TMI Blog2022 (3) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... bills of entry in this case were not assessed by the officers of DRI but by the officers of the Custom house. Only that officer who has assessed the Bills of Entry in the first place or his successor in office was the proper officer‟ who, if he was subjectively satisfied that some duty had escaped assessment, could have issued the SCN. As the SCN has been issued by officer of DRI who is not competent to issue it, the impugned order deciding such an SCN cannot be sustained and needs to be set aside. Appeal allowed - decided in favor of appellant. - Customs Miscellaneous Application No.70169 of 2021 IN Customs Appeal No.725 of 2008 with Customs Miscellaneous Application No.70204 of 2021 IN Customs Appeal No.790 of 2008 - FINAL ORDER NOS. 70080-70081/2022 - Dated:- 15-3-2022 - MR. P V SUBBA RAO, MEMBER (TECHNICAL) AND MS. RACHNA GUPTA, MEMBER (JUDICIAL) Present for the Appellant: Shri Vineet Kumar Singh, Advocate Present for the Respondent: Shri Gyanendra Kumar Tripathi, Authorized Representative ORDER These two appeals assail the same order-in-original [ Impugned order ] dated 31 July 2008 passed by the Commissioner of Central Excise and Service Tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with interest under Section 28AB and impose penalties. This SCN was adjudicated by the Commissioner by the impugned order confiscating the goods, imposing fine and confirming the demand of duty, interest and imposing penalty on Jhoola and also imposing a penalty on Jhunjhunwala. The notification provides exemption to a variety of goods listed in the table therein subject to various conditions. Of these, S.No. 30 of the table (as amended on 16.1.2004) and the condition no. 5 subject to which the exemption for the goods covered by this entry is available are relevant to these two appeals. The relevant part of the notification is reproduced below: Notification No. 21/2002-Cus. Dated 1.3.2002 Effective rates of basic and additional duty for specified goods falling under chapters 1 to 99 In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 17/2001- Customs, dated the 1st March, 2001 [G.S.R. 116(E), dated the 1st March, 2001], the Central Government, being satisfied that it is necessary in the publi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n No. 20/2004 dated 16.1.2004 30 15 A) All oils, other than edible grade, having Free Fatty Acid (FFA) 20 percent or more and falling under heading 1507, 1508, 1509, 1510, 1511, 1512, 1513, 1514 or 1515, for the manufacture of soaps 20% - 5 B) Fatty Acid (FFA) 20 percent or more and falling under heading 1507, 1508, 1509, 1510, 1511, 1512, 1513, 1514 or 1515 65% - - ANNEXURE Condition No. Conditions 5. If the importer follows the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. 4. According to Jhoola, it had obtained Registration Certificate No 01 of 2004 from Central Excise Division Varanasi for import of non-edible Crude palm oil (CPO) industrial-grade for manufacture of Soap under Customs (Import of Goods at concessional rate of duty for manufacture of excisable goods) Rules 1996. It also s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an for which it was imported. The bonds submitted by them require to be enforced. (ii) M/s JRL have rendered 250 MT of CPO (I.G) totally valued at ₹ 4654050.00, imported per MT ACE 7, seized on 30.08.2005 by DRI Gandhidham, liable for confiscation under section 111(o) of Customs Act, 1962. (iii) M/s JRL have rendered 25.474 MT of CPO (IG) totally valued at ₹ 475647.00 seized by DRI (9.510 MT of CPO(IG) valued at ₹ 178458.00 lying at tank no. 304 of M/s CRL Kandla seized on 6-10-05 by DRI Gandhidham and 15.964 MT of CPO (IG) valued at ₹ 297189.00 lying in the factory premises seized on 17.08.2005 by DRI Varanasi) liable for confiscation under section 111(o) of the Customs Act, 1962. (iv) M/s JRL have rendered 1974.708 MT. of crude plam oil (industrial grade) imported vide bills of entry No. 104819/17-05-2005, 106546/31-05-2005, 109482/23-06-2005, 109925/28-06-2005, 111098/6-7-2005, 102641/25-4-2005, 102642/25-4-2005, 794/10-1-2005 and 793/10-1-2005 imported under the Customs (import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 at concessional rate of duty liable for confiscation under Section 111(o) of the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der for which they had produced one bill. Whereas he had claimed to have consumed 290063 KGs of caustic soda in their records, but no purchase bills or any other evidence showing the same was not available with him. He was also instrumental in manipulation of records, preparation of wrongful declarations by M/s JRL. It is evident from the statement of Shri Subodh Kumar Singh on 6-9-2005 that he was forced to create a record for consumption of vitamins for a period November 2004 to December 2004 during which he was not an employee of M/s JRL. This is indicative of the fraudulent activity of the company at the behest of Shri M K Jhunjhunwala. Their manipulation of records is further evident from the fact that they have shown to have stored 127 MT of CPO (IG) in the Tank No. 2 which had a capacity of 50 MT only and which was claimed to have been used exclusively for storage of imported CPO (I.G.). He was responsible for getting registered with Sales Tax and Trade Tax Department (registration number UPTT-VN-0393521 dated 20.09.89 and CST No. VN 5215354 dated 25.09.89) and for submission of false records. On being asked how the manufactured goods (vanaspati ghee soap) are disposed off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin thirty days of receipt of this notice as to why (I) (i) 250 MT of CPO (IG) totally valued at ₹ 4654050.00, imported per MT ACE 7, seized on 30-8- 05 by DRI Gandhidham at CRL Kandla, sought to be cleared vide bill of entry 117457 dated 29-08-05 should not be confiscated under section 111(o) of the Customs Act, 1962. (ii) duty of ₹ 3085635.00 @ 65% Basic Customs Duty should not be demanded/confirmed without extending the benefit of concessional rate of duty as claimed by them under Notification NO. 21/2002-CUS dated 1.3.2002 and as to why the application in Annexure III (bond No. 16/2005 dated 2.8.2005) submitted in this regard should not be cancelled. (II) (i) 1974.713 MT. of crude palm oil (industrial grade) (including 25.474 MT of CPO(IG) totally valued at ₹ 475647.00 seized by DRI (9.510 MT of CPO lying at tank no. 304 CRL Kandla seized on 06.10.05 by DRI Gandhidham and 15.964 MT of CPO (IG) lying in the factory premises seized on 17.08.2005 by DRI Varanasi) imported vide bills of entry no. 104819/17-5-2005, 106546/31-5-2005, 109482/23-6-2005, 109925/28-6-2005, 111098/6-7-2005, 102641/25-4- 2005, 102642/25-4-2005, 794/10-1-2005 and 793/10- 1-2005 im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DRI also confirmed this position. The opinion of Prof. Bhowmick also nowhere says that Jhoola has no facility to manufacture soap. It only states that without the aid of power, handling a large quantity of material seems to be very difficult. Thus, the SCN cannot sustain even on merits. Therefore, he prays that the impugned order may be set aside. 7. Learned authorised representative of the Department reiterated the findings of the impugned order. 8. We have considered the submissions on both sides and perused the records. However, we need not examine the merits of the case, if the SCN itself was issued by an officer competent to do so. The SCN gets vitiated and so will any order deciding the proposals in such an SCN. 9. Hon‟ble Supreme Court held that DRI officers were held to be not proper officers for issue of SCN demanding duty under Section 28 in the Canon India. Since the SCN itself was issued without authority of law, the entire proceedings get vitiated. The ratio of Canon India was followed in several cases and demands were set aside by the Supreme Court, various High Courts and this Tribunal only on the ground that the SCN was issued under Section 28 by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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