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TMI Blog2013 (12) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption notification, wherein the information would be recorded for monitoring the clearance of duty free import material, export of resultant product, name and address of the factories and its ancillaries when resultant products are manufactured and details of materials on which condition of notification are not complied with etc. It is pertinent to note that there is a time limit prescribed for fulfillment of export obligation in Advance Licences - penalty imposed under Section 114A and demand of interest under Section 28AB are liable to be set aside. But, penalty to the extent of 50% of the duty demanded is liable to be imposed under Section 112 of the Act on Appellant. Goods were released to the appellant on an application made by it and on the appellant executing a bond. Under these circumstances if subsequently it is found that the import was not valid or that there was any other irregularity which would entitle the customs authorities to confiscate the said goods, then the mere fact that the goods were released on the bond being executed, would not take away the power of the customs authorities to levy redemption fine - Decided partly in favour of assessee. - C/238 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llan dated 3.2.1999 and 17.2.1999 were appropriated. The goods cleared under the advance licences were confiscated and as the goods were not physically available for confiscation a fine of Rs.20 lakhs in lieu of confiscation was imposed under Section 125 of the Customs Act, 1962. Hence, the appellants have filed these appeals before the Tribunal against the impugned order. 3. The learned Advocate on behalf of the appellants submits that it is a second round of litigation insofar as the Tribunal by Final Order dated 25.4.2003 earlier remanded the matter to the adjudicating authority for denovo adjudication. The appellant No. 1 got eight advance licences and out of that the export obligation in respect of five licences were fulfilled and licences cancelled and the other one they made export partly, which is related to Mumbai Customs. The balance two licences are under present dispute, where they made negligible export and failed to fulfill the export obligation due to global market recession. The submissions of the learned Advocate in brief, are, as under:- (a) Show-cause notice dated 10.3.1999 was issued demanding duty against the said two advance licences in terms of undertakin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Larger Bench in the case of Shiv Kripa Ispat Pvt. Ltd. Vs. Commissioner of Customs -2009 (235) ELT 623 (Tri. -LB). (f) The penalty imposed on Appellant Nos. 2 and 3 under Section 112(a)(ii) of the said Act is not sustainable as they are not involved in the import of goods. The penalty imposed on Appellant No. 4 is also not warranted as he is a partner of the firm and the demand of duty and the penalty were imposed on partnership firm. (g) The adjudicating authority in the earlier adjudication order imposed penalty of Rs.25,000/- each on Appellant No. 2 3 and Rs. One lakh on Appellant No. 4 under Section 112(a)(ii) of the Act. It is well settled that penalty cannot be enhanced in denovo adjudication order. In other way, the appellants cannot be further penalized in denovo adjudication, when Revenue has not filed any appeal against earlier adjudication order. (h) The goods were imported and duly assessed vide various Bills of Entry under DEEC scheme extending the benefit of Notification No. 203/1992 and 204/1992, the demand cannot be raised without revising or modifying the assessment orders of the Bills of Entry. Relied upon the decision of the Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble Karnataka High Court and the writ petition was dismissed reported as Varalakshmi Exports Vs. Union of India - 2010 (259) ELT 344 (Kar.) holding that all the partners and firm are jointly liable for paying penalty and no partner can escape the liability on any technicalities. 5. After hearing both sides and on perusal of the records, we find that the learned counsel on behalf of appellants resisted the demand of duty mainly on the ground that the demand of duty is hit by limitation under proviso to Section 28(1) of the Customs Act. Section 28 of the said Act provides Notice for payment of duties, interest etc. Sub-section (1) of Section 28 of the said Act provides when any duty has not been levied or has been short-levied, the proper officer may issue notice on the person chargeable with the duty or interest, which has not levied or charged within six months, provided that where duty has not been levied or has been short levied by reason of collusion or any willful mis-statement or suppression of facts etc. by the importer or the exporter, notice would be served within five years. 5.1 The contention of the learned Advocate of the appellant is that admittedly demand o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re had not followed the judgment of the Apex Court in the case of Mediwell Hospital Healthcare Pvt. in which the Apex Court had held, Obligations cast on the importer was a continuing obligation. Needless to say that in a continuing obligation the date of clearance of the goods cannot be the date for determining limitation 6.1 It is well settled that the observations made in a judgment/decision are to be understood in the context in which they are made. The Hon ble Supreme Court in the case of CCE, Delhi Vs. Allied Air Conditioning Corporation -2006 (202) ELT 209 (SC) observed as under:- A judgment should be understood in the light of facts of the case and no more should be read into it than what it actually says. It is neither desirable nor permissible to pick out a word or a sentence from the judgment divorced from the context of the question under consideration and treat it to be complete law decided by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. [See Mehboob Dawood Shaikh v. State of Maharashtra, 2004 (2) SCC 362] 6.2 In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as found that full duty had become payable by the importer. xxx xxx xxx xxx xxx 8. On behalf of the appellant, it has been? vehemently urged that the show cause notice has not been issued under Section 28(1) of the Customs Act. Therefore, question of notice having not been issued by a proper officer does not arise nor the question of limitation. It is submitted that the copy of the notice, as annexed, does not mention Section 28(1) of the Customs Act, in any case if it is taken to be there, as contended, that would make no difference. The submission is that sub-section (2) of Section 125 of the Customs Act provides that where any fine