TaxTMI 
TaxTMI 
2024 (8) TMI 271
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....ng submitted by the Director of the appellant is reproduced below: "UNDERTAKING I, Sanjay Bhargava, S/o. Hanuman Prasad Bhargava, Resident of House no.-J-33, R.B. Enclave, Paschim Vihar, West Delhi, Delhi-110063, is working in the capacity of Director at M/s. Kundan Care Products Limited located at E-22, Industrial Area, Bhadrabad, Haridwar, Uttarakhand-249403 has been authorized to furnish this Declaration vide Board's Resolution dated 17/Dec/22. I on behalf of M/s. Kundan Care Products Limited do hereby undertake that I and M/s. Kundan Care Products Limited: (a) has not been declared an insolvent or bankrupt by a Court of Tribunal. (b) has not been convicted for an offence under any law for the time being in force. (c) has not been penalized for an offence under the Act, the Central Excise Act, 1944 (1 of 1944) or Chapter V of the Finance Act, 1994 (32 of 1994). (d) has not been of unsound mind and stands so declared by a competent Court." 4. The declaration submitted by the Director of the appellant is reproduced below: "DECLARATION I, Sanjay Bhanrgava, S/o.- Hanuman Prasad, Resident of House No.....
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....IL)/2019 DATED 09.10.2019 Show Cause Notice Issued Delhi Air Cargo (Import) VIII/SIIB/CUS/ACC IMPORT/ Kundan Care/78/2018 dated 21.05.2018 Closure Report Filed VIII/SIIB/CUS/ACC IMPORT/ KUNDAN CARE/78/18 dated 02.06.2020 Closure Report filed 7. The appellant wrote a letter to the authorities seeking copies of the documents and the appellant also informed that show cause notices had not been issued in the two cases of Delhi Air Cargo (Import), in which the closure reports were said to have been filed. 8. Thereafter, a show cause notice dated 17.04.2023 was issued to the appellant to show cause as to why the License issued to the appellant on 11.01.2023 may not cancelled under section 58B of the Customs Act; why penalty under section 114AA of the Customs Act may not be imposed upon the appellant for wilful mis-statement and declaration; and why penalty should not be imposed upon the appellant under section 117 of the Customs Act. The show cause notice makes mention of the earlier show cause notice dated 21.08.2018 issued to the appellant by the Chennai Zonal Unit as also the show cause notice dated 09.10.2019 issued by the DRI Bangalore ....
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....of dictionary where 'offence' has been defined as a crime or misdemeanour, a breach of criminal laws whereas 'contravention' is defined to be an act which violates the law etc. The licensee has conveniently taken the meaning of offence only related to breach of criminal laws disregarding the first meaning of offence as misdemeanours which includes any contravention of any law. Penalisation for a offence could be either in monetary terms or both in monetary and prison sentence or only prison sentence. Thus, I find that the said definition does not come to the rescue of the licensee as though the fact was that he had been penalised under section 112 of Customs Act for an offence under the provisions of Customs Act, however he chose to give a declaration that he had not been penalised for any offence under the Customs Act, thus suppressing the vital information regarding the said penalisation under the Customs Act. 6.2.1.4. Another argument which has been taken by the licensee while arguing that penalty under Section 112(a) of the Customs Act does not pertain to an offence under the act is usage of both words 'offence' or 'contravention' under Section ....
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....that the appellant is not justified in attempting to draw a distinction between 'offence' and 'contravention'. Learned authorised representative also pointed out that under section 58A of the Customs Act, it is the discretion of the Commissioner to issue or not to issue the License. Learned authorised representative pointed out that any act or omission made punishable under the Customs Act is an offence and in support of this contention learned authorised representative placed reliance upon the judgment of the Allahabad High Court in State vs. Padma Kant Malviya and Anr. [AIR 1954 ALL 523]. Learned authorised representative, therefore, submitted that as the appellant had made a wrong declaration, there is no error in the impugned order which may call for any interference in this appeal. 14. The submissions advanced by the learned counsel for the appellant and the learned authorised representative appearing for the department have been considered. 15. Section 58A of the Customs Act deals with licensing of special warehouses and section 58B of the Customs Act deals with cancellation of license. The two sections are reproduced below: "58A. Licensing of special warehouse....
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....r section 58A of the Customs Act. This application was accompanied by an 'undertaking' and a 'declaration' by the Director of the appellant. In the 'undertaking' and the 'declaration', it was stated that the appellant had not been penalised for any offence under the Customs Act or the Central Excise Act or Chapter V of the Finance Act. 17. According to the department, an order dated 24.01.2022 had been passed by the Additional Commissioner of Customs imposing penalty of Rs. 1.5 lacs upon the appellant under section 112(a) of the Customs Act for the reason that the appellant had violated/ contravened the provisions of section 46 of the Customs Act read with rule 11 of the 1993 Foreign Trade Rules, but there is no mention of the order dated 24.01.2022 by the appellant in the 'undertaking' or the 'declaration' accompanying the application that was filed on 17.12.2022 for grant of a License under section 58A of the Customs Act. The department, therefore, believed that as the appellant had not disclosed that it had been penalised for an offence under the Customs Act, the License issued to the appellant was required to be cancelled. 18. Regulation 3(2)(c) of the 2016 Regulations pr....
