Customs, Excise and Gold Tribunal - Delhi
S.K. Nayyar And Ors. vs Collector Of Customs on 29 March, 1990
Equivalent citations: 1990(30)ECR278(TRI.-DELHI), 1990(49)ELT360(TRI-DEL)
ORDER S.K. Bhatnagar, Member (T)
1. These are the appeals against the order of the Addl. Collector of Customs, Delhi dated 15.9.1988 passed with reference to two consignments of DMF disks received under AWB No. 555-1039-2130 and under AWB No. 555-1039-2126 received in the name of M/s. Charu International (P) Limited, New Delhi.
2. Regarding the first consignment, the Bill of Entry No. 210396 dated 10.11.87 was filed and the matter was adjudicated upon by the Asst. Collector of Customs Shri K.J. Chowdry on 17.11.87. By this order, the Asst. Collector confiscated the goods but allowed them to be redeemed on payment of fine of Rs. 10,000/- only.
3. It is the department case that before the goods could be physically released a complaint was received by the Customs from M/s. Charu International in which they stated inter alia that it appeared that somebody had used their name and imported the goods and was trying to clear the same from Customs.
4. As such the Customs preventive kept survillance and when one Shri Rajesh-war Sharma approached the cargo unit with the documents they interrogated Shri Sharma. It is the department contention that Shri Sharma said that the goods actually belonged to one Shri Sunil Desai of Bombay who had imported the same in the name of M/s. Charu International New Delhi; and Shri Sunil Malhotra, an employee of the Customs House clearing agent Shri R.C. Verma, Shri S.K. Nayyar and Shri S.R. Parashar all employees in the Ministry of Finance, were concerned in the clearing of the consignment.
5. It was further revealed that Shri Sunil Desai was expected from Bombay on 17.11.87 and another similar consignment was also expected to arrive from Singapore at Delhi Airport.
6. The officers apprehended Shri Sanjeev Malhotra and Shri R.C. Verma on 17.11.87; Shri Sunil Desai was also apprehended at the domestic terminal on arrival from Bombay.
7. According to the department Shri Sunil Desai admitted ownership of the said goods and the other expected consignment and also confirmed the arrangement of clearance with the help of Sanjeev Malhotra, Shri R.C. Verma, Shri S.K. Nayyar and Shri S.R. Parashar.
8. The first consignment which was said to be cleared was examined and so also the second consignment on arrival and the goods in question were found.
9. Further enquiries were made by the department and thereafter the impugned show cause notice was issued on 29.8.1988 and the matter was adjudicated by the Addl. Collector of Customs Shri S.P. Singh who passed the impugned order in respect of both the consignments on 15.9.1989. By this order the learned Addl. Collector confiscated the goods in question absolutely and imposed penalty on Shri Sunil Desai, Shri R.C. Verma, Shri Rajeshwar Sharma, Shri Sanjeev Malhotra, Shri S.K. Nayyar and Shri S.R. Parashar.
10. He "discharged the show cause notice against M/s. Charu International Private Limited".
11. The learned counsel Shri Nankani stated that Shri Sunil Desai had received the show cause notice and also replied to the same.
12. Subsequently when personal hearing was offered they had requested for adjournment as the notice was too short and they had also asked for legible copies of some statements but instead of considering the request, the learned Addl. Collector passed the order ex parte, without giving them an opportunity of being heard in the matter.
13. It was also their submission that when the appellant arrived from Bombay he was apprehended and his statement was recorded under duress while he was still under detention.
14. He was also detained under COFEPOSA but was released by the Hon'ble High Court.
15. It was also their contention that the appellant had retracted his statement at the first opportunity and had denied any connection with the goods.
16. They had not filed any papers for clearance of the goods and were in no way concerned with the importation or clearance thereof and were not liable to penalty.
17. That apart the impugned order has been passed with reference to two consignments one of which had already been adjudicated upon by the Asst. Collector. In other words, the Addl. Collector has passed an order in original with reference to those goods as well which had already been confiscated but allowed to be redeemed on payment of fine of Rs. 10,000/- by them and the duty and fine in respect of which had in fact already been paid. This was not permissible under law.
18. The learned counsel also pointed out that as per department's case itself some information was received after the adjudication of the first consignment and accordingly they had made further enquiries and it appears that the matter was placed before the executive Collector who thereupon examined the Order No. 2040/87 dated 17.11.87 passed by Shri K.J. Chowdry, Asst. Collector against M/s. Charu International. It appears to the Collector that the order was void ab initio and therefore he passed an order under 129D(2) and directed Shri K.J. Chowdry to move an application in terms of Section 129D(2) and (4) i.e. to file an appeal before Collector (Appeals).
