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2016 (5) TMI 669 - CESTAT MUMBAI

2016 (5) TMI 669 - CESTAT MUMBAI - TMI - Imposition of penalty - Section 112 of the Customs Act, 1962 - Confiscation of goods - Import of duty free goods under Import Passbook Scheme and diverted the same to local market - defrauding the Government of its legitimate revenue of Customs duty - Held that:- the proceeding of demand of duty and confiscation was made against the main party M/s. Orient Arts & Crafts, wherein finally the demand of duty and confiscation was dropped, accordingly the prese .....

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III, whereby the Ld. Commissioner (Appeals)upheld the penalty of ₹ 4 lakhs imposed under Section 112 of the Customs Act, 1962 in the Order-in-Original No. 135/92 dt. 4.8.1992. 2. The fact of the case is that a show cause notice dt. 28.8.1991 was issued to M/s. Orient Arts and Crafts, wherein the appellant, among others, was also one of the noticees. The charge in the show cause notice was that M/s. Orient Art and Crafts in collusion with the present appellant imported duty free goods under .....

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t Policy 1988-91 and also in violation of provisions of Customs Act, 1962. The show cause notice was adjudicated vide Order-in-Original No. 135/92 dt. 4.8.1992 whereby the goods were confiscated, demand confirmed and penalty of ₹ 4 lakhs was imposed on the appellant apart from the penalties imposed on the other noticees. The appellant preferred an appeal before the Collector (Appeals), who rejected the appeal vide Order-in-Appeal No. 87/93-BP dt. 14.5.1993 for want of pre-deposit. Aggrieve .....

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CESTAT and the case was remanded back to the adjudicating authority vide Order No. A/74/WZB/05 C-I (CSTB) dt.18.8.2005 by stating that the appeal of M/s. Orient Arts & Crafts has already been allowed by way of remand as seen from 2003 (155) ELT 168 (Tri.-Mumbai) we set aside the impugned order in so far relates to the present appellant and remand this case also to the adjudicating authority. In the remand proceeding the Additional Commissioner of Customs (Prev.) vide Order-in-Original No. .....

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t as per the present status of the overall case the impugned order is not sustainable even without going into the facts of the case. He submits that the appellant was one of the notice in the show cause notice dt. 28.8.1991 only for the penalty under Section 112 of the Customs Act, 1962. He submits that against the show cause notice dt. 28.8.1991 in respect of other noticees the matter was decided by the Collector of Customs (Appeals), wherein this Tribunal quashed the show cause notice dt.28.8. .....

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e show cause notice dt. 28.8.1991 became nonest. Hence, on this ground the appeal deserves to be allowed. Alternatively, he submits that even in the second show cause notice dt. 4.4.1994 issued by the department to M/s. Orient Arts and Crafts the proceeding was concluded by this Tribunal order in the case of M/s. Orient Arts and Crafts Vs. Commissioner of Customs (P) Mumbai 2003 (155) ELT 168 (Tri.-Mumbai) wherein the entire duty penalty and confiscation was dropped. This decision of the Tribuna .....

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or this reason also the penalty imposed on the appellant is liable to be set aside. The Ld. Counsel further submits that the present show cause notice was issued by the Assistant Collector who was not the proper officer to issue the show cause notice as per the prevailing old Section 28 of the Act. According to which, it was the Collector of Customs (Appeals), who was competent to issue the show cause notice and not the term proper officer was their in Section 28 of the Act. Therefore even the r .....

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) Godrej Soaps Vs. Commissioner of Central Excise, Mumbai-2004 (174) ELT 25 (Tri.LB) (iii) Commissioner of Customs Vs. Sayed Ali-2011 (265) ELT 17 (SC). 4. On the other hand, Shri Kamal Puggal, Ld. Assistant Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. I have carefully considered the submissions made by both the sides. From the sequence of the case and the facts and circumstances and before going through the issue of jurisdiction. I fin .....

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rtion of the order is reproduced below: 2.After hearing both the sides and considering the submissions, we find that - (a) The Collector of Customs (Appeals) while setting aside the order of the Additional Collector of Customs (Preventive), Mumbai had upheld as under :- I find that in the show cause notice, the demand has been raised under Section 28 of the Customs Act, 1962. Although Section 28 is not mentioned in show cause notice. The fact remains that duty demanded under Customs Act, 1962, a .....

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has been issued by the Asstt. Collector. The proper officer to issue the show cause notice during the relevant period was the Collector of Customs and not the Asstt. Collector. The Asstt. Collector could have issued the show cause notice if the short-levy or non-levy was within six months. In the instant case the show cause notice has been issued after six months of the relevant date. As the show cause notice is issued after six months after the Order of clearance of goods given by the proper Of .....

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d evasion of duty is consequent to diverting the imported raw material and the demand has been issued after six months, the show cause notice issued by the Asstt. Collector is not legally valid. During the material time, the Asstt. Collector had no jurisdiction to issue such a show cause notice to invoke the extended period on allegation of duty evasion. In view of the above matter, the Order of Adjudication No. 135/92 is set aside. The Department shall however have the liberty to readjudicate t .....

