TMI Blog1992 (8) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... a Private Limited Company and are holders of valid REP licences. The petitioners imported 25 consignments of compound alcoholic preparations, viz. overproof strength preparations of a kind used for the manufacture of beverages. The petitioners sought clearance of the 25 consignments on the ground that the said consignments were covered by the generic description 'Ethyl Alcohol' appearing in the REP licences which were issued under the relevant import policies AM 84-85 and AM 85-88. In respect of these consignments, the Customs Department declined to clear the goods on the ground that the import was illegal. The Customs Authorities felt that the REP licences permitted import of 'Ethyl Alcohol' and the said licences did not cover the goods which were overproof strength alcoholic preparations, in other words concentrated whisky, brandy and gin. The Customs Authorities also felt that the goods imported were not relatable to the raw material used in the manufacture of the product to be exported and the goods imported were consumer goods covered by entry at serial No. 121 of Appendix 2 Part B of the import policy AM 85-88. The petitioners thereupon filed 16 writ petitions in this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icy 1988-91. The show-cause notice then recites that the goods imported under 45 consignments are nothing but concentrates of alcoholic beverages used for manufacture of Indian whisky and the goods were covered by Appendix 28, entry No. 30 and 31 of Import Policy period AM 88-91 and 1990-93 and therefore require a specific licence for valid and legal importation. The show-cause notice further recites that the various REP licences submitted by the importers do not appear to be valid for importation of compound alcoholic beverages preparations and therefore the goods appear to have been imported in contravention of provision of sub-section (1) of Section 3 of the Import (Control) Act, 1947 and Import Control Order, 1955 and therefore the goods are liable for confiscation under Section 111(d) and the petitioners are liable to penal action under Section 112 of the Customs Act. The petitioners have approached this Court to challenge the issuance of show-cause notice. 5.Shri Chagla, learned counsel appearing on behalf of the petitioners, submitted that the Assistant Collector of Customs lack jurisdiction to issue show-cause notice. It was contended that the petitioners have approached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action that the goods are not prohibited goods and the importer has paid the import duty. Section 143 confers power upon the Assistant Collector of Customs to allow import or export on execution of bonds in certain cases. The section inter alia provides that if the officer is satisfied that having regard to the circumstances of the case, the clearance cannot wait till all the requirements are satisfied, then permission can be granted to the importer to clear the goods for home consumption by executing a bond in such amount with such surety or security and subject to such conditions as the Assistant Collector of Customs approves for compliance with the requirements of the bond. Sub-section (1) of Section 143 of the Act is an enabling provision conferring power upon the Assistant Collector of Customs to grant clearance for home consumption even though the things which are required to be done prior to clearance are not satisfied, provided the importer executes a bond promising to comply with the things within a stipulated period. The bonds secured by the Customs Department from the petitioners in respect of 45 consignments are on identical grounds. The bonds recite that the Collecto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter the importer shall not be liable to penalty provided therein. Sub-section (3) on the other hand deals with cases where the importer fails to comply with the things set out in the bond within the time specified and in those cases, the Assistant Collector of Customs is not only entitled to enforce the bond but to take any other action permissible in accordance with the Act. Shri Chagla raised two-fold, contentions to urge that the show-cause notice issued in exercise of powers under Section 111 and Section 112 of the Act is not valid. The first submission of the learned counsel is that the goods imported under 45 consignments were cleared for home consumption on the petitioners executing ITC bonds as required under sub-section (1) of Section 143 of the Act. The learned counsel urged that once the goods are cleared for home consumption, then the goods covered by the consignments cease to be imported goods in accordance with the definition of expression 'imported goods' under Section 2 of the Act and consequently such goods are not liable for confiscation. There is considerable merit in the submission of the learned counsel. The goods lose its character of imported goods on bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable once the Customs Authorities come to the conclusion that the goods imported or exported were liable to confiscation because of act or omission on the part of the importer or exporter as the case may be. The power is not dependant upon the availability of the goods. It is therefore not possible to accede to the submission of Shri Chagla that as the goods covered by 45 consignments were not available for confiscation under Section 111 of the Act, the Customs Department could not have commenced proceedings under Section 112 of the Act for levy of penalty. 8.Shri Chagla then submitted that the powers under Section 112 of the Act are not available in view of the provisions of sub-section (2) of Section 143 of the Act and this submission deserves acceptance. The perusal of sub-section (2) makes it clear that if the person who had executed the bond, complied with the requirement of the bond within the stipulated period, then the Collector of Customs is bound to discharge the bond and deliver it back the person executing the same. The consequence of cancellation of the bond is that the person shall not be liable to any penalty provided under the Act and that covers the penalty con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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