TMI Blog2024 (1) TMI 538X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 53 kg gold bars, at the time of detention, were found in the declared premises and, thus, could not have been seized. The said gold was cleared from customs in late hours of 13.08.2020. The said gold was safely kept by the principal officers of the petitioner company. The gold could not be brought inside the declared premises because a search was being conducted during the relevant time on 13.08.2020 / 14.08.2020. However, it was brought inside immediately thereafter. At this stage, it is not relevant to consider whether the petitioner would ultimately succeed. The arguments raised require adjudication of facts - Whether the allegations would conclusively prove case against the assessee is not material. The same is in the realm of subjective satisfaction, which at this stage, cannot be said to be unfounded. Any such adjudication by this Court would amount to adjudicating the Show Cause Notice dated 11.08.2021. The adjudication of some of the issues raised would necessarily involve addressing disputed questions of fact and it would not be apposite to do so in these proceedings. Unless the High Court is fully satisfied that the show cause notice is ex facie without jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease the detained / seized 53 Kgs gold bars legally imported by the Petitioner company on 13.08.2020 forthwith to the Petitioner company; and/or c) Pass an appropriate writ, order or direction directing the Respondent DRI to de-freeze the bank accounts in HDFC Bank, Karol Bagh with A/c no50200034032801, Yes Bank, Kirti Nagar with A/c no 034081300000450, United Bank of India with A/c no 0535050016199 and Punjab National Bank, Rajinder Nagar with A/c no 0629002100144490 of the Petitioner company; and/or d) Pass an appropriate writ, order or direction directing the Respondent No.3, DGFT to re-validate/extend the Licence of the Petitioner as per provisions of FTD Act Rules without being influenced by the directions of DRI and grant waiver/relaxation of the composition fee, if applicable for such re-validation/extension; and/or e) Any other order which the Hon'ble Court deems fit in the facts and circumstances of the case. BRIEF FACTS 2. The petitioner is a company engaged in the business of buying, selling, manufacturing, exchanging, assembling, altering, import of Gold and export of Gold ornaments under the Advance Authorization Scheme. On 19.02.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chest was sealed. The custody of the detained gold and keys was handed over to Mr. Manindra Samanta, the Director of the petitioner. 7. Mr. Manindra Samanta rendered a statement under Section 108 of the Customs Act, 1962 (hereafter Customs Act ) on 18.08.2020 that he had imported the said duty-free gold under Advance Authorisation Scheme, and handed over the same to individuals in Delhi on instructions from a person based out of Dubai, United Arab Emirates. He was arrested on the same day on the allegation that there was a diversion of the goods and thus an evasion of customs duty. He was granted bail by the learned CMM, Patiala House Court, on 25.09.2020. 8. On 20.08.2020, the DRI directed to put the following bank accounts of the petitioner on debit freeze under Section 110 (5) of the Customs Act till 20.02.2021, after due approval of the learned Additional Director General, DRI, Lucknow: a. HDFC Bank, Karol Bagh with A/c no. 50200034032801, b. Yes Bank, Kirti Nagar with A/c no. 034081300000450, c. United Bank of India with A/c no 0535050016199, and d. Punjab National Bank, Rajinder Nagar with A/c no 0629002100144490 9. The DRI only extended the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submitted that deputy Director DRI is not a 'proper officer' as envisaged under section 2(34) of the Customs Act. The detention and seizure of impugned goods by the Deputy Director is arbitrary and illegal. 15. He submitted that the existence of reason to believe under section 110 of the Customs Act, is necessary to make such goods liable for confiscation. He stated that there was admittedly no reason to believe for seizure in respect of the gold bars and thus could not therefore be seized under section 110 of the Customs Act. 16. He further submitted that notwithstanding illegal seizure, the Show Cause Notice dated 11.08.2021, issued by Assistant Commissioner of AIR Customs is invalid since, it got issued only to be amended by a corrigendum dated 27.04.2022, substituting the issuing authority to issue Show Cause Notice by Principal Commissioner, Air Customs, Imports, Delhi. Hence, the initial Show Cause Notice dated 11.08.2021 was invalid and no show cause notice was issued within the statutory period of 6 months. He contended that the extension accorded by the Additional Director General, DRI who was neither the Proper Officer nor competent to render extension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that