Customs, Excise and Gold Tribunal - Bangalore
M/S. Flora Wall Coverings Ltd., And ... vs Customs, Bangalore on 12 January, 2001
ORDER
Shri G.A. Brahma Deva
1. These are 12 appeals filed by the appellants accompanying with the stay applications as against impugned orders A.No. 12/99 dt.23.12.99 and 14/99 dt.31.12.99 respectively.
2. By the respective impugned orders Commissioner has demanded the duty and penalties which is as under :-
SI.No Stay Petition Appeal No. O-I-O No. & Date Name of the PartyM/s./Shri./Smt Duty(Rs.) Penalty (Rs.)
1.
C/S/189/ 2000 366/2000 Or. No. 12/99 dt. 23.12.99 (C. No. VIII/ 10/11/98 Cus.Adjn.) Flora Wall Coverings Ltd., 2.30.72.878/-
2.30.72.878/-(U/S114A/112 (a)
2. E/S/191/ 2000 368/2000 M. S. A. Aleem 50.00.000/-(U/S 112(b)(i)
3. E/S/190/ 2000 367/2000 Or. No. 14/99 dt. 31.12.99 (C. No. VIII/ 10/25/98 Cus.Adjn.) Flora Wall Coverings Ltd., 4.96.12.992/-
4,96, 12,992/-(U/S114A)
4. E/S/188/ 2000 365/2000 M. S. A. Aleem 1,00,00,000/-(U/S112(b)
(ii)
5. C/S144/ 2000 296/2000 Or. No. 12/99 Dt. 23.12.99 Immanuel 10,00,000/-(U/S112
(b) (i)
6. C/S/127/ 2000 277/2000
-"-
Umesh Dhawan ......
2.00.000/-(U/S112(b) (i)
7. C/S/128/ 2000 278/2000
-"-
Nandalal Rander
8. C/S/136/ 2000 284/2000
-"-
Radheshyam Rander
9. C/S/132/ 2000 281/2000 Gowrishankar Sarda
10. C/S/164/ 2000 328/2000 Smt. Anuradha 50,00,000/-(U/S 112(b) (i)
11.
C/S163/ 2000 C/271/2000 ~ ~ ~ ~ 1,00,000/-(U/S 112 (b) (0 12. C/S/143/ 2000 C/295/2000 B.H. Mohan --- 2.00.000/-(U/S 112 (b) (i)
3. The appellants have filed the stay applications for the waiver of pre-deposit of duty and as well as penalty imposed on them respectively and stay of the recovery proceedings.
4. After hearing for sometime with reference to the stay petitions filed by the appellants we felt that the Appeals themselves can be disposed of. Accordingly the amount required to be deposited for the purpose of hearing the appeals is dispensed with and the appeals were taken for regular hearing with the consent of both sides.
5. Facts of the case in brief are that M/s. Flora Wall Coverings Ltd., the appellants and M/s. Flora Group, a 100% EOU having their registered Office at No.376/35, 6th cross, Wilson Garden Bangalore-27, are engaged in the production of textile (silk) wall coverings as per the approval granted to the said unit by the GOI vide letter dt.20.12.89 of the Secretariat of Industrial Approvals. The said unit has been permitted to import duty free, all type of goods including capital goods, required by it for manufacture, production and processing under Customs Notification No.13/81 dt.9.2.81 as amended by Notfn.No. 171/95 Cus dt.26.12.95.
6. Based on the specific information that M/s.FWCL have indulged in large scale diversion the duty free imported materials viz.mulberry raw silk yarn, without following the customs procedures, the Officers of DRI Zonal Unit, Bangalore visited their licenced premises on 20.11.97, under took a search of the said premises under the authority of an authorisation to search, issued by the Deputy Director, DRI, and certain documents considering incriminating in nature were seized. Verification of the contents of the godown, situated to the right side of the factory maintenance was under taken on 28.1.97, in the presence of independent and expert witnesses from the Central Silk Board and in the presence of Sri.Lakshman, Bank Manager, Bank of Madura, Bangalore.
7. From the investigations conducted it appeared that M/a.FWCL had:
1) indulged inclandestine removal of bonded imported raw silk
ii) substituted of waste material having no commercial value in the bags originally containing imported raw silk
iii) Non utilised the imported raw silk in the manufacture of declared finally product
iv) Diverted of imported raw silk for domestic sale
v) attempted to export/removal of bags and bales containing waste material outside the bonded premises.
8. The Commissioner who adjudicated the proceedings confirmed the demand of customs duty of Rs.2,30,72,878/- as per Notfn. No.12/99 dt.23.12.99 and similarly in respect of the capital goods in order No.14/99 dt.31.12.99 further demand of duty amounting to Rs.4,9612,992/- in addition to imposing respective penalties on the above appellants.
