TMI Blog2016 (12) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... determine the line that must never be crossed. The jurisdiction arrogated in the impugned order, unwarranted certainly, is not contemplated by law. Fraud may excite moral outrage but to allow such outrage to justify widening the tax jurisdiction beyond the plain reading of the statute is an invitation to regress to the tax regimes of the darker periods of history. The importers are, admittedly, identifiable and have been put on notice. Fastening of tax liability on Shri Inderjit Nagpal is without authority of law. Confiscation of goods - Held that: - Invoking the authority under section 111 and 113 of the Customs Act 1962 and failing to act on behalf of the new owners under section 126 is a breach of agency and a breach of trust. In the alternative, confiscation effected on goods that are not traceable, and have never been traced after its clearance for home consumption, is nothing short of a travesty. Confiscation is attended by the requirement to offer the confiscated goods to the person from whom it was confiscated on payment of redemption fine. Attaching a fine to the act of confiscation without the wherewithal to complete the process is not only futile but detracts from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... III v. Dhiren Gandhi 2012 (281) ELT 64 (Kar.) was cited to support the contention that the appeal should abate as confirmed demands cannot be recovered from successors of a deceased assessee in the absence of statutory provision for doing so. Relying upon the definition of assessee in section 2 of Central Excise Act, 1944 and the object of recovery of duty that was short-paid or unpaid in section 11A, the Hon ble Supreme Court had held that legal heirs cannot be proceeded against. Likewise, the Hon ble High Court of Karnataka had held that legal heirs are not person chargeable to duty and penalty recoverable under the Act even where such successor of a deceased proprietor-manufacturer got registered as an assessee under the same name and style. Learned Counsel for Smt Neera Nagpal further submits that section 142 of Customs Act, 1962, the recovery mechanism, refers to person and person excludes deceased individuals. 2. Learned Authorised Representative distinguished the facts in re Shabina Abraham from those in the present dispute by contending that the cited rulings were rendered in disputes over the jurisdiction to invoke section 11A against legal heirs of those who ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at some of the cards were retailed in the market through one Jawahar Lal Khubchandani operating his business in the name and style of Khubsons Electronics. He confirmed having entered into an understanding with Shri Inderjit Nagpal for supply of MPEG cards without any documentation at a price of about ₹ 400/- per piece. The said Khubchandani, upon being shown a sample drawn from a consignment of MPEG card seized from M/s Picasso Overseas, confirmed that the goods obtained by them were also the same. From the statements of the Custom House Agent and the bank records of Centurion Bank Ltd, New Deli, the investigators obtained evidence of flow of funds from M/s Everything International, belonging to Inderjit Nagpal, to the importing firms as well as to the clearing agent. The importing firms were established by Shri Sanjay R Chauhan, who is the brother of Shri Manoj Chauhan, an employee of the customs house agent at the alleged instigation of Shri Inderjit Nagpal. The customs house agency belonged to one Jaikishan Dhingra, the brother-in-law of Shri Inderjit Nagpal. The investigators also made enquiries with M/s Super Cassette Industries, Noida, who, after viewing the seized sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 10,00,000/- on Shri Sanjay R Chauhan. 6. Learned Counsel for the appellants placed reliance on the decision of the Tribunal in Schlumberger Asia Services Ltd v. Commissioner of Customs (Adj.), Mumbai 2015 (330) ELT 369 (Tri.-Mumbai) and Goodwill Clothing Co. v. Commissioner of Customs, Kandla 2008 (225) ELT 211 (Tri-Ahmd.) and the decision of the Hon ble High Court of Bombay in Commissioner of Customs (EP) v. Jupiter Exports 2007 (213) ELT 641 (Bom.) . The decision of the Tribunal in re Schlumberger Asia Services was rendered after difference of opinion was settled by reference to Third Member who held: 36.2 The ld. AR (Additional Commissioner) has contended that... the investigating authorities did not identify who the actual carriers were ....... 36.3 I agree with the appellant that they are not the owners of the goods and consequently the sole premise on which the demand has been confirmed against them by the respondent cannot be sustained . It was for the investigating authorities to have raised the demand against the person from whom it was legally due . However, having failed to raise the demand against the person from whom it is due Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability could not be fastened upon the appellant. 7. In re Jupiter Exports, the Hon ble High Court of Bombay went into the definition and held that 23. .. The definition of the term importer under Section 2(26) of the Customs Act defines the term importer and does not cover a person who has not caused the import of the goods and who does not hold himself out to be the importer or the owner of the imported goods. As the respondents are not the importer, it cannot be made chargeable to duty as the demand for duty has to be based on law and not on equity or moral considerations. The Tribunal rightly held that it was open to the department to proceed against a person who had obtained a license by fraud or misdeclaration in accordance with law. This was followed by the Tribunal in re Goodwill Clothing Co. 8. In addition, Learned Counsel placed reliance on the decision of this Tribunal in Nalin Z Mehta v. Commissioner of Customs, Ahmedabad 2014 (303) ELT 267 (Tri.