TMI Blog2004 (5) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed. The customs duty is computed on the basis of the concessions given in the Notification No. 21/2002, dated 1-3-2002 (vide Sl. No. 200). They were sent as sea cargo landed by ship at the Chennai Port, and have to be transhipped to Bangalore being final destination. Necessary Bills of transhipments are filed with the Chennai Customs through the steamer agents for transhipment of the cargo to CID, Bangalore. When the ship containing the cargo reached Chennai Sea Port, the Customs officials detained the above 46 containers and initiated investigation in respect thereof, on the allegation that the containers do not contain scrap materials but serviceable materials, and in order to avoid higher customs duty, the appellant has mis-described the goods as scrap and consequently evaded actual tax payable, and after effecting seizure of the materials under Section 110 of the Customs Act, issued show cause notice under Section 110(2) of the Customs Act seeking explanation as to why the differential customs duty of Rs. 1,36,67,079/- along with the penalty should not be levied, apart from confiscation of the goods. Questioning the same, the appellant had filed writ petitions before the K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estigate with regard to the true nature of the material imported, and if it is found to be wrongly described then take action to levy the correct duty, apart from confiscation of goods as the circumstances may warrant, and order of the learned single Judge dismissing the writ petition as not maintainable is perfectly valid and is not liable to be interfered. 4.Having regard to the facts and legal contentions raised, we found it not permissible for us to deal with the merits as to whether goods conform to scrap or serviceable material and what should be the proper customs duty and whether confiscation can be resorted to. We only propose to go into the jurisdiction issue as it cuts into the very root of the matter as in the event of second respondent not having jurisdiction to probe into the matter with regard to the nature of the goods imported and the proper duty payable thereon and the consequential penal action, then action taken so far including show cause notice have to be termed as illegal and without jurisdiction. We now go into the merits of the contentions on the above jurisdictional issue. 5.Section 54 of Customs Act deals with transhipment of goods without payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of (a) customs seeking permission for transhipment of the goods imported; the goods imported are mentioned in the import manifest or (b) the import report, as the case may be, as for transhipment to any customs station; such transhipment is by rail, a vessel, an aircraft or a (c) motor vehicle or by a combination of two or more of these modes of transport : Provided that if the goods imported are sought to be transhipped by a motor vehicle, such transhipment shall be made only on permission in writing of the Commissioner of Customs; and such Commissioner while permitting such transhipment shall have regard to the following factors, namely :- (i) the nature of the goods imported to be transhipped, (ii) the amount of revenue involved, and (iii) any other factor which the Commissioner of Customs may deem irrelevant : Provided further that the Commissioner of Customs shall, before refusing any such application for permission for transhipment of goods imported by a motor vehicle, give a reasonable opportunity of being heard to the declarant : the declarant, the transporter or, as the case may be, the (d) custodian executes a bond in such form with or without surety or security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kages containing the imported goods in durable bags and seal the bags with the Customs Department's seal in the presence of an authorized representative of the declarant, the transporter or, as the case may be, custodian, (c) in the case of a container which has been sealed by one time bottle seal by shipping lines or their agents and the Customs have been informed of the serial number of such seal, such container shall not be required to be sealed by the Customs as required under clause (a) or clause (b) at the gateway port prior to their dispatch to ICDs/CFSs/Ports by rail/motor vehicle/vessels. The materials and (2) the bags required for sealing the containers or bags under sub-regulation (1) shall be provided by, and at the cost of the declarant or the transporter or, as the case may be, the custodian." On a reading of Section 54(3) of the Act together with the Regulations mentioned above, it is clear that the concern of the Officer of the Customs House at the first point in the Indian territory is to verify whether the goods are imported by proper means and for that purpose, what is important is the authenticity of the goods purchased at a place in foreign country ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, 111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside India shall be liable to confiscation :- (a) to (e) ..... (f) any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report, which are not so mentioned;" There is not even a slightest hint that the first Customs point in Indian territory gets jurisdiction if this clause is attracted. This view of ours is further strengthened by Section 55 of the Act, which reads, "55. Liability of duty on goods transited under Section 53 or transhipped under Section 54. - Where any goods are allowed to be transited under Section 53 or transhipped under sub-section (3) of section 54 to any customs station, they shall, on their arrival at such station, be liable to duty and shall be entered in like manner as goods are entered on the first importation thereof and the provisions of this Act and any rules and regulations shall, so far as may be, apply in relation to such goods." The net result is that if the goods are imported for transhipment, the Customs House at the destination point i.e. Bangalore in the instant case, has go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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