Customs, Excise and Gold Tribunal - Mumbai
Vidya Mahadik vs Commissioner Of Customs, Ahmedabad on 26 November, 2001
Equivalent citations: 2002(145)ELT204(TRI-MUMBAI)
JUDGMENT G.N. Srinivasan, Member (J)
1. This is an application filed against under Section 129B of the Customs Act praying for recalling of the Order No. CL-277-87/WZB/2001 dated 2.2.2001 passed by this Tribunal in Appeals Nos. C/1099, 1188/98- Bom and C/39,40,44,1237/99-Bom. where under the applicants appeal C/39/99 was dismissed partially.
2. Facts of the matter are that applicant was issued with a show cause notice dt. 2.2.98 proposing to impose penalty under Section 112A of the Customs act. It resulted in the adjudication order dt. 16.10.98 passed by the Commissioner of Customs Gujarat Ahmedabad by Order-n-Original No.5/COMMR/98 APP dt. 16.10.1998 where under the adjudicating authority imposed a penalty of Rs. 1.70 crores. The Tribunal partially allowed this appeal against that order an appeal C-39/99 before the Tribunal was filed. In the adjudicating order confiscated of the contended goods as well s penalties were imposed on other notice mentioned in the show cause notice referred to above however by impugned order the appeal of other two notices were allowed ie. M/s. H. Kumar Gems importer and Ms. Sunita Goel a licence broker. The impugned order however confirmed the imposition of penalty by the adjudicating authority even though it held that the contended goods imported by H. Kumar Gems could not be confiscated.
3. Shri J.C. Patel Ld. Counsel appearing for the applicant invited our attention to paragraph 10 (SIC) said orders as well as paragraph 15 of the Order i.e. pages 20,33, & 34 of the order where the Tribunal has held that the goods could to be confiscated. Having held that the Tribunal it is argued by Shri J.C. Patel, it could not have held that the applicant is liable to penalty under Section 112 of the Customs Act. as the criteria of imposition of penalty as provided under or as enshrined under Section 112 of the Customs Act which was submitted at the time of hearing was never considered in the Order Ld. DR Shri A Chopra adopts the reasoning for the Tribunal.
4. We have considered the rival submissions in paragraph 10 of the order we have held as follows:
" Now coming to the merits of the appeals, it is seen form the impugned order, show cause notice and replies and appeals memorandum and synopsis that M/s. H.Kumar Gems imported 120 silver bars weighing 3802.98 kgs. valued at Rs. 2,03,78,860/- and filed bill of entry No. 4019/97 dated 11.8.97 under the special Import License No. P/L/2313128 dated 17.6.97, originally issued in the name of M/s. Baja Auto Ltd. dully transferred in their name and sought clearance,. Earlier, under the same licence, 2, consignments of 600 TT Gold bars weighing 69.984.00 gms. Value of Rs. 2,71,13968.00 each were cleared under Bill of entry Nos. 4011 and 4012/97 dated 8.8.97 and one consignment of 220 pieces of large silver bars weighing 7035.76 kgms. Valued at Rs. 3,71,53,375.00 under Bill of Entry No. 3922/97 dated 6.8.97 with duty amount of Rs. 15,39,978.00 Challan No. 39/8 each and Rs. 35,17,930.00, challan No. 38781,11.8.97 consignment was covered under IGM No. 573/97 dated 9.8.97 and vide AWB No. 058-3612-7055 dated 7.8.97. Special Import Licence was for Rs. 13.50 crores. It was transferred form M/s. Bajaj Auto Ltd., to M/s. Krishna Enterprises, Bada Chowk, Bihar, and from them to M/s. Girdhar International, Barmer and finally to appellant II. Kumar Gems. While scrutinizing the Bill of entry No. 4019/97 dated 11.8.97, certain doubts regarding validity of the licence arose. Enquiries were made from the office of DGFT, Pune which had issued licence, and it revealed that original licence was pending in their office for carrying on certain, amendments and the licence presented was fake one. It is from the proper source. M/s. Bajaj Auto Ltd., have denied the transfer of said licence to anybody. The above consignment was seized, as imported without a valid licence. Investigation was undertaken and premises of H. Kumar Gems was searched on 16.8.97 and documents regarding payment were resumed. Statement under Section 108 of Customs act of Hitendra Kumar U Gadhecha, Proprietor of H. Kumar Gems and Ms. Sunita Gole was recorded on 14.8.97. Her residence was searched, nothing incriminating was found. On 20.6.98, the appellant produced 8 special import licenses, afresh covering the value of seized goods, as directed by the then Commissioner of Customs. Sri Vijaya Singh on 17.6.98 for the purpose of releasing seized goods, as a result of which seized goods were provisionally release don 21.7.98 on a bond for Rs. 4 crores supported by a bank quarantee of Rs. 1 crore with condition of the bond being, that if the subsequently produced SILS were found to be invalid the bond would be enforced again. For the previous consignment also, appellant H. Kumar Gems produced 15 fresh SILs, and required to debit Rs. 8,70,69,070.00 towards the earlier 3 bills of entry dated 8.8.97, on 24.3.98. According they are accepted and debited, after seeking opinion of DGFT, New Delhi, who replied on 17.7.98, 5.8.98 and 31.8.98 that they are valid SIL's and can be accepted for goods already cleared. For the seized goods, as per policy SIL can be produced at any stage before clearance. The clarification of DGFT is binding on Customs Authorities as to validity and acceptability of Licence. So the goods cannot be confiscated, and the benefit of notification will be available to the appellant H. Kumar Gems".
