TaxTMI 
TaxTMI 
2023 (10) TMI 904
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2009 read with Section 2(w) ibid. 2. I order the confiscation of the declared goods of Rs. 4,27,122/-(Rupees Four Lakh Twenty Seven Thousand One Hundred and Twenty Two Only) based on reassessed value, duly seized, imported vide container No. TEMU 6929879 and Bill of Entry No.4228874 dated 01.12.2017 under Section 119 of the Customs Act, 1962 as they are used to conceal smuggled goods. 3. I order Shri. C. Solomon Selvaraj being the beneficial owner importer, to pay the demand of total differential duty of Rs. 4,56,00,374/- (Rupees Four Crore Fifty Six Lakh Three Hundred and Seventy Four Only) leviable on the goods imported vide container No. TEMU 6929879 including the Anti-Dumping Duty, under Section 28(4), 28(8)of the Customs Act, 1962 read with Section 46(4) ibid. 4. I confirm the demand of the interest leviable on the total differential duty under Section 28AA of the Customs Act, 1962, and payable by Shri. C. Solomon Selvaraj being the beneficial owner importer, under Section 28(8) of the Customs Act, 1962. 5. Considering the involvement and gravity of offence, I impose a penalty of Rs. 4,56,00,374/- (Four Crores Fifty Six Lakhs Three Hundred ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 70,00,000 sticks of Djarum Black Cigarettes valued at Rs. 7 crores in the consignment imported in the name of his company M/s Thivya Agencies [IEC: 0414009703] declared to contain Malaysian Core Veneer and after obtaining bail, started doing customs clearance work for various importers of commercial goods consignments with weight difference/quantity mis-match. (ii). Shri. Salomen Selvaraj owns a firm by name M/s. The Sea Shipping Forwarders and is its sole proprietor entered in to a conspiracy with Shri. Vishal, whose actual identity is unknown, to smuggle goods from China by concealing them behind declared goods to evade duty or prohibitions on the import of goods and landing the containers having such shipments/consignments at Kattupalli Port only to avoid scanning of the containers. (iii). Shri Salomen Selvaraj informed that Shri. Vishal is involved in sourcing and arranging such shipments/consignments from China and engages Shri. Salomen Selvaraj for clearing such shipments/consignments from Customs and Shri. Salomen Selvaraj undertakes such works on lump sum basis i.e. including all incidental charges and the Customs Duty. (iv). Shri Salomen Selvara....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erator M/s.Hyundai Merchant Marines Co. Ltd., through his bank account maintained in the name of M/s. The Sea Shipping Forwarders in M/S. IDBI Bank. (x). Shri. Salomen Selvaraj then instructed R.Chandrakumar to attend the examination/clearance work at CFS and R. Chandrakumar accordingly attended to the said work.as instructed and obtained the Out of Charge Order for the Bill of Entry under reference. (xi). The container TEMU 6929879 was then detained by DRI, CZU and examined again wherein undeclared goods viz."steel measuring tapes" and "sewing machine needles" were found concealed behind the declared goods and there was a shortage in quantity of the declared goods. (xii). A total of 2,01,13,000 Pieces of sewing machine needles of various sizes of Brand "Organ" and "Flying Tiger and d 70,200 Pieces of "measuring tapes" of various sizes were found which were not declared in any of the documents submitted for clearance of the goods including invoice and packing list. (xiii). There were two models of "Organ" Brand needles found in the consignment viz. DBx1 and HAx1 were found to be labelled with "Organ Needle Co. Ltd." and "Made in Vietnam",manufact....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l Saran and Shri. Ramesh Menon R, the IEC holders are not traceable in the absence of any information. (xxii). As the imported goods are mis-declared with respect to quantity, description and value and as fraudulent documents are submitted to Customs, the declared value is liable for rejection in terms of Rule 12 of the Customs Valuation(Determination of value of Imported Goods) Rules, 2007 as not a transaction value read with Explanation (1) (iii) (d) and Explanation(1)(iii)(f) to the Rule 12 of the said Rules. (xxiii). The value of the undeclared goods of description sewing machine needles of Vietnam and Japan origin of Brand Organ is to be re-determined in terms of Rule 4 ibid read with Rule 3(4) ibid, as given in the Annexure-III based on the contemporaneous value of the identical goods i.e. Same description, brand and country of origin available in ICES 1.5 as given in Annexure-II, in terms of Rule 2(d) ibid. (xxiv). As there are no contemporaneous records of imports of sewing machine needles for home use of the Brand"Flying Tiger" and country of origin as China in ICES 1.5. the value of the undeclared goods of description sewing machine needles for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., 1962 as they were used to conceal