Customs, Excise and Gold Tribunal - Bangalore
Jindal Vijayanagar Steel Ltd. vs Commissioner Of Customs on 27 July, 2004
Equivalent citations: 2004(97)ECC591, 2004(174)ELT189A(TRI-BANG)
ORDER K.C. Mamgain, Member (T)
1. This appeal is filed against Order-in-Original No. 2/03 dated 9.5.2003 passed by the Commissioner of Customs, Bangalore.
2. Shri Habibulla Bash Senior Advocate and Smt. Rukmini Menon appeared for the appellants and Shri L. Narasimha Murthy learned SDR appeared for the revenue.
3. The appellants have a public bonded warehouse in their premises operated by Central Warehousing Corporation where machinery and spares imported are warehoused pending clearance. On following up intelligence of irregularities, officers of DRI Bangalore visited their premises took stock of material in the warehouse verified all the records of import under EPCG scheme by the appellants and noticed that bearing covered by Bond No. 10/95-96 and No. 2/96-97 had been used in machinery erected before the month of November 96. Shri K. Sarover, Chief General Manager of the appellant Company identified the bearings and the machinery on which they had been mounted. He gave details of bearings mounted on the main equipment and stated that the bearings covered by the above-said two bonds had been utilized in implementation of project before they were debonded from the CWC warehouse. The warehoused goods were removed clandestinely and the bills of entry were subsequently filed to regularize the clearances after removing the goods clandestinely. Accordingly show cause notice was issued on 21.5.98 to the appellants and their officers. The case was adjudicated by Commissioner of Customs Bangalore under his Order No. 7/99-Cus. dated 5/7.5.99 confiscating the goods valued at Rs. 15,88,375 but allowed these goods to be redeemed on a fine of Rs. 12 lakhs. He also demanded duty of Rs. 43,18,783 alongwith interest of Rs. 14,12,988 and imposed a penalty of Rs. 60 lakhs on the appellants. This Order of the Commissioner was challenged before the Tribunal and the Tribunal in its Order No. 2250/99 dated 31.8.99 remanded the case for readjudication. After considering the appellants arguments and the observations of the Tribunal in its Order No. 1/01 dated 30.3.2001, Commissioner of Customs Mangalore found that the statement and letter of Shri Sarogar contain clear and categorical admission of the allegations. The warehouse was not under double lock operated both by CWC and Customs and it was possible for the appellants to regularize the clandestine clearance due to carelessness or connivance of departmental officers and he finally passed Order-in-Original demanding dues and duty and penalty as was confirmed by the Commissioner of Customs Bangalore under his Order No. 7/99-Cus. dated 5/7.5.99. Appeal against this order of Commissioner of Customs Mangalore dated 30.3.2001 was disposed of by the Tribunal under Order No. 419/2002 dated 23.2.2002. The Tribunal remanded the case for de novo adjudications with certain directions. Against this order of the Tribunal and Order-in-original No. 01/2001 dated 30.3.2001, the appellants approached the High Court of Karnataka. The High Court in W.P. Nos. 22391-22392/2002 vide order dated 18.2.2003 had set aside the Order No. 1/2001 dated 30.3.2001 of Commissioner Mangalore and Order 419/2002 dated 22.3.2002 of Tribunal. The Commissioner was directed to follow the direction of the Tribunal contained in Para 6 of the Order dated 31.8.1999 passed by the Tribunal and to complete the proceeding by 30.6.2003. Accordingly Commissioner of Customs Mangalore passed the impugned order which was again challenged by the appellant in the High Court of Karnataka. The High Court in their order dated 22.3.2004 in W.P. No. 32291/2003 (T-TAR) directed the appellants to file appeal before the Tribunal within 4 weeks and Tribunal was directed to consider appeal without insisting on limitation. The Tribunal was further directed to consider legality/validity of the impugned order passed by Commissioner in the light of specific finding and specific direction in terms of para 6 of the Tribunal's earlier order dated 31.8.1999 and to complete the proceedings within four months from the date of filing the appeal.
