Customs, Excise and Gold Tribunal - Delhi
Ram Nath Jayant vs Commissioner Of Customs on 22 February, 2000
Equivalent citations: 2000(119)ELT312(TRI-DEL)
ORDER A.C.C. Unni, Member (J)
1. These are 17 appeals filed by the above appellants against the common Order-in -Original dated 31-10-1997 passed by the Commissioner of Customs, New Delhi by which varyiing amounts of penalties were imposed on a number of noticees. The matter relates to the seizure of various items imported into India. The Department by show cause notice dated 12-5-1989 had alleged that - the noticees had acquired possession or were concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling, purchasing or in some other manner concerned with the seized goods and had dealt with such goods or other smuggled goods. The Commissioner by the impugned order had held that there was enough evidence to show that the goods seized were liable to confiscation under Section 111 of the Customs Act, 1962 and they had became liable for penal action under Section 112 of the Act. In the light of the above conclusion, various amounts of penalties were imposed on the appellants under Section 112.
2. S/Shri J.P. Pathak, J.S. Agarwal, J.M. Sharma, Harish Gulbati and S.C. Chawla, Advocates/Consultants represented the appellants before us. Shri Mewa Singh, ld. SDR was present for the Respondent Commissioner.
3. Shri J.M. Sharma, ld. Consultant appearing for the S.D. Refrigerators and others raised a preliminary point relating to the jurisdiction of the Commissioner of Customs, Delhi to pass the impugned order. He narrated the facts leading to the impugned order and submitted that as per the records, Customs Officers of Delhi Customs had conducted searches of various premises and seized certain goods and vehicles on 18-11-1988 and 22-11-1988 on the reasonable belief that the said goods were smuggled goods. The total value of the said goods amounted to Rs. 20 crores. The Department's case was that Shri Ishwar Punjabi (one of the appellants before us) was an agent supplying goods to various foreign Embassies in India. It was alleged that Shri Ishwar Punjabi and an official of the Liberian Embassy had entered into a conspiracy to smuggle goods as diplomatic cargo. Pursuant thereto the Liberian Embassay and Shri Ishwar Punjabi had obtained exemption certificate dated 25-8-1988 from the Ministry of External Affairs, Govt. of India for import of "construction material". Ministry of External Affairs had however, subsequently denied on 28-11-1988 that they had issued any such certificate. As per Bill of Entry read with the duty exemption certificate dated 25-8-1988 the goods were cleared at the Calcutta Port and forwarded to Delhi by road. The goods were cleared at Calcutta by declaraing them as 'construction material'. After completion of search of various premises by the Delhi Customs and further investigations conducted by them, seizure was made of the aforesaid goods in Delhi and proceedings were initiated by show cause notice dated 12-5-1989 against various noticees. The same was adjudicated by the Commissioner Delhi vide impugned order.
4. Ld. Consultant Shri J.M. Sharma, contends that the impugned order has been passed by the Comissioner without jurisdiction. He submits that since the goods have been cleared from Calcutta Port under the proper Bill of Entry, it was the Commissioner of Customs, Calcutta who was the 'prooer officer' to initiate action for the seizure of the said goods. Proceedings for confiscation of the seized gooes as well as penalties on the various noticees could be taken under the law only by the Proper Officer of Customs who had jurisdiction over the imported goods and not by any other authority. In this connection, he relies on the decision of the Apex Court in UOI v. Ramnarain Bishwanath reported in 1997 (96) ELT 224 and certain other decisions, viz. Ramharain Bishwanath v. CC Calcutta 1988 (34) ELT 202 (T); Grand Slam International v. CC 1992 (57) ELT 161 (T); Engee Industrial Services v. CC Bombay 1996 (87) E.L.T. 152 (Tribunal); and Devilog Systems India v. CCE 1998 (76) ELT 520 Karnataka High Court). In this connection he points out that the Commissioner himself has not disputed this fact. He had in parargraph 10 of the impugned order observed that 60 wooden pallets were imported in the name of the Liberian Embassy which were got cleared at Calcutta Port by one T.R. Disouza of M/s. Hove Pack International, Calcutta and that the goods were dispatched to Delhi in trucks. Ld. Consultant submits that the impugned order of Commissioner, Delhi cannot be sustained in law as it had been passed by an authority who had no jurisdiction in the matter.
