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TMI Blog2010 (4) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... ew Delhi - As such the CBI proceeded to file a closure report. - , all the 14 appeals filed by the appellants are allowed and the impugned order dated 16.10.2008 passed by the Tribunal as well as the order Annexure A-11 passed by the Adjudicating Authority are set aside and the entire matter is remanded back to the Adjudicating Authority for a fresh adjudication - 1 of 2010 - - - Dated:- 6-4-2010 - CORAM: HON'BLE MR. JUSTICE ASHUTOSH MOHUNTA. HON'BLE MR. JUSTICE MEHINDER SINGH SULLAR. Present: Mr. R.S. Rai, Sr.Advocate With Mr. Rajesh Garg, Advocate For The Appellant. Mr. H.P.S. Ghuman, Sr.Standing Counsel For The Respondent. ASHUTOSH MOHUNTA, J.(ORAL) This common order shall dispose of 14 appeals viz. CUSAP Nos. 1, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16 and 17 of 2010, as questions of law as well as facts involved in these appeals are common. The appellants have filed these appeals under Section 130 of the Customs Act, 1962 (for brevity "the Act") against the order dated 16.10.2008 passed by the Customs Excise and Service Tax Appellate Tribunal (herein after referred to as "the Tribunal"), whereby, the appeals filed by the appellants against the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at since the goods had already been exported, the same were not liable for confiscation and accordingly, he has not imposed any redemption fine in lieu of confiscation under Section 125 of the Customs Act. While the appellants herein filed appeals before the Tribunal against the Commissioner's order challenging the denial of drawback and imposition of penalty on them, the Revenue filed three review appeals before the Tribunal challenging the portion of the order observing that since the goods have already been exported, the same are not available for confiscation and accordingly not imposing redemption fine in lieu of confiscation. The Revenue's appeals sought imposition of redemption fine in lieu of confiscation in respect of the goods held by the Adjudicating Authority to be liable for confiscation under section 113 (d), 113 (i) and 113 (ii) of the Act. Vide impugned order dated 16.10.2008 the Tribunal rejected the appeals of the appellants and also rejected the three Review Appeals filed by the Revenue. So far as the Customs Appeals of the Respondent are concerned, the same were dismissed by this Court vide order dated 12.01.2010 as there was no valid review authorization to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and export proceeds had been remitted through proper banking channel. The learned counsel has further referred to letter Annexure A-3 written by Commissioner of Customs, Amritsar to the Joint Director, DRI Ludhiana to contend that the vigilance enquiry in the present case has found no evidence of conspiracy between the customs officials and the appellants. He further argues that regarding the allegations leveled in the show cause notice as well as addendum, the Central Bureau of Investigation (CBI) also conducted investigations wherein, the directors, employees of the appellant firms as well as certain customs officials were also arrayed as accused. The CBI has found the allegations to be false and has filed closure reports, which was accepted by the concerned Special Court. The said orders of the Court have attained finality as they were not challenged in any higher court. So far as the charges of misdeclaration and over-invoicing leveled in the addendum to the show cause notice are concerned, the learned Counsel for the appellants has contended that the same are also bereft of any merit in view of the order of the Hon'ble Supreme Court dated 21.09.2004 quashing the detention o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared. In the present case, the Impugned Show Cause Notice as well as impugned order do not deal with the live consignments but pertain to earlier consignments i.e. past exports where export had already been completed and goods had already reached the hands of the foreign buyers. It is a settled proposition of law that the past exports cannot be challenged as being improper on the basis of any irregularities noticed in subsequent exports for which a separate show cause notice had already been issued. Therefore, the impugned show cause notice could not have been issued merely on the basis of inferences or suspicion. During the course of arguments, our attention has also been drawn to the CRCL reports Annexures A-19 pertaining to the goods in question. Upon a bare reading of the test reports, it is evident that there is no anomaly pertaining to quality and description of the goods. One of the analysis of the test reports reads as under: - "…One representative sample said to be Gear Cutting Tools of Cobalt Bearing High Speed Steel as declared by the Exporter vide S/B no. 510 Dated 29.03.2000 of container Freight Station, Jalandhar port herewith for Chemical Analysis so as to asc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place in high seas. It is beyond the territorial waters of India. High seas would also mean a place outside India, if it is beyond the territorial waters of India. Therefore, if the goods were taken out to the high seas outside territorial waters of India, they will come within the ambit of expression "taking out to a place outside India". Indubitably the goods had been taken out of India. "Place" according to Webster Comprehensive Dictionary, International Edn., p. 964 means a particular point or portion of space, especially that part of space occupied by or belonging to a thing under consideration; a definite locality or location. It also means an open space or square in a city. Therefore, in international trade the ship beyond the territorial waters of a country would be a place outside the country, if the goods are taken to that place, that is to say, a situation outside the territorial waters of a country and the title to the goods passes to the purchasers. Then, in our opinion, the goods are taken to a place outside India. 