Customs, Excise and Gold Tribunal - Bangalore
Jindal Vijayanagar Steel Ltd. vs Cce on 31 August, 1999
Equivalent citations: 2000(90)ECR720(TRI.-BANGALORE)
ORDER V.K. Ashtana, Member (T)
1. To get this appeal heard, the appellants are required to pre-deposit duty amount of Rs. 43,18,783/- and penalty of Rs. 60,00,000/- imposed vide Order-in-Original No. 7/99 dated 7.5.1999 passed by the Commissioner of Customs, wherein it has been held that the present appellants removed 222 + 187 bearings clandestinely from the Customs Bond Warehouse, operated by M/s. Central Warehousing Corporation Ltd. which is a Public Sector Undertaking.
2. Heard Sri Habibullah Badsha, learned sr. advocate along with Ms. Ruk-mani Menon and Sri R. Sudhakar, learned advocates for the appellants and Smt. Aruna Gupta, learned D.R.
3. The learned sr. advocate submits that they have already pre-deposited a sum of Rs. 1,00,50,443/- and therefore, the balance amount required to be pre-deposited is only Rs. 28,81,217/-. He submits that since over 90% of the amount has already been pre-deposited, therefore, their prayer for waiver and stay should be granted. The learned senior advocate further submits that they have a very strong case on merits for the following reasons:
(a) While on the one hand, the Order-in-Original impugned does not note a single evidence which goes to show that the goods were clandestinely removed from the warehouse, on the other hand, it is on record that the appellants had submitted ex-bond Bills of Entry covered by a single EPCG licence and that these ex-bond Bills of Entry were properly processed by the Customs Bond Officer having jurisdiction over this bonded warehouses, before the goods were allowed to be removed. Since the goods were removed on the basis of EPCG licence, the Bills of Entry were assessed as 'nil' duty under the said licence. Subsequently, under pressure from the department during the course of investigation and prior to the issue of show cause notice an amount of Rs. 1 crore had to be deposited. A few days later, another amount of Rs. 43,18,783/- were also deposited on 25.11.1997 towards further dues claimed by the department.
(b) The goods were bonded into a Public Bond Warehouse operated by M/s. CWC which is a Public Sector Unit. Such goods bonded in such a Customs Warehouse are under the custody of M/s. CWC as well as the warehouse operates under the joint control of M/s. CWC and the Customs Bond Officer. There is nothing on record that there is any allegation in any show cause notice that M/s. CWC as custodian colluded with the appellants for the alleged clandestine removal. Since the goods were not physically in the custody of the appellants but were physically in the custody of M/s. CWC, therefore, there is no way that the appellants could have physically removed the goods clandestinely out of the control of M/s. CWC as well as without the knowledge of the Customs Bond Officer. Since there is no charge either against M/s. CWC or the Customs Bond Officer, therefore, the entire allegations upheld in the order impugned are totally baseless and without any support of evidence.
(c) The learned Commissioner has erred on relying on the statement of Sri K. Sarover, an employee of the appellants. The learned senior advocate takes us through the statement, which is at page 53 of the paper book and submits that the goods alleged to have been removed from the warehouse under bond No. 10/95 and 2/96 were different and were not in the bonded warehouse at all and they were items purchased from outside. Therefore, he submits that the statement of Sri Sarover has been mis-interpreted by the learned Commissioner. He further clarifies the dates referred to and the date on which the said basic equipment was placed on the foundation in the appellants factory and for this work M/s. TTG Industries Ltd. had raised bills accordingly.
(d) These submissions particularly regarding the filing of the ex-bond Bills of Entry against EPCG licence was submitted before the learned Commissioner both in written submissions as well as during the course of hearing. However, the impugned order has not considered these submissions in detail. On the contrary, the learned Commissioner concludes that since the equipment which was erected by M/s. TTG Industries Ltd. at the appellants site must have required bearings also, therefore, on this presumption alone, he has confirmed the demands. The learned senior advocate submits that therefore, instead of considering their submissions the Order-in-Original impugned has confirmed the demands only on presumption as above. The order impugned is, therefore, a non-speaking order.
4. The learned D.R. reiterates the Order-in-Original and submits that the said decision is not based on presumption, in view of the following reasons:
(a) The statement of Sri K. Sarover clearly says that the details given therein pertain to bearings under bond No. 10/95 & 2/96 and that the number of bearings has also been indicated therein.
(b) Secondly, these bearings were admittedly given to M/s. TTG Industries Ltd. much before the date of filing of ex-bond Bills of Entry, as evidenced by the bills raised by these contractors.
5. We have carefully considered the rival submissions and records of the case. As we have noticed that substantial amount of sums have already been deposited by the appellants against the total amount required to be pre-deposited and as the matter appears to us to lie on a short compass, therefore, we order waiver and stay of the balance amounts to be pre-deposited and proceed to consider the appeal itself.
6. On a careful consideration of the appeal, we find that there is substantial force in the arguments of the learned senior advocate that the goods having been bonded in a Public Sector Customs Bonded Warehouse were not in the custody of the appellants at all and therefore, the question of clandestinely removing them by the appellants would not arise, unless two other independent agents could have colluded with them. There is nothing on record to show that M/s. CWC were interrogated in the matter as to how the alleged clandestine removal took place from their custody as warehouse keeper under the 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. We also find that the statement of Sri K. Sarover does not directly admit that the specified number of bearings were cleared on a date prior to the date of the 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 the 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 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 procedures i.e. after submission of the ex-bond Bills of Entry. We find on this submission there is no order in the Order-in-Original impugned. In view of this, we are clearly driven to the conclusion that the Order-in-Original impugned is not a speaking order. Therefore, the same is set aside and the matter remanded for de novo consideration to the learned Commissioner of Customs. The Commissioner in the de novo proceedings shall take into consideration all the above submissions of the appellants as well as our observations and after further hearing the appellants, shall pass a detailed speaking order in this regard expeditiously.
7. The appeal is allowed by way of remand.
(Pronounced and dictated in the open court).