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TMI Blog2013 (6) TMI 348X X X X Extracts X X X X X X X X Extracts X X X X ..... g the respondents from proceeding with the adjudication of the said Show Cause Notice. In the instant case, it is admitted that the Government of India has written to the Kingdom of Thailand about the issuance of Certificate to the petitioner for availing exemption and the respondents are awaiting reply from the Kingdom of Thailand. Notwithstanding the outcome of the decision of the sovereign authority, namely, the Kingdom of Thailand, the respondents have got power to initiate proceedings against the petitioner. A reading of Section 124 of the Customs Act would make it clear that the respondents are empowered to issue show cause notice and proceed against the person alleged to have committed fraud, stating the ground on which they have initiated the proceedings. The respondents have substantiated that there was wrongful availment of exemption by the petitioner contrary to the law of our country and therefore, they have invoked Section 124 to issue the impugned show cause notice. When such things are substantiated, as there is no prohibition in the said provision not to proceed against the importer, who has availed wrongful exemption of duty, this Court cannot restrain the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r TIN No.33140381370 and under CST No.921118. The petitioner is duly filing VAT returns and paying the Tamil Nadu Value Added Tax at the appropriate rates on all their sales of unbranded gold jewellery in India. All purchases of gold jewellery, sales and re-sales of gold jewellery are covered by proper documents of purchase and sale and they duly reported to Governmental authorities, such as Value Added Tax and Income Tax Departments. 2.2. The Governments of India and Thailand have entered into a Treaty called "Indo-Thailand Free Trade Agreement" under which certain specified goods can be imported from Thailand to India by Indian importers without having to pay the basic customs duty and countervailing duty. The 1st respondent has issued notifications under the Customs Act, 1962 to give effect to the above said Agreement by issuing Customs Notification No.85/2004 dated 31.08.2004 as amended from time to time read with Customs Non-Tariff Notification No.101-CUS (NT) dated 31.03.2004. The imports under the above said Agreement are liable only for levy of Special Additional Customs Duty of 1%. One of the products specified under the above said Free Trade Agreement is unbranded gold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso duly paid; (g) The import transactions are absolutely without any blemish or breach of the law concerned. 2.4. The petitioner-Company has filed the required Bill of Entry and the Certificate of Origin claiming duty concessions under the India-Thailand Free Trade Agreement and the imported goods have been duly assessed and permitted for clearance by the Customs Appraising Authority under Section 47 of The Customs Act, 1962 after satisfying himself that the imported goods are not prohibited goods and that the importer has paid appropriate import duty assessed. The order passed under Section 47 by the Customs Authority is an evidence of assessment of Customs duty and relevant duty exemption by the Customs Appraising Authority. 2.5. The Petitioner-Company had a stock of imported unbranded gold jewellery weighing about 12742.500 grams and valued at Rs.3,63,16,125/-, imported vide Bill of Entry No.8086795 dated 01.10.2012 for sale in the domestic market. The above goods were the remaining unsold stock of 32,672.38 gms. of gold jewellery (unbranded) imported under the above said Bill of Entry No.8086795 dated 01.10.2012, which was cleared by the jurisdictional customs authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writing under the hand of the petitioner. Despite the request of the petitioner, the 2nd respondent declined to give the copy of the statement of questions and answers taken from the petitioner. The petitioner-Company has addressed the 2nd respondent vide his representation dated 19.10.2012 inter alia to furnish the copies of statements submitted to the 2nd respondent. Another representation dated 17.11.2012 has also been submitted to the 2nd respondent. The officials of the 2nd respondent had also seized the petitioner's duly imported unbranded gold jewellery weighing 13,566.24 Gms, valued approximately at Rs.3,94,77,758/- covered under duly filed Bill of Entry and Original Certificate of Origin under Indo-Thailand Free Trade Agreement, when it was pending assessment and clearance by the Jurisdictional Customs Authorities, vide Mahazar dated 18.10.2012. A copy of the Mahazar was not given to the petitioner-Company at the time of seizure. 