the smuggled goods i.e. undeclared measuring tapes and sewing machine needles. (xxxi).Penalty under Section 112 of the Customs Act, 1962 is imposable on M/s. R.M.Enterprises for rendering the goods liable for confiscation. (xxxii). Penalty under Section 112 of the Customs Act, 1962 is imposable on Shri. Salomen Selvaraj for abetting the smuggling of the goods liable for confiscation (xxxiii). Penalty under Section 112 of the Customs Act, 1962 is imposable on Shri Vishal for rendering the goods liable for confiscation. (xxxiv).Penalty under Section 112 of the Customs Act, 1962 is imposable on Shri.Sunil Saran Proprietor, M/s. Saran Enterprises for abetting the smuggling of the goods liable for confiscation. (xxxv).Penalty under Section 112 of the Customs Act, 1962 is imposable on M/s Asian Shipping Agencies, Customs Broker for omission to comply with Customs Brokers Licensing Regulations,2013 abetted the smuggling of the goods liable for confiscation. (xxxvi). Penalty under Section 114A of the Customs Act, 1962 is also imposable on M/S. R.M. Enterprises for short levy of duty. (xxxvii)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion or abetting the same by their omissions or commissions. 30. In view of the above, Shri. Vishal, M/s. R.M Enterprises and Shri C. Saloman Selvaraj, are jointly and severally hereby called upon to show cause to the Commissioner of Customs,Commissionerate-II, Custom House, No. 60, Rajaji Salai,Chennai-1 within 30 days from the date of receipt of this show cause notice as to why: i. The total differential duty of Rs. 4,56,00,374/- (Rupees Four Crore Fifty Six Lakh Three Hundred and Seventy Four Only) leviable on the goods imported vide container No. TEMU 6929879 including Anti-Dumping Duty, should not be demanded under Section 28(4) of the Customs Act, 1962 read with Section 46(4)ibid. ii. Interest leviable on the total differential duty should not be demanded under Section 28AA of the Customs Act, 1962. iii. Penalty should not be imposed on them under Section 114A of the Customs Act, 1962 for short levy of duty." 4. Paragraph No.28 of the Show Cause Notice dated 18.06.2018 bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017, issued under Sections 124 and 28 of the Customs Act, 1962 reads as under: "28. As the smuggling under re....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (ii) Vijay Chauhan Vs. Commissioner of Customs (Export), 2019 (365) E.L.T. 864 (Del.); (iii) Sagufa Ahmed & Ors. Vs. Upper Assam Plywood Products Pvt. Ltd. & Ors. in C.A.Nos.3007, 3008 of 2020 and (iv) Gautam Spinners Vs. Commissioner of Customs (Import), New Delhi, (2023) 9 Centax 115 (Del.) 12. The learned Junior Standing Counsel for the respondent on the other hand submitted that the present Writ Petition is devoid of any merits and therefore the present Writ Petition deserves to be dismissed in limine. It is submitted that the Writ Petition also does not disclose all of the relevant facts of the case. For better appreciation of facts, the following background facts are stated. 13. It is submitted that based on specific intelligence, the Directorate of Revenue Intelligence, Chennai Zonal Unit had conducted a preliminary investigation and found that an importer namely one M/s.R.M.Enterprises, Nellore (IEC No.0915015056), Rep. by its Proprietor Ramesh Menon had concealed and imported "Steel Measuring Tapes" and "Sewing Machine Needles" along with declared goods viz., "gas stoves" and "spare parts for gas stoves" from China vide Bill of Entry No.422....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d and paid Rs. 2000 for filing the Bill of Entry on his behalf and that all the payments for customs duty and clearance of goods were also paid by the Petitioner c. he was not aware of M/s RM Enterprises or their business activities and that after detention of consignment by DRI he had tried tracing the Petitioner but to no avail. 17. It is submitted that after recording the statement of Mr. Prem Kumar, his clerk namely Mr. K Faizullah was called upon to give his voluntary statement under Section 108 of the Customs Act. In his statement, Mr. K Faizullah inter alia stated that a. The Petitioner had approached him and promised to give 10 to 20 consignments per month and had negotiated to pay Rs. 2000 per consignment. b. The check list for filing Bill of Entry was sent by him to the Petitioner and a confirmation was received from one Ms. Lizzy from the same email id. c. The Petitioner had got the Self-Assessment verified in the concerned Assessment Groups and had used his employee Mr.Chandrakumar at the time of examination of subject goods. d. The Petitioner had informed him that he would take care of the activities such as duty payment,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng to the importer RM Enterprises 22. It is submitted that since the payment of customs duty was made from the account of the Petitioner's firm M/s. Sea Shipping Forwarders, a request for obtaining the bank account statement of the firm was made to the bankers M/s. IDBI Bank, Parrys Branch. 