TMI Blog2019 (3) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... tter. Normally, the issue may have to go back to the Original adjudicating authority for a fresh consideration. Demand of interest - Whether the provisions of interest which came into effect in 1996 can be made applicable to the imports made in 1992? - Held that:- The relevant date should be the date of occurrence of taxable event. It is not the intention of Law to penalize importers where the taxable event has occurred before the new legislation came in to effect. Moreover, the appellants were not put to Notice on the requirement of paying interest vide the adjudicating order. Therefore, the appellants are not required to pay any interest on the duty confirmed - Thus, the appellant is not required to pay any interest. It was not correct for the department to collect Interest. Freezing of appellant's accounts - Whether the Revenue was within their right to freeze the accounts of the appellant? - Held that:- Going by the above provisions of Section 142, it is seen that the Commissioner of Customs is empowered to recover sums due to government by distraining any movable or immovable property belonging to or under the control of the defaulter. Therefore deducting the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of the appellant. The department sent a letter dated 05/04/2017 asking the appellant to pay interest of ₹ 3,94,337. The appellants have paid the duty short paid of ₹ 1, 02,501, vide three different challans dated 31/01/2007, 14/02/2017 17/02/2017. The appellants requested vide representations dated 03/05/2017, 20/03/2017 and 12/07/2017. In view of the department letter an amount of ₹ 2, 60,000/- was debited from the drawback account of the importer on 20/06/2017 and 05/07/2017. 2.2. The appellants filed an appeal No C/87040/17-Mum with CESTAT and an application dated 17/10/2017 for lifting the orders freezing the accounts. CESTAT passed an order No M/90704/17-SMB dated 03/11/2017 calling for the reply of the respondent Commissioner on 24/11/2017. CESTAT held, inter alia, that sudden freezing of the bank accounts in the year 2017 was not correct; appellants have suffered the course of natural justice and granting of any opportunity of hearing to the appellant; Not only this has caused peril to justice but also the recovery suffers from illegality which goes to the root of the matter for neither service of show-cause notice nor the adjudication order w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ICICI banks. As there was insufficient balance accounts in CBI and SBI have been defreezed and the department reserves the right to recover the balance interest amount of ₹ 1,34,337. 2.4. Tribunal Vide order dated 24/11/2017 has observed that the Revenue authority below has defied the order of the Tribunal in without complying to the grounds of the order had disclosed to the appellants as there is any reason to defreeze the ICICI accounts when they have filed the letter stating that the accounts in CBI and SBI have been defreezed; neither the Commissioner nor the Chief Commissioner took pain to reduce the litigation. The Tribunal also issued notice to the learned Commissioner to show-cause the reason as to why contempt shall not be drawn against him for defying the order of the Tribunal passed on 03/11/2017. It was also directed that the appellant shall be heard on 27/11/2017 by 16 hours. Accordingly, after hearing the appellants, the Commissioner of Customs, Import-II, has passed an order dated 14/12/2017. Hence this appeal. 3. Learned Counsel for the appellant submits that the levy and collection of interest was introduced for the first time with effect from 26/05/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he accounts was in terms of the provisions of Section 142 of the Customs, Act, 1962. He also submitted that as regards the applicability of interest that the same is discussed in the order of the learned Commissioner dated 14/12/2017. 5. Heard both sides and perused the records. 5.1. There are three issues involved in the case: a) Whether principles of natural justice have been violated vis- -vis less charge demand and adjudication order issued to the appellants. b) Whether the provisions of interest which came into effect in 1996 can be made applicable to the imports made in 1992. c) Whether the Revenue was within their right to freeze the accounts of the appellant. d) Whether there is a case for contempt proceedings against the Commissioner. 5.2. Going by the facts of the case as discussed earlier, the Bill of Entry was filed in July 1992 less charge demand was issued on 18/01/1993 which I find is within the limitation. As per the compliance report given by Commissioner a notice for attending the Personal Hearing was issued on 24.1.1994 and a copy was served on CHA also. Another letter dated 28.08.1996 was issued informing about the Personal Hearing. These no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration. However, looking in to the fact that the issue is quite old, the facts of the case and submissions of the Learned Counsel that they have paid the duty, I find that no purpose would be solved, in remanding the matter back, than further procrastination of the litigation which is already 3 decades old. I find that such a decision would not be in the interest of justice and the Government revenue cannot be put in a jeopardy due to the commissions or omissions of some officers. 5.3. I will examine the provisions of interest which came into effect in 1996 and as to whether they can be made applicable to the imports made in 1992. Learned Counsel for the appellant submits that the levy and collection of interest was introduced for the first time with effect from 26/05/1995 and it was prospective only; for recovery of interest, a notice in terms of Section 28 (3) of the Customs Act, 1962 was necessary; in the instant case no such notice was issued. The appellant was never called on to defend himself as to whether interests were payable for an import made in July 1992 and alleged short levy was pointed out in January 1993. Interest is not automatic but is by operation of law. I f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries (India) Ltd Vs CC Trichy 2014(311) ELT 91(Tri-Chennai). In view of the above, I find that the appellant is not required to pay any interest. It was not correct for the department to collect Interest. Moreover, the manner in which the department proceeded to collect interest also sounds high handed. The appellant should have been put to Notice and a reasonable opportunity should have been given to appellants for representing their case. While the same was not done, jumping straight way to coercive measures was certainly uncalled for. Therefore, Interest collected being without authority of Law needs to be refunded along with applicable interest. 5.4. Coming to the issue of whether the Revenue was right in freezing the accounts of the Appellants to recover the duty and interest, the Learned authorised representative for the department submitted that the action was taken under the provisions of Section 142 of the Customs Act, 1962. I find that 142(1) (c) provides that if the amount cannot be recovered from such person in the manner provided in Clause (a) or Clause (b) ii) the proper officer may, on an authorization by a (principal Commissioner of Customs or Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson on 08.12.2017. On going through the records of the case that Commissioner of Customs (Imp-II) has passed an order dated 14.12.2017 after hearing the Learned Counsel for the Appellants. It was also reported that the Department has defreezed the accounts of the Appellants in Central Bank of India and State Bank of India. Much water has flown since then and we are in 2019. Contempt proceedings at this stage would not solve any purpose rather than to further increase the litigation which in no way was the intention of the above cited orders of the Tribunals. As the accounts have been defreezed and a speaking order has been passed by the Learned Commissioner, no further justice could be achieved by pursuing the contempt proceedings. Therefore, at this juncture when the final order is ready to be issued I am not inclined to pursue the contempt proceedings. However, the concerned officers are advised to be judicious in dealing with the importers/exporters and to ensure that the provisions of law are followed in letter and spirit. 6. In view of the above, I allow the appeal to the extent of setting aside the interest. I hold that the duty of ₹ 1,02,501/- is payable by the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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