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TMI Blog2013 (9) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... el appearing on behalf of the applicant submitted that the lower appellate authority had rejected their appeal filed against the Order-in-Original passed by the Addl. Commissioner of Customs. Since the goods have been absolutely confiscated and no clearance of goods were given to them they were not required to pay any duty at all and therefore the duty paid by them is sufficient to be treated as pre-deposit. - Held that:- the applicant had filed application before the Asstt. Commissioner of Customs claiming refund of customs duty paid by them against the impugned Bill of Entry. Their refund claim was rejected by the Asstt. Commissioner of Customs. The order passed by the Asstt. Commissioner rejecting the refund claim is not part of present appeal. Therefore, at this stage, the contention of the applicant that the amount which was rejected by the Asstt. Commissioner can be treated as a pre-deposit in the present appeal against imposition of penalty is not acceptable. Waiver of pre deposit – Assesse could not make prima facie case in his favor – Rs. 50,0000 was ordered to be pre deposited - stay granted partly. - C/339/2011 - M/577/2012-WZB/C-I(CSTB) - Dated:- 23-8-2012 - Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Drug Controller decided to carry out inspection of the subject consignment. Accordingly, on 22-4-2009 the inspection of the impugned goods was carried out by the officers of the Assistant Drug Controller s office and the Customs along with the representative of the registered agent of the original manufacturer. After examination and comparing of the labels and the container, etc. it was declared that the subject drug was spurious and not manufactured by the original manufacturer. Statement of Shri Lalit N. Shah of M/s. Vardhman Exports was recorded under Section 108 of the Customs Act, wherein it was revealed that the importer was not at all in contact with the overseas supplier of the goods and they were in contact only with the indenting agents, M/s. Nidhi Pharmachem. He further admitted that they had only indicated in the purchase order that the goods should be manufactured by the China Company mentioned above. Since the discrepancy was not known, they requested the foreign supplier to take back the goods and the sole responsibility for the violation of the law is on the indenting agents. On completion of investigation, a show-cause notice dated 22-9-2009 was issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned goods manufactured by M/s. Tianjin Tianyao Pharmaceutical Co. Ltd. If the foreign supplier has made a mistake, they are not responsible for the same. In any case they have abandoned the goods and in view of the above they are not liable to pay any duty or any penalty. 3.2 The ld. Advocate relies on the decision of the Tribunal in the case of CCE, Nagpur v. Ankit Pulps Boards Pvt. Ltd., reported in 2007 (209) E.L.T. 135 (Tri - Mumbai) and the judgment of High Court of Calcutta in the case of CCE v. Calcutta Chemical Co. Ltd., reported in 1992 (62) E.L.T. 511 (Cal.) and Dulichand Shreelal v. CCE, reported in 1987 (32) E.L.T. 388 (Cal.) in support of his contention. 4. The ld. AR appearing for Revenue on the other hand reiterates the findings of the lower appellate and adjudicating authority and prays that the appellants are liable to pay duty as well as penalty. 5. We have carefully considered the rival submissions. 5.1 From the records of the case it is seen that, in the instant case, the refund claim has been rejected on the ground of time bar. There is no dispute about the fact that refund claim was filed after the expiry of six months from the date of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the provisions of sub-section (4) of Section 17. 5.4 From the facts of the case, it is seen that in the case of impugned bill of entry, the bill of entry was assessed on second appraisement basis under Section 17(4) of the Act. Therefore, it is incorrect to say that the bill of entry was not assessed. The bill of entry was assessed and the duty liability was determined and thereafter, the payment of duty was made by the importer. Subsequently on examination it was found that the item was spurious. In view of the above factual position, the payment made by the importer on 20-4-2009 is of duty assessed and nothing else. Therefore, the provisions of Section 27(1) are attracted while determining their eligibility to refund claim. It is futile to argue the payment made by them is only a pre-deposit and not payment of duty. Inasmuch as the refund claim has been rejected as time barred, all the authorities functioning under the Customs law including this Tribunal has to adhere to time limit prescribed in the Act. Therefore, the rejection of refund claim by the lower appellate authority, though without any discussion or giving a finding thereon cannot be faulted as he is also bound by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e importer which has rendered the goods liable to confiscation and accordingly, the appellant importer cannot be escape the penal consequences under Section 112(a) and he cannot abdicate his responsibility to the indenting agent. It is settled law that mens rea is not required for imposition of penalty under Section 112(a). Mens rea will be required only for the determination of quantum of penalty and not for the imposition of penalty in per se. In the instant case, the penalty imposed on the appellant is only Rs. 1.00 lakh as against the CIF value of the goods of approximately Rs. 24.00 lakh. Hence the penalty imposed is only roughly 5% of the value of the goods, which cannot be said to be harsh or excessive. 