TMI Blog2022 (1) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Johnson Watch Co. Pvt. Ltd., have been mentioned in paragraphs 5 and 6 of this order. It is seen that while 95 high-end wrist watches were recovered from the appellant, about 6233 high-end wrist watches were recovered from M/s. Johnson Watch Co. Pvt. Ltd., 5 high-end wrist watches were recovered from Purushottam Jajodia and 16 high-end wrist watches were recovered from Pankaj Lakhani. The Principal Commissioner also committed an error in rejecting the application filed by the appellant for provisional release of the goods by holding that the seized goods were prohibited goods liable for confiscation under section 110(d) of the Customs Act. As noticed above, the watches of all other co-noticee were released by the Department and this issue has been raised by the Department only in the case of the appellant. Even while adjudicating the show cause notice issued to M/s. Johnson Watch Co. Pvt. Ltd., by order dated 27.05.2020, only a fine has been imposed under section 125(1) of the Customs Act and the goods have not been confiscated. The Delhi High Court had also in Its My Name held that both prohibited and non-prohibited goods can be released under section 110A of the Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Delhi High Court on 25.08.2020 in Writ Petition No. 4566 of 2020 filed by the appellant. The portion of the said order of the High Court relevant for the purpose of this appeal is reproduced below: 3. Having heard learned counsel for both the sides and looking to the facts and circumstances of the case, it appears that high end wrist watches have been seized and lying with the respondent No.2/DRI since 29th October, 2012. 4. Respondent No.1 had issued a show-cause notice dated 28.10.2013, which is at Annexure P-9 to the memo of this writ petition. However, the show-cause notice was not adjudicated upon by the respondents for several months. 5. Learned Senior Counsel appearing for the petitioner has submitted that they are ready and willing to deposit the duty under protest. As per the show-cause notice issued by the respondent No.1, the duty amount mentioned is ₹ 52,19,582/. Out of this amount, Rs:27,50,669/- has already been deposited by the petitioner during the course of investigation. 6. Thus, petitioner has shown the readiness and willingness to deposit the remaining amount of ₹ 24,68,913/- for the provisional release of the high end wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 020 passed by the Division Bench of this Court in CUSAA 229/2019, we hereby direct the respondent No.1 to decide the application for the provisional release of the goods, in accordance with law . The petitioner shall prefer application for provisional release of goods within a period of one week from today. The respondent No.1' shall decide the provisional release application preferred by the petitioner under Section 110-A of the Customs Act, 1962 within a period of two weeks from the date of the receipt of the provisional release application from the petitioner. 12. With these observations, this writ petition is hereby disposed of. ( emphasis supplied ) 3. The Principal Commissioner rejected the aforesaid application by order dated 11.09.2020 and the relevant portion of the order is reproduced below: 20. From the language of Section 110A of the Customs Act, 1962, I find that it is apparent that the Adjudicating Authority has been bestowed with discretionary mandate decide to the application for provisional release on merit based on the facts of the Case that could be different from Case to Case as has been held by the Hon ble Courts in the judgments as deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ratio of Order dated 01.06.2020 of Hon'ble High Court of Delhi in the Case Its My Name Pvt. Ltd. Supra [wherein Hon'ble Court did not allow provisional release of such seized Goods that were recovered without valid/licit documents] with the instant Case as said seized Goods as covered under Show Cause Notice dated 28.10.2013 were also recovered without any valid/licit documents and (iv) several other facts and judicial inferences as discussed in the preceding paras. 38. In view of the above facts and judicial verdicts I am of considered opinion that the request of provisional release of seized Goods as covered under said Show Cause Notice dated 28.10.2013 as made by said Shri Pushpak Lakhani(Noticee to the said Show Cause Notice dated 28.10.2013), C/o Sh. Mukesh Bellani, R/o F-82, Kirti Nagar, New Delhi-110015 vide his above said representation dated 31.08.2020 is legally not sustainable on grounds as discussed in the preceding paras and therefore, I reject the said request of said Shri Pushpal Lakhani for provisional release of said seized Goods as covered under said Show Cause Notice dated 28.10.2013. ( emphasis supplied ) 4. It would be useful, before n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oom/Store of M/s. JWCPL 491 Watches of foreign origin 6. Showroom/Store of M/s. Bhagwan Singh Sons 234 Watches of foreign origin 7. Showroom/Store of M/s. Sondhi Brothers 250 Watches of foreign origin 8. Showroom/Store of M/s. JWCPL 253 Watches of foreign origin 9. Showroom/Store of M/s. JWCPL 692 Watches of foreign origin 10. Showroom/Store of M/s. JWCPL 1622 Watches of foreign origin 11. Showroom/Store of M/s. JWCPL 585 Watches of foreign origin 12. Showroom/Store of M/s. JWCPL 370 Watches of foreign origin 7. It needs to be noticed that the high-end wrist watches, foreign currency and cash recovered from the premises of M/s. Johnson Watch Co. Pvt. Ltd. and the residence of its Directors were released on an undertaking submitted by the Directors of M/s. Johnson Watch Co. Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant was, therefore, advised to approach the concerned adjudicating authority for a decision regarding provisional release. 11. On 28.11.2013, the appellant deposited a sum of ₹ 27,50,669/- with the Department and, thereafter, filed Writ Petition No. 7535 of 2013 stating that since amount had been deposited within 30 days of the issuance of the show cause notice, the goods may be released. The appellant also stated that in case any further amount was found to be due against the appellant, the same would be deposited. This Writ Petition was disposed of by an order dated 29.10.2013, directing the respondent to treat the Writ Petition as a representation and to pass an appropriate order within two weeks. The order is reproduced below: Mr.C.Harishankar, learned counsel for the petitioner states that payment in terms of the show cause notice including interest amount calculated by the petitioner has been paid within thirty days. In view of the said position, he, submits that the present writ petition may be treated as representation to the respondents. In case, any further amount is due and payable as interest, the respondents may inform and the petitioner upon veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. 16. The order dated 11.09.2014 was subsequently modified by the Supreme Court on 17.03.2015 and the said order is reproduced below: The respondents in both the appeals shall be entitled to refund of 50% of the seized amount and the watches seized by the appellant within four weeks hence subject to an undertaking filed before the Registry of this Court within ten days that if the appellant succeed in appeal, they shall make good the dues along with interest. List the matter after six weeks. 17. A show cause notice dated 24.09.2014 was thereafter issued to the appellant under section 28(6)(ii) of the Customs Act, seeking demand of the balance amount of customs duty of ₹ 24,68,918/-. 18. Another noticee Pankaj Lakhani also filed a Writ Petition before the Delhi High Court for release of the goods on the basis of the judgment of the Delhi High Court in Writ Petition No. 416 of 2014 filed by Purushottam Jajodia. Relief was not granted to Pankaj Lakhani and the order of the Delhi High Court is reproduced below: The learned counsel for the petitioner places reliance on a Division Bench s decision of this Court in Purushottam Jajodia vs. Directorate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed watches and currency subject to undertaking being filed. 10. It is already noticed that a similar request was turned down by Division Bench of this Court by its order dated 11th August, 2015 in WP(C) No. 6605/2015. Consequently, the above prayer is declined. 11. As far as the central issue in the writ petition is concerned, with the Petitioner not having been able to persuade this Court about the Respondents‟ failure to serve him the SCN on or before 28th October 2013, the Court is not inclined to entertain the writ petition. 12. This order however will not preclude the Petitioner from urging all the contentions available to him in accordance with law in the proceedings pursuant to the impugned SCN, except of course that it has not been served on him. 13. The writ petition is dismissed. The interim order is vacated. 21. Thereafter, the appellant filed another application for provisional release of the goods on 31.10.2019. 22. In the meantime, the show cause notice dated 27.10.2017 earlier issued to M/s Johnson Watch Co. Pvt. Ltd., was adjudicated upon by order dated 27.05.2020. In paragraph 39 of the order a finding has been recorded that M/s. Johnson ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexure A9- Showroom/Store of at M/s. Johnson Watch Company Pvt. Ltd., at Shop No. UG-19 Ambience Mall, Nelson Mandela Marg, Vasant Kunj, New Delhi 692 93 599 10 Annexure A10- Showroom/Store of at M/s. Johnson Watch Company Pvt. Ltd., at 243, DLF Emporio, Vasant Kunj, New Delhi 253 0 253 11 Annexure A11- Showroom/Store of at M/s. Johnson Watch Company Pvt. Ltd., at C-19 Cannaught Place New Delhi 491 111 380 Total 6233 2869 3364 23. The appellant, thereafter, filed Writ Petition No. 4566 of 2020 before the Delhi High Court for a direction upon the respondent to release the goods after accepting the balance deposit of ₹ 24,68,913/- in terms of the letter dated 24.03.2014 and the show cause notice dated 24.09.2014. It was pointed out by the learned senior counsel appearing for the appellant that 3356 high-end wrist watches had been released by the Commissioner of Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner completely ignored the fact that in all other cases, the goods had been released either because of an undertaking given by the Directors of M/s Johnson Watch Co. Pvt. Ltd. or on the basis of the orders passed by the Supreme Court, but the application made by the appellant has been rejected even though the appellant had deposited substantial amount of duty demanded and had undertaken to deposit the balance amount of duty without prejudice to rights and contention; iii. The stay order granted by the Supreme Court on 11.09.2014 could not have been made a ground for rejection of the application filed by the appellant; iv. The Principal Commissioner committed an error in observing that the goods seized were prohibited goods liable