4. Shri Habibulla Basha Senior advocate pleaded that the appellants have set up a steel plant at Toranagallu Bellary. They were importing items required for setting up the steel plant in 1997 and used to warehouse imported goods in the Central Warehousing Corporation located in their factory premises. Bearings were among various items imported by the appellants which were required to be mounted on various machineries. These bearings were bonded under bond Nos. 10/95-96 dated 7.3.96 and 2/96-97 dated 19.4.96. He pleaded that these bearings were removed from the warehouse under cover of 2 ex-bond bill of entries both dated 22.11.96. The said ex-bond bill of entries were duly countersigned by custom authorities and 'pass out of customs charge' was given. He pleaded that the Hon'ble High Court had directed the Commissioner to decide the case as per the direction given by the Tribunal in para 6 of the CEGAT order dated 31.8.99. He stated that the order of the Commissioner is not legal and correct on the following grounds:
(i) Commissioner has gone contrary to the directions of the High Court as well as Tribunal.
(ii) The Commissioner has analysed the statement of Shri Sarovar to prove that it substantiates the allegation of clandestine removal of bearings. This is contrary to the direction of CEGAT dated 31.8.99 wherein in no uncertain terms the CEGAT has held that statements of Mr. Sarovar does not in any way substantiate the claim of clandestine removal.
(iii) Reliance placed on Shri Sarovar's statement is without jurisdiction as it is not inculpatory and there is nothing to indicate that the goods were removed clandestinely before the ex-bond bill of entries were filed. Tribunal in it's order dated 31.8.99 had clearly held that statement of Shri Sarovar does not directly admit that specified number of bearings were cleared prior to date of ex-bond bill of entry because the dates mentioned therein were the dates with regard to completion of erection of basic equipment on foundation in the appellants premises and it is quite possible that the same dates may be different from the dates on which the bearings were actually removed.
(iv) The Tribunal has directed the Commissioner to find out as to exactly on what date the goods were clandestinely removed. Commissioner has failed to do so and he admits that the exact date of the alleged clandestine removal were not contained in Sarovar's statement.
(v) Once the bill of entry has been filed under Section 46 of the Customs Act and the goods have been bonded and thereafter ex-bond bill of entry have been filed and out of custom charge has been given, it means that proper officer has applied his mind and allowed the clearance of goods after satisfying himself, then there is no jurisdiction vested in the Commissioner to go beyond the bill of entry and hold that the goods were removed clandestinely.
(vi) Once the goods have been removed after scrutiny by the proper officer, no show-cause can be issued in respect of the same. If the department wants to set aside that order it can only proceed under Section 129-D of the Customs Act. Since no action has been initiated under that provision, show cause notice and subsequent proceedings were without jurisdiction. The Supreme Court in the case of Shipping Corporation of India Ltd. v. C.L. Jain Woollen Mills, 2001 (75) ECC 225 (SC) : 2001 (129; ELT 561 (SC) has held that all warehoused goods would be subject to control of proper officer of Customs as provided under Section 62 and the owner of the goods is required to pay rent and warehousing charges fixed by the Commissioner of Customs as provided under Section 63 of the Customs Act. Section 68 provides procedure which an importer would follow while clearing the warehoused goods for home consumption. Without the permission of custom authorities goods cannot be cleared from warehouse.
(vii) Demand under section 72 is without jurisdiction as has been dealt with in para 40 of the Commissioner's order. Section 72 (i)(a) can be invoked only where any warehoused goods can be removed from a warehouse in contravention of Section 71 and Section 71 stipulates that no warehoused goods shall be taken out of warehouse except on clearance for home consumption or re-exportation or for removal to another warehouse or as provided by the Act. In this case goods have been cleared by filing ex-bond bill of entry.
(viii) Reliance on Khaja's evidence paras (26 & 44) is in violation of principles of natural justice. Opportunity to cross-examine Shri Sarovar should have been provided but it was refused on the ground that his statement was recorded under Section 108 of the Customs Act.