in lieu of confiscation of goods is imposed, the importer shall also, in addition, be liable to any duty and charges payable in respect of such goods. The Hon ble Supreme Court held as under:- Whenever an order confiscating the imported goods is passed, an? option, as provided under sub-section (1) of Section 125 of the Customs Act, is to be given to the person to pay fine in lieu of the confiscation and on such an order being passed according to sub-section (2) of Section 125, the person shall in addition be liable to any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005 (188) ELT 374 (Tri. - LB) held that they do not agree with the observation in Lady Amphthil Nurses Institution (supra) that period of limitation in such cases will commence from the date of issue of notice. Since time limit prescribed under Section 28 has been held not to be applicable to such cases and since there is no other specific time limit prescribed under the Customs law to cover such cases the notice of the demand will not be subject to any limitation of time in such cases of non-fulfillment of post-importations casting a continuing obligation. (d) The assessee filed appeal before the Hon ble Bombay High Court against the Five Member Bench order in the case of Bombay Hospital Trust (supra). The learned Senior Advocate on behalf of the assessee before the Hon ble High Court submitted that the issues involved in this appeal are covered by the judgment of the said Court in the case of Commissioner of Customs Vs. Wockhardt Hospital And Heart Institute- 2006 (200) ELT 15 (Bom.). In the case of Bombay Hospital Trust (supra), the Hon ble Bombay High Court held as under:- 10. In cases, where the goods are confiscated before clearance, the duty and charges becom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hospital (Customs Appeal No. 22 of 2004) dated 28th April, 2006, we answer the questions raised in this appeal by holding that in the facts and circumstances of the customs authorities are justified in seeking to recover duty from the assessee under Section 125 of the Customs Act even though the assessee has not opted to redeem the goods by paying fine in lieu of confiscation. 6.3 It is seen that all the decisions as discussed above are related to Notification No. 67/86-Cus. dated 1.3.1988. In Jagdish Cancer Research Centre (supra), Revenue urged that no show-cause notice was issued under Section 28(1) of the said Act and therefore question of limitation does not arise. The facts of the case are mostly similar insofar as to whether the duty free imported medical equipment can be confiscated under Section 111(o) for non-fulfillment of obligation of the said notification and allowed to be redeemed on payment of fine, duty etc. under Section 125 of the said Act. It was answered in favour of the Revenue. The Hon ble Bombay High Court in Bombay Hospital Trust (supra) against the order of Five Member Bench held that the customs can recover duty from the owner of the goods under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e context of Notification No. 203/92-Cus. rightly observed that no demand of duty can be raised after five years from the date of import under Section 28(1) of the said Act. So, the demand of duty of Rs.48,03,968/- in respect of Bills of Entry cleared during the period 12.4.1993 to 28.2.1994 vide Show Cause Notice dated 10.3.1999, which are beyond five years, are liable to be dropped. 7. The demand of duty of Rs.34,96,777/-, we do not find any force in the submission of the learned counsel. The DRI officers during their visit on 12.1.1999 detected that the appellant manufactured silk sarees by utilizing the duty-free import material and sold in local markets through their sister units Appellant Nos. 2 and 3. This fact was admitted by Appellant No.4 in his statement. The submission of the learned counsel that the appellant acted in a bonafide manner cannot be accepted because the appellant had not disclosed the utilization and clearances of duty-free material in local market, which is a clear case of suppression of facts and proviso to Section 28(1) of the said Act would be invoked. The case laws relied upon by the learned Advocate is not applicable in the facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, neither quantum of penalty can be enhanced nor any new order of confiscation and imposition of fine can be imposed by the Commissioner. Relied on in the case Goenka Impex Pvt. Ltd. Vs. Commissioner of Customs, Lucknow -2009 (233) ELT 102 (Tri. -Del.), MRF Ltd. Vs. CCE -2007 (210) ELT 96 (Tri. -Mumbai), HC Infosystems Ltd. Vs. CCE, Meerut -2005 (192) ELT 740. In the case of HCL Infosystems (supra), it has been held that:- We agree that in remand proceedings on appeal filed by the appellants, neither the amount of penalty imposed initially can be enhanced nor any new Order regarding confiscation of land, building, machinery, etc. can be passed by the Commissioner. This issue stands settled by the Tribunal in the case of Atul Glass Industries Ltd. (supra) wherein it has been held that amount of duty or penalty cannot be enhanced during the remand proceedings. Accordingly, we set aside the confiscation of land, building, machinery, etc. ordered by the Commissioner in the impugned order. 9.2 The learned counsel also submitted that admittedly the goods are not available for confiscation and redemption fine cannot be imposed under Section 125 of the Act. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fine. 11. We, therefore, sustain the duty demand affirmed in the order impugned. Penalty imposed on the firm under Section 114A is set aside, but such penalty is sustained under Section 112 of the Customs Act, the quantum is reduced to 50%. Penalty imposed on the partners are set aside. The redemption fine as well as the demand of interest under Section 28AB are set aside. The appeals stand partly allowed as above. 10. Now, on the imposition of penalty of Rs. 5 lakhs each on Appellant Nos. 2 and 3 and Rs. 10 lakhs on Appellant No. 4, we agree with the submission of the learned AR for the Revenue that the Hon ble Karnataka High Court in the appellants own case against the adjudication order under Foreign Trade (Development and Regulation) Act, 1992 held that penalty is imposable on the firm and partners. It is seen that in earlier adjudication order, the adjudicating authority imposed penalty of Rs.1,00,000/- on Appellant No. 4 and Rs.25,000/- each on Appellant Nos. 2 and 3 under Section 112(a)(2) of the said Act and no appeal was filed by the Revenue for enhancement of the penalty and therefore, in denovo adjudication order, enhancement of penalty is not sustainable. So, the am ..... X X X X Extracts X X X X X X X X Extracts X X X X
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