TaxTMI 
TaxTMI 
2018 (6) TMI 649
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.... specified in the LOP. The appellant availed duty exemption under Notification No.52/2003 dated 31.3.2003. 2. Based on intelligence that appellant had disposed of the imported scrap items clandestinely in the local market without exporting to foreign country, an investigation was carried out which brought to light that substantial quantity of scrap was diverted by the appellant into local market instead of sorting into various categories and exporting the same as per the LOP. 3. On 24.1.2003, the SIIB officers of Chennai Custom House visited the premises and as per mahazar seized 453 MTS of scrap lying in the unit. The seized goods were handed over for safe custody to the appellant under an order as per Section 110 of the Customs Act which was issued by the Appraiser of SIIB. Against the quantity of 512 MTS of mixed metal scrap imported, bonded vide pending bonds, only 453 MTS were available in the premises. The officers proceeded to seize the 453 MTS of bonded goods on the reasonable belief that the goods were in violation of the provisions of Customs Act, 1962 and that 59 MTS of bonded goods were diverted without payment of duty. The officers recorded in the mahazar that the ap....
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..... Meanwhile, the Tribunal vide order dated 685 to 688 of 2005 dated 11.8.2005 granted stay against Order-in-Original & Service dated 20.4.2004 subject to predeposit of Rs. 20 lakhs. Subsequently, vide Final Order No. 1150 to 1156 of 2006 dated 30.11.2006, the Tribunal set aside the Order-in-Original dated 20.4.2004. Thus, the confiscation, redemption fine and the penalties imposed alleging diversion and shortage of scrap was set aside by the Tribunal. In short, the proceedings initiated vide Show Cause Notice dated 19.7.2003 culminated in favour of the appellant. 10. On 6.11.2007, a show cause-cum-demand notice was issued to the appellant demanding duty of Rs. 42,33,841/being the duty on 297.06 MTS of the scrap which was found deficit in the bonded premises and reported by appellant to be stolen. It appeared to the department that as the subject goods were imported by availing exemption from payment of customs duties, vide relevant notification and appellant being custodian of the goods was obliged to keep the goods safely and securely in the bonded premises belonging to them. That appellants are responsible for loss / deficit and liable to pay duty on the shortage of 297.06 MTS o....
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....ms (Exports), Chennai to consider the representation of the petitioner dated 9.4.2008 and to pass orders on merits in accordance with law. 16. Pursuant to such direction, the Commissioner passed the order impugned herein wherein he held that the impugned confiscated goods during the relevant time were in the custody of the appellant and that the possession was not taken over by the department on behalf of the Central Government at any point of time. According to department the Managing Partner of appellant Shri Saminathan had issued a letter of undertaking whereby he undertook to keep the goods in the bonded warehouse in safe condition. That appellants are therefore responsible for the safety and security of confiscated goods at the material time and therefore the claim of the appellants for compensation/ value of goods was rejected. The appellant is thus before Tribunal against the said order. 17. On behalf of the appellant, Id. counsel Shri S. Murugappan reiterated the grounds of appeal and made the following submissions:- a. Section 126 of the Customs Act, provides that when goods are confiscated, such goods shall thereupon vest in the Central Government. Sub-clause (2) of t....
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....artment cannot contend that the goods having stored in the appellant's bonded warehouse, are in possession and custody of the appellant. 18. The Id. AR Shri A. Cletus appeared and argued on behalf of the Revenue. He raised preliminary objection that the appeal is not maintainable. The impugned order passed by the Commissioner is not an adjudication order. As per Section 129A of the Customs Act, a person aggrieved by a decision or order passed by the Commissioner of Customs as an adjudicating authority can prefer an appeal before the Appellate Tribunal. The present order has not been passed by the Commissioner as an adjudicating authority. Section 2(1) defines an "adjudicating authority" to mean 'any authority competent to pass any order or decision under the Act'. The present order passed by the Commissioner is not an order passed under the Customs Act, 1962. The prayer of the appellant is to grant compensation for loss of goods. The Act does not contain any provision to allow compensation in case goods are lost after confiscation. The adjudicating authority can only pass orders within four corners of the Act. He cannot decide on questions as to whether the loss has oc....
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....the goods which was not availed by appellant. The appellant cannot abdicate the responsibility to safeguard the goods which were kept in their own premises. The appellant was paying rent for the premises and therefore the goods when lost from the premises, the appellant is liable to pay the duty. 19. Heard both sides. 20. The facts narrated above show that the department had seized 453 MTS goods vide mahazar dated 24.1.2003. At the time of such seizure, the goods were lying in the registered premises of the appellant and the premises belong to one Shri Vidyasagar. The appellant had taken the premises on rent. The goods were later confiscated vide Order-in-Original dated 20.4.2004. Even after confiscation the goods were kept in the bonded warehouse of the appellant under lock and key by department. Chapter IX (Sections 58 to 73) deals with warehousing of goods. Admittedly, the appellant has been issued licence under 58(1) of the Customs Act for Private Bonded Warehouse. They were also issued sanction order for In-bond manufacturing as under section 65(1) of the Act. The goods were seized as per provisions under section 110 of the Act and later confiscated. After seizing the goods,....
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....oth sides as well as perusal of records, we find that the relief claimed is based on the allegation put forward by appellant that, after confiscation the property in goods vests with Government and the department has been negligent in taking proper care of the goods confiscated. For better appreciation, Section 126 is reproduced as under:- "On confiscation, property to vest in Central Government. - (1) When any goods are confiscated under this Act, such goods shall thereupon vest in the Central Government. " (2) The officer adjudging confiscation shall take and hold possession of the confiscated goods. 23. On a closer examination of the facts brought out as well as relief claimed by the appellant, we entertain a serious double whether the appeal is maintainable or not. The issues for consideration are in the nature of who was in custody o possession at the material time, whether there was a duty cast on the department, whether the department was negligent it performing duty, whether such negligence is the proximate cause for the loss of goods, what is the extent of loss, whether appellant is entitled for damages etc. The Customs Act, 1962 does not provide for any right or re....