(ix) The documents have precedence over the statements. Even if Shri Sarovar's statement is inculpatory in nature when there are documents to establish that goods were removed legally, the document will prevail over the statements recorded under Section 108 of Customs Act. They relied on the Tribunal's decision in the case of Philips Fernandes v. Commissioner of Customs, Mumbai, 2002 (140) ELT 180 and RP Industries v. CC, Ahmedabad, 1996 (82) ELT 129.
(x) The Commissioner's order is not based on any evidence worth the name but is only based on conjunctures and surmises.
(xi) After the hearing they submitted the decision of the Larger Bench of the Tribunal in the case of Commissioner of Central Excise v. Machine Montel 2004 (168) ELT 466 wherein it was held that where the duty has been paid before the issue of show cause notice, no penalty can be imposed under Section 11AC of Central Excise Act and no interest can be demanded under Section 11AB ibid. They pleaded that in the present case the appellant had paid the duty before the issue of show cause notice. Therefore, penalty and interest cannot be imposed on them.
5. Shri L. Narasimha Murthy learned SDR appearing for the department pleaded that in this case on the basis of information that the appellants had cleared goods from their bonded warehouse clandestinely without payment of duty to complete the project for inauguration of the same by the Chief Minister of Karnataka and the appellants were not having EPCG licence for clearance of the said goods without payment of duty but they cleared the goods clandestinely and subsequently when they received the EPCG licence they filed the bill of entry for nil rate of duty and shown clearances of the goods, DRI officers started investigation. During investigation they checked the various documents at bonded warehouse and recorded the statement of various officers of the appellant Company and found that there were irregularities in clearance of the goods from the warehouse and the goods were removed from the warehouse without the knowledge of the Officer in charge of CWC bonded warehouse and customs officers in the night by the appellants with the help of cranes from the open bonded warehouse, area of which was demarcated by barbed wires and which was in the premises of the appellants and under the security of the appellants. The warehouse was an open yard which was only surrounded by barbed wires and was illuminated with halogen lamps during the night time. There was sufficient place around the warehouse where the trucks and cranes can be moved and goods could have been taken out. The officers of the appellants had clearly mentioned that the goods were removed from the warehouse in the night when neither customs officer was there nor the warehouse keeper of the CWC was there. In order to conceal the clearance of the packages of machines they were replaced by the original packages, by filling these up with old junk machines, scrap and stones which were available in the appellants site for or erection of the plant and these packages were replaced again in the warehouse, so that neither the warehouse manager of CWC nor the customs officer could detect any movement of the packages from the open warehouse. Accordingly the case was booked for which separate proceedings were done. On further investigation, the officers further detected irregularities in clearance of the bearings which were used in the plant which was inaugurated by the Chief Minister on 22.8.96. On 12.11.97 after detecting the irregularities, the officers visited the appellants premises again on 22.11.97 and on identification of the bearings which were alleged to have been removed by them clandestinely the same were seized on 22.11.97 on their being identified by Shri Sarovar, the Chief General Manager of the appellant Company. The present proceeding were initiated only in respect of the bearings covered by the two bonds and which are in dispute in the present appeal.
6. He pleaded that when originally the case was adjudicated by the Commissioner, his order was set aside by the Tribunal under Final Order No. 2250/99 dated 31.8.99 at the preliminary stage of hearing of the stay application without going into the details but only on the submissions of the advocate of the appellants and the case was remanded back to the Original authority for readjudication. The readjudicated case was also challenged by the appellants before the Appellate Tribunal and the appellate Tribunal again remanded the case back to the original authority with certain direction. The Commissioner again adjudicated the case as per the direction of the Tribunal. However, the appellants filed writ petition before the High Court, Hon'ble High Court of Karnataka who set aside both the order of the Commissioner as well as the Tribunal and directed the Commissioner to readjudicate the case in terms of directions given in para 6 of the remand in Final Order No. 2250/99 dated 31.8.99. Now the appeal before the Tribunal is to be seen whether the Commissioner has decided the case in terms of the directions given in para 6 of the Tribunal's order.