23. On scrutiny of the statement, it was found that a sum of Rs. 5,00,000/- was credited to the account of the Petitioner firm by one Mr. Sunil Saran of M/s. Saran Enterprises who had an account in the same branch. Thereafter, verifications were made with respect to the declared address of M/s.Saran Enterprises as per bank records and it was found that the premises were already vacated. It is further submitted that summons were also sent to Mr Sunil Saran as per the address proof in the bank records and the same was undelivered with the remark "Not Known". 24. It is submitted that since the packages of sewing machines needles which were found concealed in the consignment had a mention of one M/s. Sunny International, with address in Kolkata, investigations were also initiated against them by the Officers of DRI, Kolkata Zonal Unit on 17.03.2018. However, no incriminating documents w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he time limit to pass the adjudication order was extended for a period of two years. 33. It is submitted that thereafter due to COVID-19 pandemic, the time limit for completion of proceedings and issuance of order, notice, intimation, etc., came to be extended upto 30.09.2020 in terms of Section 6 of the Taxation and other laws (Relaxation of Certain Provisions) Ordinance, 2020. Subsequent to relaxations announced by the Ministry of Home Affairs, an opportunity for personal hearing was given to all the notices on 10.09.2020 and thereafter an order was passed on 28.09.2020. In view of aforesaid development, the limitation period stood further extended and within such extended period, the impugned order was issued by the Respondent. Hence, the impugned order issued is perfectly sustainable under law. 34. It is submitted that the argument that impugned order has imposed insurmountable amount of duty and penalty on the petitioner and therefore, even the appellate remedy under Section 129-A of the Customs Act, 1962 has become illusory is irrelevant. 35. The learned Junior Standing Counsel for the respondent would further submit that there is no scope for bye-passing an appeal r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at in the Show Cause Notice dated 18.06.2018 bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017, it has been admitted that the investigations are incomplete by reserving its right to issue a supplementary notice after investigating afresh the petitioner, Shri.Vishal, Shri.Manikandan and Shri.Sunil Saran. 41. It is further submitted that the impugned Order-in-Original No.76206/2020 dated 28.09.2020 has confirmed that the Customs Duty Demand was solely on the petitioner by treating him as "beneficial owner" on one hand and as an abettor on the other hand without giving any reasons for not having confirming the liability on the importer and Shri.Vishal and among others on whom the duty demand was proposed. 42. It is submitted that charge levelled against the petitioner cannot co-exist with the finding that the petitioner is the only person solely responsible for the alleged smuggling. 43. It is submitted that there is violation of principles of natural justice and therefore, the petitioner cannot be forced to avail the alternate remedy and prayed for allowing the Writ Petition. 44. I have considered the arguments advanced by the learned counsel for the petitioner and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (b) within one year from the date of notice in respect of cases falling under sub-section (4). Provided that where the proper officer fails to so determine within the specified period, any officer senior in rank to the proper officer may, having regard to the circumstances under which the proper officer was prevented from determining the amount of duty or interest under subsection (8), extend the period specified in clause (a) to a further period of six months and the period specified in clause (b) to a further period of one year: Provided further that where the proper officer fails to determine within such extended period, such proceeding shall be deemed to have concluded as if no notice had been issued. 51. In the Show Cause Notice dated 18.06.2018, the petitioner has been treated as a "beneficial owner". 52. As per Section 28(9)(a) of the Customs Act, 1962, wherever a show cause notice is issued without invoking the ingredients of Section 28(4) of the Customs Act, 1994, the proper officer has to determine the amount of duty or interest under Sub-Section (8)of the Customs Act, 1962, within a period of six months from the date of notice. 53. On the other hand....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ved. After the documents were furnished to the petitioner, the case was listed for personal hearing. 61. As far as the petitioner is concerned, the petitioner has replied on 15.10.2018, 07.02.2019, 09.08.2019 and 10.09.2020. Last two mentioned letters / replies of the petitioner itself were after the expiry of the one year period of limitation which expired on 17.06.2019. 