Customs, Excise and Gold Tribunal - Delhi
Kalinga Gases vs Commissioner Of Customs on 17 March, 2004
Equivalent citations: 2004(96)ECC278, 2004(170)ELT252(TRI-DEL)
ORDER P.G. Chacko, Member (J)
1. This appeal is against an order passed by the Commissioner of Customs in adjudication of show cause notice dated 29-3-2001 issued to the party for confiscating certain goods (along with the vehicle used for transportation thereof) which were the subject-matter of final assessment of a Bill of Entry dated 27-9-2000 under Section 47 of the Customs Act. In the impugned order, the Commissioner confiscated 30 gas cylinders containing 284.5 Kgs. of Carbon dioxide under Section 111(m) of the Customs Act and gave option to the appellants to redeem the same by paying a fine of Rs. 20,000/-. He also held that 68 other gas cylinders (provisionally released) were liable to be confiscated and appropriated Rs. 10,000/- from the security amount towards redemption fine. He ordered likewise in respect of the truck which belonged to the appellants. The Commissioner, further, imposed a penalty of Rs. 10,000/- on the party under Section 112 of the Act.
2. Heard both sides. Ld. Counsel for the appellants submits, at the outset, that the show cause notice and subsequent proceedings are not maintainable. Counsel has given a brief account of the relevant facts of the case to substantiate this contention. The appellants, during the material period, were engaged in the activity of supplying various gases (Carbon dioxide, Nitrogen, etc.) in liquefied form in metallic cylinders to their customers across the Indo-Nepal border. The customers, after consuming the gases, used to return the empty cylinders back to the appellants in India. In one such transaction, a total of 98 cylinders (returned by customer) were cleared at the Land Customs Station, Sonauli under Bill of Entry dated 27-9-2000. That clearance was pursuant to assessment made by the proper officer of Customs under Section 47 of the Customs Act. The truck containing the cylinders so cleared was intercepted in Indian territory and seized under Panchnama by officers of Customs. In follow-up action, the department gathered evidence in the form of statements and test reports and booked a case of misdeclaration against the appellants in respect of the goods cleared under the Bill of Entry. The show cause notice, which followed, proposed to confiscate the vehicle and the goods as also to impose penalty on the appellants. The proposals were contested. The Commissioner of Customs, in adjudication of the show cause notice, passed the impugned order, the gist of which has already been noted.
3. The Counsel's argument is that, for the Department, the only remedy, in the facts of this case, was to revise the Section 47 assessment through recourse to Section 129D of the Customs Act. Counsel submits that the finality of assessment under Section 47 is a fact acknowledged in the impugned order. Therefore, relying on case law, ld. Counsel argues that the show cause notice alleging misdeclaration in the Bill of Entry could not have been issued. The department, if aggrieved, in any manner by the assessment made by the proper officer of Customs, could only have resorted to the appellate remedy available under the Customs Act. The case laws cited by the Counsel are the following :-
(i) Union of India and Ors. v. Popular Dyechem [1987 (28) E.L.T. 63 (Bom.)].
(ii) Decor India and Ors. v. CC, New Delhi [1987 (31) E.L.T. 400 (T)].
Ld. DR has opposed the above argument on the strength of the Supreme Court's decision in Commissioner of Customs v. Candid Enterprises [2001 (130) E.L.T. 404 (S.C.)], a decision relied on by the adjudicating authority in this case. Ld. DR further submits that there is no express prohibition under the Customs Act against issuance of show cause notice for confiscating any imported goods on the ground of misdeclaration even if assessment order has been passed under Section 47. According to ld. DR, the goods in question were liable to seizure on account of misdeclaration in the Bill of Entry, which happened to go unnoticed at the time of assessment under Section 47.
4. I have carefully examined the submissions. It is not in dispute that the assessment made by the Assistant Commissioner of Customs at the Land Customs Station in respect of the goods in question was one made under Section 47 of the Act. Such assessment was a comprehensive proceedings encompassing every kind of liability of the importer in relation to the goods. These liabilities included duty liability, liability of the goods to confiscation and liability of the importer to penalty. The order passed by the Assistant Commissioner under Section 47 was comprehensive and covered all these liabilities in relation to the goods. If the department was aggrieved by the said order, the remedy available to them was under Section 129D, which enabled the Jurisdictional Commissioner to exercise his revisional power and call upon his subordinate officer to file an appeal to the Commissioner (Appeals). The department did not resort to this remedy. Instead, they issued a show cause notice for confiscating the goods and the vehicle as also to penalise the importer on the ground of misdeclaration in Bill of Entry. The correctness or otherwise of the declaration by the importer stood already decided by the assessment order issued under Section 47, which could not be reopened through show cause notice. It could have been done only by recourse to Section 129D. This is precisely what was held by the Bombay High Court in the cited case of Popular Dyechem (supra) and by this Tribunal in the case of Decor India (supra). Ld. Counsel has succeeded in substantiating his plea that the show cause notice proceedings are not maintainable in view of the finality of assessment on the subject Bill of Entry under Section 47 of the Act. Ld. Commissioner of Customs has rejected the above plea of the appellants by relying on the Supreme Court's judgment in Candid Enterprises (supra), wherein the Court, dealing with an application for condonation of delay of appeal, invoked the principle enshrined in Section 17 of the Limitation Act, which was, that fraud nullified everything. I am at a loss to understand as to how such a principle under the Limitation Act could be adopted in the present case. DR has not argued for applying the principle either.
5. Following the cited decisions of the Bombay High Court and this Tribunal on the preliminary issue raised before me, I hold that, in the facts of this case, it was not open to the department to issue the show cause notice in question to the appellants. Accordingly, the show cause notice and all subsequent proceedings including the impugned order are set aside with consequential relief to the appellants. The appeal is allowed.