Customs, Excise and Gold Tribunal - Calcutta
Biocon India (Pvt.) Ltd. vs Additional Collector Of Customs on 5 May, 1989
Equivalent citations: 1989(24)ECR110(TRI.-KOLKATA), 1994(70)ELT688(TRI-KOLKATA)
ORDER S.K. Bhatnagar, Member (T)
1. Shri S.N. Sinha Mahapatra, the Ld. Counsel for the petitioners stated that in this case they had cleared the goods in question from their factory near Bangalore for export to Nepal against prescribed documents including GP 1 and Nepal Invoice and the said Invoice along with GP 1 had been duly counter-signed by the Central Excise Officers concerned.
2. The packages were sealed and they were transported to Indo-Nepal Border and the relevant documents along with goods were presented to the Indian Customs Officers at Raxaul.
3. At this stage, the Customs Officers noticed at Raxaul that the Central Excise duty was evidently paid according to the documents at the rate of 5% whereas it ought to have been paid at the rate of 15%.
4. The Customs Officers thereupon seized the consignment citing Section 11 of the Customs Act, 1962 read with Section 3(1) of the Imports and Exports (Control) Act, 1947 and Rule 9(1) of the Central Excise Rules.
5. The show cause notice was issued by the Assistant Collector of Customs at Raxaul invoking Section 11 of the Customs Act read with Section 3(1) of the Imports & Exports (Control) Act, 1947 and Rule 9(1) of the Central Excise Rules read with Central Excise Notification No. 68/63, dated 4-5-1963 (issued under Section 12 of the Central Excises Act) and alleging consequential violation of Section 113 of Customs Act, 1962 and invoking Section 114 of the Customs Act, 1962. The case was adjudicated by the Additional Collector of Customs (Prev.), I.N.B., Muzaffarpur and the goods were confiscated referring to the above provisions and a redemption fine of Rs. 20,000.00 was imposed and a penalty of Rs. 1,00,000.00 was imposed under the Customs Act, 1962.
6. It was their contention that the goods had been cleared from the Central Excise factory by paying 5% duty which was applicable to the goods for home consumption and not for the goods meant for export to Nepal. When this mistake was pointed out to them, they had immediately paid the balance amount due to the Government.
7. As a matter of fact, the Customs Authorities at Nepal had intimated their Bangalore counterparts and they had deposited the duty at Bangalore. Then the Customs at Raxaul were duly informed about it. It was also their contention that the Department has wrongly treated it as a case of smuggled goods and has incorrectly invoked the provisions of the Customs Act and the Customs Officers have also erred in seizing the goods under the Central Excise Rules and the Customs Act and imposing fine and penalty under the latter Act which was not applicable.
8. No violation of Customs Act or the Imports & Exports (Control) Act, 1947 was involved in this case and the Department has not shown as to which clause of Section 113 was attracted and from which clause of the Imports & Exports (Control) Act was attracted and how fine and action could be taken under both the Customs and Central Excise Acts and the goods could be confiscated and penalty imposed under the Customs Act, 1962.
9. In view of the above position, it was their contention that they had got prima facie a strong case and the balance of convenience was in their favour.
10. Heard Shri P.C. Jain, the Ld. JDR who drew our attention to the Order-in-Original.
11. In view of the above facts and circumstances, we consider that prima facie case and balance of convenience were in favour of the applicants. As such grant stay of recovery of the amount in question and waive the pre-deposit of penalty unconditionally.
12. Thereupon, the Ld. Counsel mentioned that in this case the seizure was made in July, 1987 and the goods are still in the custody of the Department and the Border Check-Post at Raxaul.
13. The goods are chemicals and are likely to be affected due to long storage and they are suffering daily loss. In the circumstances, the main appeal may also be taken up immediately.
14. The Ld. JDR has no objection.
15. We found that the prayer of the appellants was justified and therefore, with the consent of both the sides we took up the main hearing of the appeal.
16. During the hearing of the main appeal both the sides reiterated the above submissions and stated that the submissions made above may be taken into account for the purpose of the main appeal.
17. We find that in this case the show cause notice has been issued by the Assistant Collector of Customs, Raxaul for alleged evasion of Central Excise Duty by wrongfully availing of the benefit of Central Excise Exemption Notification No. 216/86-C.E. The Ld. Assistant Collector has invoked Section 11 of Customs Act, 1962 read with Section 3(1) of the Imports & Exports (Control) Act. 1947 read with Rule 9(i) of the Central Excise Rules and Central Excise Notification No. 68/63(1).