Further in paragraph 15 of the order at pages 33 & 34 thereof we have held as follows:
15. The above clarification is attacked by the learned senior counsel for respondent as opposed to policy and Import and export act, and so not acted upon in the Impugned order. When once SIL produced at the first instance for clearance is held to be fraudulent, and is admitted to be forged. Goods automatically stands confiscated, as forgery vitiates every thing. Adjudication is only a formality and knowledge is immaterial. How far this is to be upheld is a matter to be considered. From the perusal of para 4 of Impugned order, it is seen that the adjudicating authority has totally rejected the subsequently produced fresh SIL's on the sole ground that importer had knowledge about the invalidity of SIL produced at the time of Import along with the B/E. It is further held on the date of Import goods were not covered by any SIL. Tariff rate will continue. As contended by appellant M/s. H. Kumar Gems the arguments of Learned senior counsel goes contrary to the Impugned Order about knowledge. The fact that the licence produced along with B/E. at the time of clearance is a forged one or not is a matter of proof. No inference can be done in that regard. So, under these circumstances the Impugned Order cannot but upheld so far as the - confiscation of seized goods, for want of proper licence. In view of SIL's valid on the date of import produced by appellant was accepted, verified and acted upon by the Department by releasing the seized goods, which is backed on the Precedent order of Commissioner of Customs, New Delhi as referred above. The letter of DGFT referred above after long correspondence with the Customs Department has clarified the correct position under the policy the effect of substituting the fake licence by fresh SIL's valid at the time of shipment/despatch of goods from supplier, under the Clause G. 15 for more than one time, with the repeated question or doubt raised by Customs Department under different circumstance.s The contention of Learned Senor Counsel that it is contrary to policy and import and export act is not substantiated by any particular provision there under or decided finally settled case law. But the clarification issued is thorough, well studied, supported by provision clause g. 15 of policy and the order of Commissioner of Customs, New Delhi, and also the direction of the Commissioner of Customs, Ahmedabad on 17.6.98. In view of these things, the case of the appellant in that regards deserves to be and is upheld.
5. It is the submission of the Counsel before us that the liability of penalty in terms of Section 112 which has submitted by him was not considered.
6. When we look into also states during arguments that under similar circumstances by order Application No. C/ROM-863/2000-Mum, in Ashwin Mehta v. Commissioner of Customs (Prev.) Mumbai order No. C-1/1903/WZB/2001 certified on 27.7.2001 it was the order passed by the Tribunal was recalled.
7. When we look into the order the submission of the Learned Counsel for the applicant has been mentioned in our order at paragraph 3 & 5, but we do not find any consideration in that said order apart the contention of the applicant about the applicability of Section 112 of the Act. Therefore there is no proper finding of the Tribunal could be found in the impugned order. When we consider the submission made by the Ld. Counsel that any person who, in relation to any goods it thus omits to do any act which at or omission would render such goods liable to confiscation did are abate the doing or omission or such an act. Here we have found that goods imported by H. Kumar Gems one of the noticees under the show cause notice could not be confiscated in terms of paragraphs 10 & 15 of the order extracted above. The imposition of penalty can be made against any person only if, or in relation to any goods any person does or omit to do any act which such act omission would render such goods liable for confiscation under Section 111 of the Act. When the goods are held not liable for confiscation then the provision of Section 112 would applicable We also note that in this case the argument of the Ld. Counsel was recorded and no finding has been made. Therefore there is an error apparent on the face on record following the precedential order in Ashwin Mehta' case Supra.
8. We therefore recall our order No. C-I/277-87/WZB/2001 dated 2.2.2001 made under Appeal No. C/39/99-Bom and allow the appeal of the applicant appellant and set aside the order-in-original NO. C/COMMR/98/APP passed by the Commissioner of Customs dt. 16.10.98, in so far as it relates to imposition of penalty of the applicant.
(Pronounced in Court)