2019 (4) TMI 254 - AT - Customs

Smuggling - Gold Biscuits - time limit for issuance of SCN - Held that - A perusal of the Mahazar makes it clear that is has recorded what transpired on the eventful day of 03.10.2018 at the Airport upon the arrival of the appellant. There are two witnesses already assembled at the arrival hall, at 19 15 Hrs; but it is not clear if they were also the other passengers are outsiders. In their presence, the said Mahazar is drawn, they witness the appellant identifying his bag/baggage, its screening through the screening machine and then the body search of the appellant at Air Intelligence Unit Room situated near arrival hall. The gold chain allegedly concealed in the neck area and two Gold Biscuits allegedly hidden in his both socks were found and the same were weighed with the help of electronic weighing scale available in the customs arrival hall; they also witness one Mr. C.N. Badrinath being requested for valuation, who heeds to the request and weighs the above items there only and informs that as on 04.10.2016, the rate per gram was ₹ 3138/-, assess the value of the above items at ₹ 10,45,833/-; he also submits a certificate dated 04.10.2016, etc. - the above Mahazar dated 03.10.216 has also been signed by the witnesses on 03.10.2016 wherein it refers to valuation certificate dated 04.06.2016, i.e, the next day. With this discrepancy, the evidentiary value of the Mahazar cannot therefore be sustained. The appellant is only questioning the validity of SCN on the ground that the same is in violation of Section 110(2) of the Act. Admittedly, there is no allegation by the Revenue that the service of the notice in question is for the reasons attributable to the assessee. The time-limit of six months has also been reiterated, even by the CBEC, vide Circular No. 7/2013-Cus. Dated 19.02.2013. Appeal allowed.

Summary

Issues involved:
1. Confiscation of gold chain and gold biscuits.
2. Imposition of penalties under Sections 112(a) and 114AA of the Customs Act, 1962.
3. Validity of the show cause notice (SCN) issued.
4. Compliance with the time-limit of six months for issuing notice.

Detailed Analysis:
1. The appellant had gold items seized by Customs Officers upon his return from Dubai, leading to confiscation and penalties under the Customs Act, 1962. The Commissioner of Customs (Appeals) confirmed the confiscation and one penalty while setting aside another, prompting the appeal.

2. The appellant cited various cases in support of his appeal, challenging the penalties imposed. The AR supported the lower authorities' findings and referred to additional cases to justify the notice's issuance within six months, not necessarily its delivery within that timeframe.

3. The Tribunal scrutinized the evidence, focusing on the Mahazar document detailing the seizure. Discrepancies in dates and procedural irregularities raised doubts about the Mahazar's reliability. The Tribunal emphasized the importance of proper documentation and adherence to procedural requirements in such cases.

4. The Tribunal delved into the legality of the SCN issued post-seizure, invoking a Supreme Court judgment regarding the time-limit of six months for such notices. Noting the late issuance of the notice to the appellant, the Tribunal found non-compliance with the statutory time-limit, supported by a relevant circular from the CBEC.

5. Relying on the Constitution Bench's decision, the Tribunal held the impugned order unsustainable due to the late issuance of the notice, leading to setting it aside and allowing the appeal. The Tribunal directed the release of the seized items upon payment of applicable Customs Duties, maintaining the penalty under Section 112A due to the technical nature of the appeal's success. The appeal was partly allowed, emphasizing procedural compliance and statutory timelines.

This detailed analysis covers the issues of confiscation, penalties, validity of the notice, and compliance with statutory timelines as per the legal judgment delivered by the Appellate Tribunal CESTAT BANGALORE.