Karnataka High Court
M/S Intersales vs The Commissioner Of Customs on 29 January, 2021
Bench: Alok Aradhe, Nataraj Rangaswamy
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 29TH DAY OF JANUARY 2021
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE NATARAJ RANGASWAMY
C.S.T.A. NO.3 OF 2017
BETWEEN:
M/S. INTERSALES
REPRESENTED BY ITS PARTNER
SHRI. MUKESH BHANSALI
NO.18, R.N. MUKHERJEE ROAD
8TH FLOOR, KOLKATTA-700001.
.... APPELLANT
(BY MR. RAGHAVENDRA B. HANJER, ADV.,)
AND:
THE COMMISSIONER OF CUSTOMS
PB NO.5400, C.R. BUILDING
QUEENS' ROAD, BANGALORE-560001.
... RESPONDENT
(BY MR. JEEVAN J. NEERALGI, ADV.,)
---
THIS C.S.T.A. IS FILED UNDER SEC. 130 OF THE CUSTOMS
ACT, ARISING OUT OF ORDER DATD 05-10-2016 PASSED IN
FINAL ORDER NO.20905/2016 BY THE APPELLATE TRIBUNAL IN
APPEAL NO.C/373/2006, PRAYING TO DECIDE THE QUESTION OF
LAW AS FRAMED HEREIN ABOVE IN FAVOUR OF THE APPELLANT
AND THEREBY ALLOW THE APPEAL IN FULL WITH
CONSEQUENTIAL RELIEF IF ANY. SET ASIDE THE FINAL ORDER
NO.20905/2016 DATED 05-10-2016 PASSED BY THE HON'BLE
APPELLATE TRIBUNAL IN APPEAL NO.C/373/2006 (PRODUCED AT
ANNEXURE-A) AND THEREBY DIRECT THE RESPONDENT TO PAY
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THE MAHAZAR VALUE OF RS.28,26,001/- ALONG WITH INTEREST
AT THE RATE OF 18% PER ANNUM TO THE APPELLANT & ETC.
THIS C.S.T.A. COMING ON FOR HEARING, THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:
JUDGMENT
Mr.Raghavendra B.Hanjer, learned counsel for the appellant.
Mr.Jeevan J.Neeralgi, learned counsel for the respondent.
This appeal under Section 130 of the Customs Tax Act, 1962 (hereinafter referred to as 'the Act', for short) has been filed by the appellant against the order dated 05.10.2016 passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short).
2. Facts leading to filing of this appeal briefly stated are that the appellant is the holder of import export code and is engaged in the business of import and export of earth moving equipments. The appellant imported earth moving machinery parts from USA through Bangalore Airport and filed two bills of entry bearing No.004350 dated 19.02.1993 3 for clearance through their customs house agent M/s. Pavan Enterprises. However, the officers seized the goods on 19.03.1993 on the allegation that the imported goods have been manufactured by KOMATSU in Japan and the appellant has failed to produce the country of origin certificate. The appellant thereafter filed a writ petition before this Court namely W.P.No.9028/1993 seeking a direction for release of goods seized during the course of investigation. This Court, by an order dated 12.04.1993, ordered for release of goods on provisional basis on payment of appropriate duty determined within two weeks. However, it is the case of the appellant that the aforesaid order was not complied with, by the Department and the Assistant Commissioner of Customs, Bangalore, vide communication dated 22.04.1993, determined the duty liability at Rs.29,67,700/- has asked the appellant to execute provisional duty bond for the differential duty of Rs.17,01,610/- with surety. However, no specific order was passed in respect of bills of entry for releasing of the seized goods.
