2014 (5) TMI 367 - AT - Customs

Determination of ownership of seized goods - diversion of free imported goods into local market - Importation of Mulberry Raw Silk Yarn/Silk Yarn under Advance Licence Exemption notification Rate of Duty Levy of interest and penalties - Whether Adjudicating authority had not considered the evidences and provisions of various laws, such as Bill of Lading Act, Customs Act etc. placed by them to decide the ownership of the seized goods as claimed by the High Sea Sellers - Held that - On perusal of Adjudication Order dt. 12.6.2013, it is found that duty was demanded jointly and severally - The seized goods were confiscated and redemption fine was imposed but it was not mentioned to whom the seized goods would be released - It has demanded interest against 4 noticees, without mentioning the names and therefore such order cannot be sustained. This Court directs the Adjudicating authority to decide the claim of the ownership of the seized goods as claimed by the High Sea Sellers in terms of the order in M/s. Prachi Silks Versus The Commissioner of Customs (Seaport-Exports) 2014 (5) TMI 121 - MADRAS HIGH COURT on the basis of documents and provisions of Customs Act and Regulations - Thereafter, the demand of duty along with interest and penalties would be determined as proposed in the show cause notices in accordance with law - So, the impugned orders are set aside to the extent of appeals filed Matter remanded back to the Adjudicating authority. Decided in favour of Assessee.

Issues Involved:
1. Ownership of seized goods.
2. Demand of duty and penalties.
3. Confiscation and redemption of goods.
4. Compliance with legal provisions and procedural laws.
5. Contradictions in adjudication orders.
6. Joint and several liability for duty.
7. Release of goods to High Sea Sellers.

Issue-wise Detailed Analysis:

1. Ownership of Seized Goods:
The appellants, High Sea Sellers, claimed ownership of the seized Mulberry Raw Silk Yarn, asserting that the goods should be released to them instead of the importer, M/s. Ravi Enterprises. The Hon'ble Madras High Court directed the Commissioner of Customs to consider their representation. The adjudicating authority initially rejected their claim based on allegations of fraud but was directed to reassess the ownership claims considering all evidences and relevant legal provisions, such as the Customs Act and Bill of Lading Act.

2. Demand of Duty and Penalties:
The adjudicating authority confirmed the demand of duty along with interest and penalties on the seized goods and past consignments, denying the benefit of exemption under Notification No.96/2009-Cus. The demand was made jointly and severally, which was contested by the appellants as being contradictory and against the provisions of Section 28 of the Customs Act, 1962. The Tribunal found that the adjudication orders lacked clarity on the specific noticees liable for interest and penalties, rendering them unsustainable.

3. Confiscation and Redemption of Goods:
The goods were confiscated under section 125 of the Customs Act, 1962, with an option to redeem them on payment of a fine. However, the adjudicating authority failed to specify to whom the goods would be released, leading to ambiguity. The Tribunal emphasized the need for clear directives regarding the release of confiscated goods.

4. Compliance with Legal Provisions and Procedural Laws:
The appellants argued that the adjudicating authority did not consider the evidences and provisions of various laws, such as the Bill of Lading Act and Customs Act, while deciding the ownership of the seized goods. The Tribunal directed the adjudicating authority to re-examine the claim of ownership in light of the evidences and legal provisions before rejecting the claim.

5. Contradictions in Adjudication Orders:
The appellants highlighted several contradictions in the adjudication orders, such as conflicting statements regarding the demand of duty and interest, and the imposition of penalties on High Sea Sellers despite the goods being with the department. The Tribunal acknowledged these contradictions and found the orders to be unsustainable.

6. Joint and Several Liability for Duty:
The demand of duty jointly and severally was contested by the appellants as being contrary to the provisions of the Customs Act, 1962. The Tribunal noted that fixing duty liability jointly and severally is not repugnant to the scheme of the Customs Act but required clear identification of the liable parties.

7. Release of Goods to High Sea Sellers:
The High Sea Sellers requested the release of seized goods based on their ownership claims. The Tribunal directed the adjudicating authority to consider the ownership claims in light of the evidences and legal provisions and then determine the release of goods accordingly.

Conclusion:
The Tribunal set aside the impugned orders and remanded the case to the adjudicating authority to re-examine the ownership claims of the High Sea Sellers and determine the demand of duty, interest, and penalties in accordance with the law. The adjudicating authority was directed to provide a proper opportunity for hearing and decide the matter within 8 weeks, considering the perishable nature of the goods. The stay applications were disposed of accordingly.

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