during the search conducted on 13.08.2020/14.08.2020, the seized gold bars weighing 53 kgs were not found at the premises of the petitioner company. He relied upon the voluntary statement of Sh. Umakant Jha wherein he stated that the 53 kgs of gold was cleared from Delhi Air Cargo on 13.08.2020 at about 9.00 p.m. The said 53 kgs of gold (detained on 17.08.2020) was kept outside the declared premises and subsequently placed in the locker / almirah of the petitioner company, to show his bona fide after the search conducted by the respondent / DRI. 23. The learned Standing Counsel for Respondent no. 3 / DGFT submitted the petitioner had not applied for Export Obligation Extension in respect to Advance Authorisation, and the request for revalidation with respect to Advance Authorisation Licence no. 0510409693 was rejected on grounds of public notice dated 26.09.2019. ANALYSIS 24. In terms of Section 110(5) of the Customs Act, the attachment of the bank account cannot continue beyond the period of six months, the same can be extended by another period of six months in terms of proviso to Section 110(5). The connected writ petitions W .P.(C) No. 2571/2021 and W.P( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17.08.2020, detaining the gold, was not passed under Section 110 of the Customs Act. The same was passed for the first time on 22.12.2020. Admittedly, there is no provision in the Customs Act, which empowers the officer to detain the goods before ultimately seizing the same under Section 110 of the Customs Act. The power available to the officer is to be exercised in terms of the procedure contemplated under the Customs Act. It is settled law that if a statute provides for a thing to be done in a particular manner, then it is to be done in that manner alone and in no other manner. ( Ref : Chandra Kishore Jha v. Mahavir Prasad and Others : (1999) 8 SCC 266) 29. However, the reason that the gold was detained without any authority of law would not entitle the petitioner for the release of the said gold at this stage. The Seizure Order was admittedly passed on 22.12.2020. In the said order, the respondents have recorded categorical reasons. 9. Analysis of resumed records have revealed that during the period from 10.06.2020 to 10.08.2020, M/s Shree Gold Art Pvt. Ltd., has imported 380.50 KG of gold duty free under Advance Authorisation No. 0510409693 dated 19.02.2019 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,587/-, which is to be recovered from the company. Neither the company M/s Shree Gold Art Pvt. Ltd., has assets nor bank credit limits to pay off the duty evaded in past. 12. Therefore, in view of the facts stated above, 1, Mudit Rai, Deputy Director, DRI, Noida, hereby seize 53KG Gold (53 Gold bars) having cumulative assessable value of INR 24,97,17,450/- ( Twenty Four Crore Ninety Seven Lakhs Seventeen Thousand Four Hundred Fifty only), imported under Bill of Entry No. 8461348 dated 13.08.2020 (for 31KG) and Bill of Entry No. 8461516 dated 13.08.2020 (for 22KG) by M/s Shree Gold Art Private Limited as per details given in attached annexure-A, under Section 110 of the Customs Act, 1962. 30. In the present case, it is alleged that the Advance Authorisation issued to the petitioner permitted it to import 1000 kg of gold bars against which, the mandated export obligations were export of 1062.701 kg of plain jewellery and articles. The petitioner had imported 649 kg of gold and had exported 228.830 kg of gold. The balance stock of gold was not found in the declared premises and the 53 kg of gold, which was detained on 17.08.2020, was also not found during the search condu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and un-studded and Gold medallions and coins. M/s Shree Gold Art Pvt. Ltd has so far imported 649 Kgs of 24 Ct Gold and the quantity of jewellery exported so far contained 228.830 Kg of 24 Ct Gold. Out of remaining 420.160 Kgs, only 53 Kgs gold was found store in the premises on 17.08.2020. Remaining 367.160401 Kgs was neither found at any of the premises belonging to the company or purported job workers nor its whereabouts have been disclosed by Manindra Samanta or its family or company officials. xxxx xxxx xxxx 26.1 On 13/14.08.2020, 53KG Gold (detained on 17.08.2020 by DRI) was kept outside the declared premises with the sole intention of diversion as done in past and was placed in the Locker(Chest)/Almirah of M/s Shree Gold Art. Pvt. Ltd., by Mr. Manindra Samanta to show his bonafide after DRI search on 13/14.08.2020 in view of submission of Shri Manindra Samanta that he has imported duty free gold imported under Advance Authorisation No. 0510409693 dated 19.02.20219 for one Dubai based person and handed over this Gold in India to some persons instead of use in manufacture of export goods. 26.2 Neither Shri Manindra Samanta nor his family members/staff disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2(25) of the Customs Act, imported goods do not include goods, which have been cleared for home consumption. 