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TMI Blog2014 (5) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... o various persons and the sale proceeds were not sent through the banking channels. Thus, it was established that the respondent/assessee was dealing in smuggled goods. However, no smuggled goods were seized from the assessee. A show cause notice was issued to the assessee and others who were involved in the smuggling for imposition of penalties and also for a demand of duty. A sum of Rs. 92,23,740/- was claimed as duty under Section 28 of the Customs Act, 1962 (for short hereinafter referred to as the Act). Penalty was also demanded under Section 114A read with Section 112(b) of the Act. The Commissioner of Customs in the Adjudication Order held that the goods dealt with by the assessee are liable for confiscation. He imposed penalty under Section 112(b)(ii) of the Customs Act, 1962. However, he dropped the demand of duty on the assessee on the ground that the department has not produced any evidence to show that the assessee actually imported the goods. Therefore, he dropped the demand of duty as it was not sustainable in law. Aggrieved by the said order, the revenue preferred an appeal before the Tribunal. The revenue contended before the Tribunal that the duty is demandable fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per officer may; (a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, within one year; (b) in any other case, within six months, from the relevant date, serve notice on the person chargeable with the duty or interest which has not been levied or charged or which has been so short-levied or part paid or to whom the refund has erroneously been made, requiring to him to show cause why he should not pay the amount specified in the notice : Provided that where any duty has not been levied or has been short-levied or the interest has not been charged or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisions of this sub-section shall have effect as if for the words "one year" and "six months", the words "five years" were substituted." 5. A reading of the aforesaid provision makes it very clear that in the case of any import made by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch bill of entry to him shall be deemed to be the date of such commencement for the purpose of this section : Provided further that if the Board is satisfied that it is necessary in the public interest so to do, it may, by order for reasons to be recorded, waive the whole or part of any interest payable under this section." 9. This provision makes it clear that before the goods imported or permitted for clearance of the goods for home consumption, the import duty has to be paid by the importer as assessed thereon under the Act. Sub-section (2) provides for charging of interest if the import duty is not paid within the time prescribed therein. Therefore, a harmonious reading of this provision makes it clear that when the goods are imported into the country, the importer has to pay duty under the Act before the goods are cleared for home consumption. It is that payment if not made by the importer or not levied or short-levied or erroneously refunded, then a notice could be issued under Section 28 of the Act demanding such payment of duty. If the goods, which originated in the alien country gets into the country contrary to the procedure prescribed therein, it would be a smuggl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods required to be produced under section 109 is not produced or which do not correspond in any material particular with the specification contained therein; (l) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77; (m) [any goods which do not correspond in respect of value or in any other particular] with the entry made under this Act or in the case of baggage with the declaration made under section 77 [in respect thereof or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54]; (n) any dutiable or prohibited goods transited with or without transhipment or attempted to be so transited in contravention of the provisions of Chapter VIII; (o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person chargeable to duty lies. In the case of a notice demanding duty under Section 125(2) firstly the goods should have been confiscated and the duty demandable is in addition to the fine payable under Section 125(1) of the Act in respect of confiscated goods. Therefore, in the instant case, the material on record discloses that the assessee is not the person who imported the goods. He is not the owner of the goods. He was only a dealer of the smuggled goods and therefore, there is no obligation cast on him under the Act to pay duty and therefore, the notice issued under Section 28 of the Act to the assessee is unsustainable as he is not the person who is chargeable to duty under the Act. 14. Insofar as application of Section 125(2) is concerned, admittedly, no goods are seized. Once the goods are not seized, consequently, there is no confiscation and in the absence of a confiscation, payment of duty chargeable from the person who is the owner or from whose possession does not arise. Hence, the Tribunal was justified in upholding the order passed by the Adjudicating Authority who has held that no duty is leviable against the assessee as he is neither the importer nor the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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