Custom, Excise & Service Tax Tribunal
M/S.Usha Stud & Agricultural Farms (P) ... vs Cc, New Delhi on 11 May, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Customs Appeal No.601-602/2006-Cus
(Arsing out of Order-in-Original No.07/MDS/06 dated 11.8.2006 passed by the CCE, IGI Airport, New Delhi)
For approval and signature:
Honble Mr. M.V.Ravindran, Member (Judicial)
Honble Mr.M.Veeraiyan, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s.Usha Stud & Agricultural Farms (P) Ltd. Appellants
Ms.Ameeta Mehra, Managing Director
Vs.
CC, New Delhi Respondent
Present for the Appellant: Shri Krishan Kant, Advocate
Present for the Respondent: Shri B.L.Soni, SDR
Coram: Honble Mr.M.V.Ravindran, Member (Judicial)
Honble Mr.M.Veeraiyan, Member (Technical)
Date of Hearing/decision: 11.05.2011
ORDER NO._______________
PER: M.VEERAIYAN
1.1 Appeal No.C/601/06 is by the appellant company challenging confiscation of three mares and demand of duty of Rs.15,93,447/- alongwith interest and imposition of penalty vide order of the original authority 07/MDS/06 dated 11.8.06.
1.2 Appeal. C/602/06 is by the appellant managing director against imposition of penalty of Rs.3 lakh by the same impugned order.
1.3 As both appeals arise out of the same impugned order, they are disposed of by this common order.
2. Heard both sides.
3.1 Learned Advocate made a preliminary submission which deserves to be considered. It was submitted that the import of mares took place in January, 99 and the bill of entry was assessed and the duty was paid on 21.1.99 and therefore five years period for demand of duty under section 28 expired on 20.01.2004. the show cause notice though dated 20.1.2004 was actually served on the appellant only on 23.1.2004. Since the show cause notice has been served after the expiry of five years, the entire proceeding proposing confiscation of mares on the allegation of undervaluation and imposition of penalties should be held not legal and proper. He also submits that the charge of undervaluation is not backed by any evidence on extra payment over and above the declared value. He also submits that the claim of the department that the show cause notice was served on one Ms.Ritika Goel, a friend of the appellant director, on 21.1.04 should be rejected as such a service is not valid service.
3.2 Learned Advocate relies on following decisions in support his contention:-
(1) Corvine Chem. & Pharmaceuticals Ltd. vs. CCE, Cheanna- 2004 (170) ELT 181 (Tri.-Del.) (2) CCE, Lucknow vs.Sarda Steels Industries Ltd.-2004 (170) ELT 182 (Tri.-Del.) (3) Krisons Electronic Systems Ltd. vs. CC, Calcutta-1996 (87) ELT 514 (T) (4) Prasant Glass Works Pvt.Ltd. vs.CC, Calcutta-1996 (87) ELT 518 (T) (5) Jayshree Textiles and Industries, Rishra vs. CC, Calcuta-1986 (23) ELT 491 (T)
4.1 Learned SDR submits that the show cause notice dated 20.1.04 was issued by Additional General DRI, Mumbai. The same has been served by tendering to one Ms.Ritika Goel who accepted the same on behalf of appellant company and appellant director 20.1.04. He also submits that the order of clearance on the assessed of bill of entry was made on 22.1.99 and therefore the service of notice on 22.1.04 was within stipulated period of five years.
4.2 Alternatively ld.SDR submits that even if the demand is held to be time barred, the proposal for confiscation and penalties could be issued under Section 124 of the Customs Act and there is no time limit prescribed in the said section and therefore the confiscation and imposition of penalty should be upheld.
