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TMI Blog2011 (3) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract under Project Import ( Registration of Contracts (Regulations) 1965). on 26.12.1986, M/s. Falcon Beverages India (P) Ltd., were duly informed by the Customs Department that the application for registration has been registered under Project Contract Import Regulations. They were asked to keep the bond and bank guarantee alive till the finalisation of the project contract. In January 1987, the Customs Department calls upon M/s Falcon Beverages India (P) Ltd., to confirm whether the imports under project contract is completed and were asked to furnish documents for finalisation of the contract. On 30.11.1987, the importer viz., M/s Falcon Beverages India (P) Ltd., informed the Customs Department that all the machineries imported were erected and they will start commercial production and by stating so, they requested the Customs Department to release the bond so as to enable them to withdraw the Bank Guarantee submitted by them. Thereafter on 21.1.1988, M/s. Falcon Beverages India (P) Ltd., informs the Customs Department that they have started commercial production as on 7.1.1988. Again on 4.3.1992, i.e. four years after the information as above was sent by M/s. Falcon Beverages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice that certificate under Section 142(1)(c)(ii) of the Customs Act 1962 (Act 52/1962) was issued in F.No. S37/380/86 Gr.6 dated 26.10.2004 by the Dept. of Customs (Gr.6) pursuant to order-in-original No.2425/2004, Job No.2624, dated 23.6.2044 passed by the Deputy Commissioner (Gr.6) confirming customs duty demand of Rs.43,07,526/- under Section 28(2) of Customs Act 1962 on M/s. Falcon Beverages India (P) Ltd., No.19 Ranganathan Road, Nungambakkam, Chennai.34. It has been brought to the notice of the undersigned that the assets and the liabilities of the said company were sold to M/s. Aradhana Bottling Co. No. 3 Madha Church Road, Mandavellipakkam, Madras.28 vide agreement dated 28.3.1994, which happens to be a subsidiary of M/s. Pepsico India Bottling Co., Madurai. It is also understood that the assets and the liabilities of the said company were sold to M/s. Aradhana Bottling Co., No. 3 Madha Church Road, Mandavellipakkam, Madras28 vide agreement dated 28.3.1994, which happens to be a subsidiary of M/s. Pepsico India Holdings Pvt. Ltd., Madurai. It is also understood that the assets of the said M/s. Aradhana Bottling Co., including the Double Code Plant of Carbonated soft drin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, in accordance with the authorisation issued by the Deputy Commissioner of Customs Gr.VI, by certificate dated 26.10.2004 invoking power under Section 142(1)(c)(ii), the said sum was sought to be recovered from the petitioner. Challenging the same, the present writ petition has been filed. 7. The writ petition was admitted, the respondents have been noticed, a counter affidavit has been filed and the respondents have been called upon to produce relevant records and the correspondence based on which, the facts as narrated above has been set out. 8. The contention of the counsel for the petitioner is as follows:- (i) On the date of agreement of sale entered into between M/s. Falcon Beverages India (P) Ltd., and M/s. Aradhana Bottling Company i.e. on 1.11.1994, there was no show cause notice issued by the Customs department demanding duty. There is no order demanding customs duty as due and payable by the importer. Therefore, on the date of transfer of the Bottle Inspector Machine, the transferor or the goods did not suffer customs duty liability and it could not have been passed on to M/s. Aradhana Bottling company or the petitioner. (ii) Even as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Beverages India (P) Ltd., to submit documents for finalisation of the project contract. Series of Correspondence viz., letters dated 12.3.1992, 10.2.1993, 2.9.1993, 25.7.1994, 23.12.1994, 22.5.1996, 22.7.1996 and the show cause notice dated 1.6.2004 were sought to be served on the importer viz., M/s. Falcon Beverages India (P) Ltd.,, but were returned undelivered. Therefore, the Order-in-Original dated 26.3.2004 came to be passed confirming the demand of Rs.43,07,526/- and consequently, the Department proceeded to recover the amount in accordance with the provisions of Section 142 of the Act against the petitioner, who steps into the shoes of the importer. 11. According to the learned counsel for the respondents, obligation to pay duty is cast upon the importer as well as the subsequent purchaser of the equipment. 12. According to the respondents, the proviso to Section 142 of the Customs Act provides for recovery of duty from the subsequent purchaser, which is relevant for deciding this case, reads as follows:- 13. SECTION 142 of the CUSTOMS ACT 1962 reads as follows:- " Recovery of sums due to Government: (1) (Where any sum payable by any person) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vessels, utensils, implements and articles in the custody or possession of the person so succeeding may also be attached and sold by the proper officer, after obtaining written approval from the Commissioner of Customs, for the purposes of recovering the amount so payable by such predecessor at the time of such transfer or otherwise disposal or change.) (2) Where the terms of any bond or other instrument executed under this Act or any rules or regulations made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provisions of that sub section." The respondents therefore, justified the impugned proceedings. 14. The learned counsel for the respondents relied upon the decision of the Karnataka High Court in KSIIDC Ltd., Vs. - Secretary, Ministry of Commerce reported in (2005 (187) E.L.T. 12 (Kar.) wherein the provisions of Section 142 of the Customs Act came to be considered and it held that the Department is entitled to recover all the dues of the importer from the subsequent purchaser in terms of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The proviso to Section 142 after the amendment does not provide for recovery retrospectively. It will be applicable in respect of the transaction on and after 10.9.2004 when the amendment was made to Section 142 of the Customs Act. Hence, the first issue is answered against the respondents. 16(ii) The impugned proceedings on the face of it is bad as the certificate dated 26.10.2004 issued by the Deputy Commissioner of Customs under Section 142 (1)(c) (ii) is against the importer viz., M/s. Falcon Beverages India (P) Ltd., and not against the present petitioner. Proviso to Section 142(1)(c)(ii) of the Act provides for obtaining written approval from the Commissioner of Customs for the purpose of recovering the amount so payable by the said purchaser at the time of transfer or otherwise disposal by change. In this case, there is no certificate issued by the Commissioner of Customs, the competent authority under the Act for recovery of the amount as against the petitioner. Therefore, the impugned proceedings contrary to the certificate issued by the Deputy Commissioner of Customs is bad and without authority of law. In the absence of specific order by the Commissioner of Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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