 28(11) of the Act as authorising the officers of the Customs, DRI, the DGCEI etc. to exercise powers in relation to non-levy, short-levy or erroneous refund for a period prior to 8^th April 2011 if, in fact, there was no proper assigning of the functions of reassessment or assessment in favour of such officers who issued such SCNs since they were not 'proper officers' for the purposes of Section 2(34) of the Act and further because Explanation 2 to Section 28 as presently enacted makes it expli....
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....law with effect from 8.4.2011, that does not make any difference to the law laid down by Apex Court in Commissioner of Customs Vs. Sayed Ali reported in 2011 (265) ELT 17 (SC) which still holds the field declaring that officers of DRI, DGCEI and SIIB were not "proper officer" for the purpose of Section 28 of the Act and had no power to issue show cause notice explanation 2 well explains the position of law that the non-levy, short-levy or erroneous refund before the date on which the Finance Bill 2011 receives assent of the President shall continue to be governed by the provisions of Section 28 of the Act as it stood immediately before the date on which such assent is received, Revenue contends that the said Explanation is to be read in the manner to construe that the officers of the said Agencies at all times were "proper officer" even prior to 8.4.2011. 15.7 The Hon'ble High Court of Delhi in paragraph 70.1 of the judgment in Mangali Impex reported in 2016 (335) ELT 605 (Del.) held that Department cannot seek to rely upon Section 28(11) of the Act, to contend that the officers of customs, DRI, DGCEI etc., shall exercise power in relation to the cases of non-levy, short-lev....
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....Pradesh & Ors. 1983 (13) ELT 1277 (SC). Accordingly right to justice under that law cannot be taken away except otherwise stated by any retrospective amendment in that behalf and the right inhered in a party on the date of the lis does not extinguish without express provision of law to that effect. 15.11 It may be stated that operation of the judgment in the case of Mangali Impex (supra) has been stayed by the Hon'ble Supreme Court in Union of India & Ors. Vs. Mangali Impex Ltd. in SLP (C) No. 20453/2016 by an order dated 1.8.2016 and the Hon'ble Court is seized of the matter. Tribunal being creature of the statute, is subordinate to the Hon'ble Supreme Court and it should not overreach to the Jurisdiction of higher court following the principle laid down in Union of India Vs. West Coast Paper Mills Ltd. - 2004 (164) ELT 375 (SC). Apex Court held that once an appeal is filed before Apex Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last court cannot be said to have attained finality. Therefore once the matter has been considered for hearing on merit by the Apex Cour....