Customs, Excise and Gold Tribunal - Bangalore
Guru Electronics Singapore Pte Ltd. vs The Commissioner Of Customs on 8 February, 2007
Equivalent citations: 2007(118)ECC206, 2007ECR206(TRI.-BANGALORE), 2007(216)ELT281(TRI-BANG)
ORDER T.K. Jayaraman, Member (T)
1. This appeal arises from the OIO No. 42/200-Cus.Adjn.(Commr) dated 22.12.2004 passed by the Commissioner of Customs, Bangalore.
2. In the impugned order, the Adjudicating Authority has imposed a penalty of Rs. 10,00,000/- on the appellant under Section 112(b) of the Customs Act. Further, the goods sent by the appellants have been confiscated under Section 111(m) of the Customs Act. The appellants strongly challenge the impugned order.
3. Shri K. Parameswaran, the learned Advocate who appeared for the appellants, urged the following points:
(i) The appellants company inter alia is engaged in the business of trading of various types of computer parts, spares and accessories. They received orders from various buyers including from M/s. Suntech, Bangalore, for purchase of computer spares during 2002. Due to oversight, the appellants wrongly sent a shipment meant for another party to the said M/s. Suntech, Bangalore. The appellants sent a letter dated 17.10.20002 to the Commissioner of Customs, indicating the facts of erroneous despatch. There was further a request for re-export of the consignments from India. This request was rejected on the grounds that once the Bill of Entry has been filed, the title of the goods are transferred from the consignor to the consignee and, therefore, the legal right and ownership of the consignment is only with the importer. Aggrieved over the decision of the Department, the appellant appealed to the Commissioner (Appeals) who passed an order dated 21.04.2004 in favour of the appellant. When the above was the factual position, a Show Cause Notice had been issued to various parties involved, but in the said Show Cause Notice issued originally, the appellant was not made a party and accordingly not at all considered as liable for any action. Later, an addendum dated 21.03.2003 was issued requiring the appellant also to show cause on the ground of abatement in dealing with such goods which they knew or had reason to believe were liable for confiscation. The issue of Show Cause Notice and subsequent addendum actually came to the knowledge and notice of the appellant only after receiving subsequently an order passed by the Commissioner of Customs. Neither the Show Cause Notice with the said addendum nor the intimation fixing the personal hearing dated 25.05.2004 was served on the appellant by the Customs authorities. Thus, the appellant was totally in the dark about the said proceedings having been initiated or any such addendum having been issued.
(ii) The fixing of personal hearing on 25.05.2004 had been sought to be communicated through the High Commission of India in Singapore. But, no such communication had been received by the appellant at any point of time. The appellant is not aware of any such action alleged to have been taken by the Customs Authorities in India.
(iii) Even from the departmental appeal filed in CESTAT on 14.05.2003, it is seen that there is no mention of the addendum having been issued.
(iv) The requirements of Section 124 of the Customs Act have not been fulfilled in toto.
(v) The impugned order is an ex-parte order and passed in violation of the Principles of Natural Justice as no opportunity had been given to refute the evidence relied upon by furnishing a copy of the same.
(vi) The appellant has not undertaken any activity within the territorial jurisdiction of India and cannot be subjected to levy of penalty under the Customs Act in India on any allegation when the selling or despatching of the goods actually took place in Singapore.
(vii) The appellant is a corporate entity which cannot be said to have any mens rea ie. 'a guilty mind', which is the essential requirement for imposing penalty under Section 112(a) as laid down in several judgments applicable in this regard. The following case-laws were relied on:
a. CC v. Jayant Oil Mills b. A.F. Gani v. CC, Madras c. Margra Industries Ltd. and Anr. v. CC, New Delhi/CCE, Chandigarh 2006 (76) RLT 433(CESTAT-LB)
4. The learned JDR reiterated the findings in the OIO.
5. We have gone through the records of the case carefully. Against the impugned OIO, six appeals were filed earlier and this Bench, passed Final Order Nos. 75-80/2005 dated 18.01.2006 by upholding the OIO and reducing the penalties in respect of three appeals. However, the present appellant viz. M/s. Guru Electronics Singapore PTE Ltd. was not a party in respect of the above Final Order. It is seen that the issue presently can be decided on a short point. The Show Cause Notice originally issued has not implicated the appellants. However, an addendum appears to have been issued later on the grounds that the appellant had abetted in certain actions which render the goods liable for confiscation under the Customs Act. It is seen that the appellants had not received the said addendum. Revenue is not in a position to prove proper service of the Show Cause Notice and also the addendum. In the case of CC v. Jayant Oil Mills (cited supra), it has been held that the giving of notice is not complete unless and until it reaches the person concerned or its actual tender. This decision has relied on the Apex Court's decision in the case of K. Narasimhiah v. H.C. Singri Gowda- 1966 (053) AIR 0330(SC). In the case of A.F. Gani v. CC, Madras (cited supra), it has been held that under Section 124 of the Customs Act, personal hearing is a must. If the notice of personal hearing is not sent to the appellants, the Principles of Natural Justice are violated. In the present case also, the appellants stated that they have not received the intimation of personal hearing. Revenue has also not shown that they have served the personal hearing notice on the appellants. Hence, the ratio of this case is squarely applicable. In the case of Margra Industries Ltd. and Anr. v. CC, New Delhi/CCE, Chandigarh, the Larger Bench of the Tribunal has held that dispatch of order by speed post/registered post would not amount to valid service in the absence of proof of actual delivery. In the present case, Revenue has not shown any proof of delivery of the Show Cause Notice/addendum to the appellant. In these circumstances, the penalty imposed under Section 112(b) on the appellant cannot be sustained. On this point, we allow the appeal.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)