2.8. The 2nd respondent has proceeded to issue a Show Cause Notice dated 14.11.2012 on file F.No.VIII/48/39/2012-DRI stating that the Show Cause Notice is issued under Section 124 of the Customs Act, 1962, proposing to deny the Customs duty con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porting gold jewellery from Thailand by wrongly availing the benefit of exemption under the Custom's Notification No.85/2004-Cus. dated 31.08.2004 read with Custom's Notification No.101/204-Cus.(N.T.) dated 31.08.2004 and thereby had been evading the payment of appropriate duty, the 2nd respondent initiated investigation into the imports made by the petitioner. Pursuant to that, the Office cum business premises of the petitioner was searched under Mahazar proceedings on 15.10.2012 and gold jewellery imported, totally weighing 12742.5 gms and valued at Rs.3,63,16,125/- by wrongly availing exemption benefit under the above Notifications were seized under the provisions of the Customs Act, 1962 along with incriminating documents. Investigation has revealed that the petitioner has entered into a conspiratorial arrangement with suppliers in Thailand and has imported gold jewellery manufactured in Singapore and Dubai into India through Thailand by misusing the exemption provided under Notification No.85/2004 dated 31.08.2004 with respect to FTA between India and Thailand. The petitioner and one of the major suppliers, Shri. Praful Kumar Jain has admitted to the said illegal act in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntries, obviously did not bring the same to the knowledge of the Customs Authorities in India and has deliberately and fraudulently been suppressed by the respondent from Customs in India at the time of import and bills of entry were filed with a claim under the said notifications knowing fully well that they are not eligible for the same. While doing so, they have willfully misstated the facts and fraudulently subscribed to truthfulness of the declaration made, as is required under Section 46 of the Customs Act. 3.5. Prima facie, a fraud has been committed by the respondent by orchestrating a premeditated Scheme in collusion with the suppliers in Thailand to misuse the benefit extended under the FTA between India and Thailand, a letter has been addressed to the Designated Authorities in Kingdom of Thailand, stating the facts of the investigation done and with a request to revoke the Certificates of Origin issued by them for all the consignments of gold jewellery imported by the respondent. 3.6. In terms of Rule 15(c) of Annexure B of the Interim Origin Rules, as mentioned in Notification No.101/2004 dated 31.08.2004, the gold jewellery imported under the FTA may be provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act and that amounts to an adjudication order. Therefore, it was not open to the Collector of Customs to recall or revise the previous order permitting clearance of imported goods and hence the seizure and confiscation of the goods or the imposition of the personal penalty is without any authority, To substantiate his contention, he cited the following authorities : (i) Jain Shudh Vanaspati Ltd. v. Union of India, 1982 ELT 43 (Del.) (ii) Industrial Cables v. Union of India, 1986 (25) ELT 33 (P H) (iii) Ajay Exports v. Collector, 1986 (26) ELT 873 (Tribunal) (iv) Parkar Leather Export Co. v. Collector, 1987 (29) ELT 53 (v) Union of India v. Popular Dyechem, 1987 (28) ELT 63 (Bom) In reply, Smt. Nisha Chaturvedi, learned SDR submitted that in the case of Jain Shudh Vanaspati Ltd. v. Union of India, supra, it was also held that the finality attached to an order passed under Section 47 of the Customs Act, can be disturbed where the Department successfully shows that there was fraud or deliberate suppression." (ii) 1995 (76) ELT 520 (Kar) (Devilog Systems India vs Collector Of Customs, Bangalore) "7. Be that as it may, even in the light of the aforesaid notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention canvassed by learned counsel for the revenue that any officer at Madras could issue such notices to any importer in any part of India and the jurisdictional Collector would be bound by such notice and he has to act on it, cannot be appreciated. Therefore, the notification issued on 14th May, 1963 will have to be held to mean that authorised officers working under the jurisdictional collectorate within whose jurisdiction the goods are imported can issue such notice and it is not necessary that only the Assistant Collector of Customs should issue such notice. 