62. The petitioner appears to have requested for adjournment by letter dated 07.02.2019. The approval for passing order beyond the period of one year under Section 28(9) of the Customs Act, 1962 was accorded on 26.06.2020 by the Chief Commissioner. It was pursuant to a note put up for a fresh notice of hearing to the petitioner. 63. In the preliminary reply the petitioner had also requested for furnishing all the Relied Upon Documents (RUD) which forms the basis of the Show Cause Notice bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017 dated 18.06.2018, issued under Sections 124 and 28 of the Customs Act, 1962. 64. The petitioner appears to have given additional reply on 09.08.2019. This was after 17.06.2019, being one year from the date of Show Cause Notice dated 18.06.2018 bearing Reference F.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 72. The impugned Order-in-Original No.76206/2020 has been passed on 28.09.2020 well before 30.09.2020. There is a saving of limitation under Chapter-V of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020. 73. The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020, was issued by the President of India in exercise of power under Article 123(1) of the Constitution of India on 31.03.2020 in the wake of outbreak of Covid-19 pandemic to save limitation. 74. The said ordinance was later replaced by The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 under the Scheme of Constitution. 75. That apart, Notification No.G.S.R.418(E) [R.No.CBEC- 20/06/08/2020-GST] was issued under Section 6 of The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020. 76. Section 6 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020 reads as follows:- "6. Notwithstanding anything contained in the Central Excise Act, 1944, the Customs Act, 1962 (except sections 30, 30A, 41 , 41A, 46 and 47), the Cus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....020 reads as under:- "6. Notwithstanding anything contained in the Central Excise Act, 1944, the Customs Act, 1962 (except sections 30, 30A, 41, 41A, 46 and 47), the Customs Tariff Act, 1975 or Chapter V of the Finance Act, 1994, as it stood prior to its omission vide section 173 of the Central Goods and Service Tax Act, 2017 with effect from the 1st day of July, 2017, the time limit specified in, or prescribed or notified under, the said Acts which falls during the period from the 20th day of March, 2020 to the 29th day of September, 2020 or such other date after the 29th day of September, 2020 as the Central Government may, by notification, specify, for the completion or compliance of such action as- (a) completion of any proceeding or issuance of any order, notice, intimation, notification or sanction or approval, by whatever name called, by any authority, commission, tribunal, by whatever name called; or (b) filing of any appeal, reply or application or furnishing of any report, document, return or statement, by whatever name called, shall, notwithstanding that completion or compliance of such action has not been made within such time, stand ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 of the General Clauses Act, 1897 prescribes the method for computation of limitation. Section 2(j) of the Limitation Act, 1963 defines the expression "period of limitation". They read as under:- Limitation Act, 1963 2. Definitions - 4. Expiry of prescribed period when court is closed.- (j) "period of limitation" means the period of limitation prescribed for any suit, appeal or application by the Schedule, and "prescribed period" means the period of limitation computed in accordance with the provisions of this Act Where the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court re-opens. Explanation.-A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day General Clauses Act, 1897 10. Computation of time (1) Where, by any 1 [Central Act] or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed per....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Products Private Limited and others, (2021) 2 SCC 317. 87. There, the Hon'ble Supreme Court was concerned with the Limitation prescribed for filing the appeal before the National Company Law Appellate Tribunal (hereinafter referred to as 'NCLAT') under Section 421 of the Companies Act, 2013. 88. Sub-Section (3) to Section 421 of the Companies Act, 2013 prescribes the period of limitation for filing the appeal before the Appellate Tribunal within a period of 45 days from the date on which the copy of the order of the Tribunal is made available. 89. In terms of proviso to Sub-Section (3) to Section 421 of the Companies Act, 2013, the Appellate Tribunal (i.e.,) NCLAT may entertain the appeal after the expiry of the said period of 45 days, but within a further period not exceeding 45 days, if it is specified that the appellant was prevented by sufficient cause from filing the appeal within that period. 