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e present impugned order, indicates on facts, there is no new material in the second show cause notice issued by the Collector of Customs (Preventive) for the same period and only the extended period for and a demand under Section 28 of the Customs Act is invoked, on account of wilful misstatement and suppression of facts by them i.e. M/s. Orient Arts and Crafts in collusion with other notices; while first show cause notice was for the normal period without invoking the extended period as it app .....

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lea questing the jurisdiction of Collector of Customs (Preventive), Mumbai to issue demands as proper officer and to determine the assessments on the Bills of Entry, which have been filed and for the consignments covered by the same were pending clearance in Docks but which were seized by Officers of the Marine and Preventive Wing of the Collector of Customs (Preventive), Mumbai. They have relied on the following case laws : (i) Manohar Bros. (CACITORS) v. Collector of Customs-II, Bombay [1998 ( .....

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axes [1984 (55) STC 292 Andhra Pradesh] (ix) UOI v. Ram Narain Biswanath [1997 (96) E.L.T. 224 (S.C.)] We find there is substantial force in the arguments on jurisdiction as made by the learned C.A. for the appellants. The demands of duty under Section 28 of the Customs Act, 1962 have to be made by the proper officer and not by any Officer of Customs, since proper officer of Customs was designated by law. Interpretation on jurisdiction, as arrived at by the learned Adjudicator to assume the juri .....

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act or omission which renders the goods liable to confiscation under the provisions of the Act. In his case, M/s. Orient Arts and Crafts have been charged with trafficking of the goods imported and cleared free of duty in violation of the provisions of exemption Notification No. 117/88, dated 30-3-1988 and fabrication of documents to show receipt and consumption in their premises. These acts and omissions thus rendered the goods liable for confiscation under the provisions of the Customs Act, 1 .....

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ts it cannot be said that import having been caused against passbook, the offence could not be investigated or adjudicated by the Preventive Commissionerate. In the light of above position that the charges against M/s. Orient Arts and Crafts amount to smuggling, the judgment in the case of Sharad Himatlal Daftri v. Commissioner of Customs, Calcutta, 1988 (36) E.L.T. 468 is inapplicable to the present case. Shri K Srinivasan, Consultant has also cited the cases of M/s. Metro Exports, 1988 (14) EC .....

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upon by the appellants lead us to conclude that determination of demand of duty under Section 28 of the Customs Act, 1962 is not made by the proper officer as per law, same therefore is not upheld. We also rely on the decision in the case of Pune Rollers as reported in 1997 (89) E.L.T. 604 and M/s. Bakemans Home Products Pvt. Ltd. v. CC as reported in 1997 (95) E.L.T. 278 to hold the demands to be not determined by the proper officer for the goods cleared and also for the goods under clear .....

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ise the powers of a Customs Officer then in such case the jurisdiction of the second and any other authority are deemed to be ousted, when any one of the authorities having a concurrent parallel jurisdiction has taken cognizance of a particular issue. In this case, the Officers of Customs of Customs House, Mumbai had taken cognizance of the imports and had passed orders of assessment. They, therefore were the proper officers to determine, whether the conditions under which they allowed the earli .....

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mbai and officers have jurisdiction to investigate into the matter of smuggling, the question of determination of liabilities under Section 111(o) and consequent demands and orders for original assessment of the goods required to be made on the Bills of Entry, cannot be usurped by them. In this connection, it is found, that a Division Bench of the High Court of Punjab and Haryana at Chandigarh in the case of Kenapo Textiles Pvt. Ltd. & Another v. State of Haryana & Others [1992 (84) STC .....

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sued notice to the petitioners to finalise the assessment against them. The jurisdiction of this Anti-Evasion Squad Officer was challenged. The Punjab and Haryana High Court, while upholding the authority of the Notification granting concurrent parallel jurisdiction to Anti-Evasion Squad to make assessments, recorded the following propositions of the law - Under the Act, the District Excise and Taxation Officer-cum-Assessing Authority would have jurisdiction to make the assessment. In case the S .....

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icer, he will have to stay his hands. However, the authority named in Rule 7 will have the jurisdiction to transfer the pending proceedings to the other officer and until such an order is passed, the officer who started the proceedings first will continue to have jurisdiction to frame the assessment and the other officer will not have the jurisdiction to do so. If this rule is not followed, there is likelihood of conflict of opinion between officers of co-ordinate jurisdiction and in law such a .....

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he jurisdiction of Collector of Customs, Calcutta to charge duty on goods assessed and cleared through Paradeep Port, when goods were seized in Calcutta Collectors jurisdiction after clearance from Paradeep Port. No submission or case law was made or relied before us, by the Departmental Representative. Bound by the law as laid down by the Supreme Court and following these binding decisions, it has to be concluded that the Commissioner of Customs (Prev.) cannot derive authority to take over the .....

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pending Bills of Entry, we cannot uphold the liability of confiscation arrived at under Section 111(o) or 111(b) of the Customs Act, 1962. (d) Since we find the second show cause notice issued is not valid for demanding the duty and it is not upheld, the demand is set aside. Consequent orders for confiscation cannot be upheld. They are required to be set aside. The Bills of Entry which have not been assessed by a proper officer shall have to be remitted to such proper officer, for passing an ord .....

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