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TMI Blog2010 (7) TMI 346X X X X Extracts X X X X X X X X Extracts X X X X ..... d fabrics by a number of export firms, the Directorate of Revenue Intelligence (DRI), Mumbai came across that the appellants are having the IEC number and the activities of the appellants are managed by its Director Shri Yunus H Mithwani. On examination of the Customs-Edi data, it was observed that the appellants had availed export benefits as below :- Year Numbers of shipping bills filed FOB value of exported goods (Rs. in crores) DEPB benefit claimed/availed (Rs. in crores) Drawback benefit claimed/availed (Rs. in crores) 2007 1076 55.42 0.02 6.08 2008 1555 101.02 0.13 7.86 2009 976 91.00 1.13 7.86 Total 3607 247.44 1.28 21.86 The declared business premises of the appellants were located at Amina House, 130-136, J.B. Shah Marg, Gr. Floor, 1st Chinch Bunder Road, Mumbai-9 comprising of 300 Sq. ft. office and one staff and two unskilled labourers were working there. The department to protect its own property and or money which were discovered to have been handed over to and coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full in this export also. But they failed to explain how they had managed remittance of the entire amount as declared to the Indian Customs when the actual transaction value was fraction of the value declared to Indian Customs. The exporter was also asked to produce all the local purchase documents and details of financial transaction like payment to the seller and to disclose the sources from where they had procured the goods exported by them so chat the genuineness of the export benefit claimed by the could be verified. But the exporter has failed to produce such documents and the exporter is under obligation to co-operate with the investigation as per the direction of the Hon'ble Delhi High Court by its order dated 3-6-2010. The investigation could not be completed within six months from the seizure of the goods i.e. Bank account of the exporter in this case. The Commissioner (Exports) extended the time limit for issuance of the show-cause notice under the proviso of 110(2) of the Customs Act, 1962. Aggrieved from the said order of extending time to seize the Bank account by six months to issue the show-cause notice, the appellants are before me. 4. Shri Sanjay Agarwal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the control of the possession of the appellant, adverse inference cannot be taken and the same cannot be the ground for extension of time for investigation by continuing the 'seizure of any goods'. The Commissioner has also erred in interpreting the order that the Hon'ble High Court of Delhi upheld the applicability of Section 110 in the matter. The Commissioner ignored and not dealt with the judgment cited by the appellants on the ground that the officers of the DRI do not have power to freeze bank account in the following cases : - (a) Vikas Gumbar v. UOI - 2009 (234) E.L.T. 439 (Del.); (b) Raghuram Grah Pvt. Ltd. v. CCE - 2005 (186) E.L.T. 50 Allahabad; (c) Anil Kumar Mehensaria v. C.C. Port - 2003 (155) E.L.T. 18 Calcutta 4.3 The Ld. Commissioner also failed to consider that if the amount lying in the bank is sale proceeds of the goods exported, thus there is no charge of over-valuation be confirmed as the appellants have not received any extra amount apart from lying in the Bank. He also submitted that if the goods are over-valued then the amounts lying in the Bank, which has been seized by the DRI are not the sale proceeds of the goods, the DRI h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives under Drawback and DEPB schemes, and 11-12-2009 in relation to the Bank Account), the seizure itself was without jurisdiction and therefore there was no question of granting extension for continuance of the illegal 'seizure'. 4.6 With regard to the Drawback account with SBI and the export incentives under the Drawback scheme are concerned, the time limit of six months was already expired and the Ld. Commissioner has failed to release even the freezed Drawback account and the export incentives ignoring the statements made by the Counsel for the Revenue before the Hon'ble Delhi High Court vide Order dated 3-6-2010 that - the time limits as set out in Section 110 of the Customs Act will be adhered to. He also relied on the following decisions :- (i) Asstt. Collector v. Charan Das Malhotra - 1983 (13) E.L.T. 1477. (ii) Gurmukh Singh's case - 1984 (18) E.L.T. 274 (P H). (iii) Bhavesh Exports Pvt. Ltd. - 2002 (144) E.L.T. 50 (Bom) At last he prayed that the impugned order be set aside with consequential relief. 5. On the other hand, learned SDR submitted that there are several evidences against the appellants namely :- (a) The appellants are having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y another 6 months. Lastly he relied on the case law in the case of Engee Industrial Services Pvt. Ltd. v. Commissioner of Customs, Bombay reported in 1996 (81) E.L.T. 100 (Tri), which deals with the issue and the issue is covered by the said decision. Finally he prayed that the appeal be dismissed, which is without any merits. 6.Heard both sides. I have carefully gone through all the submissions made by both the sides. 