TMI Blog2016 (2) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... begin to run from the date of knowledge of the mis-declaration or undervaluation of the goods is contrary to the express language of clause (a) of Explanation 1 which makes it clear that limitation begins to run from the 'relevant date' which in the present case will be the date on which the goods were cleared by the Customs. Further, there can be no manner of doubt that the subject matter of the two SCNs were two different sets of B/Es. Each B/E is separately assessed at the time of clearance of the imported goods. The B/Es mentioned in the first SCN are not the ones mentioned in the second SCN and vice versa. Therefore, the question of applicability of the principle of res judicata does not arise. Demand with levy of penalty confirmed - writ petitions dismissed - Decided against the appellant. - WP (C) No. 861/1998, WP (C) No. 1526/1998, WP (C) No. 2634/1998 - - - Dated:- 27-1-2016 - S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr Rajesh Rawal, Adv For the Respondent : Mr Kamal Nijhawan, Adv ORDER 1. Writ Petition (C) No. 861 of 1998 is by Maldhari Sales Corporation (Petitioner No.1) through its Sole Proprietor Mr. Kumud J. Dharaya (Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orts which form the subject matter of two show cause notices (SCNs) issued in the present case. One SCN concerned goods that were mis-declared/undervalued and cleared by the Customs but were available for confiscation. The other SCN concerned goods that were mis-declared/undervalued and cleared but had already been diverted and sold in the market and, therefore, not available for confiscation. 5. The first SCN dated 8th August 1989 issued by the DRI to nineteen entities and persons including the Petitioners in these three petitions, concerned import of three consignments of steel wire ropes weighing 732.390 MT, 146.570 MT and 343.340 MT of declared CIF value of ₹ 52,99,324, ₹ 10,21,717 and ₹ 24,28,707 respectively. The first SCN specifically referred to bills of entry ('B/E') Nos. 3239/81 and 3239/84 both dated 27th December 1988 and IGM/Item No. 661/108. These three consignments were imported from West Germany by AWRL, Hyderabad under the DEEC Scheme. 6. Apart from the seized documents, files and materials, the details of which have been set out in the first SCN, the names of the persons whose statements were recorded during the course of investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that no evidence had been produced by the noticees to prove that they had in fact used the imported steel wire rods for the manufacture of steel wire ropes. Further the evidence brought on record by the Department proved that the imported steel rods had been sold in the open market for profit. The import of EN-1A leaded free cutting steel wire rods against the advance licences under the DEEC Scheme was clearly unauthorized and the goods in question were liable for confiscation under Section 111 (d) of the Act read with Section 3 (2) of the Imports Exports (Control) Act, 1947. Further the documents showed that they had deliberately undervalued of the goods making them liable for confiscation under Section 111 (m) of the Act. The goods cleared against the two B/E made them liable for confiscation under Section 111 (o) of the Act. However, some of the goods sold like this are not available for confiscation, only the quantity which has been seized is available for confiscation. As far as penalty was concerned, detailed findings were recorded as regards the following noticees and penalties were imposed as indicated below: (i) AWRL ₹ 25 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiations of himself and Mr. Subhash Gupta with the suppliers they first reduced the same to DM 700 per MT and thereafter probably considering the relationship of Mr. Vipen Gupta, they ultimately reduced the price to DM 482 per MT. Mr. Janakiram submitted that the entire material was sold but he maintained that he did not know that it was sold since the imported goods were not useful for their products. Reference was made to the statements of Mr. Subhash Gupta and Mr. K. Subramanyam, both Directors of AWRL, Mr. M.R.N. Rao, the Chief Executive of AWRL, Mr. T.N. Prahlad, Accounts Manager of AWRL. Reference was also made to the statement of Mr. K. Satyanarayan, Import Export Manager of AWRL and Mr. P.C. Pantulu, Finance Manager of AWRL. 11. Interestingly, whereas the first SCN was issued to 19 noticees, the second SCN was issued to 43 entities. The second SCN was adjudicated by the Collector of Customs by an order-in-original dated 31st August 1994. This order also discussed at length the evidence produced. It was concluded that the case of the Department stood entirely proved. However, as regards the persons involved it was held that 28 of the noticees who were specifically buye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the extended period of limitation under Section 28 of the Act. Mr. Rawal placed reliance upon the decisions in Nizam Sugar Factory v. Collector of Central Excise, A.P. 2006 (197) ELT 465 (SC), M. Nagabhushana v. State of Karnataka 2011 (27) ELT 481 (SC) and CCE v. Damnet Chemicals (2007) 216 ELT 3 (SC). 15. Mr. Kamal Nijhawan, in reply to the above submissions, pointed out that whereas the first SCN related to the three consignments only, the facts relating to other seven consignments, which form subject matter of the second SCN, came to light in the course of investigation into the three illegally imported consignments which formed the subject matter of the first SCN. Mr. Nijhawan pointed out that in terms of Explanation (1) to Section 28 of the Act, the extended period of limitation would begin from the 'relevant date' which would be the actual date of clearance of imported consignments by mis-declaration or undervaluation. He pointed out that the principle of res judicata would not apply as the subject matter of the two SCNs was different. 16. The Court finds no merit in the submission of learned counsel for the Petitioner for the reasons that follow. At the ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation or undervaluation of the goods is contrary to the express language of clause (a) of Explanation 1 which makes it clear that limitation begins to run from the 'relevant date' which in the present case will be the date on which the goods were cleared by the Customs. For the purpose of Explanation 1 (a) to Section 28 of the Act, it is not the date of knowledge of the misdeclaration that is relevant but the date of clearance of the goods under a B/E which contained such mis-declaration and/or undervaluation. Consequently, the second SCN in the present case was issued within the extended period of limitation in terms of Section 28 (4) of the Act. 19. Further, there can be no manner of doubt that the subject matter of the two SCNs were two different sets of B/Es. Each B/E is separately assessed at the time of clearance of the imported goods. The B/Es mentioned in the first SCN are not the ones mentioned in the second SCN and vice versa. Therefore, the question of applicability of the principle of res judicata does not arise. 20. The decisions cited by learned counsel for the Petitioners are clearly distinguishable on facts. In Nizam Sugar Factory (supra), what was sou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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