Customs, Excise and Gold Tribunal - Tamil Nadu
Iocl vs Commissioner Of Customs on 19 October, 2000
Equivalent citations: 2001(73)ECC125, 2003(159)ELT1152(TRI-CHENNAI)
ORDER S.S. Sekhon, Member (J)
1. The appellant is a PSU unit who have obtained Clearance Certificate from the Committee of Secretaries. They have filed this stay petition against the following order of the Commissioner :
"Thus the provisions of Section 112(a) of the Customs Act, 1962, regarding imposition of penalty are applicable in this case keeping in view the provisions of Section 111(m) of the Customs Act. 1962. Since 111(m) is attracted in this case as discussed above, the imposition of penalty under Section 112(a) of the Customs Act, 1962 on the Company is fully justified. Thus, I am of the view that the goods are liable for confiscation under Section 111(m) of the Customs Act, 1962. Since the goods had been cleared and are not available for confiscation, this aspect is kept in view while imposing penalty under Section 112(a) of the Customs Act, 1962. On the basis of the above facts and findings, I pass the following order :-
(a) The freight paid on daughter vessel is includible in the assessable value and accordingly, I order that the differential duty of Rs. 73,72,124/- already paid by M/s. IOCL is hereby confirmed and the same be taken into account during finalisation of the assessment of Bs/E, mentioned in the Annexure enclosed to the show cause notice dated 5-6-98. M/s. IOCL is hereby directed to produce the documentary evidence for the payment of freight paid for the daughter vessel in respect of all the 99 Bills of Entry shown in the Annexure to the show cause notice within a week's time for the finalisation of pending Bills of Entry.
(b) I also impose a penalty of Rs. 30,00,000/- (Rupees thirty lakhs only) on M/s. Indian Oil Corporation Ltd., under Section 112(a) of the Customs Act, 1962.
(c) I also demand interest on all Bills of Entries under Section 28AB of Customs Act, 1962, on short paid duty which will be intimated to M/s. IOCL at the time of finalisation of the said Bills of Entry."
2. We have heard both sides in the matter with consent we take up the appeal after waiver of deposit since the issue revolves in a very narrow compass. From this order we find that there is a direction to produce documents for all the 99 Bills of Entry shown in the Annexure to the show cause notice for finalisation of the pending Bills of Entry, we cannot understand how the duty demand and thereafter a penalty has been imposed when the assessment are provisional. It is also not understood how a demand under Section 28 itself could be invoked, since the assessments are not finalised and duty has not been discharged as per the final assessment, the relevant date under Section 28 has not been reached and therefore, how the interest under Section 28AB would be worked out in the facts of this case. The order of interest and penalty, to our mind, is pre-mature and is required to be set aside.
3. We, therefore, set aside the present order and remit the matter back to the jurisdictional Assistant Commissioner to finalise the Bills of Entries as per law and only thereafter if a demand under Section 28 is required to be issued within the time limit prescribed thereunder, the question of interest can arise. We do not find any case or cause for invocation of penalty as the issue of addition of freight as per the decision in the case of Garden Silk Mills v. U.O.I. [1999 (113) E.L.T. 358 (S.C.)] would not call for an offence under Section 111(m) as the valuation is debatable and was settled by the Hon'ble Supreme Court only in the year 1999 vide the above cited decision. We make it clear that but for this reason, if there are other reasons to invoke the confiscation process, the department is free to do so after issuing proper show cause notice drawing up proceedings under the relevant rules. The stay application and appeal are disposed of in the above terms.