35. According to Mr. Singla, the Customs Act does not distinguish between the custom cleared goods or goods brought into India without custom assessment and clearance, and if the violation falls in the category defined under Section 111 of the Customs Act, the goods shall be liable for confiscation and seizure. 36. Mr. Singla relies upon the judgment passed by the Hon ble Apex Court in the case of Sheshank Sea Foods Pvt. Ltd., Karnataka v. Union of India and Others : (1996) 11 SCC 755 in support of his argument that breach of the condition of an Advanced Authorisation is also breach of the condition upon which the importer obtains exemption from payment of customs duty and therefore, in terms of Section 111(o), the Customs Authorities have power to investigate and confiscate such gold. 37. As discussed hereinbefore, we do not propose to adjudicate the said aspect since admittedly, the Show Cause Notice issued by the learned Commissioner of Customs (Imports) on 11.08.2021, is pending adjudication. The Adjudicating Authority, while adjudicating the Show Cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for issuance of show cause notice warrants any interference in these proceedings. 41. The Division Bench of the Hon ble Rajasthan High Court, in the case of Commissioner of Customs (Preventive) v. Swees Gems and Jewellery : 2019 SCC OnLine Raj 6178 , had the occasion to consider the amendment under Section 110(2) of the Customs Act. The Division Bench noted the judgment passed by the Hon ble Apex Court in Harbans Lal v. Collector (supra) and held as under: 15. The change in the statute, in the opinion of this court, is a significant one. The previous provision required the Commissioner to show sufficient cause, which meant that such cause had to be based on objective considerations. However, the amended provision merely requires the Commissioner to record the reasons in writing and inform the person from whom such good were seized before the expiry of the period so specified . In this court's considered view, the amended provision deliberately sought to overbear the previous view that a notice before extension was necessary. Now two conditions are to be satisfied : one, the Commissioner has to record his reasons in writing, why the extension is necessary, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record reasons in writing, which of course, should be based on materials and inform the concerned party about the extension before the expiry of the first period of six months. At this stage, it is necessary to also notice that even in IJ Rao, (supra) the court recognized that not all reasons can be disclosed, because investigative processes and information gathering can be confidential. 42. The same view was taken by the Division Bench of the Hon ble Kerala High Court in M.M. Hassan and Another v. Superintendent of Customs and Others : 2020 SCC OnLine Ker 19557 and the Hon ble Calcutta High Court in Additional Director General, D.R.I, Kolkata Zonal Unit v. Dec Agrotech Pvt. Ltd. 43. We respectfully concur with the view taken by the High Courts in the above cases and find no fault with the decision to extend time for issuance of a show cause notice under proviso to Section 110(2) of the Customs Act without affording the petitioner a prior hearing. 44. It was further argued that the Show Cause Notice dated 11.08.2021 is non est since the corrigendum was issued on 27.04.2022, where the Assistant Commissioner of Customs, who had issued the said Show Cause Notice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egal issues involved in the present matter. 49. The adjudication of some of the issues raised would necessarily involve addressing disputed questions of fact and it would not be apposite to do so in these proceedings. Unless the High Court is fully satisfied that the show cause notice is ex facie without jurisdiction, a writ petition should not be entertained. In the present case, admittedly the contentions advanced can be urged before the Adjudicating Authority. It is a settled law that the statutory fora are empowered to adjudicate not only the factual aspects, but also the issues in relation to their jurisdiction and other legal aspects. 50. In regard to the prayer seeking directions to the DGFT to revalidate / extend the licence of the petitioner as per provisions of the Foreign Trade (Development and Regulation) Act, 1992 (hereafter FTD Act ) and the Rules is concerned, this Court, while disposing of W.P.(C) No. 2571/2021 and W.P(C) No. 2042/2021, had noted the stand taken by the DGFT that no application in respect to Advance Authorisation licence is pending with it. It was also noted that the DGFT had reaffirmed that if any application is received, the same would be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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