19. This order of the executive Collector Shri M.K. Jutshi is dated 24.12.87 (Page 139 of paper book).
20. This order shows that an appeal was contemplated against the order of the Asst. Collector. However, instead of complying with this order, the Asst. Collector issued the impugned show cause notice on 29.8.88 to show cause to the Addl. Collector and the Addl. Collector adjudicated the matter and passed the impugned order.
21. A perusal of the show cause notice and the order of the Addl. Collector's order would show that it does not refer to the above facts and has ignored the order of the Collector of Customs dated 24.12.87. In this show cause notice, the matter relating to the first consignment was clubbed with the matter related to the second consignment and the Addl. Collector passed the impugned order with reference to both the consignments taken together and imposed a penalty keeping in mind the total quantity and value and the alleged offences.
22. The learned Addl. Collector also ignored the executive Collector's order dated 24.12.87 and proceeded to deal with the matter as if it did not exist.
23. It was also noteworthy that whereas the order of the Executive Collector shows that the department's view was that the goods had been mis-declared both in respect of the quantity and value and gross under-valuation was involved, the impugned show cause notice does not refer to Section 111(m) and (1), but has been issued with reference to Section 111(1) and (i) and in the impugned order the learned Addl. Collector has also passed the impugned order with reference to Section 111(d) and (i).
24. Further no case has been made out with reference to Section 111(i). But the same has been invoked and the order has been passed with reference to it. Again Section 112 has been invoked without mentioning any sub-section.
25. The learned Executive Collector has already brought on record his views that the order of the Asst. Collector was incorrect and void for reasons stated in his order under Section 129D(2) and (4). The learned Addl. Collector has in the impugned order ignored. As a matter of fact he has ignored the order of the Asst. Collector as well as the order of the Collector and has not cared to verify whether in pursuant of the executive Collector's order an appeal had been filed and if so what was the orders of the Collector (Appeals) thereon; but has confiscated all the goods contained in both the consignments and has imposed penalty on the appellant keeping in view the quantity and value of both the consignments (both together).
26. It was his contention that all this shows that the impugned order has been passed without taking all the relevant facts into account, without proper application of mind and without observing principles of natural justice. The impugned order does not state as to why their request for adjournment was not granted. That apart, the order does not discuss the issue involved and does not amount to a speaking order.
27. The order was therefore bad in law and was required to be set aside.
28. The learned DR stated that after the Asst. Collector has passed the adjudication order, with reference to the first consignment a complaint was received from M/s. Cham International and therefore survillance was kept and as a result of enquiry and investigation it was found that there was a conspiracy involving all these appellants who have been penalised for the conspiracy, to clear the consignments through Customs in violation of the Customs Law as stated in the show cause notice and the order in* original.
29. The show cause notice was issued to all the person concerned and an opportunity for personal hearing was granted but they did not avail of the same. In the circumstances the Addl. Collector had to pass the order ex parte.
30. He however accepts that the goods confiscated by the impugned order included the goods regarding which on the spot adjudication order had already been passed by the Asst. Collector and the penalty had been imposed keeping in mind the total quantity and value of the goods taking together the contents of both the consignments.
31. He also accepts that after the issue of the order in original by the Asst. Collector the matter had been reviewed by the Executive Collector of Customs and an order had been passed by him in terms of Section 129D(2) and (4) in which he had directed the Asst. Collector to file an appeal before the Collector (Appeals). He further stated that an appeal was actually filed in terms of this order and the appeal No. was 908 dated 21.3.88/22.3.88.
32. The learned counsels for other appellants stated that they adopt the arguments advanced by the learned counsel Shri Nankani in respect of the legality and propriety of the order. They would also like to emphasise that there was non-application of mind on the part of the Addl. Collector and he had passed the order without giving them an effective opportunity of being heard in the matter and without taking into account the submissions made by them in reply to the show cause notice.
33. The learned counsel for Shri Parashar added that his client had given an exculpatory statement. He had received the show cause notice and given a reply denying the charges but had in fact not even received the notice of personal hearing.
34. The learned counsel for Shri R.C. Verma added that he was under detention under COFEPOSA but instead of serving the show cause notice in the jail where he was lodged, it was knowingly sent to his family. He had however subsequently sent his reply and denied the charges. Further there was no need for personal hearing and it was merely a show.
35. The learned counsel for Shri Malhotra also added that his client was merely a clerk of the clearing agent and had nothing to do with the actual importation of the goods.
36. His statement which was inculpatory was recorded under duress while under detention but he had retracted the same at the earliest opportunity. He had received the same and replied to it denying the charges.
37. He was offered but had requested for adjournment which was refused and ex parte order was passed.
38. The counsel for Shri Nayyar stated that he was also under detention under COFEPOSA while an attempt was made to deliver the show cause notice at his residence but the postman did not deliver and he got the show cause notice after six months and gave a reply. The adjournment requested for was not allowed and the Addl. Collector passed the ex parte order.
