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TMI Blog2010 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... plain even prima facie how these goods were found in its godown. Merely producing documents to establish that the godown is of RPC is not the same thing as showing that the goods found therein belong to RPC – petition dismissed seeking a direction to the Respondents to release on an urgent basis with cost X X X X Extracts X X X X X X X X Extracts X X X X ..... were subject to actual user condition for printing magazines. Pursuant to the intelligence gathered, the residential and office premises of three major traders were searched on 28th December 2005. These included M/s Newsprint Trading Corporation Pvt. Ltd. (NPTC) of Mr. Prakash Garg; the residential premises of Mr. Prakash Garg; the office premises of Mr. Utpal Gupta, Director of M/s Allied Freight System Pvt. Ltd. (AFS) as well as his residential premises and the office-cum-godown premises of M/s Vijay Enterprises. The searches led to the recovery of several incriminating documents including blank signed cheque-books of various RNI holders, rubber stamps of various RNI holders, the blank signed cheque books of Qaumi Patrika, Qaumi Shaheed and M/s Sankalp Times along with CPUs and the laptops. 7. In a statement recorded under Section 108 of the Customs Act, 1962 (Act) on 28th December 2005 Mr. Prakash Garg stated that besides the NPTC he was running Vijay Enterprises and Salwan International Pvt. Ltd. (SIPL) and that he was looking after the affairs of the said firms as General Manager. AFS was the Customs Handling Agent (CHA) for his three companies. For the imports made by his th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises, inter alia, NIPL and Mr. Praveen Kumar Goel on 15th February 2006. While documents relevant to the investigation were recovered from the office premises of NIPL, nothing relevant was found from the residential premises on Mr. Praveen Kumar Goel, searched on 15th February 2006. Mr. Praveen Kumar Goel was summoned and his statement was recorded on 1st March 2006 and 2nd March 2006 under Section 108 of the Act. He then disclosed that he used to place orders on overseas suppliers for import of newsprint/LWC paper in the name of various RNI holders, including Qaumi Patrika and Sandhya Qaumi Patrika since 2001-02 and that the paper imported in their names were kept in his godowns in Nangloi. He had supplied only 25% to 30% of the total quantity of the newsprint imported to the RNI holder and the rest was sold by him in the open market. For this, he used to pay Rs.500/- per metric tonne in cash to Mr. G.S. Babbar who used to raise debit notes in their name; used to give the amounts shown in the debit note to Mr. GS Babbar in cash and later on Mr. G.S. Babbar used to give him the cheque of the equivalent amount. After importing he used to keep the imported consignment in his godow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PL seeking extension of time limit by six months under the proviso to Section 110 (2) of the Act in respect of the goods placed in the godowns of NIPL at Kavita Colony and Village Hiran Kudna. The adjudicating authority i.e., the Commissioner of Customs by an order dated 1st September 2006 extended the time limit for issuance of show cause notice in respect of the above goods. Against the aforementioned order dated 1st September 2006, passed by the adjudicating authority, NIPL filed an appeal before the Customs Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi on 9th October 2006. The stay application of NIPL was dismissed by the CESTAT on 21st November 2006. 13. The show cause notice dated 22nd December 2006 indicated NIPL and Mr. Praveen Kumar Goel as Noticees Nos.13 and 14 respectively. A similar show cause notice dated 23rd December 2006 in relation to RNI holder, Kranti Sankalp in whose name the above imports were made which resulted in diversion of newsprint to the domestic market, was also issued. On 2nd March 2007 in relation to the show cause notice dated 22nd December 2006 issued in respect of RNI holder, Qaumi Shaheed, an addendum was issued adding paras 40, 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on if the bail granted to Mr. Praveen Goel as he was refusing to cooperate in the investigations. The ACMM by an order dated 24th February 2007 directed Mr. Praveen Goel to report to the Senior Intelligence Officer within a period of seven days from 24th February 2007 with prior intimation to the Senior Intelligence Officer at least one day in advance. 16. The addendum to the show cause notice recorded in paras 65 F and 65 G that by a letter dated 28th February 2007, the DRI advised Praveen Goel to be present at the godown premises on 1st March 2007 for the purpose of examination/inventorization of the goods lying therein. The letter was served upon Mr. K.C. Goel, the father of Praveen Goel. A copy was also sent to his counsel. The DRI officers on 1st March 2007 waited for a considerable period of time at the godown premises but neither Mr. Praveen Goel nor his authorized representative turned up. Thereafter the goods stored in the two godowns located in Kavita Colony and village Hiran Kudna were examined in the presence of witnesses. Two separate panchnamas dated 1st March 2007 were drawn up. Different types of papers were recovered and were inventorised in the presence of witn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party that he will not challenge the identity of the seized goods during the course of adjudication or prosecution proceedings, if any. The submission of the counsel for the Petitioner that the Respondent could not have acted outside the scope of the Customs (Provisional Duty Assessment) Regulations, 1963 („PDA Regulations‟) and only 20% of the duty could have been insisted upon for being paid as a pre-condition for such provisional release, was noticed. The response of the DRI that the Petitioner had not yet produced the import documents as requested in the letter dated 25th June 2007, was also noticed. Thereafter this Court issued the following directions:- "(a) The petitioner‟s representative shall be present before the Additional Commissioner (Adjudication) on 17.9.2007 at 11 a.m. with all the necessary documents indicated in the letter dated 25.6.2007. After submission of these documents, the respondent shall inspect the godown which is presently sealed and to relate them with