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TMI Blog2022 (12) TMI 1340X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner (Appeals), Bhubaneswar upholding an order dated 17th February, 2005 passed by the Commissioner of Central Excise and Customs, Bhubaneswar thereby a demand of Rs.17,41,843/- was conformed along with interest and an equivalent penalty was also imposed under Section 114A read with Section 117 of the Customs Act, 1962 (Act). 2. The present appeal was admitted by this Court by an order dated 7th October, 2016 and an interim order was passed to the effect that with the Appellant already having deposited 50% of the impugned demand, no further amount need be deposited during the pendency of the present appeal. 3. The following questions of law are framed for consideration by this Court: "I. Whether on the facts and in the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisionally to duty on 17th December, 1999. 6. MESCO paid the duty only in respect of 1B/E for 1000 MT of LAM Coke on 18th December, 1999 and in respect of another B/E for 1000 MT of LAM Coke on 7th January, 2000 along with interest under Section 47 of the Act. On the remaining 1001.5 MT of LAM Coke assessed under the remaining 2 B/Es, MESCO failed to pay the assessed customs duty of Rs.17,41,843/-. The reason given was that the goods were not in existence. 7. On 1st April 2000, MESCO informed the Customs Department that the entire quantity of goods under the above B/Es had been washed away due to the super cyclone which occurred on 29th October, 1999 and which hit the Paradip area with severity. For about three years thereafter, no ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods were not pilfered in the customs bonded area; (ii) the port was not in-charge/custody of the goods; (iii) the goods had been lost due to natural events like super cyclone which was not in the control of the PPT. Further, as regards the liability under Section 48 of the Act, it was pointed out by PPT that the goods in question were not warehoused under the port and, therefore, no responsibility thereunder attached to the PPT. 11. On 30th July 2004, the Joint Commissioner (Customs), Bhubaneswar gave PPT a personal hearing. The hearings continued on 8th and 15th October, 2004. Written submissions were also filed by the PPT. In the adjudication order dated 17th February 2005, the Joint Commissioner concluded that the PPT had failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ury Satyajit Mishra, learned Senior Standing Counsel for the Revenue Department. 15. Sections 45(3) and 48 of the Act read as under: "45 Restrictions on custody and removal of imported goods-xxx (3) Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading thereof in a customs area while in the custody of a person referred to in sub section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an [arrival manifest or import manifest] or, as the case may be, an import report to the proper officer under Section 30 for the arrival of the conveyance in which the said goods were carried. "48. Procedure in case of good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een able to dispute the fact that although MESCO sent a letter on 1st April, 2000 informing them of the loss of cargo in the super cyclone, no action was taken till the issuance of SCN three years later on 18th July, 2003. This delay has not been explained. If the goods themselves were not available on account of the super cyclone, it is inconceivable how the PPT could be made liable to pay customs duty on such goods under Section 45(3) of the Act which applies only in a situation where imported goods are "pilfered after unloading". There is absolutely no material to come to the conclusion that the aforementioned goods not cleared by MESCO were 'pilfered'. There cannot be any presumption on this score as has been done in the adjudication or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t excludes a body of persons who by virtue of a law for the time being in force is entrusted with the custody of goods by incorporation of law under another enactment, i.e. the Port Trust Act. We see no reason what mischief Parliament sought to undo by sub-section (3) of Section 45 of the Customs Act. At the highest, it has to be read in the context that pilferage may take place from a private warehouse or a customs warehouse run by a private party. The negligence on such private parties should not cause loss to the exchequer. No purpose would be served by one arm of the Government imposing a duty on another arm of the Government which is discharging statutory duties." 21. The above observations and findings were rendered in a case which p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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