Customs, Excise and Gold Tribunal - Bangalore
Jindal Vijayanagar Steel Ltd. vs Commissioner Of Customs on 22 March, 2002
Equivalent citations: 2002(82)ECC105
ORDER S.S. Sekhon, Member (J)
1. As a follow-up action on registering an offence case against the Appellant for alleged clandestine removal of imported goods stored in the Customs Bondec Warehouse, maintained by the Central Warehousing Corporation, located in their premises, the officers of Directorate of Revenue Intelligence, Zonal Unit, Bangalore verified the past import/warehousing and other private records pertaining to imports under EPCG Scheme. They made detailed investigations regarding bearings covered by Bond No. 10/95-96 dated 7.3.96 and 2/96-97 dtd. 19.4.96. On 22.11.97 alongwith independent witnesses to inspect the installation of the goods covered under the abovementioned bonds, verified the same in the presence of Shri K. Sarovar, the Chief General Manager of the Appellant's plant. The said Mr. K. Sarovar identified the bearings which were mounted on the installed machines. The appellant at that time, on being pointed out the various alleged lapses of their part with respect of clearance of bearings covered by Bond Nos. 10/95 and 2/96, paid customs duty of Rs. 43,18,783, interest of Rs. 14,12,877 voluntarily vide TR-6 challan dated 22.11.97. Besides sum of Rs. 43,18,783 was also deposited by the appellant, vide challan dated 25.11.97 towards further possible liability. Thereafter a Show Cause Notice dated 21.5.98 was issued to the appellant and others, culminating in the order of the Commissioner of Customs, Bangalore dated 7.5.99 confiscating the goods with an option to redeem on payment of fine of Rs. 12 lakhs confirming duty of Rs. 43,18,783 under Section 72, interest of Rs. 14,12,988 and penalty of Rs. 60 lakhs on the appellant and dropped penalty proceedings of Mr. Singhal and Mr. Kedia. CEGAT while hearing the Stay Application by their order dated 31 .§.99 disposed of the appeal itself and remanded the matter for de novo consideration to the Commissioner of Customs. While passing the order CEGAT observed as follows:
We also find that the statement of Shri K. Sarovar does not directly admit that the specified number of bearings were cleared on a date prior to the date of the ex-bond Bills of Entry because the dates mentioned therein are the dates with regard to the completion of the erection of the basic equipment on the foundation in the appellants premises and it is quite possible the same dates may be different from the date on which the bearings are actually removed. There is no analysis or evaluation of any evidence as to exactly on what date the clandestine removal took place. We also note that as against this the appellants had also submitted before the original authority that the removal had been in terms of EPCG licence and only after following the due procedures i.e. after submission of the ex-bond Bills of Entry. We find on this submission there is no order in the Order-in-Original impugned. In view of this, we are clearly driven to the conclusion that the Order-in-Original impugned is not a Speaking Order.
They also specifically directed, that the Commissioner in the de novo proceedings should take into consideration all the submissions of the appellant and their observation and pass a speaking order expeditiously.
2. The Commissioner (Mangalore) due to changes in the jurisdiction, passed the order impugned before us. He confirmed the demand of duty of Rs. 43,18,783 under the provisions of Section 72 of the Customs Act, 1962, confiscated the goods under seizures made on 21.1.97 under Section 111(d)/111(j) of the Customs Act, 1962 and gave an offer of redemption on a fine of Rs. 12 lakhs. Interest was demanded on the duty determined. A penalty of Rs. 60 lakhs under Section 112(a) of the Customs Act, 1962 was imposed on the appellants and the proceedings of penalty on the others, 'was dropped.
3. The appellants have taken the grounds:
(a) Order has been passed in a totally arbitrary manner completely ignoring the directions of the CEGAT order dtd. 2.9.99 by totally relying upon the earlier order of the Commissioner of Customs, Bangalore dtd. 7.5.99 which had been set aside by the CEGAT.
