2022 (12) TMI 733 - AT - Customs

Confiscation of imported goods - imposition of redemption fine - penalty under Section 112 (a) of Customs Act, 1962 - jurisdiction prescribed in Section 128 A of Customs Act - allegation is that there is no opportunity to defend itself before the adjudicating authority owing to the circumstances which were beyond its control, and that the respondent did not receive any Show Cause Notice or even the notice of personal hearing - HELD THAT - Section 110 (2) ibid mandates issuance of show cause notice under Section 124 (a) within a period of six months and if not issued within six months, then it prescribes that the seized goods should be returned back to the person from whom the goods were seized - the first appellate authority has only partially remanded while sustaining the duty liability and the interest thereon and hence, if the prayer of the Commissioner in the appeal is to be sustained whereby the Commissioner has prayed interalia for upholding the appellate authority s order, for the reason that the order of the first appellate authority did not appear to be proper and just and that the order of the Commissioner (Appeals) merits rejection, then the entire order of the Commissioner (Appeals) has to be set aside. With regard to the order of confiscation, what was imported under advance authorization was only raw materials which were subsequently converted into final products and hence, the order of confiscation could only to be restricted to the raw materials alone, which perhaps is the reason for the first appellate authority to have remanded the matter with the direction to re-examine partially, which according to me appears to be correct. There are no reasons to interfere with the partial remand order of the first appellate authority, for which reason, the appeals of the Revenue are dismissed.

Summary

Issues involved: Appeal against remand order by first appellate authority, denial of duty exemption, demanding of customs duty, interest, confiscation of imported goods, imposition of redemption fine, penalty under Section 112(a) of Customs Act, 1962.

Analysis:

1. Appeal against Remand Order:
The Revenue filed appeals against the Orders-in-Appeal dated 04.02.2022, where the first Appellate Authority sustained duty exemption denial and customs duty demand but remanded the issue of confiscation, redemption fine, and penalty under Section 112(a) of Customs Act, 1962. The Revenue contended that the remand exceeded jurisdiction as the Orders-in-Original adhered to Principles of Natural Justice. The first appellate authority remanded due to lack of opportunity for defense before the adjudicating authority. The Tribunal noted the contentions of both parties.

2. Principles of Natural Justice and Timelines:
Section 110(2) mandates a show cause notice under Section 124(a) within six months, after which seized goods should be returned. The show cause notice in this case was issued after over 12 years, with only 15 days granted for a reply, violating natural justice principles. The Tribunal highlighted this discrepancy, emphasizing the importance of adherence to procedural timelines and fairness.

3. Partial Remand and Confiscation Issue:
The first appellate authority partially remanded while upholding duty liability and interest. The Commissioner appealed to set aside the entire order of the first appellate authority. The Tribunal noted that the order of confiscation should be restricted to raw materials imported under advance authorization, not final products. The partial remand was deemed appropriate, and the Tribunal found no reason to interfere with it, ultimately dismissing the Revenue's appeals.

In conclusion, the Tribunal upheld the partial remand order by the first appellate authority, emphasizing fairness, procedural adherence, and appropriate consideration of the confiscation issue. The judgment serves as a reminder of the importance of following legal procedures and principles of natural justice in customs matters.