the documents. (b) After completion of above exercise the Custom Authorities shall proceed to issue an appropriate adjudicatory order provisionally assessing the goods in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted on behalf of the petitioner that a fresh exercise of co-relating the goods can be carried out, if the applicant is so agreeable for this purpose after which the necessary orders would be made by the Authority empowered under the Customs Act under Section 110-A. In view of the above statement, the two premises shall be visited by the concerned Authorities under the Customs Act for the purpose of settling/co-relating the documents with the goods on 11th & 12th December, 2007 at 11.00 AM. After completion of the said exercise appropriate order either accepting the petitioner‟s request or rejecting it shall be passed by the concerned authorities under the Customs Act, empowered to deal with such application for release of goods in terms of the Customs (Provisional Duty Assessment) Regulations, 1963 shall be made, within 4 weeks of the said dates of inspection. The application is disposed of in terms of the above directions." 23. On 11th December 2007 fresh panchnamas were drawn up in relation to the goods at both godowns. In relation to the goods at Kavita Colony godown, the officers of the DRI and customs produced six Bill of Entries and the details thereon were tal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 26. In the companion writ petition by RPC, the prayer is for release of the goods in the godown at village Hiran Kudna which according to this Petitioner is its godown and factory. The Petitioner refers to a site plan which shows that the godown was sealed from the common main gate which links this godown with the godown of NIPL. RPC had sought to implead himself in Writ Petition (Civil) No.3813 of 2007 filed by NIPL. Later RPC filed Writ Petition (Civil) No.8049 of 2007. In that writ petition, this Court passed an order asking the Respondents to grant the Petitioner a personal hearing in relation to the goods seized from the godown. It was noted in the order dated 29th August 2008 by this Court that according to the Respondents the goods do belong to RPC but to NIPL and that Mr. Pradeep Kumar, the Proprietor of RPC was also a Director of NIPL. According to the Petitioner, the above observation in the order dated 29th August 2008 indicates that the goods are not unclaimed but are of RPC whereas the Respondents claim it to be that of NIPL. 27. According to RPC, the Respondent throughout confirmed that the godown as well as the goods therein belonged to RPC since the name board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as paid at the time of clearance and therefore no differential duty remained payable. Moreover, the above importers were not parties to the case. Here again it is claimed that no duty as such is payable. It is submitted that the differential duty is totally fabricated with the malafide intention of harassing the Petitioners to keep the goods under seizure so that it may be spoiled and be of no use. Counsel for the Petitioners refers to an order dated 31st August 2006 passed by this Court in Writ Petition (Civil) No.9414-15 of 2006 where this Court directed the provisional release of the goods upon furnishing of bonds for 25% of the value of the goods. A reference is also made to an order dated 10th October 1988 passed by the Supreme Court in Civil Appeal Nos.3935 and 3937 of 1988 where the goods were directed to be provisionally released upon payment of 20% of the difference of the duty and furnishing of bonds for the remaining 80% of the duty. 29. On behalf of the Respondents Mr. Satish Aggarwala, the learned Senior Standing Counsel for DRI submits that with CESTAT having dismissed the appeal of the Petitioner NIPL and Mr. Praveen Kumar Goel on 20th February 2008 on the ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice alleges not only mis-description of the goods by the Petitioners but also of their undervaluation. Therefore, when a full-fledged adjudication has yet to take place pursuant to the show cause notice, it is not possible for this Court to conclude that the goods were indeed correctly valued by the Petitioner at the time of their clearance. This is a crucial factor in determining whether the direction for payment of differential duty at the stage of provisional release is justified or not. The Petitioner has not been able to make out a prima facie case for release of the goods without payment of differential duty. In other words, merely because the Petitioner has acquired the goods under the exim policy by payment of the duty as assessed it cannot mean that the customs authorities are precluded from realizing the actual duty payable on the correct value of the goods as determined after the conclusion of the adjudication proceedings. 33. The other objection pertains to the execution of the bank guarantee to the extent of 25% of the seizure value. Learned counsel for the Respondents is right in his contention that under Section 110A, there is a discretion with the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect understanding of the legal position. Unless the RPC is able to prima facie establish by proper documentation that the goods found in the godown A belong to it, there is no obligation on the Commissioner of Customs in law to even provisionally release those goods to RPC. What RPC has produced is a bunch of documents claiming to be invoices for purchase of "paper". Considering that what was seized in the godown is imported newsprint, such invoice can hardly constitute even a prima facie evidence that the imported goods in fact belonged to RPC. Moreover, RPC claims that it had stopped importing goods for the last seven years. RPC has not been able to satisfactorily explain even prima facie how these goods were found in its godown. Merely producing documents to establish that the godown is of RPC is not the same thing as showing that the goods found therein belong to RPC.
36. Consequently this court is unable to accede to the prayers in the writ petitions.
37. For the aforementioned reasons, both the writ petitions are dismissed with costs of Rs.5,000/- each which will be paid by the Petitioners to the Respondents within a period of four weeks from today.
S. MURALIDHAR, J. X X X X Extracts X X X X X X X X Extracts X X X X
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