(b) Has erred in holding that Mr. K. Sarovar, in his statement recorded by the Customs authorities has clearly admitted that the bearings covered by the subject Bills of Entry and that as the said statement has not been retracted. It was submitted that the Ld. Commissioner himself has stated that Mr. Sarovar in his statement had clarified that the contractor M/s. T.T.G Industries had installed machinery and submitted a report at the end of every month showing the items installed that the items mentioned in the bond Nos. 10/95 and 2/96 were covered in the reports of the contractor and that these items were cleared from the bonded warehouse over a period of 3-4 months prior to installation. Mr. Sarovar in his statement dtd. 22.11.97 stated that the dates mentioned against various entries were pertaining to placement of basic equipment of foundations. From these, it is clear that Mr. Sarovar was referring to only basic equipment and not to bearings. He has further stated that he was not in charge of day to day administration and only used to visit the factory occasionally.
(c) The Ld. Commissioner has further erred in holding that before the CEGAT, the appellant had taken the Bench through the statement of Sri K. Sarovar and submitted that the offending goods had been purchased from the outside, that there was no deposition to that effect in the statement of K. Sarovar forming part of the case records. In this regard, it is submitted that Mr. Sarovar himself in his statement has clearly relied upon the contractors bills raised from time to time. These Bills referred to various machinery which had been installed from time to time with respect to which the contractor had raised their bills. With respect to some of the machinery's referred to in the contractor bills, the bearings covered by bond Nos. 10/95 and 2/96 had been used. However, the basic machinery was not under issue and this was what purchased locally. These bills were a part of the case records before the CEGAT. It is once again reiterated that contrary to what has been held by the Commissioner in the impugned order, Mr. Sarovar in his statement dtd. 22.11.97 has not anywhere categorically stated that bearings covered by bond Nos. 10/95 and 2/96 were removed from the warehouse before de-bonding. The said conclusion has been reached by the Ld. Commissioner on a mis-interpretation of the said statement.
(d) Commissioner in the impugned order from time to time has referred to and relied upon the earlier order of the Commissioner of Customs, Bangalore dtd. 7.5.99 to justify his own stand. Reliance placed upon such a non-existent order to justify clandestine removal of the bearings is totally unsustainable. As an adjudicating authority, the Commissioner instead of relying upon in earlier order which had been set aside should have applied his mind independently to the facts of the case as presented to him.
(e) Inspite of very specific directions of CEGAT, Ld. Commissioner has chosen to ignore the submissions put forth by the appellant at the time of personal hearing and has solely relied upon the various observations of the Commissioner in his earlier order to pass the present impugned order.
(f) Commissioner has laid a great deal of emphasis on the earlier proceedings pertaining to the appellant and the various statements recorded in the course of the earlier investigations. He has stated in the order that in the said earlier statements, the clandestine removal of goods was admitted by the appellant and that the various dues was settled under the KVSS Scheme.
(g) The CEGAT had specifically while remanding, directed the Commissioner that the appellants submissions regarding removal in terms of EPCG Licence and after following due procedures i.e., after submissions of ex-bond Bills of Entry should be given due consideration and a speaking order should be passed. The Commissioner has relied upon all irrelevant facts and statement as well as the earlier order of the Commissioner to reach the conclusion that the bearings covered by bonds No. 10/95 and 2/96 were cleared clandestinely before filing of the ex-bond Bills of Entry. An order which ignores the actual evidence of record and relies upon all irrelevant material is therefore clearly unsustainable in law.
(h) The bearings under consideration are cleared by two ex-bond Bills of Entry No. 320202 and in the reverse of the ex-bond Bills of Entry, there is an endorsement made by the officer of CWC that the de-bonded material was issued on 23.11.96 and there is also an endorsement by Customs Officer that the goods were passed out of Customs charges on 23.11.96, once this is established the question of clandestine removal of these goods does not arise. They are covered by proper licence and ex-bond Bills of Entry. Licence No. 0150052 11/13/10/1/1 is mentioned in the Bills of Entry. Allegation of clandestine removal cannot be based on conjectures and surmises. The charge of clandestine removal against the appellant is totally unsustainable. The question of confirming demand against the appellant does not arise at all.