4.3 Learned SDR relied on the decision in the case of S.A.Plywood Industries Ltd. vs. CCE, Siliguri-2010 (17) STR 616 (Tri.-Kolkata) 5.1 We have carefully considered the submissions and perused the records. It is not disputed that the duty as per assessment of the bill of entry was paid on 21.1.99. It is claimed by the Department that the clearance of mares was granted on 22.1.99. The show cause notice for recovery of duty not levied or short levied or erroneously refunded requires to be issued in terms of section 28. In the present case suppression of facts invoked. Therefore, the relevant provisions of section 28 are reproduced below:-
(1) When any duty has not been levied or has been short-levied or erroneously refunded, or when any interest payable has not been paid, part paid or erroneously refunded, the proper officer may, -
(a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, within one year;
(b) in an other case, within six months, from the relevant date, serve notice on the person chargeable with the duty or interest which has not been levied or charged or which has been so short-levied or part paid or to whom the refund has erroneously been made requiring him to show cause why he should not pay the amount specified in the notice :
Provided that where any duty has not been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any willful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisions of this sub-section shall have effect as if for the words "one year" and "six months", the words "five years" were substituted.
Explanation : Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or six months or five years, as the case may be.
(2) The proper officer, after considering the representation, if any made by the person on whom notice is served under sub-section (1), shall determine the amount of duty or interest due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount determined.
(3) For the purposes of sub-section (1), the expression "relevant date" means -
(a) in a case where duty is not levied, or interest is not charged, the date on which the proper officer makes an order for the clearance of the goods;
(b) in a case where duty is provisionally assessed under section 18, the date of adjustment of duty after the final assessment thereof;
(c) in a case where duty or interest has been erroneously refunded, the date of refund;
(d) in any other case, the date of payment of duty or interest. 5.2 In the present case, undisputedly assessed duty stands paid on 21.1.99. It is not case where duty was not at all levied but a case of demand of differential duty alleging undervaluation. In view of the above the clause (d) of explanation 1 applies to the facts of the present case. Inasmuch as the duty was paid on 21.1.99, show cause notice should have been served on or before 21.1.04.
6.1 The service of any order or decision or any summon or notice is to be done as per the procedure prescribed under section 153 of the Customs Act which reads as under:-
153. Service of order, decision, etc. - Any order or decision passed or any summons or notice issued under this Act, shall be served -
(a) by tendering the order, decision, summons or notice or sending it by registered post to the person for whom it is intended or to his agent; or
(b) if the order, decision, summons or notice cannot be served in the manner provided in clause (a), by affixing it on the notice board of the customs house.
6.2 From the above, it is clear that the notice should have been served by tendering to the person for whom it is intended or to his agent. The service on a friend of the appellant director cannot be treated as valid service and therefore the service said to have been made on Ms.Ritika Goel cannot be treated as valid service. As a result, it is seen that the notice has been served only on 23.1.04 beyond the period of five years stipulated for service of notice under section 28 invoking the extended period. Therefore, the order of the Commissioner demanding duty by issuing notice beyond five years cannot be sustained. The decision relied by the appellants clearly supports the view as above.
6.3 It was being contended that Section 124 does not prescribe any time limit for proposing confiscation of goods and imposition of penalty. It is to be seen that show cause notice has been issued without referring to Section 124 of the Customs Act. Even otherwise, proposal for confiscation relates to allegation of undervaluation with consequent to evasion of customs duty which requires to be demanded in terms of Section 28 of the Customs Act. Section 28 prescribes issue of show cause notice within maximum five years from the relevant date, in this case, the date of payment of duty namely 21.1.99. The proposal for confiscation and imposition of penalties are directly linked to demand of differential duty invoking extended period of limitation. Even though Section 124 does not specify a time limit, the same cannot exceed the, maximum time limit of five years prescribed under Section 28 of the Customs Act. This view is supported the decision of the Tribunal in the case of Collector of Customs, Madras vs. T.V.S.Whirlpool Ltd. reported in 1996 (86) ELT 144 wherein it has been held that in the case of demand of interest where no time limit is prescribed, time limit prescribed for demand of differential duty will apply. The appeal filed by the Department against the said decision stands rejected by Honble Supreme Court reported in 2000 (119) ELT A-177.
7. In view of the above, inasmuch as proceedings have been initiated after stipulated period of five years under Section 28, the order of the Commissioner confiscating the goods, demanding duty and interest and imposing penalties cannot be sustained.
8. The appeals are allowed with consequential relief as per law.
(Pronounced in the open court) (M.V.RAVINDRAN) MEMEBR (JUDICIAL) (M.VEERAIYAN) MEMEBR (TECHNICAL) mk 8