7. He stated that the present order of the Commissioner is as per the directions given by the appellate Tribunal in para 6 of the order dated 31.8.99 and as per the directions of the High Court. The Commissioner has given findings in para 20.2 and 20.3, the manner in which the clandestine removal has taken place. These paras are based on the basis of evidence relied upon in the show cause notice. The show cause notice and the evidences relied upon in the show cause notice were not restricted to be used either by the High Court or by the Tribunal. The observations of the Tribunal in para 6 of their order of 31.8.99 are not based on examinations of evidence but these are only general observations as pleaded by advocate of appellant. However, in show cause notice in para 3 it is clearly mentioned that Shri P.K. Mathew Manager Central Warehousing Corporation already deposed under Section 108 of Customs Act that officers of DRI visited his office on 23.8.97 alongwith two independent witnesses and was asked to produce the warehouse register and copies of into-bond and ex-bond bills of entry. When asked to explain as to why the goods bonded in the warehouse were found missing he stated that the goods as received were properly warehoused but the warehouse premises is open yard with wire fencing. He suspected the top management of M/s JVSL to have taken out the materials missing from the bonded warehouse. Since all the items were machinery and parts thereof which could be used in only by them, theft from warehouse might have taken place after his office hours. He was the only employee of CWC working in that warehouse at Toranagallu. Para 5 of the show notice also mentioned that Shri K. Sarovar, Chief General Manager of the appellants, in his statement dated 27.8.97 has stated that the manner in which the packages were removed from CWC yard. In para 9 of the show cause, Shri P.K. Kedia, General Manager of JVSL, in his statement dated 8.9.97 has given the entire manner how these warehoused goods were taken out without the knowledge of the CWC and Customs authorities. From this statement it is clear whatever is the observation of the Tribunal in para 6 regarding clearance of the goods from warehouse is not based on the evidence recorded in the show cause notice and relied upon by the Commissioner but was general observation as pleaded by appellants and not a fact finding observation. Therefore, in the present adjudication order the Commissioner has relied on these evidences already mentioned in the show cause notice issued to the appellant and appellants have not produced any evidence contrary to these. Therefore, he has correctly relied on the Mohazar dated 22.11.97 and stated that it is clearly mentioned in the mohazar that "to a specific question of the officers as regards installation of machines on which these bearings are mounted the said Shri Sarovar informed the officers that these equipments were installed during the period between July 96 and October 96. Thereupon the officers informed us as well as Shri Sarovar that the goods in question were officially debonded from the CWC warehouse during November 96 and as such the same have been removed from bonded warehouse much earlier to debonding and these goods have been taken out and utilized without following the customs procedure and thereby violating the provisions of customs and these goods becoming offending goods are liable for confiscation under provisions of Customs Act. Thereafter the Senior Intelligence officer based on the admissions given by Shri Sarovar seized the above-said goods which were installed/utilized in the plant and machinery of JVSL" He also referred to the statement dated 22.11.97 of Shri K. Sarovar wherein inter alia he has admitted that on verification of records available as on date it has been evident that certain goods pertaining to bond Nos. 10/95 and 2/96 have been utilized in implementation of project before they were debonded from the CWC bonded warehouse. He gave the details of these goods. Regarding observations of the Tribunal that there is no analysis or valuation of any evidence as to exactly on what date clandestine removal took place. He pointed out to paras 21, 22, 23.2, 24 and 25.2 of the impugned order.
8. Regarding the appellants claim that removal has been in terms of EPCG licence and only after following the due procedure i.e. after submission of ex-bond bill of entry the learned SDR pointed out that this issue has been considered by the Commissioner in para 26 of the impugned order.
9. He further pleaded that in the remand order it is clearly mentioned that the Commissioner in the de novo proceedings shall taken into consideration all the above submission of the appellants as well as our observations and after further hearing the appellants shall pass detailed speaking order. Now since the Commissioner after hearing the appellants and considering all the points as mentioned in the para 6 has passed the impugned detailed speaking order which is as per the direction of the Tribunal and the High Court. There is no infirmity in the order as has been pointed out by the appellants. All the fallacies pointed out by the appellants in the statement of Shri Sarovar has been duly considered by the Commissioner in para 46 of his order and has given a very detailed and fact finding order based on the evidence on record as indicated in the show cause notice. Therefore, his order is correct in law and the same should be upheld.