8. It was then contended by learned counsel for revenue that in any case the Madras Collectorate is entrusted with the work of auditing the imports at Bangalore and once in the audit it came out that there was a case of short-levy, non-levy or erroneous refund of duty collected, then the audit staff at Madras becomes competent to work as 'proper officers' for issuing the notice under Section 28(1) of the Act. It must be kept in view that for the purposes of auditing any other office of a nearby collectorate Madras staff may have been given the power of audit but so far as the adjudication machinery is concerned it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 47 the 'proper officer' would be the Assistant Collector of Customs, Bangalore. But according to him, for Section 28(1) it can be different. In our view on the facts of the present case, especially in the light of the absence of notification dated 1-2-1963, we cannot hold that the audit wing at Madras is competent to issue notice under Section 28(1) of the Act. Merely because the Madras audit office is given the power to audit the accounts of Bangalore office, it cannot be said that they are also competent to issue notice under Section 28(1) of the Act, more so when there is no material on record to show that they are competent to do so. Consequently, so far as the first point is concerned, on the facts of the present case it has to be held in favour of Assessee and against the revenue that the notices dated 10th February, 1994 and 28th May, 1994 were not issued by the 'proper officer' attached to the jurisdictional Collectorate at Bangalore where the goods were imported and are, therefore, invalid. 14. We make it clear that whatever we have observed while considering Point No. 2 is only for the purpose of this reference and would not come in the way of adjudicating authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayutham Pitchaiya, learned Central Government Standing Counsel appearing for the 2nd respondent would contend that the act of the petitioner in clearing the consignment under Section 47 of the Act by fraudulent means, knowing fully well that the said consignment does not correspond to the material particulars stated in the Certificate of Origin, does not debar the issuance of Show Cause Notice for confiscation of goods under Section 124 of the Act. Therefore, an order under Section 47 obtained by means of employment of fraudulent methods does not have to be set aside by the exercise of revisional powers as contemplated under Section 129D. 6. Heard the learned counsel on either side, given careful consideration to the submissions made by them and perused the materials available on record. 7. A perusal of the facts would reveal that the petitioner has imported gold jewellery classified under the customs tariff heading 711319 from Thailand duly supported by the original Certificate of Origin issued by the designated authority in Thailand. It is given to understand that the Governments of India and Thailand have entered into a Treaty called "Indo-Thailand Free Trade Agreement" unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peatedly representing for the same in the course of his rendering evidence in response to the Summons issued to him. 9. It is the case of the respondents that neither the Free-Trade Agreement nor the notifications dated 31.08.2004 have the provisions to restrain the respondents from issuing any show cause notice. They would contend that if the respondents have to wait till the entire matter is resolved and no duties can be demanded and no infringing goods should be held liable for confiscation, pending such resolution between two Sovereign Nations, then the law of limitation will come into force and the duty evaded by persons similar to that of the petitioner can never be demanded resulting in permanent loss to public exchequer, thereby vitiating the due process of law. 10. It is settled law that the goods cleared under Section 47 of the Customs Act, 1962 cannot be confiscated except in contemplation of an order or in pursuance of an order passed in revision under Section 129D of the Act. Such exercise of the revisional powers or correctional jurisdiction by a superior authority like the Collector of Customs can only be by calling for the records, examining the same on grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrongful availment of exemption by the petitioner contrary to the law of our country and therefore, they have invoked Section 124 to issue the impugned show cause notice. 14. When such things are substantiated, as there is no prohibition in the said provision not to proceed against the importer, who has availed wrongful exemption of duty, this Court cannot restrain the respondents from proceedings further, unless there is anything contrary to law. Therefore, it is for the petitioner to go before the respondents, explain the case and request them to stall the proceedings, till a decision is taken by the government authorities of the Kingdom of Thailand. 15. Law has prescribed certain powers on the authorities empowering them to initiate action against the concerned in cases of violations and such a power has been exercised by the respondents herein in the manner as prescribed. Therefore, unless the respondents have acted contrarily, no Writ of Prohibition could be issued against them. 16. Section 124(a) of the Customs Act contemplates that no order confiscating any goods or imposing any penalty on any person shall be made under the Chapter unless the owner of the goods or suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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