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2016 (2) TMI 388 - CESTAT MUMBAI

2016 (2) TMI 388 - CESTAT MUMBAI - 2015 (328) E.L.T. 135 (Tri. - Mumbai.) - Detention of live consignment - request for extension of inquiry - Mis-declaration of import of processed/polished pearls as raw pearls - Claim of exemption against Replenishment License issued - Held that:- As the investigation requires time to verify records of past imports in the office of the PCCCC, I hold that there is no specific reason for extension of time with respect to live consignment dated 8-4-2014. The live .....

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as been sought for, extension under the provisions of Section 110(2). The show cause notice dated 25-5-2015 only requires the appellant to show cause as to why benefit under Notification No. 60/2002 should not be denied and further disputing the description and valuation of the pearls under the live consignment.

The learned Commissioner is in error in holding that there is sufficient cause for extension of time for issue of show cause notice under the provisions of Section 110(2). - .....

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, Sahar whereby in respect of raw pearls imported by Bill of Entry dated 8-4-2014 which were seized on 29-5-2014, as the Revenue prima facie found them to be mis declared and/or undervalued and thereby resorted to further investigation in the matter. By the impugned order, the time limit for issue of show cause notice have been extended under the provisions of Section 110(2) of the Customs Act by the Commissioner of Customs for a further period of six months beyond 28-11-2014. 2. The brief .....

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stoms leviable thereon under the said First Schedule and the additional duty, if any, leviable thereon under Section 3 of the said CTA, subject to the condition that imports are made under a Replenishment License issued, and in accordance with paragraph 4.4.1 of the Export and Import Policy, or Gem Replenishment License issued under, and in accordance with, paragraph 4.4.13 of the Export and Import Policy of 2002-2007. The appellant being a regular Importer and Trader, imported the consignment o .....

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Further, on 8-5-2014, the samples were drawn from the consignment and sent for examination at Pangem Testing Laboratory, Pune (a private laboratory). One Apoorva Mehta, an expert, on 12-5-2014 has expressed opinion that the pearls appeared to be processed/polished pearls. According to opinion of Apoorva Mehta, the Revenue, enhanced the value as suggested by the Expert, at ₹ 83,10,863/- against the declared value of ₹ 31 lakhs (approx.). As per the report of the Testing Laboratory, th .....

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ent of the partner of the appellant was recorded on 3-6-2014 and again on 17-6-2014 and further on 24-6-2014, and the last statement was recorded on 29-9-2014, wherein it was stated by the partner of the appellant that the pearls were imported in the same manner and from the same supplier from whom they have been importing all through the last two years and the pearls are neither processed nor are worked or misdeclared on their part as per the description in the documents. The appellant also fil .....

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rts made during last 5 years including the sales bills and the Bank statement as well as the details of the customers of the appellant. The appellant submitted the telephone numbers and address of the customers along with copies of invoice and Bank details were filed on 20-6-2014 for the period 2010-11 and 2011-12. On 24-6-2014, the appellant had also submitted further documents and Bill of Entry for the past import for the year 2009-10. 2.2 Prior to show cause notice was issued, the appell .....

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he appellant including carrying on of search in the premises of the customers along with seizure of documents and also pearls from the customers premises. The partner of the appellant, Mr. Shailesh Jhaveri, received a letter from the Revenue in terms of the RTI application for payment of requisite fee for the information. Accordingly, the said amount was paid on 11-11-2014 and the documents were provided being examination report for the past 27 consignments relating to import under Notification .....

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ound of imported pearls alleged to be processed and therefore, there is misdeclaration both with regard to nature and value. It was also mentioned that the appellants have been importing similar consignment from last several years and availing the benefit of Exemption Notification No. 60/2002 and there have been no dispute save and except in the present live consignment. 2.4 The appellant further mentioned that they have co-operated in the investigation and have given explanation as well as .....

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been no sufficient reason and moreover the high-handed nature of the investigating officers and coercive measure for making the payment of the duty as assessed by them and to take the clearance of the goods. The appellant further contended that there is no ostensible reason for grant of extension of time, as the goods under seizure is examined, subjected to Laboratory test and further the appellant have provided the necessary explanation and documents and no case of fraud on their part is found .....

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investigation involve inspection and scrutiny of large number of documents at PCCCC as well as the Importer Cell and after scrutiny of the documents further statement may be required to be recorded. It was further observed that it was submitted by the appellant through their Advocate that they had been called upon to submit copies of document relating to all the imports made during the last 5 years. Further, the Investigation Cell has submitted that the documents are voluminous in nature and co- .....

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to take time and will require extensive investigation and as such the extension of time is required. The learned Commissioner found that extension of time limit of six months is justified in the facts and in terms of Section 110(2) of the Customs Act. Further, reliance has been placed on the ruling of Hon ble Supreme Court in the case of Harbanslal v. Collector of Customs - 1993 (67) E.L.T. 20 (S.C.) and further reliance were placed on the ruling in the case of Assistant Commissioner of Customs .....

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ort. Such contention is vague, in view to the fact that after 29-9-2014 neither any further statements have been recorded nor any further documents are called from the appellant. The show cause notice states that the reference has been made through proper channel to conduct overseas inquiry. It appears that the details and data of such information have not been given. Further, in para 7 of the show cause notice it is specifically mentioned that Bill of Entry filed by importer i.e. appellant M/s. .....

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1983 (13) E.L.T. 1477 (S.C.), wherein some watches were seized from Charan Das Malhotra on 19-3-1963 by the Customs Department. Some of the watches were released before the completion of investigation on production of vouchers, as relating to them. In respect of the watches for which documentary evidence could not be produced, the show cause notice (much after six months) dated 6-3-1964 was issued. Charan Das Malhotra had challenged the extension of time, on two occasions ex parte, without any .....

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issued. It was further observed that even assuming that the first extension which was granted ex parte and without any opportunity to the respondent of being heard, were to be valid, the period of 4 months granted having expired on 19-1-1964, and no order for further extension have admittedly been made, it was obligatory on Customs to return the watches to the respondent. It has been stated, under Section 110(2) that there was a corresponding statutory right with the respondent to have them rest .....

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no jurisdiction to grant extension without giving to the respondent an opportunity of being heard. The Hon ble Supreme Court considered the appeal of the Revenue and have observed that there can be no doubt that the proviso of Section 110(2) contemplates some sort of inquiry. The Collector, obviously, is expected not to pass extension orders mechanically or as a matter of routine but only on being satisfied that there exist facts which indicate that the investigation could not be completed for b .....

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Customs - 1993 (67) E.L.T. 20 (S.C.), wherein it was held that the seized goods are required to be returned to owner unless show cause notice is issued within 6 months. It was further held in the case of Harbans Lal (supra) that the show cause notice is not issued, the seized goods have to be returned, but the Revenue can proceed in terms of the notice issued under Section 124 as the two sections are independent. Accordingly, the learned Counsel for the appellant prays for setting aside of the i .....

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ving considered the rival contentions, I find that the issue relates to the live consignment for which Bill of Entry was filed on 8-4-2014. Further, from the copy of the show cause notice and the impugned order, it is evident that the inquiry with respect to live consignment was completed sometimes in May-June, 2014 when the reports have been received from the Laboratory, which is evident from the copy of the Panchanama wherein the Laboratory reports have been shown to Panch-witness on 29-5-2014 .....

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