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2. The appellant vide communications dated 14.06.1993, 27.06.1993 and 30.06.1993 requested the Assistant Commissioner to release the goods immediately. However, no action in the matter was taken. Thereafter, two show cause notices dated 19.05.1993 were issued to the appellant by the Commissioner of Customs, Bangalore proposing to reject the declared invoice value on the ground of mis-declaration. The appellant filed a common reply on 30.07.1993 in which the allegations in the show cause notices were denied. The appellant thereafter submitted various documents received from the supplier in USA along with a communication, informing that the supplier had extended the discount up to 60% for KOMATSU parts. The Collector of Customs, Bengaluru, vide common order dated 04.10.1993 rejected the transaction value of the imported goods and thereby re-fixed the transaction value by enhancing the same by 50%. The Collector also ordered for confiscation of the imported goods and also imposed penalty of Rs.50,000/- on the appellant. Aggrieved by the order of the Collector, the appellant filed an appeal before the Appellate Tribunal. During the pendency of the appeal, the 5 respondents auctioned the goods on 10.10.2000 for a lesser amount as against the value of goods mentioned in mahazar which was Rs.28,00,000/- without any notice to the appellant and in violation of the directions issued by this Court to release the goods in favour of the appellant on provisional basis. The Appellate Tribunal, vide order dated 30.01.2002, remitted the matter with a direction to re-consider the issue afresh on the ground of not considering the issue of country of origin supported by the certificate issued by the distributors / suppliers. The appellant, after remand, filed written statement on 02.04.2004. The Commissioner of Customs, Bangalore, vide order dated 01.05.2006, upheld the earlier order and enhanced the penalty from Rs.50,000/- to Rs.2,00,000/-. The appellant being aggrieved by the order of the Commissioner, filed an appeal along with the application for stay before the Appellate Tribunal. The Tribunal, vide order dated 05.10.2016, dismissed the appeal preferred by the appellant on the ground that the Tribunal has no power to order for compensation under the appellate jurisdiction.
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3. Learned counsel for the appellant, while inviting the attention of this Court to the order passed by the Tribunal and in particular paragraph 4 of the aforesaid order, submitted that the Tribunal had not adverted to the contentions raised by the appellant with regard to the invalidity of the confiscation proceedings and subsequent sale. It is further submitted that the Tribunal ought to have appreciated that under Section 129B of the Act, it has power to pass such order as it deems fit which included the power to pass an order for restitution of the amount of value of goods which was illegally confiscated. In support of aforesaid submission, reliance has been placed on the decisions in 'B.ARUN KUMAR & CO. Vs. COMMISSIONER OF CUSTOMS' (2005) 180 E.L.T. 152 (CAL.), 'MOHAMMED YASIN Vs. COMMISSIONER OF CUSTOMS, BANGALORE (2005) 189 E.L.T. 56 (TRI-BANG), 'SHILPS IMPEX Vs. UNION OF INDIA' (2002) 140 E.L.T.3 (SC), 'RATAN LAN JAIN' Vs. UOI (2017) 349 E.L.T. 468 (CAL.), 'CC UTTAR PRADESH & UTTARANCHAL Vs. PIDILITE INDUSTRIES LTD. (2014) 309 E.L.T. 598 (ALL), 7 'COMMISSIONER OF CUSTOMS (PREVENTIVE) Vs. ASHAN WARIS' (2017) 345 ELT 86 (CAL.)
4. On the other hand, learned counsel for the respondent has supported the order passed by the Tribunal and has submitted that the action of the respondent in confiscating and in putting the confiscated goods to sale, has been upheld by the Tribunal.
5. We have considered the submissions made on both sides and have perused the record. From perusal of paragraph 4 of the order, we find that the Tribunal has not considered the issue with regard to the validity of the confiscation of the goods and the consequent sale. The order passed by the Tribunal is cryptic and suffers from the vice of non-application of mind inasmuch as the Tribunal had not adverted to the rival submissions made by the learned counsel for the parties. In the fact situation of the case, we deem it appropriate to quash the impugned order passed by the Tribunal and remit the matter to the Tribunal to decide the issue afresh. The Tribunal shall specifically advert to the 8 issue of validity of the confiscation proceedings and the consequent sale by the respondent and thereupon, shall decide the issue with regard to restitution of value of goods to the appellant.
6. In the light of the decision rendered by various High Courts including this Court which has been relied upon by the learned counsel for the appellant, the Tribunal is directed to decide the appeal within a period of two months from the date of receipt of certified copy of the order passed today.
Accordingly, the appeal is disposed of.
Sd/-
JUDGE Sd/-
JUDGE RV