5. Shri J.S. Agarwal, Advocate appearing for Shri Punjabi and others submitted that he fully concurred with the submissions made by Shri J.M. Sharma, ld. Consultant on the question of jurisdiction of the Commissioiner, Delhi to pass the impugned order. He explained that in fact there were two proceedings, one relating to confiscation and the other relating to penalty. By Order-in-Original No. 326/91 dated 23-12-1991 Additional Collector, Delhi had directed confiscation of the said goods which were later confirmed by this Tribunal. Proceedings for imposition of penalty were taken out separately which had resulted in the impugned order passed by the Commissioner, Delhi. He submitted that under the Scheme of the Customs Act, it was for the 'Proper Officer' as defined in Section 2 (34) thereof to initiate action under various provisions of the Act. Under Sections 4 & 5 of the Act, the Central Government and the Central Board of Excise and Customs are empowered to appoint Officers of Customs and to allocate powers excercisable by the Proper Officers under the Act, territory-wise or function-wise. Under Section 47(1) where the Proper Officer is satisfied that the importer had paid the import duty assessed thereon, the Proper Officer has to make an order permitting clearance of the goods for home consumption. Where the import of the goods takes place within the territorial jurisdiction of a Proper Officer, it is that Proper Officer who had jurisdiction to deal with the goods by way of assessing the appropriate duty and to permit clearance of the goods for home consumption. This follows that proceedings relating to the confiscation of the goods so cleared or in relation to imposition of penalty on any person connected with such goods would also fall within the territorial jurisdiction of that Proper Officer and not on any other person. Inasmuch as the impugned order imposing penalties on the present appellants has been passed by the Commissioner of Customs, Delhi who was not the Proper Officer who had passed the order permitting clearance of the goods for home consumption under Section 47, he was not authorised to pass the impugned order and his order was without jurisdiction. He refers to para 76 of the impugned order wherein it has been observed by the adjudicating authority that the seized goods had been cleared at the Port of clearance at Calcutta by mis-declaring them as building material and in the disguise of diplomatic goods. Ld. Counsel relied on the following further decisions in support of his contention that the Commissioner Customs, Delhi did not have jurisdiction to pass the impugned order:
Bharat Electronic v. CCE -1997 (23) RLT 837 Sharad Homelal Daftry v. CCE -1988 (36) E.L.T. 468 (Cal.) High Court Singh Radio and Ors. v. CCE - 1988 (36) E.L.T. 713 (Tribunal) Sneh Sales Corp. v. CC - 1993 (63) E.L.T. 128
6. Shri J.P. Pathak, Advocate appearing for M/s. Ram Nath Jayant and Others, Shri Pawan Narang, Advocate appearing for Shri Ravinder Singh, Shri S.C. Chawla appearing for Shri Jawahar Gurbaxani adopted the submissions of ld. Consultant Shri J.M. Sharma and Shri J.S. Agarwal, ld. Advocates.
7. Opposing the above submissions, SDR Shri Mewa Singh, pointed out that the appellants had not raised the point relating to jurisdiction at the time of the adjudication proceedings and they could not raise the same at the stage of the appellate proceedings. He submitted that the proceedings initiated against the appellants for imposing penalty were on the basis of contravention of the provisions of Section 112 of the Customs Act read with Section 111 thereof. Section 111 made goods brought from a place outside India liable to confiscation under certain circumstances. Section 111 (m) made any goods which were imported which did not correspond in respect of value or other particulars liable to confiscation. Section 112 made any person who acquired possession or was in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling, purchasing or in any manner dealing with any goods which he knew or had reason to believe are liable to confiscation under Section 111 liable to penalty. In the instant case it was an admitted fact that the importer had mis-delcared the goods as building material in the Bill of Entry and had got clearance thereof as diplomatic goods and got them transported to Delhi. The action initiated against the appellants for imposing . penalty was consequent upon the seizure of goods under Section 111. Under Section 110 the Proper Officer who had reason to believe that any goods are liable to confiscation under the Act, may seize such goods. The seizure of the goods can take place in any place where the goods are lying at the time of seizure. Since in the instant case, the goods were found within the jurisdiction of the Commissioner of Customs Delhi, he was the Proper Officer for initiating proceedings for confiscation of the seized goods and for imposing penalties on the persons concerned with the said goods. He therefore, submitted that no question of jurisdiction arose in the present appeals and the preliminary objection raised by the appellants may be over-ruled.
8. We have considered the submissions. It is settled law that unless there is some provision either in the Act or in the Rules which precludes an assessee from raising an objection as to the jurisdiction, the assessee is not precluded from raising that objection even at a later stage since objection as to jurisdiction goes to the root of the case. [Para 3 of Bharat Electronics v. CCE -1997 (23) RLT 837 quoting Supreme Court decision in Commissioner of Sales Tax v. Sarjoo Prasad and United Commercial Bank v. Their Workman]. We, therefore, do not agree with SDK's contention that the appellants cannot raise objection relating to jurisdiction at this stage.
