TMI Blog2011 (3) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... f recovering the amount so payable by the said purchaser at the time of transfer or otherwise disposal by change - In the absence of specific order by the Commissioner of Customs as prescribed under the Act, the Tax Recovery Officer has no authority to issue the impugned proceedings against the petitioner - Hence, the second issue is also answered against the respondents Except sending series of letters, which were not served on the importer, no effective steps appears to have been taken to serve on the importer and adjudicate the case - It is, therefore, clear that the concerned officer of the respondents has wasted his time sending notices time and again without proper service and slept over the issue for more than a decade - The delay and laches remain unexplained - The claim for duty against the petitioner is not justified as the inordinate delay and laches on the part of the department further disentitles them to take action against the petitioner - Hence, the third issue is also answered against the respondents - W.P.No.13123 OF 2006 - - - Dated:- 1-3-2011 - MR. JUSTICE R. SUDHAKAR, J. For Petitioner: : Ms. L. Maithili For Respondents: : Mr. S. Yashwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Imports) wrote a letter on 12.3.1992 to M/s. Falcon Beverages India (P) Ltd., asking them to file a Bill of entry relating to import of 7th machine viz., Bottle Inspector Machine stating that it is not available with the Department. This was followed by reminders dated 10.2.1993 and 2.9.1993. 4. It will be pertinent to point out that the communications dated 12.3.1992, 10.2.1993, 2.9.1993 have not been served on M/s. Falcon Beverages India (P) Ltd., as could be seen from the narration of facts by the Department in the order in Original No. 2425/2004, dated 23.6.2004 in file No. S37/380/86 Gr.6. While the matter stood thus, on 12.1.1994, the importer M/s. Falcon Beverages India (P) Ltd., entered into an agreement with M/s. Aradhana Beverages Foods Company Ltd., for sale of land and machinery, which included the Bottle Inspector Machine. 5. Subsequently, on 25.7.1994, the Department sent a reminder to M/s. Falcon Beverages India (P) Ltd., asking them to file a triplicate copy of Bill of entry for Bottle Inspector Machine followed by reminders dated 25.7.1994, 22.5.1996, 22.7.1996, and 1.1.2004. On 1.6.2004, a show cause notice in terms of Section 124 of Customs Act was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of Rs.43,07,526/- with applicable interest is to be recovered from you as per the above said Order-in-Original. 3. The Asst. Commissioner of Customs (Gr.6) has sent the said certificate to the undersigned who has been authorized under Section 142(1)(c)(ii) of the Customs Act 1962 read with Rule 4 of the Customs (Attachment of Property of Defaulters for Recovery of Customs Dues) Rules, 1995, specifying that an amount of Rs.43,07,526/- (Rupees forty three lakh seven thousand five hundred and twenty six only) is to be recovered. Therefore:- (1) You are hereby required to pay the amount aforesaid within seven days from the date of service of this notice. (2) A copy of the Challan in Form TR 6 is enclosed for the purpose. (3) You are hereby informed that in case of default, steps would be taken to realize the amount in accordance with the provisions of the Customs (Attachment of Property of Defaulters for Recovery of Customs Dues) Rules, 1995. (4) In addition to the amount aforesaid, you will also be liable for:- (a) Such interest as is payable in accordance with Section 28AA of the said Act, for the period commencing immediately and (b) All cost, charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly, the department has been sending notices and reminders to the importer but there is no effective service. The Order-in-Original No.2425/2004 dated 23.6.2004 was also passed exparte. In any event, based on the order-in-original passed against the importer, the authorities have to proceed by issuing the recovery certificate against the original importer only. The department can only proceed against the importer and not the petitioner. The impugned notice against the petitioner without a certificate in terms of Section 142(1)(c)(ii) of the Act cannot be enforced as it will be without jurisdiction and bad. (iii) Assuming without admitting that the petitioner is a transferee of the Bottle Inspector Machine, and the respondents while trying to recover the dues from the importer in terms of Section 142(1)(c)(ii) of the Act and the proviso thereunder, cannot invoke the said provision insofar as the petitioner is concerned, as the proviso was amended by Section 72 of Finance Act No.2 Act 23/2004 only on 10.9.2004. Therefore, the amended proviso to Section 142 of the Act will be applicable prospectively and not retrospectively and in that event the liability if any cannot be fastened ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or may require any other officer of customs to recover the amount so payable by detaining and selling any goods belonging to such person which are under the control of the (Assistant Commissioner of Customs or Deputy Commissioner of Customs) or such other officer of customs; or (c ) if the amount cannot be recovered from such person in the manner provided in clause (a) or clause (b) - (i) the (Assistant Commissioner of Customs or Deputy Commissioner of Customs) may prepare a certificate signed by him specifying the amount due from such person and send it to the Collector of the District in which such person owns any property or resides or carries on his business and the said Collector on receipt of such certificate shall proceed to recover from such person the amount specified thereunder as if it were an arrear of land revenue; or (ii) the proper officer may, on an authorisation by (commissioner of Customs) and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; and in case, any part of the said amount payable or of the cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present petitioner, who is the subsequent purchaser? (iii) Whether the Department is barred from collecting the amount from the present petitioner only on account of delay and laches? 16. The admitted fact in this case is that the agreement of sale between M/s. Falcon Beverages India (P) Ltd., and M/s. Aradhana Bottling company is dated 12.1.1994. On this date, the proviso to Section 142(1)(c)(ii) of the Customs Act was not in force, It came into effect only on 10.9.2004 i.e. 10 years after signing the agreement and the sale. Therefore, the applicability of the above provision has to be considered. 16(i) The petitioner is the subsequent purchaser of the goods imported. The assets and liabilities, that will have to be taken into account is relatable to the date when the agreement was entered into and the sale was effected. As stated above, on the date when the agreement and the sale was effected, the proviso to Section 142 (i)(c) (ii) of the Act was not in the Statute. The proviso states that recovery from the person succeeding to the goods, materials etc. by way of attachment will be based on a written approval of the Commissioner of Customs for the recovery of amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and requested for release of bond and withdrawal of the Bank guarantee. The importer sought for finalisation of project contract on 4.3.1992. The Department, slept over the issues for more than twelve long years. Except sending series of letters, which were not served on the importer, no effective steps appears to have been taken to serve on the importer and adjudicate the case. The laches on the part of the concerned authority stares on the face of the records. Admittedly, the department letters were returned as undelivered as is evident from the Order-in-Original passed by the competent authority. It is, therefore, clear that the concerned officer of the respondents has wasted his time sending notices time and again without proper service and slept over the issue for more than a decade. Armed with the exparte order-in-original passed by the competent authority, the recovery proceedings have been initiated against the petitioner. In this case, having failed to recover the amount from the importer, as rightly pointed out by the Division Bench of Gujarat High Court in ANIL ELASTIC INDUSTRIES vS. - UNION OF INDIA (2008 (222) E.L.T. 340(Guj.), the Department seems to have woken up f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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