39. It was reiterated on behalf of all the appellants that the principles of natural justice were not duly observed and the order was a non-speaking order and was bad in law.
40. The learned SDR drew attention to the operative portion of the order in original and stated that opportunity for P.H. has been granted but not availed of by the appellants. He emphasised that the goods having been imported in violation of the Customs Act were liable to confiscation and the appellants were liable to penalty as the persons concerned.
41. We have considered the submissions of all the appellants and the respondent.
42. We find that the submissions of the learned counsels have a lot of force inasmuch as apparently two orders-in-original have been passed in respect of the one and the same consignment (namely the first consignment). This was obviously improper.
43. It is really surprising that the learned Asst. Collector who issued the show cause notices as well as the learned Addl. Collector who adjudicated the case have entirely ignored and by-passed the statutory order of the (executive) Collector passed in terms of Section 129D(2) and (4). It is even more surprising that even the observation of the (Executive) Collector regarding facts and his views regarding mis-declaration of quantity and value including gross mis-declaration regarding value) has also not been taken note of and no charges have been even framed with reference to Section 111(m) and (1). Be that as it may, this shows that in respect of the same consignment different set of allegations have been made by the department one in the matter placed before the (executive) Collector and another in the matter placed before the Addl. Collector (Adj.); and serious charges with reference to gross mis-declaration have been omitted while issuing the impugned show cause notice for reasons which have not been disclosed. This in our view seriously affects the credibility of department's version placed before us.
44. In any eventuality there cannot be two adjudication orders in original in respect of the same goods and the second order was null and void in so far as it related to the first consignment.
45. In respect of second consignment it was of course open to the department to issue a show cause notice and it was open to the Addl. Collector to adjudicate it. However in this respect the department has seriously erred in invoking Sub-section (1) of Section 111 as no case has been made out with reference to 'concealment' to which this Sub-section relates.
46. It is also not clear as to why only Section 112 has been mentioned without reference to any Sub-section instead of the well-established position in hand that it was necessary so to do. Further it has been stated by the department that M/s. Charu International in whose name the goods were imported and documents filed had subsequently complained that their name had been misused. As such an enquiry from the Bank and the suppliers was obviously called for.
47. However it is not clear as to what enquiry, if any, was made with the Banks and/or the foreign suppliers to find out as to who had actually placed the orders and how Bank has retired the documents.
48. It is also not clear as to why the learned Addl. Collector has not dealt with the submissions made by the appellants in their respective reply to the show cause notice.
49. It is also not clear as to why he has not even referred to the statements of various appellants and not discussed the aspects of the alleged admissions and denials. It is noteworthy that as the matter stands now, all the appellants have denied the charges and denied the ownership of the goods and stated that they are not concerned with the goods in any manner. Shri Sunil Desai has claimed that his inculpatory statement was recorded while he was under detention and that he had retracted the statements at the first opportunity but there is no mention about these aspects in the order of the Addl. Collector. Similarly it is not clear as to on what basis the Addl. Collector has passed orders in respect of the other appellants.
50. It is also surprising that while personal hearing was offered no real or effective opportunity of personal hearing was granted to anyone of the appellants.
51. It is well-established that giving an opportunity to the appellants is a very serious and important matter and is not intended as merely a high chance or an eyewash. Therefore a perfunctory hearing has no meaning.
52. It is noteworthy that one of the appellants stated that he did not even receive the notice of the personal hearing.
53. Others who had received the notice but requested for adjournments have not been told as to why the request was refused. Only one of those who ultimately appeared before the adjudicating authority has stated in the open court that no submissions were allowed to be made and he did not get a chance to say anything. We are inclined to believe these submissions because the order in original does not disclose as to what submissions if any had been made during the personal hearing. This aspect is in fact conspicuous by its absence.
54. We also note that the Addl. Collector has in fact not discussed any of the major issues or the aspects detailed by the learned counsels and has not recorded any finding in this respect.
55. It is well-established that an order must be a speaking order and yet no effort seems to have been made towards that end. Indeed by glossing over the written submissions made by the appellants and by ignoring the oral submissions which were allowed to be made it at all and by passing a non-speaking order ex parte the learned Addl. Collector had indeed violated all the norms of established law and procedure.
56. We further note that since the learned Addl. Collector has adjudicated the matter with reference to both the consignments taking together the quantity and value of the goods contained in both the consignments (including the one already adjudicated upon) and imposed penalty keeping in mind their total quantity and value even otherwise it was not possible to segregate or separately assign or appropriate the penalty to anyone of the consignments at this stage and the imposition of composite penalty cannot be upheld.
57. In view of the above position, we feel that there has been non-application of mind and the action of the department suffers from serious infirmities and the order is bad in law ex-facto.
58. As such without going into the merits of the case, we set aside the penalty imposed on all the appellants.