10. We have carefully considered the submissions made by both the sides. The main issue to be decided is whether the bearing covered by bonds No. 10/95 and 2/96 were cleared clandestinely or under cover of Ex-bond bills of entry filed by appellants. We find that in para 6 of the Order dated 31.8.99, the Tribunal has given the following direction to the Commissioner of Customs.
"The Commissioner in the de novo proceedings shall take into consideration all the above submissions of the appellant as well as our observations and after further hearing the appellants pass a detailed speaking order in this regard expeditiously."
Thus from para 6 it is clear that the case was remanded to the Commissioner with certain observations and not on certain findings of facts.
The first observation in para 6 is that "the goods having been bonded in Public Sector Customs bonded warehouse were not in the custody of appellants at all and therefore, the question of clandestinely removing them by the appellants would not arise unless two other independent agents have colluded with them. There is nothing on record to show that M/s CWC were interrogated in the matter as to how alleged clandestine removal took place from their custody as warehouse keeper under Customs Act. There is also nothing on record as to how the Bond Officer allowed these clearances as the warehouse is normally kept under dual locking under both M/s CWC and Customs Bond Officer".
These observations of the Tribunal are based on the arguments of the learned Senior Advocate who appeared for the appellants. This issue has been examined by the Commissioner in the impugned order in paras 19 to 20.7. From his findings it is clear that the warehouse premises is an open land area fenced only with barbed wire with a single gate for both entry and exit to the warehouse. All around the said premises outside the barbed wire fence, there is open space in which trucks and cranes can move about freely and normally the bonded goods after debonding are removed with the aid of cranes which would lift the debonded goods from outside the barbed wire fencing of the bonded warehoused premises. Further the gaps between the barbed wires are also wide enough for any person to enter into the bonded warehouse through them. In fact the gate of bonded warehouse is rendered useless in preventing entry of any unauthorized person. The halogen lights provided all around the bonded warehouse keep the warehouse illuminated during night. The said warehouse is being managed by CWC with one officer of the rank of warehouse manager without any supporting staff. The warehouse manager remains present in warehouse during office hours and beyond office hours no staff of CWC remains present to guard the warehouse. The appellants had provided the security to said warehouse since the same is located inside their premises. The show cause notice dated 21.5.98, issued to the appellants clearly shows in para 3 that Shri P.K. Mathew Manager Central Warehousing Corporation, and in-charge of the warehouse, in his statement dated 23.8.97 has clearly admitted that he is the only employee of CWC working in that warehouse at Toranagallu and he stated that Top Management of M/s JVSL would have taken out the material missing from the bonded warehouse since all the items were machinery and parts thereof which could be used only by them and theft in the warehouse might have taken place after office hours. In para 5 to para 9 of the show cause notice, how the goods were removed from the warehouse without knowledge of CWC and Customs is explained in the statements of the various officers of the appellants and which has been taken into account by the Commissioner in his order. Therefore, the appellants have not denied the possibility of taking out the goods from the bonded warehouse with the help of cranes and laboureres in the night and replacing the same packages after filling up the same with junk machinery, scrap and stones as has been admitted in the various statements of Shri K. Sarovar, Chief General Manager and Shri P.K Kedia, General Manager (Commercial). Therefore, the findings of the Commissioner on this count are based on evidence which are mentioned in the show cause notice that the goods can be cleared from the bonded warehouse without the connivance of CWC and the Customs. The Commissioner has also referred to statement of Shri Khaja Inspector of Central Excise and bond officer in para 26 of his order. However, the appellants have objected that SCN does not rely on the statement of Shri Khaja. We find that even if the statement of Shri Khaja is kept aside still it is established that by other statements that the goods can be removed without the connivance of the bond officer and CWC Officer from the warehouse during the night.
