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TMI Blog2006 (9) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed the debonding of the unit in his order dated 26-11-2002. The Respondents requested the Customs Authorities for re-export of the materials. The Commissioner of Customs gave them extension of warehousing period till 12-10-2003. As the Respondents failed to comply in the sense they could not re-export the goods, the Dy. Commissioner issued a notice demanding a duty of Rs. 3,64,033/- and Rs. 9,17,96,916/- along with applicable interest. The reason for demanding duty is that the goods were treated to have been improperly removed from the warehouse within the provisions of Section 72(1)(b) of the Customs Act. An Order-in-Original No. 25/2004 dated 14-9-2004 was issued to the effect that in case of failure to comply with the demand of duty, the goods shall be sold for recovery of the said amounts. Against the above mentioned Order No. 25/2004, the Respondents approached the Commissioner (Appeals). The Commissioner (A) made the following observations in the Para 14 of the impugned order. "14. In view of what has been discussed herein above, I hold that since the appellants are in dire financial straits and have liabilities to the Department of Customs, the Bank and others, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rong with the same. To that extent the OIA is faulty. (iv) The Commissioner (Appeals) has only considered the reported financial constraints of the appellants (party) and has issued directions to the original authority in the direction of solving the said financial problems of the party. The Commissioner (Appeals) has not found any illegality on the part of the original authority in observance of various procedures culminating in passing the said OIO. Therefore, it seems that the Commissioner (Appeals) has considered only extraneous matters in passing this order. (v) In para 10 of his order, the Commissioner (Appeals) has mentioned (in the context of the third extension given to the party up to 12-10-03) that "I fail to understand the logic behind such granting of permission to a person whose hands are bound and no money in his pocket, to first pay up immediately and then re-export the goods in warehouse under attachment". It is submitted that this finding arises from a lack of correct appreciation of facts. In the said extension given by the Commissioner, which was up to 12-10-03, the condition was that before re-exporting the entire lot of fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se goods way back in the early nineties, a facility was extended to the party under which duty was deferred subject to certain conditions. Those conditions clearly not having been fulfilled, duty is now rightfully demanded for which several notices have already been given. In the background of all these facts, to give a finding that duty demand is "at the press of a button" appears to be totally without any basis. (viii) The Commissioner of Customs (Appeals) has failed to appreciate that there is no contradiction between the Attachment of goods by the customs department on the one hand and the demand of more than Rs. 9 Cr. of duty by the impugned OIO No. 25/04 on the other. A careful reading of the facts which are narrated in great detail in the said OIO will make it clear that the goods were attached under the provisions of Section 142 since the party had despite repeated notices, failed to pay up the confirmed dues of Rs. 3.64 lakhs, plus interest, which had been confirmed vide the earlier OIO No. 44/01. However, even though the goods (valued at more than Rs. 7 Cr CIF) were so attached, the duty liability on these goods themselves does not vanish. That liability, which is in exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of part quantity is tantamount to the Commissioner (Appeals) giving a direction to the Commissioner of Customs, which is clearly beyond his competence under the statute. In fact, Section 5(3) of the Customs Act makes it very clear that Commissioner (Appeals) shall not exercise the powers other than those specified in Chapter XV and Section 108. (c) In Para 10 of his order, the Commissioner (Appeals) has taken note of some expressions of interest shown by some potential buyers of the fabrics in question. However, the amounts if any being offered by these buyers are not mentioned in the order from which it appears that these are nothing but tactics by the party to further prolong the matter which is already 10 years old. The Commissioner (Appeals) has suggested that party should be allowed to sell/re-export 30-40% of the stock of goods so that they could pay, within a period of ninety days, their dues of the confirmed demand. This suggestion is totally infeasible. As mentioned earlier, the total CIF value of the imported goods is about Rs. 7 crore and the duty involved thereon is about Rs. 9 crore. Thus, even the notional market value is about Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the Order-in-Appeal passed by Commissioner of Customs (A), Bangalore is proper and legal and hence, the appeal filed by the Revenue may be dismissed. (e) The Tribunal may direct the appellant (Revenue) to consider the request of the Respondent for extension of warehousing period for a period of one or two months and permit him to re-export the goods forthwith. 5. We have gone through the records of the case carefully. The power of Commissioner (A) to remand has been questioned by Revenue. It is now well settled that Commissioner (A) has powers to remand even after amendment of Section 128A in 2001. Now let us deal with other issues. The Respondent imported duty free goods valued at Rs. 7,15,82,320/- under the 100% EOU scheme. It is on record that since inception of the unit in 5-8-1987, exports worth Rs. 110.66 crores have been made as against the imports of capital goods worth Rs. 77 lakhs and raw materials worth Rs. 80.86 crores. The Respondents ran into certain financial problems and the unit became defunct. Considering a fact that the Respondent had met its export obligation in terms of EXIM policy, the Development Commissioner allowed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Customs Act. Further, the Original Authority by virtue of the power vested under him under Section 72(2) of the Customs Act ordered that on failure to pay the demands within seven days, all the goods sealed shall be inventorised and sold for recovery of the two amounts of Rs. 3,64,033/- and Rs. 9,17,96,916/- along with interest thereon. The Commissioner (A) before deciding the issue called for a factual report from the Dy. Commissioner of Customs. As per that report, he had issued a No Objection Certificate dated 17-5-2004 to the Customs Headquarters for disposal of the goods under attachment at the unit. It was further confirmed that inventorisation of the stocks had been undertaken to enable the Headquarters (Customs) to go ahead with the auctioning of the goods. The Commissioner (A) has also referred to the decision of the Hon'ble High Court of Karnataka in WP dated 26-11-2004 filed by the Respondents wherein the Commissioner of Customs, Bangalore; the Asst. Commissioner, Customs Bangalore and Commissioner of Customs (A) are Respondents No. 1, 2 & 3. The High Court had directed Respondent No. 3 [Commissioner (A)] to dispose of the appeal as expeditiously as possible and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, he has not done that. When the impugned goods could not be removed for export till the expiry of the warehousing period, it is deemed to have been removed improperly and duty is liable to be demanded under Section 72(1)(b). The OIO demands duty only under this provision. The Commissioner (A) has not discussed this aspect. Further, Revenue has pointed out that the Commissioner has not appreciated the facts of the case properly. In the grounds of appeal the Revenue has made it clear that when extension up to 12-10-2003 was granted the party was required to pay only an amount of Rs. 364 lakhs and not the entire Rs. 9.17 crores of duty which related to the very goods, whose re-export was then permitted. The Revenue has pointed out that the power to permit extension of warehousing period for re-export or for whatever reasons, which was earlier vested in the Chief Commissioner of Customs is now vested with the Commissioner of Customs, is not in the jurisdiction of any officer lower in the rank, then the Commissioner of Customs and therefore no direction in this regard can be given by the Commissioner (A), since his jurisdiction is confined to matters arising from the decisions or ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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