for confiscation under section 111(d) of the Customs Act; v. The Principal Commissioner completely failed to appreciate that the decision of the Delhi High Court in Additional Director General (Adjudication) vs. M/s. Its My Name Pvt. Ltd. [ CUSAA 229/2019 and CM No. 53877/2019 decided on 01.06.2020 ] was not applicable to the case of the appellant; and vi. The Principal Commissioner committed an error in holding that proceedings agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cast upon the adjudicating authority under section 110A of the Customs Act while deciding an application filed for provisional release of the goods and in P. Pandithurai vs. Joint Commissioner of Customs (Adjudication), Trichy [ 2020 (373) E.L.T. 451 (Mad.) ], the Madras High Court observed that such discretion must be exercised in a manner known to law and that an opportunity of being heard is also required to be given. The observations are as follows: The adjudicating authority should be permitted to exercise their discretion in manner known to law. While exercising their discretion, they may also examine the statements made by the petitioner. Naturally, they would have to provide an opportunity to the petitioner of being heard. 32. The Madras High Court in Malabar Diamond Gallery Pvt. Ltd. vs. Additional Director General, DRI Chennai Ors. [ Writ Appeal No. 377 of 2016 decided on 28.07. 2016 ], also observed that sufficient discretion has to given to the adjudicating authority in passing an order for provisional release of the goods. The Delhi High Court in Mala Petrochemical Polymers vs. The Additional Director General, DRI Anr. [ W.P. (C) 3965/2017 decided on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Details 1. Johnson Watch Co. Pvt. Ltd. 6233 for 2869- documents available and for 3364, no documents available) - 3050000 - 5413700 - 750000 - $4700 6233 All On an undertaking given by the Directors in 2012 itslef. No application for provisional release was made by JWCPL or its Directors. 2. Purushottam Jajodia 5 1000000/- 5 500000/- Supreme Court order dated 17.03.2015 3. Pankaj Lakhani 16 - 16 - Supreme Court order dated 17.03.2015 4. Appellant- Pushpak Lakhani 42 4700000 None None 5. Ms. Shikha Pahwa 44 new 9 old 1400000 None None 36. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terprises vs. Commissioner of Customs [ 2002 (81) ECC 501 ], the Tribunal examined whether the Commissioner of Customs, Pune was correct in absolutely confiscating the impugned goods when admittedly 37 such consignments of used Diesel Engines imported by various other importers through C.F.S., Pune were released on payment of Redemption Fine. In regard to this issue, the Tribunal held that the adjudicator cannot be selective in its approach to the import of similar goods as in the case of M/s. Preet International the same goods had not been treated as prohibited goods . The relevant paragraph of the decision is reproduced below: (c) In the case of M/s. Preet International relied upon by the appellants, the same adjudicator, as in this case, as Commissioner (Appeals), in March 2001, around the time the imports impugned herein were contemplated/effected, has in case of imports of Diesel engines, while approving the higher values, fixed by the assessing officer, upheld the value mis- declarations and the redemption fine but reduced the redemption fine to about ₹ 3 lakhs on a value of ₹ 8.52 lakhs. This order was relied upon by the appellants before the adjudicator. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e subsequent show cause notice dated 27.10.2017 have been completed and the appellant has been held liable to penalty; ii. The facts of the case covered under the show cause notice dated 28.10.2013 are identical to Its My Name case decided by the Delhi High Court as provisional release of seized goods was not allowed where the goods were found to be without valid documents; iii. The seized goods covered under the show cause notice dated 28.10.2013 would be piece of evidence in proceedings under sections 132 and 135 of the Customs Act; iv. Seized goods are prohibited goods liable for confiscation under section 111(d) of the Customs Act; and v. The judgment of the Delhi High Court in Writ Petition No. 416 of 2014 filed by Purushottam Jajodia was stayed by the Supreme Court on 11.09.2014. 41. Much emphasis has been placed by the learned authorized representative appearing for the Department on the decision of the Delhi High Court in Its My Name. Learned senior counsel for the appellant also placed reliance on this judgment. The relevant paragraphs on which reliance has been placed by them are reproduced below: 42 . Significantly, these were cases emanating o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the concerned authority in the Customs Department. Operative portion of the judgment reads as under: However to protect the interest of revenue, we direct that the goods in question be released on provisional basis within two weeks from the date of receipt of this order, provided that the petitioner deposits the amount of CD and furnishes bank guarantee of 20% of the value of the goods in question and for the balance value of goods, furnish a personal bond to the satisfaction of concerned authority in the Customs Department. The petition stands disposed of with the above directions. 