5.6 Coming to the second question, whether the appellant is liable to pay duty when the goods are absolutely confiscated, it has to be borne in mind that liability to pay duty arises when the goods are imported. The liability to confiscation arises for violation of the provision of the Customs Act as specified in Section 111 ibid. There are separate provisions under the Customs Act for the levy of duty and for imposition of penalty and one is not dependent on the other. Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this distinction and duality are remembered, the interpretative process simplifies itself. 6. Admittedly, the respondent imported pedals uncovered by any licence. Two legal consequences followed. The importation attracted duty which any importer, licit or illicit, had to pay the moment customs barrier was crossed. Secondly, the commission of the offence of importing pedals without a licence caught the offender in the coils of Section 167, entry 8, inviting the jurisdiction of the authority prescribed under Section 182 to confiscate the goods or, alternatively, to impose a fine in lieu of confiscation, under Section 183. Of course, if confiscation is resorted to, the title vests in the State, as provided in Section 184. 7. Import duty has to be paid inevitably in these cases, by the importer confiscation or fine in lieu thereof is an infliction on the offender or circle of offenders falling within Section 167, Entry 8. Sometimes, the burden in both the cases, falls on the same person. At other times, they may fail on different person. In some cases the importer as well as the confiscatee may be identified and so the duty and the penalty may be imposed validly. In other cases i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prima facie of the view that the appellant has not made out any case for complete waiver of the dues adjudged. Accordingly, we direct the appellant to make a pre-deposit of Rs. 50,000/- within four weeks towards penalty and report compliance on . On such compliance, the balance of penalty adjudged shall stand waived and recovery thereof stayed during the pendency of the appeal. 7. As I do not agree with the decision taken by the ld. Member (Technical) of pre-deposit, therefore, I am recording a separate order. 8. In the order, the Member (Technical) has recorded the facts, the same are not being repeated here. 9. In the facts and circumstances of the case, the Ld. Counsel (in support of their stay application) submitted that the duty of Rs. 5,24,536/- paid by them may be treated as sufficient in compliance to the provisions of Section 129E of the Customs Act, 1962 for waiver of penalty of Rs. 1.00 lakh imposed on them by way of impugned order. 10. In this case it is admitted fact that the goods have not been cleared for home consumption. 11. As per Section 47 of the Customs Act, 1962, assessed duty and charges have to be paid before an order permitting clearance of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Finance (P) Ltd., (supra), Garden Silk Mills Ltd., (supra), Wockhardt Hospital Heart Institute (supra), and Poona Health Services (supra). In all these cases the goods were cleared for home consumption without payment of duty claiming the exemption under notification imposing post importation condition, which is not in the case in hand and the goods are not cleared for home consumption. As no clearance has taken place for home consumption, therefore, the duty paid by the applicant is sufficient to safeguard the interest of the Revenue. 13. Accordingly, waiver of requirement of pre-deposit of penalty is granted during the pendency of the appeal. DIFFERENCE OF OPINION 14. As there is difference of opinion between both the Members, therefore, the matter be placed before the Hon ble President for reference to 3rd Member on the following points of difference : (a) Whether pre-deposit of Rs. 50,000/- towards penalty is required in the facts and circumstances of the case where the goods are absolutely confiscated before the clearance for home consumption and the applicant has paid the duty as held by the Member (Technical) OR (b) Whether duty already paid by the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter as per the assessed Bill of Entry, it is incorrect to say that this amount is to be treated as a pre-deposit made by the applicant. As regards imposition of penalty on the applicant, he submitted that since the goods imported were found to be spurious drugs as held by the Assistant Drugs Controller of India, the goods are liable for absolute confiscation and importer of the goods is liable to penalty under Section 112(a) of the Customs Act. Accordingly, the penalty was rightly imposed and confirmed by the lower authority in the impugned order. He submitted that it has been held in various decisions that duty is required to be paid by the importer in case of the confiscated goods and therefore, the pre-deposit is rightly ordered by the Hon ble Member (Technical). 20. I find that the present stay application is filed against the Order-in-Appeal No. 43 44/Mumbai-III/2011, dated 28-2-2011 arising out of Order-in-Original No. ADC/SKS/359/09/ADJ/ACC, dated 20-11-2009. In the Order-in-Original the adjudicating authority confiscated the goods absolutely and imposed a penalty of Rs. One lakh on the applicant. I also find that after this Order-in-Original was passed by the Addl. Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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