The second observation of the Tribunal in para 6:
"We also find that the statement of Shri Sarovar does not directly admit that the specified number of bearings were cleared on a date prior to the date of 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 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 find that this issue has been examined by the Commissioner in detail from Para 21 to Para 25.2. We find that Shri Sarovar in his statement dated 22.11.97 has admitted as under:
"On verification of the records available as on date, it has been evident that certain goods pertaining bond 10/95 and 12/96 have been utilized in implementation of the project before they were debonded from the CWC bonded warehouse. The details of the same are as under:
Bond No. 10/95: Details of bearings mounted on the main equipment:
------------------------------------------------------------------------------
(a) AT 226 H 51 Nos. Installed at Furnace Run-in-Table on 28.9.96;
Furnace Run-out Table on 30.8.96; R.M. Approach
Table on 25.9.96, 31.8.96, 28.9.96; Delay
Table on 25.7.96.
(b) AW 222 H 68 Nos. As at (a) above
(c) ASM 240 H 10 Nos. R.M. Front Mill Table and RM Back Mill Table
(d) AW 218 H 30 Nos. Delay Table on 31.10.96
(e) AW 212 H 25 Nos. Run-out Table on 28.9.96 and 31.10.96
(f) A 216 H 25 Nos. As at (e) above
Bond No 2/96
(g) AD 8310 97 Nos. As at (a) above
(h) AW 212 H 75 Nos. As at (e) above
-----------------------------------------------------------------------------
The above dates are the ones pertaining to placement of basic equipments on foundations for which a contractor has raised bills and copies of which are furnished."
Thus Shri Sarovar after verifying the record has stated that certain goods pertaining to bond No. 10/95 and 2/96 have been utilized in implementation of the project before these were debonded from CWC bonded warehouse. He has also given the details of the bearings mounted on the main equipment and dates of placement of basic equipment on foundation. His statement does not show the date on which the bearings were mounted on the main equipment. In para 22 of the Order, the Commissioner has observed that in an undated letter of Shri Sarovar written to Dy. Director DRI Bangalore he has clarified that their contractor M/s TTG Industries Ltd., had installed the machinery and at the end of each month they were showing the items installed. The items of bond No. 10/95 & 2/96 are listed at Sl. No. 26 and 29 of report No. 11/31.8.96, Sl. No. 1, 3, 5, 35, 36, 37, 38 and 39 of report No. 13/28.9.96, Sl. No. 1 and 6 of report No. 10/25.7.96 and Sl. No. 14, 29, 30 and 35 of report No. 16/31.10.96. These items have been cleared from the bonded warehouse prior to installation which has been over a period of 3-4 months. He also observed that rollers cannot be installed and checked for working without bearings. The appellants have contested that this letter is not relied upon in the show cause notice. We find that this letter which was submitted by Shri Sarovar in response to questions from Dy. Director DRI does not give a new fact which is not in the SCN or statement of Shri Sarovar dated 22.11.97 or Mahazar dated 22.11.1997 relied upon the SCN. This undated letter of Shri Sarovar referred to in para 22 of the Order-in-Original refers to items mentioned in Bond No. 10/95 and 2/96 and listed in report No. 10/25.7.96, 11/31.8.96, 13/28.9.96 and 16/31.10.96 of their Contractor M/s TTG Industries Toranagallu. We find that these reports are part of the show cause notice as relied upon documents. Therefore, reliance placed by the Commissioner cannot be said to be outside the scope of show cause notice when the reports, statement of Shri Sarovar and Mahazar dated 22.11.97 are part of the show cause notice. Thus, if the statement of Shri K. Sarover recorded on 22.11.97 is read with report Nos. 10/25.7.96, 11/31.8.96, 13/28.9.96 and 16/31.10.96 of M/s TTG Industries then it is clear that the bearings in dispute were cleared prior to 31.10.96 from the bonded warehouse without clearance documents and the Commissioner has therefore correctly given his findings.
11. The Tribunal in his order dated 31.8.99 in para 6 has observed that:
"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 procedure i.e. after submission of the ex-bond bills of entry."