4 . It is this judgment which is the subject matter of the present appeal. It is clear from the aforesaid direction that the respondent was allowed to get the goods released on provisional basis with certain conditions. We are informed that after the passing of this aforesaid direction by the High Court, the Respondent had even got the goods released after complying with the directions of the High Court. In these circumstances, nothing survives in the present appeal. Otherwise also, there is no reason to interfere with the order in question, when the arrangement made by the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any goods, documents or things seized . The Court, as the interpreter of the legislation, cannot profess to greater wisdom than the legislator. Where the legislature has not thought it appropriate to limit, in any manner, the nature of goods, documents or things which may be provisionally released, under Section 110A, in our view, it is no part of the function of a court to read, into the said statutory provision, any artificial limitation, not to be found therein. It is only in exceptional situations, where there is an apparent legislative lacuna, which, if left unfilled, would result in manifest injustice, or frustrate the object of the legislation, that a Court can step in and fill the lacuna and, to that limited extent, perform a quasi-legislative function. Else, the Court must rest content with being an interpreter of existing legislation, and has to accept the legislation for what it is. 49. We may, to make matters clearer, contradistinguish Section 110A of the Act, as extracted hereinabove, with Section 125(1) thereof, which reads thus: 125. Option to pay fine in lieu of confiscation. (1) Whenever confiscation of any goods is authorised by this Act, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from Om Prakash Bhatia. Even if, for the sake of argument, the gold, gold jewellery and silver were to be treated as prohibited , that, by itself, would not render the ineligible for provisional release, under Section 110A of the Act, for the simple reason that Section 110A does not except its application in the case of prohibited goods. Rather, it indicates, unequivocally, to the contrary, by using the omnibus expression any goods, documents or things . 51. The learned ASG also placed pointed reliance on Circular 35/2020-Cus supra, issued by the CBEC, para 2 of which absolutely proscribes provisional release of goods prohibited under the Customs Act, 1962 or any other Act for the time being in force , goods that do not fulfil the statutory compliance requirements/obligations in terms of any Act, Rule, Regulation or any other law for the time being in force; and goods specified in or notified under Section 123 of the Customs Act, 1962 . Mr. Ganesh relied on Agya Import Ltd: 2018 (362) DLT 1037 (Del), which holds that para 2 of the said Circular was merely in the nature of a general guideline , and did not incorporate any mandate. We, having perused para 2 of Circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are unable to agree, for various reasons. 56. Firstly, Section 129B(1) of the Act empowers the learned Tribunal, seized with an appeal, challenging the order of the adjudicating authority, to pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary . We are convinced that the jurisdiction, of the learned Tribunal, to confirm, modify or annul the order dated 4th October, 2019, was wide enough to encompass the power to direct provisional release, and fix the terms thereof. Remand, to the authority to pass the order under appeal before the learned Tribunal, is, statutorily, only an alternative course of action, the learned Tribunal. We may take judicial notice, at this point, of the fact repeated demands, to the authorities below, merely clog the litigative process and lead to multiplicity of proceedings, and benefits neither the assessee nor the Revenue. Where, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, the question of provisional release of the goods would be rendered infructuous and, in fact, the adjudicating authority would become functus officio in that regard, in view of the specific words used in Section 110A, the only conclusion, that can follow from the afore-extracted inexplicable finding of the ADG, is that he had made up his mind not to release the seized gold, gold jewellery and silver, provisionally, at any cost. We, therefore, find ourselves in agreement with Mr. Ganesh that any remand, of the matter, to the ADG, to fix the terms of provisional release, would have been an exercise in futility. For this reason, too, we are unable to hold that, in directing provisional release of the gold, gold jewellery and silver, and fixing the terms thereof, the learned Tribunal exceeded the jurisdiction vested in it. 58. Thirdly, it is trite that an appeal is a continuation of the original proceedings, and that the appellate authority enjoys the powers vested in the original authority. The power to direct provisional release, therefore, did vest in the learned Tribunal, and continues to vest in this Court, seized with successive appeals, emanating from the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case, the learned Tribunal has decided to provisionally release the goods in issue, and has fixed the terms of provisional release, this Court would, in appellate jurisdiction under Section 130 of the Act, interfere only where the exercise of discretion, by the learned Tribunal, is found to be perverse, in that it is contrary to the facts before the learned Tribunal, amounts to a perverse appreciation thereof, or is such as no reasonable person would have arrived at. Absent these infirmities, we are convinced, in