18. The Ld. Assistant Collector has, further, invoked Section 113 of the Customs Act and asked the appellants to show cause to the Collector of Customs (Preventive), Patna as to why the goods should not be confiscated under Section 113 of the Customs Act and why penalty should not be imposed under Section 114 of the Customs Act read with Section 3(2) of the Imports & Exports (Control) Act, 1947.
19. We also notice that the case was, however, not heard by the Collector of Customs, Patna. But it was adjudicated by the Additional Collector of Customs, Muzaffarpur for reasons of which have not been specified.
20. We also notice that the Ld. Additional Collector of Customs has found it to be a case of removal of excisable goods from a factory at Bangalore (for the purpose of export to Nepal) after paying the Central Excise duty at a rate less than due (as alleged in the show cause notice). Since the show cause notice and the adjudication order a reference has been made to Section 12 of the Central Excise Act and Excise Notification No. 68/63 issued thereunder (apparently for the purpose of showing jurisdiction). The relevant portions thereof may be indicated below for convenience of reference.
Section 12. ...the Central Government may by notification in the official gazette declare that any of the provisions of the Customs Act "relating to levy of and exemption from customs duties; drawback of duty, warehousing, offences and penalties, confiscations, and procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by Section 3."
Notification No. 68/63-C.E., dated 4th May, 1963 (as amended):
"... the Central Government hereby declares that the provisions of Sub-section (1) of Section 105, Section 110, Section 115 [excluding clauses (a) and (e) of Sub-section (1)], clause (a) of Section 118, sections 119, 120, 121, 124 and clause (b) of Sub-section (1) of Section 142 of the Customs Act, 1962 (52 of 1962) relating to matters specified therein, shall be applicable in regard to like matters in respect of the duties imposed by Section 3 of the first mentioned Act, subject to the following modifications and alterations which the Central Government considers necessary and desirable to adapt those provisions to the circumstances namely...."
21. A plain reading of the above provisions shows that certain sections of the Customs Act have been made applicable to the Central Excise cases for the purpose of enabling the proper (jurisdictional) authorities under the Central Excise Act to follow a procedure similar to that provided under the Customs Act in respect of like matters in the enumerated circumstances.
22. These provisions do not empower the Assistant Collector of Customs or the Collector/Additional Collector of Customs (or any other officers of customs for that matter) to take cognizance of violation of Central Excise Act and Rules (and to seize or confiscate the goods under the Customs Act for violation of Central Excise Act and Rules).
23. We also note that the show cause notice makes a reference to Section 11 of the Customs Act, 1962 read with Section 3(1) of the Imports & Exports (Control), Act, 1947 and the aforesaid Central Excise provisions. However, a reading of the Section 11 of the Customs Act, 1962 shows that it does not refer to the Central Excise Act or Rules.
24. It is also not clear from the show cause notice or the order-in-original as to how the Section 11 of Customs Act, 1962 comes into picture and how it can be read with the Central Excise Rules. The Ld. Departmental Representatives have also not been able to show us any provision(s) under the Customs Act or the Central Excise Act which confer(s) or vest(s) powers on Collector of Customs (Preventive), Patna (or any other officers of Customs, Indo-Nepal Border for that matter) to take cognizance of violation of Central Excise Law committed in the Bangalore Central Excise Collectorate (or any other Central Excise Collectorate for that matter).
25. In view of the above position, we are of the considered opinion that the Assistant Collector of Customs and the Additional Collector of Customs, I.N.B. had no jurisdiction to deal with the violation of Central Excise Law.
26. As aforesaid, Section 11 does not cover Central Excise Act or Rules; as such a violation of Central Excise Law cannot be deemed to be a violation of Customs Act, ipso facto, and the Customs Officers do not get any authority to pass any orders under the Customs Act, with reference to the provisions of Central Excise Law. The departmental action is, therefore, misconceived in this respect.
27. We further note that although the show cause notice makes a reference to Section 113 and Section of the Customs Act, no case has been made out with reference to Section 113 of Customs Act, 1962 in the show cause notice and there is no evidence to show that the appellants were making an attempt to illegally export the goods to Nepal. On the contrary, from the submissions made before us by the Ld. Counsel (and not contradicted by the Departmental Representatives), it is abundantly clear that the goods had been presented to the Customs Authorities at the Customs check-post alongwith the relevant documents and therefore, it cannot be called an attempt to export the goods illegally by any stretch of imagination and the charges under the Customs Act and allied laws are also misconceived and the order of the Additional Collector is incorrect. In fact, the entire proceedings is bad in law ab initio.
28. In view of the above position, we set aside the impugned order and direct that the goods may be released forthwith.
29. The appeal is accepted.