9. As regards reliance placed by the appellants on the various decisions referred to above, we find that the facts of the present case are different from the cases in which it was held that the Proper Officer to initiate proceedings would be the proper officer within whose jurisdiction the goods had been cleared for home consumption after import. In the case of UO1 v. Ramnarain Bishioanath (supra), the allegation was that the goods were imported on fictitious licences. The goods were imported at the Paradeep Port in Orissa whereas the seizure took place in West Bengal and proceedings were initiated by the Customs Authorities in West Bengal. In the case of Engee Industrial Services v. Commissioner of Customs (supra), the Tribunal had taken the view that where an order of clearance of imported goods under Section 47 had been passed by the proper officer having territorial jurisdiction over the import, it was only the Commissioner having territorial jurisdiction over the place of import/clearances who can pass an order extending the period for issue of a show cause notice under Section 124 for confiscation of the goods. However, it was also observed in the same order at paragraph 9 that the said principle would not apply to clandestinely imported goods i.e. goods in respect of which no order has been passed under Section 47 and no assessment had been made. In such a case, there was no assessment order passed by a Proper Officer having territorial jurisdiction over the place where the goods were imported. It was held that either of the two Proper Officers, namely, the Proper Officer having jurisdiction over the place of seizure or the Proper Officer having jurisdiction over the place of clandestine import can take action. It is to be noted that there was no finding to the effect that the proper officer within whose jurisdiction the seizure took place cannot adjudicate penalty. The ratio was to the effect that either of the two Proper Officers could initiate action and adjudicate the notice. Since a part of the cause of action is at the place to which the goods had been conveyed, the Proper Officer having territorial jurisdiction over the place of seizure will have jurisdiction to initiate, conduct and conclude adjudication proceedings. In the instant case, it cannot be said that no part of the cause of action in relation to the goods in dispute has arisen within the territorial jurisdiction of the Commissioner, Delhi. The Tribunal decision in Engee Industrial Services case, therefore, does not advance the case of the appellants as regards the jurisdiction question. In the case of Devilog System India (supra), the question considered by the Hon'ble Karnataka High Court was whether it was proper for the Assistant Collector of Customs, Internal Audit Department, Madras to issue show cause notices relating to short levy on goods imported through Madras Port but cleared for home consumption at the Inland Container Depot (IAD) Bangalore. It was held that though IAD Madras had been assigned the function of Audit and Accounts and assessment of ICD Bangalore, there was nothing in the Board's Notification dated 1-2-1963 which had conferred on IAD Madras the jurisdiction as the 'Proper officer' for issuing a valid notice under Section 28 (1) for imports at Bangalore. The question for consideration was as to the scope of the Board's Notification re : functional jurisdiction of Asstt. Collector. This decision does not also therefore, support the contentions advanced on behalf of the appellant before us in the facts of the case.
10. In the Tribunal decision in Manohar Brothers v. CCE 1998 (98) ELT 821 also one of the questions that was raised was whether the show cause notice issued by Commissioner of Central Excise Bombay in was valid for purposes of Section 28 (1) of the Customs Act as per Notification dated 31-7-1992. It was observed that though the Collector of Central Excise Bombay III had been mentioned as Collector of Customs in the said notification, other officers of Customs working under him did not ipso facto, become Proper Officer for issuing Show Cause Notices. It was held that only those who had been assigned those functions would fall within that category. No support can therefore; be derived from the observations of the Tribunal in the said case for the proposition presently canvassed before us.
11. A proceeding for confiscation of seized goods is necessarily an action in rem which pertains to the goods per se. The Proper Officer having territorial jurisdiction over the sites of the seized goods will not lose his authority to initiate proceedings for confiscation or penalty merely because the goods were initially imported and cleared for home consumption by another proper officer. Further, the declaration in the Bill of Entry had described the goods as construction material. The Department had alleged that there was a mis-declaration on the part of the importer inasmuch as the goods that were actually imported were not construction material but some other goods. To the extent the clearance that was given under Section 47 by the Proper Officer at Calcutta Port did not correspond to the goods seized by the Customs Authorities, Delhi, it is clear that there is no nexus between the clearances under Section 47 and the impugned goods. In other words, the mis-declaration of the goods had the effect of breaking the nexus between the Bill of Entry and the seized goods. We also observe that in none of the decisions relied on by the appellants for questioning the jurisdiction of the Commissioner in the present appeal, the actual identity of the goods was in dispute. The said decisions are thus dearly distinguishable on facts.
12. In the above view of the matter, we are unable to accept the preliminary plea raised by the appellants about the impugned order being improper and not legal for reason of lack of jurisdiction on the part of the adjudicating authority.
13. The preliminiary point is accordingly rejected.