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TMI Blog1990 (12) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued to M/s. K.C.A., Jamnagar - the appellants - on 7-5-1984 to show cause as to why the goods should not be confiscated under Section 111(d) and 111(o) of the Customs Act, 1962 citing contravention of the I.T.C. order 1955 and violation of Notification 117/78-Customs, dated 9th June, 1978 as amended. 3. The appellants claimed that the goods were imported and cleared through the Bombay Port and, as such, their seizure was illegal and/or in excess of the powers conferred on the authorities at Jamnagar. Various other pleas were also taken in the proceedings before the Collector who, after consideration of all matters, finally ordered confiscation of the goods under Section 111(o) Customs Act and imposed penalty of Rs. 1 lakh under Section 112 ibid. The goods were allowed to be cleared on payment of a fine of Rs. 1.25 lakhs in lieu of confiscation. Although the Collector held that the appellants had not followed the Duty Exemption Scheme as laid down in Notification No. 117/78-Customs dated 9-6-1978 as amended, with intention to avoid payment of duty amounting to Rs. 1,52,967.03, no order demanding the duty was passed by the Collector. 4. This appeal was first filed before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench. We find from the impugned Order that the Collector has ordered confiscation of the goods under Section 111(o) of the Customs Act on the ground that the goods where exempt from duty having been imported under the DEEC Scheme to which Notification 117/78 is applicable. 9. There is no doubt that the Collector has referred to the DEEC Scheme while passing the order but he has not demanded any duty; nor was there any demand for duty in the show cause notice. The order relates only to confiscation of goods and imposition of penalty. In the adjudication order, there is no determination of any question having relation to the rate of duty or to the value of goods for purposes of assessment. In this view of the matter, the appeal does not fall within the jurisdiction of the Special Bench. It should, therefore, be dealt with in West Regional Bench. 10. As regards cases of Metro Export and Bliss Impex Export Corporation relied upon by the learned counsel for the appellants during the arguments, the decisions in these cases are clearly distinguishable in as much as demand for duty was made in both these cases whereas in the present case no duty has been demanded. It is for this reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slip No. 458 prepared on 12-11-1983 in support of so called shortage is an apparent after-thought to cover up the excess obtained for removal of the materials (emphasis supplied.); (c) The DEEC Scheme is so devised that there cannot be excess or shortage, the import quantum of the input is commensurate with the export obligation. In view of this the excess of 2420 Kgs. of MPDSA appears to have been obtained by manipulation of manufacturing ratio in relation to the consumption of imported input. Similarly, 238 Kgs. of PWA also represents the excess quantity (emphasis supplied.); (d) On verification of the physical balance in the premises of M/s. K.C.A. Ltd. of the MPDSA and PNA immediately after the seizure of the goods, it is observed that the stock tallied with the book balance of 20-11-1983 and 21- 11-1983. This would mean that the MPDSA and PNA under seizure were actually excesses obtained from manipulation of the manufacturing ratio. M/s. K.C.A. Ltd. clearly admitted of the unaccounted excess which is under seizure (emphasis supplied.) (e) The goods under seizure though despatched by M/s. K.C.A. Ltd. in favour of M/s. Dip Jyot Chemicals, Bombay as reported by the former, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms House, Bombay and as such seizure was illegal and/or in excess of power conferred on authorities at Jamnagar; (b) That the goods were cleared for home consumption and as such ceased to be imported goods and as such were not hit by the provisions of Section 111(d) and 111(o) of the Customs Act, 1962. (c) That the said goods were imported against three valid DEEC Import Licences which were allowed clearance by the Customs Authorities after verification of all the Import Documents and as such were not hit by Section 111(d) or 111(o) of the Customs Act, 1962. (d) The Customs authorities at Bombay had endorsed and accepted the quantity of raw materials imported and the quantity of finished products exported after verifying the quality of the exported goods. Since the quality of export goods was never questioned by the Customs Authorities nor were the goods subjected to test at the time of export, the authorities at Jamnagar had no power or jurisdiction to raise the issue of quality or allege manipulation of the quality of the exported goods. (e) The goods did not belong to the category of notified goods and as such were not prima facie liable to seizure. (f) The attentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SA is an after thought to cover the excess for disposal. (e) It is established that unaccounted goods are from exempt materials imported under DEEC Scheme. (f) Since the goods under seizure are unaccounted for goods, it is reasonably concluded that this material has not gone into the consignment of the goods as was required under the Notification No. 117/78 and the conditions of the licence and the scheme. (g) The party s plea that they have discharged export obligation and their accountability has