We find on this issue, the Commissioner has given clear finding in para 25 to 25.2 of his order relying on various decisions of the Supreme Court mentioned in the said para that department was not required to prove its case with mathematical precision, but what was required was the establishment of such a degree of probability that a prudent man may on its basis believe in the existence of the facts in issue. We find that the findings of the Commissioner are according to the law as in the case of "clandestine removal" it is not always possible to establish the exact date of clearance but if the period during which clearance have taken place is established, then it is sufficient to say that the goods have been removed within that period. In the present case, the reports of M/s TTG Industries as mentioned above read with the statement of Shri Sarover and Mahazar dated 22.11.97 clearly shows that the bearings were removed during the period from July to October. Thus, on the direction of the Tribunal he has analyzed the evidence and came to the conclusion that bearings in dispute were cleared from the warehouse from July to Oct. 1996, The appellants submission that the warehouse goods were removed under cover of ex-bond bill of entry and after proper officer has passed the order to out of customs charge. This is also discussed by the Commissioner in para 26 to para 29. We find that once it has been established from the records that impugned goods were cleared clandestinely between July to October 1996, clearance of same goods under ex-bond bill of entry on 22.11.96 becomes manipulated. This has been discussed by Commissioner in Para 26 of the Order as to how packages were cleared without opening the same. Only marks and number of packages with reference to invoice were seen. Contents of the packages were not examined. Since the clearance of contents of packages which were originally warehoused was done clandestinely, and packages were again placed back in the warehouse after removing the bearings as discussed earlier, and contents of packages were not examined when Ex-bond bill of entry was filed, hence it cannot be said that clearance under ex-bond bill of entry was of the bearings. Since the appellants have used fraudulent method for removal of the goods, there was no need of review of order of assessment as held by Supreme Court in the case of Union of India v. Jain Sudh Vanaspati Ltd., 1996 (86) ELT 460 (SC). Demand under Section 72 of Customs Act is correct in law as the goods have been removed from the warehouse improperly without payment of duty.
12. The appellants reliance on decisions in case of RP Industries v. Collector of Customs, 1996 (82) ELI 129 (T) and on the ground that documents have precedence over statement is not helpful to them. The statements relied upon in this case are supported by documents of the appellant's contractor whereas the clearances under ex-bond bill of entry on which appellants have relied become fraudulent once it has been established that goods were cleared much before filing the ex-bond bill of entry. Other issues raised by them are disused from paras 30 to 39 of the impugned order. He therefore finally came to the conclusion that it is proved beyond doubt that JVSL had cleared the impugned goods clandestinely from the Govt. bonded warehouse without a valid EPCG and without filing proper ex-bond bill of entry. Thus, we find that the Commissioner has meticulously examined all the issues and considered all the observations of the Tribunal in para 6 of the order dated 31.8.99 and after examining the evidence produced by the appellants had come to the conclusion that the appellants had contravened the provisions of the Customs Act and they are liable for penalty and also liable to pay duty and the goods are liable for confiscation.
13. The appellants in their appeal have raised various points. All these points are already considered by the Commissioner in his order and we find that the findings of the Commissioner does not require any modification as we do not find anything wrong in the Order of the Commissioner. The order of Commissioner is based on evidences and not on conjunctions and surmises as claimed by the appellants.
14. The appellants have claimed that they have paid the duty before issue of show cause notice and in view of the Tribunal's decision in case of Commissioner of Central Excise Gurgaon v. Machino Montell (I) Ltd., 2004 (168) ELT 466 once the duty has been paid before issue of show cause notice, no penalty can be imposed under Section 11 AC of Central Excise Act and no interest can be demanded under Section 11 AB. By following ratio of this decision of the Larger Bench of the Tribunal, we find that in the present case the appellants had deposited the customs duty of 43,18,783 and interest of Rs. 14,12,877 voluntarily as mentioned in para 2 of the show cause notice. Therefore, these amounts were paid before the issue of show cause notice. Now following the decision of Larger Bench in case of CCE v. Machino Montel (I) Ltd. (supra), we set aside the penalty imposed on the appellants and interest demanded under the Customs Act. Rest of the order of Commissioner, is upheld. Ordered accordingly.