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....regoing it is evident that the importer, while filing the aforementioned bill of entry with the comments mentioned that Under Section 74 shows that the intension of importer is very much clear to re-export the goods, and not to use the said goods for actual user purpose. Thus, the importer has not complied with the statutory provisions contained under section 46 of the Customs act, 1962 read with Rule 11 of the Foreign Trade (Regulations) Rules, 1993. It will not be out of place to mention that the Bill of Entry is a legal document required to be correctly filed at the time of importation of the goods. Therefore, I find that the importer violated/ contravened the provisions of Section 46 of the Customs Act, 1962 read with Rule 11 of the Foreign Trade (Regulations) Rules, 1993 in as much as actual use condition was not fulfilled. I find that the goods are already re-exported and not available for confiscation under Section 111(d) of the Customs Act, 1962. However are liable for penal action under section 112(a) of the Customs Act, 1962. 10. I, accordingly, pass the following order: ORDER I. As the goods imported vide BE no. 4487371 dated 11.08.2019 are liable fo....
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....7, 143(2), 156(1)(g) and 158(2)(ii) relate to 'contravention' of the provisions of the Customs Act or 'contravention' of any law. 26. On the other hand, sections 23(2), 26A(1)(d)(iii), 68(c), 104(1), 109A, 127B(1)(b), 127H(1)(3), 127L(1)(ii), 135(1)(d)(i), 135A, 135B, 136(2)(b), 137(1),(2)(a)(b), (3)(a)(b) & (d), 138, 138A, 140 and 140A deal with committing an 'offence' or prosecution of an offence under the Customs Act. 27. This apart, section 1(2) of the Customs Act that extends the Customs Act to the whole of India and, save as otherwise provided in the Customs Act, it applies also to an 'offence' or 'contravention' thereunder committed outside India by any person. The same sub-section (1) uses both the words 'offence' and 'contravention'. It is, therefore, clear that the meaning assigned to these two words in the Customs Act is different. 28. In this connection, it would be appropriate to refer to the judgment of Bombay High Court in Devidayal Electronics & Wires Ltd. and another vs. Union of India and another [1984 (16) E.L.T. 30 (Bom.)]. The Bombay High Court held that since the Notification used the word 'factory' and also the word 'industrial unit' in the same Noti....
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....e legislature has consciously used the expression 'may' and 'shall' at different places in the same Section, i.e., Section 9A of the Act. In such a scenario, it has to be presumed that different expressions were consciously chosen by the Legislature to be used, and it clearly understood the implications thereof. Therefore, when the word 'may' is used in the same Section in contradistinction to the word 'shall' at other places in that very Section, it is difficult to interpret the word 'may' as 'shall'. Therefore, it is difficult to read the word 'may' as 'shall'." 32. The Andhra Pradesh High Court in Madhucon Projects Limited vs. Cus., Ex. & S.T. Sett. Comm., Chennai [2016 (44) S.T.R. 321 (A.P.)] also observed that two different expressions in a statute must be construed to carry different meanings and the observations are as follows : "IX. Two Different expressions in a statute must be construed to carry different meanings : 49. As Parliament has used two different expressions in the Explanation to two distinct provisions, this Court cannot presume the effect of both the Explanations to be the same. If both the Explanations were meant to have the same effect, ....
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....a licence stated that the appellant has not been penalised for an offence under the Customs Act. Regulation 3(2)(c) does not state that the license shall not be issued if penalty has been imposed for 'contravention' of the provisions of the Customs Act. 36. The appellant had not been penalised for an 'offence' under the Customs Act. It cannot, therefore, be urged that by not making reference to the order dated 24.01.2022 passed by the Additional Commissioner of Customs imposing a penalty upon the appellant under section 112(a) of the Customs Act for contravention of the provisions of section 46 of the Customs Act, the appellant had withheld vital information from the department or had made a false statement. 37. At this stage, it would be pertinent to refer to the decision of the Supreme Court in M/s. Prakash Roadlines (Pvt.) Ltd. vs. Union of India and Another [AIR 1989 SC 1962 equivalent to (1989) 4 SCC 15]. 38. Sections 463 and 464 of the Delhi Municipal Corporation Act 1947 came up for consideration before the Supreme Court. Both the sections fall in the Chapter "Offences and penalties". It was sought to be contended on behalf of the appellant that the punishment provi....
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....at they will be tried by a competent magistrate and the punishment could only be inflicted by the competent magistrate on conviction of the person for the offences alleged against him. Whereas wherever penalties are provided it has been provided that where the facts attract the relevant provisions pertaining to penalty the tax plus penalty could be imposed and these penalty provisions neither talk of any offence nor talk of conviction before a competent court of a Magistrate. It was contended that on the basis of this distinction, if the two sections 463 and 464 which are relevant are examined it is clear that Section 464 do not pertain to any offence and therefore the penalty thus imposed under this Section is not a punishment which could only be inflicted under Section 463 after conviction and therefore for imposition of penalty under Section 464 the prosecution of the appellant before a competent magistrate is not at all necessary. Learned counsel also contended that even reading the provisions of Section 470 or 469 do not indicate contrary. xxxxxxxxx 6. The only question which arises in this appeal is as to whether penalty as provided in Section 464 of the Act....
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....es not help the appellant in any manner." (Emphasis Supplied) 40. It, therefore, clearly transpires from the aforesaid decision of the Supreme Court in Prakash Roadlines that there is a clear distinction between 'offences' and 'penalties'. This position has also been highlighted in the earlier paragraphs of this order. 41. The contention of learned authorised representative appearing for the department is that the Customs Act is a 'law' and, therefore, any act or omission made punishable under the Customs Act is an 'offence'. In this connection learned authorised representative placed reliance to the decision of the Allahabad High Court in Padma Kant Malviya. 42. Reliance placed by the learned authorised representative on the decision of the Allahabad High Court in Padma Kant Malviya is misplaced. The High court answered the questions referred in the following manner: "79. Our answer to the questions referred to us for opinion is as follows: "(1)(a) Contempt of court is not an offence within the meaning of Section 5(2) of Criminal Procedure; (b) In view of our answer to the previous question this question does not arise. ....