90. In the said case, the appellant had failed to file the appeal within the period of 45 days from the date of communication of the order of the Tribunal on 19.12.2019. The normal period of limitation of 45 days expired on 02.02.2020 from 19.12.2019. The extended....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f limitation. Any period beyond the prescribed period, during which the Court or Tribunal has the discretion to allow a person to institute the proceedings, cannot be taken to be "prescribed period". 95. A reading of the above decision of the Hon'ble Supreme Court in Sagufa Ahmed and others Vs. Upper Assam Polywood Products Private Limited and others, (2021) 2 SCC 317, clearly indicates that the extension granted by the Hon'ble Supreme Court in its decision rendered on 18.09.2020 was in the wake of the outbreak of Covid 19 pandemic. It was of no relevance to the facts of the case in Sagufa Ahmed and others Vs. Upper Assam Polywood Products Private Limited and others, (2021) 2 SCC 317, as the extended period of limitation to file an appeal had already expired on 18.03.2020 i.e. before the lock down was imposed with effect from 24.03.2020. 96. The said decision was not rendered in the context of The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020 and The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the Notification referred to supra. As far as specified union Tax laws were concerned, ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 'importer' and 'beneficial owner' are defined in Sections 2(26) and 2(3A) of the Customs Act, 1962. They read as under:- Section 2(26) Section 2(3A) "importer", in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer; beneficial owner means any person on whose behalf the goods are being imported or exported or who exercises effective control over the goods being imported or exported; 104. This Court would normally not enter into the disputed question of facts as such disputed question of facts are best left to be distilled and finally determined by the Tribunal as the ultimate fact finding Authority. Article 226 of the Constitution of India cannot be invoked to decide the issue based on disputed question of fact. 105. However, a reading of the Show Cause Notice dated 18.06.2018 and impugned Order-in-Original No.76206/2020 dated 28.09.2020, indicates that the Department has treated the petitioner as a "beneficial owner" within the meaning of Section 2(3A) of the Customs Act, 1962, on account of its inability to tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d with fine / penalty. 112. There are however no records available to infer that the petitioner exercised effective control over the smuggled goods viz., needles and measuring tapes which were attempted to be smuggled along the goods declared in Bill of Entry No.4228874 dated 01.12.2017. Thus, the impugned order seeking to fasten the duty liability and penalty under various provisions on the petitioner is arbitrary. 113. Show Cause Notice dated 18.06.2018 and impugned Order-in- Original No.76206/2020 dated 28.09.2020 also reveals that the petitioner has merely received a sum of Rs. 5,00,000/- from one Mr.Sunil Saran of M/s.Saran Enterprises. Out of Rs. 5,00,000/- received from the said Mr.Sunil Saran of M/s.Saran Enterprises, a sum of Rs. 4,26,188/- was used for paying the customs duty on the declared goods viz., gas stove imported for which the Bill of Entry No.4228874 dated 01.12.2017 was filed. 114. The conclusion that the petitioner is a "beneficial owner" of the smuggled goods only because Shri. Sunil Saran of M/s. Saran Enterprises, who credited a sum of Rs. 5,00,000/- into the petitioner in the petitioner's account viz., M/s. The Sea Shipping Forwarders for paym....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r" of the smuggled goods. The impugned Order-in-Original No.76206/2020 dated 28.09.2020 which imposes the customs duty and anti-dumping duty on the petitioner by holding that the petitioner as the "beneficial owner" is unsustainable. 120. The imposition of customs duty and penalty under Section 114-A of the Customs Act, 1962 for a sum of Rs. 4,56,00,374/- and further penalty on the petitioner under Section 114-A of the Customs Act, 1962 for a sum of Rs. 50 lakhs and another sum of Rs. 5 lakhs on the petitioner is disproportionate to the alleged role played by the petitioner. This would require re-consideration considering the role played by the petitioner as facilitator in the smuggling of the goods. The case therefore requires to be remanded back to the respondent to pass a fresh order denovo. 121. Therefore, the impugned Order-in-Original No.76206/2020 dated 28.09.2020 imposing penalty under Section 114-A of the Customs Act, 1962 and a further penalty under Section 114-AA of the Customs Act, 1962 on the petitioner for filing of documents for clearance of the imported consignments on the aforesaid Bill of Entry No.4228874 dated 01.12.2017 cannot be sustained. 122. The Cus....