our mind, that no case for interference, with the decision of the learned Tribunal could be said to have been made out, even if we, on the facts, may be of the opinion that the learned Tribunal could have decided otherwise. These, in our view, are principles which are too well settled to merit repetition. ********* 68 . These two categories , of the gold jewellery seized at the Airport have, we feel, to be dealt with, differently. ********* 73 . We may hasten to add, here, that our view, in this regard, does not discountenance, in any manner, the allegation, of the DRI, that the entire quantity of 51172.4 grams of gold jewellery was, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8B of the Act, thus: 138B. Relevancy of statements under certain circumstances. - (1) A statement made and signed by a person before any gazetted officer of customs during the course of any inquiry or proceeding under this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under this Act, the truth of the facts which it contains, (a) when the person who made the statement is dead or cannot be found, or is incapable of giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be obtained without an amount of delay or expense which, under the circumstances of the case, the court considers unreasonable; or (b) when the person who made the statement is examined as a witness in the case before the court and the court is of opinion that, having regard to the circumstances of the case, the statement should be admitted in evidence in the interests of justice. (2) The provisions of sub-section (1) shall, so far as may be, apply in relation to any proceeding under this Act, other than a proceeding before a court, as they apply in relation to a proceeding before a court. A Division Bench of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in-chief has to precede cross-examination, and cross examination has to precede re-examination. 21 . It is only, therefore, (i) after the person whose statement has already been recorded before a Gazetted Central Excise Officer is examined as a witness before the adjudicating authority, and (ii) the adjudicating authority arrives at a conclusion, for reasons to be recorded in writing, that the statement deserves to be admitted in evidence, that the question of offering the witness to the assessee, for cross- examination, can arise. We express our respectful concurrence with the above elucidation of the law which, in our view, directly flows from Section 138B(1) of the Act or, for that matter, Section 9D of the Central Excise Act, 1944. 77 . The framers of the law having, thus, subjected statements, recorded under Section 108 of the Act, to such a searching and detailed procedure, before they are treated as relevant in adjudication proceedings, we are of the firm view that such statements, which are yet to suffer such processual filtering, cannot be used, straightaway, to oppose a request for provisional release of seized goods. The reliance, in the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise and does not finally adjudicate on any liability; iii. The exercise of power under section 110A of the Customs Act to release imported goods on a provisional basis is essentially and fundamentally discretionary in nature; iv. Section 110A of the Customs Act contemplates release of any goods. Thus, both prohibited goods and non- prohibited goods can be released; v. If the goods are not per se prohibited, question of going into prohibited goods as per Om Prakash Bhatia case does not arise at the stage of provisional release; vi. A Circular which absolutely proscribed provisional release of prohibited goods or where any provisions are contravened, is void; vii. The Tribunal is competent to order provisional release and fix terms and there is no need for remand; viii. While passing an order for provisional release, there is no adjudication of competing rights and liabilities; ix. High Courts would interfere with an order passed by the Tribunal for provisional release of the goods only on grounds of perversity; x. Allowing provisional release of the seized goods does not interfere with the adjudication of the show cause notice or with the jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to penalty, also suffers from an error. 46. As noticed above, the watches of M/s. Johnson Watch Co. Pvt.Ltd. had been released even though no application had been filed for provisional release of the goods and even otherwise only a fine has been imposed while adjudicating the show cause notice and the goods have not been seized. In the present case, the appellant had deposited ₹ 27,50,669/- and had also made an offer to deposit the balance amount of duty under protest. The mere fact that the judgment of the Delhi Court in the Writ Petition filed by Purushottam Jajodia was stayed by the Supreme Court on 11.09.2014, could not also have been made a ground for rejecting the application filed by the appellant for provisional release of the goods. It needs to be noted that the stay order was subsequently modified by the Supreme Court and the goods were directed to be released. In the present case, the appellant had not only deposited a substantial amount of duty proposed in the show cause notice but had also made an offer to deposit the remaining amount under protest so that the goods could be released provisionally. It has also been found as the fact that the 6233 high- end ..... X X X X Extracts X X X X X X X X Extracts X X X X
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