9. Arguing for the appellants M/s.FWCL and Chairman Shri.M.S.A.Aleem, Shri. Subramanium, Ld. Advocate submitted that the order suffers from for want of justification. Since the goods were imported through port at Madras, the Commissioner Bangalore has no jurisdiction to adjudicate the matter. In support of his contention, he relied upon the decisions of the Tribunal in the case of Grand Slam International Vs. Collector of Customs reported in 1992 (57) ELT 161 (T). This plea was rebutted by Shri. Thomas JDR representing the Department. He submitted that the licence was issued by the Officers at Bangalore on letter of Indent given by the party and since the goods were warehoused at Bangalore in a Customs Bonded Warehouse which is within the jurisdiction of Commissioner Bangalore. He also submitted that ratio of the decision in the case of Grand Slam International (supra) is not applicable as it was held in a different context, with which we concur.
10. Shri.Subramanian submitted that apart from the merits of the case the order suffers from denial of principles of natural justice. He submitted that Shri.M.S.A.Aleem, Chairman & Director of the company M/s-FWCL had suffered Heart Attack and was admitted into Hospital and due to this fact the appellants were not in a position to reply to the Show Cause Notice and sought for an adjournment even for a Personal Hearing. The Commissioner has procceded to pass an exparte order without granting sufficient opportunity.
11. Further he stated that the party had specifically requested to supply relevant documents by writing several letters to the DRI as well as to the Commissioner to take part in the proceedings, but this plea has not been responded to, by DRI and similarly this important plea was not dealt with in the impugned order as can be seen. Accordingly the order suffers from denial of principles of natural justice which requires to be set aside.
12. Shri.Satish Sundaram, Ld. Adv. appearing for the M.D. Smt.Anuradha Bhoovan, submitted that she had resigned as M.D. as early as in April 1996 and since she was not concerned with course of action, she was not liable for commissions and ommissions. He also referred to the statement given by her.
13. Shri.Laxminarayan, Adv. appearing for the appellants Shri.Gowrishankar Sardar, Partner, Shri.Nandalal Rander, Umesh Dhawan and Radhyeshyam Rander, submitted that they were bonafide layers and they bought the goods under bonafide impression that the party could sell the goods under the transferable advance licence. Hence penalty on them is not justified.
14. Shri.G.Sampath, Adv. appearing for the two employees Shri.Immanuel Vice President & B.H.Mohan, Works Engineer submitted that penalty of Rs.10 lakhs and Rs.2 lakhs have been imposed respectively. The role of them has not been discussed properly and further more as against the main party, penalty of Rs.1 lakh has been imposed whereas penalty of Rs.10 lakhs and Rs.2 lakhs have been imposed on these two employees respectively. He also submitted that they have acted as per the direction of the M.D. and further more they have no means to pay since their financial condition is so bad.
15. Shri. Balasubramanium appearing for the Branch Manager Shri. Viayapuri submitted that as can be seen from paras 26 & 27 of the impugned order it is clear that Commissioner has exonerated the Bank Manger who was incharge at the time of the goods which were allegedly substituted, but he fixed the liability on the person who has handed over the charge long back.
He also submitted that inspite of specific plea taken by the appellant for supply of copies of the relevant documents/ warehoused register, etc. the same were not supplied to him to prove that the goods were not substituted.
16. Shri. Thomas, appearing for the revenue submitted that sufficient opportunities were given to the parties and the same were not availed by the respective appellants, as can be seen from the impugned order. He specifically drew our attention to para 13 of the Order No.12/99 dt.23.12.99 where the Commissioner has discussed the issue with reference to principles of natural justice. However, he fairly conceded that the Commissioner has not dealt the issue with reference to the supply of documents which were specifically asked for.
17. We have carefully considered the matter. After taking into consideration all the facts and circumstances and pleas made by both sides we find that there is some force in the arguments advanced on behalf of the appellants M/s.Flora Wall Covering Ltd., the impugned order suffers from denial of principles of natural justice. Although issue with reference to principles of natural justice has been dealt with in Order No.12/99 in Para 13, as referred to by the D.R. but issue with reference to supply of documents was not dealt with in the Order as rightly pointed out by the Counsel for the appellants.
18. In view of this position without expressing our opinion and on merits of the case, we are remanding the matter back to the jurisdictional authority to deal with the matter afresh and to pass an appropriate order in accordance with law, taking into consideration all the submissions made by the party and on providing an opportunity to the party. The party should make use of this opportunity and co-operate with the Department for early disposal of the matter.
19. At this stage Shri. Balasubramanium requested for de-linking of the appeal filed by Shri.Viayapuri with which we are not inclined to since all the matters have to be heard together.
20. While re-adjudicating the matter, the Commissioner may take not of the clarification/instruction of Excise & Customs as per Notfn.No.21/95 Cus dt.10.3.95. Accordingly all these appeals are disposed of in the above terms. The stay petitions also gets disposed of accordingly.
(Pronounced and dictated in the Open Court).