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2024 (4) TMI 637 - AT - CustomsConfiscation of imported goods - Black pepper - advance authorisation scheme - fulfilment of export obligation or not - reliability of statements - cross-examination of persons whose testimony is relied upon - HELD THAT - Owing to non-adherence to section 138B of Customs Act 1962 the findings of the lower authorities cannot be validated that have relied upon statements to conclude that the appellants were aware of the diversion that M/s Bruno Exports were engaged in which has bearing on recourse to section 112 of Customs Act 1962. The findings of the lower authorities suffer from infirmities arising from having fastened condition while ordering redemption and from the statements relied upon not having crossed the bar of relevancy prescribed by section 138B of Customs Act 1962 - the appeals cannot be taken to its logical conclusion in the absence of validity of the impugned order on both counts. The impugned order is set aside - matter remanded back to the adjudicating authority for a fresh decision after permitting cross-examination of the witnesses sought for and to set right the terms of redemption - appeal allowed by way of remand.
Issues Involved:
1. Confiscation of imported goods u/s 111(m) and 111(o) of Customs Act, 1962. 2. Imposition of penalty u/s 112 of Customs Act, 1962. 3. Validity of condition for re-export of confiscated goods. 4. Denial of cross-examination of witnesses. Summary: Issue 1: Confiscation of Imported Goods u/s 111(m) and 111(o) of Customs Act, 1962 The appeal concerns the confiscation of 13.5 metric tons of 'black pepper' valued at Rs. 72,78,746 imported by M/s Ashwin Traders against bill of entry no. 9926071/11.12.2020, and 59 bags containing 2950 kgs of 'black pepper' valued at Rs. 17,08,541 recovered at the premises of M/s Eskimo Ice Mfg Co Pvt Ltd. The goods were imported under the 'advance authorisation scheme' but were found to be in breach of conditions in notification no. 96/2009-Cus dated 11th September 2009. The Tribunal noted that the appellant was aware that the goods were imported duty-free and purchased them at a price lower than the market rate, indicating knowledge of the breach of import conditions. Issue 2: Imposition of Penalty u/s 112 of Customs Act, 1962 The penalty of Rs. 6,00,000 was imposed on the individual appellant for their involvement in the illegal transaction. The Tribunal upheld the penalty, noting that the appellant was an experienced merchant and importer of spices and was aware that the goods were imported without payment of customs duty and diverted into the domestic market illegally. Issue 3: Validity of Condition for Re-export of Confiscated Goods The Tribunal found that the order for re-export of confiscated goods on payment of redemption fine was contrary to the decision in Pace India v. Commissioner of Customs, Bangalore [2020 (372) ELT 442 (Tri-Bang)], which held that the Customs Act does not provide for re-export of imported goods on payment of redemption fine. The Tribunal cited Section 125 of the Customs Act, which does not confer upon the authority the power to impose conditions while allowing redemption of goods. The condition for re-export was thus set aside. Issue 4: Denial of Cross-examination of Witnesses The Tribunal noted that the lower authorities denied the request for cross-examination of witnesses whose testimonies were relied upon. Owing to non-adherence to section 138B of Customs Act, 1962, the Tribunal found itself unable to validate the findings of the lower authorities. The statements relied upon did not meet the relevancy criteria prescribed by section 138B. Conclusion: The Tribunal set aside the order and remanded the matter back to the adjudicating authority for a fresh decision, permitting cross-examination of the witnesses sought for and to set right the terms of redemption in line with judicial pronouncements. (Order pronounced in the open court on 08/04/2024)
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