TMI Blog2005 (9) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... extending the benefit thereunder. Both sides confirm that the amount of Rs. 5,83,81,368/- already paid by the importers is the duty payable on an application of the notification. We, therefore, hold that the above amount already paid by the importers represents the correct duty payable and accordingly set aside the duty liability confirmed in excess of Rs. 5,83,81,368/-. Confiscation is not challenged by the appellants and hence we uphold the same, but in the light of discussion and in view of the fact that the stand of the importers that the goods were removed in February 1999 after provisional assessment of the bills of entry by the proper officer on 26-2-1999 only due to space constraints and other operational problems at the jetty is not controverted by the Revenue, we reduce the fine to a token amount of Rs. 1,00,000/-. Penalty - As found earlier, the goods were in the original packed condition, in the manner in which they were imported, and no attempt had been made to use them, which would prove the bona fides of the appellant as importer and/or as Custodian. Therefore this is a fit case where the principles laid down by the Hon'ble Supreme Court in the case of Hindustan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantive one and not merely procedural, while the provisions of Section 45 are procedural. In the absence of such a finding, we hold that non-obtaining of prior written permission from the proper officer would get reduced to a condonable breach for which a penalty is not justified. The penalty imposed under the provisions of Section 112 of the Customs Act, 1962 cannot be upheld. To sum up, we order as under :- (a) Liability of the imported goods to confiscation is upheld as it is not challenged. (b) Redemption fine in lieu of confiscation is reduced to Rs. 1,00,000/-. (c) EPCG licence covering the goods in question is accepted. (d) Duty of Rs. 5,83,81,368/- already paid is the correct duty payable. (e) The duty demand in excess of the amount already paid is set aside. (f) Penalty equal to duty amount is set aside. (g) Penalty u/s112 is also set aside. The appeal is thus partly allowed in the above terms. - HON'BLE JYOTI BALASUNDARAM, VICE-PRESIDENT AND S.S. SEKHON, MEMBER (T) For the Appellant : M. Chandra Shekharan, Sr. Adv., Vipin Kumar Jain and Manish Pushkarna, Advs. For the Respondent : Ajay Saxena, SDR JUDGMENT Jyoti Balasundaram, Vice President 1. The above appeal ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods already shipped/arrived provided customs duty has not been paid and the goods have not been cleared from Customs. We note that the request for reassessment has been rejected on the ground that there can be no reassessment after determination of duty liability under Section 28(2), that reassessment can be done only under Section 17(4) in the situations prescribed therein and there can be no reassessment of goods after removal of the goods, under Section 17(4). The claim for EPCG benefit has been denied on the grounds that the goods had been removed unauthorisedly from the customs area without the permission of the proper officer and therefore cannot be treated as pending clearance from customs, as per para 6.6 of the Exim Policy and that the benefit of notification 49/2000 dated 27-4-2000 was not admissible to the appellants as the goods had already been removed from the customs area without producing the licence for debit before the proper officer at the time of clearance, as per the condition of the notification. 5. We are not in agreement with the reasoning of the adjudicating authority for rejection of the request for reassessment and for coverage of the goods under the EP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the imported goods from the declared Customs Area and the Revenue's case is that they have been 'Removed without permission' under the provisions of Section 45 of the Customs Act, 1962, and deposited from where they were seized. Therefore, they were held liable to confiscation under Section 111(j) of the Act. The use of the word 'removed' in Section 111(j) and not 'cleared' is vital. If goods are only 'removed' or 'removal' has only taken effect, then the goods are not 'cleared from Customs' or 'Clearance from Custom' is yet required. If that be status of the goods herein, then there is no reason therefore to deny the benefit of Exim Policy para 6.6, and or clearance under the EPGC Scheme. (c) The difference in the words 'Removed' and 'cleared' as applicable to shifting of goods, in Commodity Taxation, has been accepted by the Board way back in 1984. The Board vide Circular No. 202/55/84-CX-6 dated 24-11-1984 issued in the context of goods 'Removed' 'Cleared' have taken a view, after obtaining the advice of Law Ministry, that 'clearance' refers to 'removal after payment of appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it was held that there is no provision under the Customs specifically for reassessment and reassessment contemplated in Section 17(4) is limited only to cases where reassessment becomes necessary on account of discrepancy found on examination of goods after assessment is complete. In the present case, the benefit of concessional rate of duty of 5% was claimed in terms of notification 49/2000-Cus. dated 27-4-2000 is the goods were covered by a valid licence issued under the Export Promotion Capital Goods (EPCG) Scheme in terms of paragraph 6.2 of exemption policy permitting import of goods @ 5% duty - in other words, the request for reassessment arose for the reason that the benefit of exemption was being claimed. In the case of Arthanari Loom Centre v. CC - 2001 (132) E.L.T. 464, the Tribunal has extended the benefit of amended EPCG licence to goods in question in that case in the absence of any order permitting clearance for home consumption. In the present case, there is no order of the proper authority permitting clearance for home consumption in terms of Section 47 