1998 (9) TMI 365 - AT - Customs

Issues Involved:
1. Duty demand under Section 28(2) and Section 72(1)(a) and (d) of the Customs Act, 1962.
2. Interest on the confirmed duty as per Customs Notification 80/95.
3. Penalty under Section 114(A) and Section 112 of the Customs Act, 1962.
4. Disposal and auction of seized goods under Section 72(2) read with Section 142 of the Customs Act, 1962.
5. Alleged removal of bonded goods in violation of rules and regulations.
6. Lack of proper examination and application of mind by the Commissioner.
7. Violation of principles of natural justice.

Detailed Analysis:

1. Duty Demand:
The Commissioner confirmed a duty demand of Rs. 1,49,813/- under Section 28(2) proviso read with Section 72(1)(a) and (d) of the Customs Act, 1962. The Tribunal noted that there was no clear explanation or evidence provided by the appellants regarding the discrepancies found in the bonded goods records. The appellants' arguments about the extra indents placed by the masters of the vessels and cash payments were rejected due to lack of evidence and violation of RBI guidelines.

2. Interest on Confirmed Duty:
The order also included a directive for the payment of appropriate interest on the confirmed duty as per Customs Notification 80/95, dated 31-3-1995. However, the Tribunal found that the Commissioner failed to provide a detailed finding on how the duty amount of Rs. 1,49,96,813/- was computed.

3. Penalty under Section 114(A) and Section 112:
The Commissioner imposed a penalty of Rs. 1,49,96,813/- on the appellant company under Section 114(A) and a penalty of Rs. 1,00,000/- on an individual under Section 112 of the Customs Act, 1962. The Tribunal noted that there was no clear finding or evidence to justify these penalties, and the Commissioner did not scrutinize the documents or the evidence provided by the appellants.

4. Disposal and Auction of Seized Goods:
The order included a provision for the disposal of seized goods valued at Rs. 68,87,955/- if the appellants failed to fulfill their obligations within 30 days. The Tribunal found that the Commissioner did not provide a clear finding on how the seized goods were to be auctioned and how the disposal amount would be adjusted against the total dues.

5. Alleged Removal of Bonded Goods:
The Commissioner grouped the alleged offenses into three categories:
(i) Supplying bonded stores over and above the indent placed by the Shipping Corporation of India.
(ii) Supply of bonded goods not matching the entries in the shipping bills or bonded register.
(iii) Denied supply of goods to Coast Guard vessels.
The Tribunal noted that the Commissioner failed to provide a detailed examination of the evidence and did not address the appellants' defense adequately.

6. Lack of Proper Examination and Application of Mind:
The Tribunal highlighted that the Commissioner passed the order without due application of mind, without scrutinizing the documents, and without considering the evidence produced by the appellants. The order lacked detailed findings on how the demands were computed and how the appellants were liable to pay duty.

7. Violation of Principles of Natural Justice:
The Tribunal found that the order violated the principles of natural justice as the appellants were not given an opportunity to summon records or witnesses to defend themselves. The Commissioner did not provide a speaking order and failed to address the appellants' contentions adequately.

Conclusion:
The Tribunal set aside the impugned order and remanded the matter for de novo consideration. The Commissioner was directed to re-examine the case, observe the principles of natural justice, and allow the appellants to summon records and witnesses. The adjudication was to be completed expeditiously within six months from the date of receipt of the Tribunal's order. The appeals were allowed by remand.

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