ceased had no relevance. It remains unexplained as to how the party could discharge the export obligation without full utilisation of the import material under the scheme which has to be placed under seizure being sound as unaccounted goods. The owner of the truck Shri Jasbir Singh Ramsingh of M/s. Punjab Transport Co., Jamnagar has explained that they have a transport contract with M/s. K.C.A. Ltd. Jamnagar and accordingly they are transporting the goods of M/s. K.C.A. Ltd. as per the advice and instructions, 43 drums under seizure were transported on 21-11-1983 in normal course of transport contract. The documents had been given to the driver of the truck by the store keeper of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falsely claimed discharge of export obligation and that the imported material was not utilised for the purpose for which it was imported. It was further alleged that the appellants therein had deliberately mis-declared the description of the packing materials in the shipping bills with a view to get the export obligation fulfilled and thereby to evade customs duty on the imported white card board amounting to Rs. 5,53,971.81 after the adjudication, the Collector of Customs held the appellants to have failed to comply with the conditions specified in Notification No. 717/78 and ordered them to pay customs duty of Rs. 5,53,971.51 and also imposed penalty of Rs. 50,000/-. (b) (i) In that case, the appellant contended before the Tribunal that (a) the Assistant Collector had no powers to issue the Show Cause Notice as longer period had been invoked; (ii) There was no allegation of suppression of facts or mis-statement or collusion on the part of the appellants and hence it was urged that it was barred by time the import having been effected on 19-1-1984 and the last shipment having been effected on 13-4-1984; (iii) The second preliminary objection raised was that the import having bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have led to demand of duty, penalty etc., the proper course would have been for him to report the matter to the Collector of Customs, Madras to enable the latter to proceed against the appellants in accordance with law. The Cochin Collector, however, seems to have assumed jurisdiction to deal with the matter himself. The analogy with Central Excise Rule 196 as sought to be drawn by Shri Naik is inapplicable. The rule itself provides for demand of duty by the proper officer having jurisdiction over the applicant-user who may have got his requirement of materials, cleared duty-free or at concessional duty in terms of Rule 192 from a manufacturer situated in another officer s jurisdiction. Such is not the case here. The two decisions cited in this context are of no help to the Revenue. Shri Naik has sought to justify the demand on the plea that what was demanded by the Cochin Collector was not really duty but only an amount equal to the duty leviable. This contention is, on the face of it, untenable. For one thing, what the notification makes the importer liable to pay on demand is an amount equal to the duty leviable but for the exemption. No doubt the duty has to be quantified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Bond/Undertaking executed by the Importer has been cancelled and the question of its invoking by the Customs Collector, Bombay no longer subsists. The case in hand is pure and simple violation of the various provisions of DEEC Scheme, Notification No. 117/78 and the Customs Act. The allegation in Show Cause Notice is contravention of provisions of clause 5 of Import (Control) Order 1955 issued under Section 3 of the Import and Exports (Control) Act, 1947, which has been considered as deemed to be prohibited under Section 11 of the Customs Act, 1962 by virtue of Section 3(2) of the said Act, of 1947. Hence, Section 111(d), 111(o), 112 and Section 115(2) of the Customs Act, 1962 were invoked to initiate the proceedings. The relevant provisions are noted below :- Section 11 deals with power to prohibit importation and exportation of goods. Section 111 deals with confiscation of improperly imported goods, etc. The following goods brought from a place outside India shall be liable to confiscation :- (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and imposing the confiscation under Section 125 of the Act has not demanded duty. Sub-section (1) clearly states that the officer adjudging the case has to impose the fine and as a consequence of imposition of fine under Sub-section (1), the duty and charges payable also become liable under Sub-section (2) of the Section 125 of the Act. As noted above, the Adjudging Officer has neither demanded duty nor confirmed it in his order and as such Sub-section (2) cannot be invoked after the adjudging the case to demand duty on the basis of imposition of fine under Sub-section (1) of Section 125 of the Act. Therefore, there is no demand of duty and the Importer, while choosing to exercise the option of redeeming the goods is required to pay the fine as levied under Sub-section (1) of Section 125 of the Act alone. 22. In view of this position, the ruling of M/s. Metro Export and M/s. Bliss Impex (supra) are not applicable to the facts and circumstances of this case and as there is no question of determination of rate of duty in this appeal but question of contravention of provisions of the Import and Export (Control) Act, 1947 and Customs Act, the Special Bench has no jurisdiction to de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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