-Ahmd.) 11. In view of the above reproduced ratio of various judgments, it has to be concluded that an importer under Section 2(26) is a person who has filed the Bills of Entry for the cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cleared for home consumption. This is a corollary of the definition of imported goods which ceases to be so upon clearance for home consumption. Ownership, in general parlance, goes hand-in-hand with title to the goods but Customs Act, 1962 does not thrust the statutory obligations therein upon the owner of the imported goods. The scheme of Customs Act, 1962 envisages compliance with duty liability through a mechanism of control over vessels or aircraft carrying imported goods during their sojourn in Indian waters or at Indian airports. Once goods are discharged from conveyances they remain under the control of designated custodians till their warehousing or clearance for home consumption. It is only upon declaration of intent to warehouse or to clear for home consumption that duty liability is crystallized by assessment of bill of entry. The import manifest is the document that enables control over and accountal of goods intended to be landed in a customs port for import into India till such clearance. 11. The goods that are imported belong to some owner till the title is transferred to new owners. Ownership by persons outside India is not relevant to Indian laws and, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve beyond the pale of the King s justice because the Magna Carta, that forerunner of tax statutes of today, was yet to be granted. It is nobody s case that recovery of short-paid duties can be effected from buyer in due course ; nor can there be a justification for effecting recovery on the belief of a few that an individual is the owner. The owner ceases to have relevance with the erasure of importer along with imported goods . With jurisdiction under section 28 of Customs Act, 1962 continuing over person chargeable to duty that has not been levied or short-levied, that provision can be invoked only on goods that have already been cleared for home consumption when the descriptions used till then cease to be valid; that would explain the expression person chargeable to duty - obviously referring to the one who, by filing the bill of entry, had made himself liable to discharge duty liability. This should be apparent from section 28 (1) (a) of Customs Act, 1962. Considering the legal position and the decisions referred supra we have no hesitation in holding that there is no authority to demand duty short-levied or non-levied from anyone other than the importer. 13. There i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority under section 111 and 113 of the Customs Act 1962 and failing to act on behalf of the new owners under section 126 is a breach of agency and a breach of trust. In the alternative, confiscation effected on goods that are not traceable, and have never been traced after its clearance for home consumption, is nothing short of a travesty. Confiscation is attended by the requirement to offer the confiscated goods to the person from whom it was confiscated on payment of redemption fine. Attaching a fine to the act of confiscation without the wherewithal to complete the process is not only futile but detracts from the credibility of government. It would appear that the adjudicating Commissioner has not comprehended the semantically insignificant but substantively major distinction between confiscation and liability to confiscation. The two are distinct and separate; with a finding of liability to confiscate, the lack of goods is admitted, thus foreclosing the possession of goods, but the ingredient necessary for invoking section 112 and section 114 is breathed into existence. Therefore, the confiscation of the goods in the impugned order is not in accordance with the law. 15. We t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Valuation (Determination of Price of Imported Goods) Rules 1988. The Rules are framed under section 156 read with the valuation provisions in section 14 of the Customs Act, 1962. Section 12 authorises charging of duty on each consignment presented for import. There is no authorization to encompass all imports effected during a period for recovery of duty that has allegedly been short-paid. In the impugned proceedings, no effort appears to have been made to identify the bills of entry which have been assessed and for which short-recovery has been effected. We rely on section 28 which specifies its scope as: that any duty has not been levied or has not been short-levied and is to be invoked within the period counting from the relevant date in section 28(3) with the alternatives being one among (a) date on which the proper officer makes an order for clearance of the goods (b) the date of adjustment of duty after the final assessment thereof and (c) the date of payment of duty or interest. Each of these situations is inextricably linked to assessment under Section 17 or 18 and section 47 for clearance which is conditional upon payment of duty. Thus, section 28 can be invoke ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