7.In this case, the issue is that whether order of extending the time limit for issue of show-cause notice for another period of 6 months i.e. upto 14-12-2010 in terms of proviso of Section 110(2) of the Customs Act, 1962 is legal and correct or not. 8. Before going into the issue, the relevant provisions of law are reproduced herein under for better appreciation :- The Customs Act, 1962 : SECTION 110. Seizure of goods, documents and things. - (1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods : Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise Duties and Service Tax Drawback Rules, 1995 : Rule 16. Repayment of erroneous or excess payment of drawback and interest. - Where an amount of drawback and interest, if any, has been paid erroneously or the amount so paid is in excess of what the claimant is entitled to, the claimant shall, on demand by a proper officer of Customs repay the amount so paid erroneously or in excess, as the case may be, and where the claimant fails to repay the amount it shall be recovered in the manner laid down in sub-section (1) of section 142 of the Customs Act, 1962 (52 of 1962). 9. In the instant case, during the course of investigation it was observed that the appellants are engaged in the business of export of ready-made garments. During last three years the exporter has exported the goods worth more than Rs. 247.44 crores. To export the said goods the appellants had filed 3607 shipping bills under DEPB benefit scheme to different countries like Dubai, Saudi Arabia, Tanzania, Sri Lanka etc. Only in one consignment at Tanzania, on verification it was revealed that in the consignment exported by the appellants under Bill of Lading No. NSA/DAR/FCL/ 20090170 dated 2-2-2009, the FOB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, which are not available, only the sale-proceeds received through the Bank account and the same are lying in the Union Bank of India, Md. Ali Road Branch in current account of the appellants. In the impugned order, the Commissioner has not given any finding that, whether the amount lying in the Bank are sale-proceeds of the goods exported. If it is taken that the amount lying in the Bank is sale-proceeds of the goods, which are over-valued, the contention of the Revenue that "these are sale-proceeds of the smuggled goods" is not correct. If these are not the whole sale-proceeds of the smuggled goods, the Commissioner has to show the sufficient reason to belief to seize the Bank account. As per the version of the Revenue that the goods have been over-valued by 50 times of the actual value of the goods than in this case, the amount lying in the Bank account cannot be the sale-proceeds of the exported goods. There is no allegation against the appellants that they have received the money against the exported goods by other channels also. The amount which is lying in the bank account is against the goods exported through shipping bills filed before the Customs. With regard to exce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the account of the petitioner, such money becomes the property of the petitioner. The moment it becomes the property of the petitioner, the customs authority can attach such property only in accordance with law either by taking aid of necessary order through competent court or by exercise of power, if conferred upon it, by statue. There is no provision of any statute which enables Deputy Commissioner to seize any personal property of the petitioner including money lying in a bank account merely because an investigation is going on in respect of an export transaction for which drawback has been released in favour of the petitioner. Even if the Customs Authority approaches the Court for an order in the nature of attachment before judgment, in such a case, such attachment can be limited to the extent of money fraudulently obtained but not in excess of that amount. In this case, till date no final order has been passed holding that any amount received by the petitioner by way of drawback was outcome of fraudulent export. Both the Deputy Commissioner and the Bank acted illegally and without jurisdiction resulting in withholding of the amount available in the account of the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of Customs, Bombay reported in 1996 (81) E.L.T. 100 (Tri), the facts of the case were that the key person Shri Vinod Goyel was absconding and the goods were imported illegally were available. Accordingly, the facts of the said case are not relevant to this case. 12. The contention of the learned DR is absolutely correct that the Revenue has every right to safeguard their revenue. But it is pertinent to mention here that they have right to safeguard the revenue in a legal way. The action of the ld. Commissioner to extend the period to issue show-cause notice by another six months by seizing the Bank account is not correct without ascertaining the facts that whether the money lying in the Bank account is the sale-proceeds of the actual value of the goods or not. The High Court of Bombay held the same observation in the case of M/s. Bhavesh Exports Ltd. (supra). Nowhere in the impugned order the Commissioner has been able to take decision about the sale-proceeds, although the appellants have contended in their reply of the show-cause notice. The Commissioner has also failed to show that the seizure of Bank account is required for investigation. Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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