of the Customs Act and the EPCG licence has been produced by the importers for debit by the proper officer befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... played by the appellant, i.e. as an importer and as custodian. The notice contains one set of allegations directed against the appellant in its capacity as an importer and another set in its capacity as a custodian. The appellant, while replying to the show cause notice, also submitted explanations separately in two capacities. The impugned order of the Commissioner also maintains this dichotomy, which is evident from his findings in para 19.0 of the order, wherein it has been held that M/s EOL have removed the goods unauthorisedly from the Customs area as custodian and taken delivery outside the Customs Area as importer without seeking clearance from the proper officer . This would show that the Commissioner has accepted that the act of removing the goods from the Customs area was effected in its capacity as a custodian only with a view to ensure safety and proper storage of the goods. The further finding of the Commissioner that the appellant had taken delivery of the said goods outside the Customs area as an importer, has been contested by the appellants, by pointing out that there was no basis for coming to such a conclusion, as, firstly, the goods were found in the same condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to have regularized this removal by exercising his power under Section 45(2) and allowed the matter to rest there. There is force in these pleas, as the Commissioner himself has accepted that this act of removal was carried out by the appellant in its capacity as the custodian. Since Section 5(2) of the Customs Act empowers the Commissioner to do whatever his subordinates should have done under the Act, the Commissioner ought to have exercised his powers and accorded necessary permission under Section 45(2) and regularized the matter. In arriving at this conclusion, the following observations of the Supreme Court in LIC v. Escorts Ors. AIR 1986 SC 1370 are very relevant :- 61. From what has been narrated above, one of the principal questions to be considered is seen to be whether the Reserve Bank of India had the power or authority to give ex post facto permission under Section 29(1)(b) of the Foreign Exchange Regulation Act for the purchase of shares in India by a company not incorporated in India or whether such permission had necessarily to be previous permission. 62. We do not propose to refer to any dictionary to find out the meaning of the word 'permission', whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing permission to non-resident companies to purchase shares in Indian companies... The above observations would be relevant to conclude that the post facto approval of removal should have been granted under Section 45(2) by the adjudicator and the matter dropped at that stage. It is found that there are several provisions in the Customs Act, 1962 which require previous permission to be obtained from the concerned authorities. For instance, Section 110 prohibits a owner of seized goods from removing or otherwise dealing with the seized goods except with the previous permission of the proper officer. Likewise, Section 137 requires a previous sanction of the Commissioner before a Court can take cognizance of any offence under Sections 132 to 137 of the Customs Act. Section 155 also refers to a prior notice to be served on the Central Government before a suit can be commenced against it or any officer of the Government for anything purported to be done in pursuance of the Act. Since the words, 'permission' appearing in Section 45 are not prefaced by the word 'previous' or 'prior', it will be reasonable to hold that permission under sub-section (2) of Section 45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, an EPCG Licence was obtained and the appellants approached the Department for re-assessment of the said BEs. It appears, that several letters were written, to the department; last one being letter dated 13-3-2003, requesting reassessment in terms of the EPCG Scheme to enable discharge of duty clearance of goods for home consumption. The Show Cause Notice records that on 6-4-2003, a team of officers visited the Vadihar Port for verification of the uncleared goods and that in the course of such verification, the officers found that the subject goods were not present in the Port Area. Thereafter, on enquiry, they learnt that the goods had been shifted to the Project site. The Notice does not state that this verification was done on the basis of any prior intelligence. It appears that the appellants' persistent requests for reassessment caused the enquiry. When the officers went to the Project site, they found that the goods were lying in the same condition in which they have been imported several years ago. When the statements of the appellants' personnel were recorded, all stated that the Bills of Entry had already been filed, and that the goods had been shifted from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That effort should not visit them with a penalty. We also find that it was the appellants themselves, who had approached the department, time and again, seeking reassessment of the Bill of Entry and offering to pay duty as per the EPCG Scheme. A different view could have been arrived at, had the appellants made any attempt to utilize the goods, before payment of duty. As found earlier, the goods were in the original packed condition, in the manner in which they were imported, and no attempt had been made to use them, which would prove the bona fides of the appellant as importer and/or as Custodian. Therefore this is a fit case where the principles laid down by the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa 1978 (2) E.L.T. J 159 and Akbar Baddruddin Jiwani v. CC - 1990 (47) E.L.T. 161 (S.C.) would apply. The Hon'ble Supreme Court has held that even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