(i) Has erred in confirming the demand under Section 72 of the Customs Act and brushing aside the contentions of the appellant that reliance of Section 72 was misconceived and any duty demand for Customs duty could only be made under Section 28 of the Customs Act.
(j) Suffers from total non-application of mind, he has reimposed the redemption fine of Rs. 12 lakhs and penalty of Rs. 60 lakhs under Section 112A, which was the same as was imposed by the earlier order in original dtd. 2.9.99. Has chosen to ignore all the case laws cited at the time of personal hearing with respect to imposition of fine and penalty in the given facts of the case.
4. We have heard both sides and considered the submissions, and find:
(a) The Commissioner has not complied with the remand order. While we appreciate the argument of the Ld. SDR, that the finding of removal of goods having taken place before the issue of EPCG licence, would be sufficient, as it may not be possible to prove the exact manner and time of the commission of the offence, which is within the special knowledge of the party. That was not required as held by the Supreme Court in the case of Collector of Customs v. Bhooramal 1983 ELT 1546 and subsequent decisions. All that is required is, the establishment of such a degree of probability that a prudent man may, on its basis, believe in the existence of the fact in issue. The Ld Advocate on behalf of the appellants, is also making a valid point that the reliance by the Commissioner on Mr. Sarovar's statement and his subsequent letters, to prove that the goods had been cleared prior to the ex-bond Bills of Entry, are mis-construction and incorrect reading of the statements. The Ld. Advocates have laid stress on that part of the statement, wherein they are interpreting that it pertains only to placement of basic equipment on the foundation for which purpose the Contractor had raised the bills and a reference to such basic equipments would not necessarily mean a reference to the bearings. We have also considered, that the statement dtd. 22.1.97, is not the only statement of Shri K. Sarovar and there have been other statements, recorded, on other dates. These statements are required to be considered in their totality, as regards disclosures made by him. We have also noted the fact that Sarovar's cross-examination was not sought for by the appellants. Therefore it was more important, for the Commissioner to have considered the given details as recorded in his statement dtd. 22.1.97 and arrived at his findings especially on the detailed chart as given by him in this statement dtd. 1.9.97 as regards the placement of the bearings and the actual details of installations. This was what the Commissioner was required to do. It has not been done.
(b) Since the interpretation of the submissions have not been made in their entirety by the Commissioner in the remand proceedings and Revenue is making a serious submission that there are relied upon documents which corroborated. The statement of Sarovar as regards the reports of the Contractor. It is also submitted that at Page 88 of the Paper book, filed by the appellant, the first sentence of Sarovar's statement, should read "the above dates are the ones pertaining to placement of basic equipments on foundations for which a contractor has raised the bills and copies of which are furnished and not the mistyped statement as on record. Considering the same and since the original statements were not before us, we are unable to comment and determine as to what was in the Original statement. The Commissioner should look into the original statement, verify the submission of the Revenue that the numbers of the ball bearings that went into each item are available in those statement of Sarovar or not and only thereafter decide the matter.
(c)The Commissioner in the remand proceedings should examine Sarovar's statements in minute details alongwith the material in form of corroborative documents on record, as submitted by Revenue. Therefore, comply with the original remand directions, which was the gravamen of the submissions by the Ld. Senior Advocate when the matter was heard by us. We would not expect the unrevelling of each link in the chain, as held in Bhooramal's case by the Apex Court cited by the Ld. SDR, however, we would expect the establishment of the fact that the bearings were not only removed but also used by installing them in the machines, before the finalisation of the ex-bond Bills of Entry. We do not expect the adjudicator to determine with mathematical position, the exact time of removal of the bearings but would expect him to examine Sarovar's depositions and conclude as to what it deposes in light of the material available in this case.
(d) We are in agreement with the appellant's submission that the imposition of the same amounts of Redemption Fine and penalty, as in the earlier order which was set aside, without giving reasons for the same cannot be upheld. It would exhibit non-application of mind if not a pre-set mind. The same as imposed are also therefore ordered to be redetermined, in the remand proceedings, which we are reluctant y ordering in this case.
6. In view of our findings, the order is set aside and remanded to the Commissioner for de novo adjudication.