8. The expression "place" will depend for its connotation on the context in which it is used. In clause of charter party requiring chartered to procure s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the appellants, which is a subject matter of the present controversy, were also referred to the CBI by the DRI by way of RCCHG2004A0007 dated 15.03.2004. Comprehensive investigation was conducted by the CBI and it was found that the allegations had no substance it. The investigations before the CBI in that case contained following allegations: - "The instant case was registered on source information on the allegations that S/Sh. A.K. Kaul, D.R. Ahuja both Inspectors at Customs Freight Station, Ludhiana, accepted and cleared container No. CRXU-235135-8 Comprising shipping Bill No. 3231 to 3240 of M/s S.R.G. International a proprietary concern of Sh. Vinod Garg on 22.5.2000 purportedly carrying Gear Cutting tools of Cobalt bearing high speed steel. However, before the goods could move from the duty port at Ludhiana to the port at Mumbai they were intercepted on secret information by the Directorate of Revenue Intelligence, Regional Unit, Amritsar on 25.5.2000 and a representative sample was taken and tested which confirmed that the exported items were of inferior quality. Immediately thereafter 15 more containers belonging to M/s SRG International, New Delhi and its sister c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehensive report; the CBI concluded that there was absolutely no evidence available against for committing any offence. In the said case, the following conclusions were arrived at by the CBI: - "…. As already discussed in detail, the allegation of export of scrap does not stand substantiated…" "…During processing of the export documents, the documents, the documentation was found in order and there was no deficiency whatsoever. Similarly, the export goods i.e. Alloy Steel Forging(machine) was also found to be the same as declared in the shipping bills during physical inspection/examination. Further since the export item i.e. the Alloy Steel Forging (machine) had value cap of Rs 175/- per kg fixed by the ministry of Commerce, Government of India and the price quoted by the merchant exporters was always below the value cap, market enquiry regarding its present market value (PMB) was not necessary as per CBEC circular no. 69/97-CUS (F.No.605/51/97-DBK) dated 08.12.1997" "Thus, there was no need, whatsoever, to undertake any exercise to find out whether the value was over invoiced \inflated. However, as a matter of abundant precaution custom official draw the samples and got the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ineers, M/s Sunrise International M/s Tech Industrial Corporation M/s Vikrant Overseas and M/s National Steel Products Company. In view of the fact that such rebate claim is sanctioned only after the Central Excise authorities are satisfied with the actual exports, and in view of above analysis, the allegation of export of scrap/substandard material worth Rs.5/- in place of actual item i.e. Alloy Steel Forgins (Machined) as alleged in the FIR could not be proved." "Since the samples of the exported goods contained more than 0.3% by weight of chromium as per the CRCL reports mentioned above, the exported goods was definitely Alloy Steel and not scrap as alleged in the FIR". "In its's report No.; 35- Chem/Cus/2002/CL/197-198 DRI dated 23.10.2003, CRCL has stated that, "Each of the two samples is in the form of a circular article having diameter of 21.5 cm on the upper side and 13.5 cm on the lower side. Each is made of steel. Chromium content in the samples is 0.50% and 0.53% by weight in the sample Nos. CL 197 and CL 198 respectively. Carbon content in samples is 0.1% and 0.11% by weight in sample Nos. CL 197 and CL 1098 respectively. By chemical tests, it is not possible to sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly by the merchant exporters through banking channels and credit to the respective bank accounts of the merchant exporters. The bank documents such as statements of accounts, vouchers, swift messages etc, collected from the bankers of the merchant exporters and also from A-4 Shri Vinod Garg reveal that there were, in fact, inward foreign remittances into these accounts from the original consignees. The concerned bank officials have also confirmed this fact. In view of the inward foreign remittances having been received from the original consignees, the allegation of bogus nature of original consignees is not proved. It is also pertinent to note here that the export transactions took place as per RBI norms". "As regards the alleged payment of bribe by the merchant exporters to the Customs Officials to facilitate clearance of scrap as Alloy Steel Forgings (Machined), investigation did not reveal sufficient evidence to prove that the Customs officials accepted the alleged payments as a motive or reward for showing undue favour to the merchant exporters in the discharge of their duties as public servants. As already discussed in detail, the allegations of export of scrap does not sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of detention, had acted in haste without there being adequate materials. The appellants have formulated various questions of law. However, the necessity of dealing with these questions is obviated because after having carefully examined the submissions of the learned counsel for the appellants as well as the counsel for the respondent and after going through the impugned orders of the Tribunal as well as the Adjudicating Authority and other relevant materials on record, we are of the considered opinion that the authorities below have failed to examine the entire matter especially in the light of the aforesaid facts. The facts brought to our notice show that non-examination of the aforesaid issues have caused prejudice to the case of the appellants. Therefore, the whole matter requires reexamination and reconsideration by the authorities below especially in view of the observations made herein above, as the same are necessary, relevant and would have a vital bearing on the issues involved. Accordingly, all the 14 appeals filed by the appellants are allowed and the impugned order dated 16.10.2008 passed by the Tribunal as well as the order Annexure A-11 passed by the Adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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