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2017 (8) TMI 346
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....th August, 2006 passed by the Customs, Excise and Service Tax Appellate Tribunal ('CESTAT') whereby, the order of imposing penalty and confiscation passed by the Commissioner of Customs (Imports) Mumbai, has been set aside. All the Respondents were the Appellants before the Commissioner of Customs. The other connected appeals are also listed with this Appeal. 3. This Court on 18th July, 2007, admitted the departmental Appeals on following common questions of law: " Admit on the following substantial questions of law: a) Whether the CESTAT was correct in holding that the order of confiscation under section 111(j) of the Customs Act, 1962 was not legal on the ground that the importers had obtained the permissions for conversion of the vessels and the port clearance without obtaining an order permitting clearance of goods for home consumption under section 47 of the Customs Act, 1962? b) Whether CESTAT was correct in holding that clearance of the goods on the basis of the port clearance permissions was proper despite the fact that Bills of Entry were filed by importers for home consumption under section 46 of the Customs Act, 1962 for clearance of such goods wherei....
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....ondent No.1) M/s. Hyundai Heavy Industries Co. Ltd. submitted about 9 bills of entry (the Bill) on respective dates. Respondent No. 2 M/s. Boskalis Westminister Middle East and Respondent No.3 M/s. CGG Marine filed respective Bill. All three importers filed their Bills through M/s. J.M. Baxi. 5. On 04/11/2004, Custom House Agent (the "CHA") M/s. J.M. Baxi requested Dy. Commissioner, Export Department of Customs, Mumbai (the Export Department) to issue instructions to convert vessel 'M.V. Echo Star' of Importer M/s. CGG Marine from "Foreign Run to Coastal Run" as the Bill dated 03.11.2004 was filed at Import Department and cleared. On 06/11/2004, the Importer M/s. CGG Marine cleared the goods after obtaining the conversion of the Vessel and port clearance. The goods of the Bills were examined on first check. As stated, they had not discharged the duty liability and the goods were not ordered "Out of charge" from the proper officer of the Customs. On 20.11.2004, the goods of Bill dated 11.11.2004 of M/s. Boskalis Westminister Middle East were examined on first check and import documents were forwarded to Import Appraising Group for further assessment. 6. On 22.11.2004, ....
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....ncashment Letter was issued by the Appellant to Chouhang Bank in case of M/s. Hyundai Heavy Industries. On 24.11.2005, Writ Petition No.2745/2005 was filed against the action initiated by the department for encashment of BG. On 24.11.2005, Judgment in Writ Petition No.2745/2005 was passed by this Court, directing Respondent No.1 in this appeal to approach CESTAT. 14. On 28.11.2005, encashment of BG was executed by M/s. C.G.G. Marine to the extent of Rs. 1,23,12,179/through ICICI Bank, Mumbai. On 28.11.2005, encashment of BG was executed by M/s. Boskalis Westminister Middle East Ltd. to the extent of Rs. 88,31,774/through BNP Paribas Bank, Mumbai. 15. On 30.11.2005, Respondent Nos.1 and 5 filed the Appeal No.C/1345 & a461/05Mum with stay Applications. On 15.12.2005 by order the CESTAT allowed the stay applications. On 20.12.2005, Writ Petition (L) No.3054/05 was filed by the department against the CESTAT order dt.15.12.2005 and judgment was passed. 16. On 22.12.2005, M/s. Hyundai Heavy Industries extended their both Bank Guarantees amounting to Rs. 39.37 crores for another one year i.e. upto 22.12.2006. On 30.12.2005, Misc. Application for Transfer of Bench was filed before....
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....evant provisions: 21. The relevant Sections /provisions of the Customs Act, in Chapter VI, which deals with the provisions relating to conveyance carrying imported and exported goods are sections 17, 18, 30, 38, 42, 46, 47, 111(j) and 112(a), 128(A), 129(A), 130(1) and the related procedure rules: "Section 42. No conveyance to leave without written order. (1) The person-in-charge of a conveyance which has brought any imported goods or has loaded any export goods at a customs station shall not cause or permit the conveyance to depart from that customs station until a written order to that effect has been given by the proper officer....... Section 47. Clearance of goods for home consumption.- [(1)]Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption:...... Section 111. Confiscation of improperly imported goods, etc.( j) any dutiable or prohibited goods removed or attempted to be removed from a cus....
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....tract in Bombay High area. The Agent had also obtained necessary bonds required for clearance of the vessels. The Demand Draft and other sanctions for discharge of liabilities on the vessels were filed. The assessments on the Bills were not completed by the concerned officers in the Mumbai Custom House, Appraising Group, which ought to have been done at earliest possible time, without delay. The reasons for Officer's defaults, if any, cannot be stated to be that the vessels, barges, sales propels were left in contravention of the cited provisions. The allegations that the concerned ACDC incharge had not approved the noting and the Bills were not countersigned, which ought to have been done, cannot be the reason to accept the case that importers or its agents were in breach of the provisions. This is in the background that all necessary permissions, sanctions and clearances have been obtained by the Respondents and the vessel was left accordingly. 24. The question of penalty and other confiscation will come, only if, there is a breach and/or contravention of the basic provisions so raised and referred. The act of release and/or selling of vessels, barges from Mumbai port, jus....
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..../permissions by the concerned authorities. The mandate of relevant provisions have been complied with at the relevant time and the Respondents proceeded accordingly, as the Appellant's Officers permitted them to do so. The supportive reasons of the CESTAT No case of perversity and illegality: 27. We have to keep in mind the provisions and the power and scope of High Court to interfere with the findings so arrived at, by the CESTAT. Having once noted above, we have gone through the reasons while setting aside the order of confiscation and penalty. The CESTAT has considered the issue of "port clearance" and its procedure, as prescribed under Section 42 (2)(d) read with Section 111(j) of the Customs Act. It is noted that the fact of grant of port clearances, which includes the safeguard and security required for the Custom House were never recalled. The goods were permitted to remove from the customs area, by the concerned officers. The importers and/or their agents or employees cannot be held responsible for removal from the Customs area of the port in such situation. The CESTAT has noted that the "removal" and "clearance" cannot be equated to clear the goods for home consumpt....
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....ition that the payment of duty has been made before issuing show cause notice itself. No case of "misrepresentation", "misstatement" and of "fraud": 30. It is settled that Section 46 of the Customs Act contemplates, directory procedure. Sections 48 and 46 read together support this aspect. The duties were paid even prior to show cause notices. Every technical breach cannot be treated, as breach for penalty or confiscation Hindustan Steel Ltd. Vs. State of Orissa 1978(2) ELT. 159 (S.C.). The goods were released after port clearances and due permissions. The vessels left the port/Custom's area after due permission, under Section 42 of the Customs Act. All the vessels were subsequently cleared for home consumption also. Therefore, the penalty and the confiscation order is rightly set aside by the CESTAT. 31. It is settled that, mere nonpayment of duties, even if any, cannot be treated and read for meaning "collusion" or "willful misstatement" or "suppress of facts". M/S. Uniworth Textiles Ltd vs Commissioner of Central Excise, Raipur. 2013 (9) SCC 753, (2013) 288 ELT, 161 The Respondents have paid even the same, after due declaration. Therefore, in the present case, the D....