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TMI Blog2014 (6) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... ving the country next day. This excuse or reason for not recording the removal of diamonds in petitioner's record was found on facts by the Tribunal to be an after thought as it was not so mentioned by its manager when the diamonds were seized on 31 May 1990 at the gate of SEEPZ. In this case, the market value of the goods is ₹ 1.06 Crores. The benefit of which the petitioner would obtain by the illegal conduct of its Manager would have resulted in non-payment of excise duty which is equivalent to customs duty i.e. 60% ad-valorem. The petitioner being a limited company cannot act but through the human agency of its Directors, Manager and Workers. Therefore, the submissions of the petitioner that it cannot held liable for the acts of its Manager/employees is unacceptable. The confiscation of the diamonds and the redemption fine of ₹ 20 lacs on the confiscated diamond was reached taking into account the overall facts and appreciation of evidence on record. This finding is not shown to be arbitrary and/or perverse - no question of law arises so as to direct the Tribunal to send any case for our consideration - Decided against assessee. - CUSTOMS REFERENCE NO.1 OF 1997 - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the mind of over enthusiastic employee, indirectly penalize the employer who is the owner of the goods by imposing a very heavy redemption fine, particularly when there is no appeal being adjudicated by the Tribunal in respect of such employee? (v) In determining the quantum of redemption fine is the Tribunal required to consider its own finding with regard to the bonafide conduct of the owner of the goods? (vi) Can the Tribunal, when it wants to penalize an employee, impose a heavy redemption fine on the employer because there is no appeal pending before it in respect of the said employee? 3. However, at the hearing the petitioner proposed several fresh questions of law. However, the same can be crystallized in the following one question: Whether in the facts and circumstances of the case, the Tribunal was justified in imposing the redemption fine of Rs.20,000,00/- on the confiscation, even though no penalty was imposed upon the petitioner and that in the over all facts and circumstance of the case, no redemption fine was justified? (3A) Briefly, the facts leading to this petition are as under: (a) The Petitioner is a 100% Export Oriented Unit (EOU), carryin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the diamonds from SEEPZ area and in fact no actual removal. However, even though the above order dated 16 December 1991 of the Collector of Central Excise dropped the proceedings against the petitioner, a penalty of Rs.20,000/- was imposed under Section 112 of the Act upon its Manager; (g) Being aggrieved by the order of the Collector of Central Excise dated 16th December 1991, the Revenue filed an appeal before the Tribunal. By an order dated 4 December 1995, the Tribunal partly allowed the appeal of the Revenue holding that the seized diamonds are liable for confiscation under Section 111(j) of the Act. However, the confiscated diamonds having a market value of Rs.1.06 crores was allowed redemption on payment of redemption fine of Rs.20 lacs. Save and except the above modification, the order dated 16 December 1991 of the Collector of Central Excise was undisturbed. (h) Consequent to the above order of the Tribunal, the petitioner filed application under the erstwhile Section 130(1) of the Act, seeking the Tribunal to refer the following questions of law to the High Court: (i) Whether cut and polished diamonds manufactured in a SEPZ area can be said to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of law be answered by the Court at this stage itself rather than direct the Tribunal to refer the question along with statement of case. The jurisdiction of this Court under Section 130D of the Act is an advisory jurisdiction. The Kerala High Court in CIT v. Wondoor Jupiter Chits (P.) Ltd. [1993] 213 ITR 73has while dealing with similar provisions under the Income Tax Act, 1961 held that it is not open to the High Court to dispose of the matter finally by answering the question proposed by the petitioner before it without having called upon the Tribunal to state the questions of law. However, as against the above, Delhi High Court in CIT v. Maharshived Vigyan Vishwa Vidyapeetham [1998] 232 ITR 170 held that when facts as contained in the order of the Tribunal passed on merits are not in dispute, the High Court can answer the question of law framed by it without calling for a statement of case from the Tribunal. The aforesaid view of the Delhi High Court has been followed by the Punjab Haryana High Court in CIT v. Munk Engineers (P.) Ltd. [2004] 271 ITR 361. 6. Therefore, taking into account the above facts we find that the Delhi and Punjab High Courts have in identical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s allowed redemption on payment of fine of Rs.20/- lacs. 8. Before us the fact that the seized cut and polished diamonds are liable for confiscation under Section 111(j) of the Act is not disputed by the petitioner. The only issue canvassed before us is the question of redemption fine to be imposed upon the petitioner. 9. Mr. Daruwalla, learned Counsel appearing for the petitioner in support of the Petition that no redemption fine is imposable for redeeming the confiscated cut and polished diamonds submits as under: (a) No penalty has been imposed by the Tribunal under Section 112 of the Act. Therefore, the Tribunal has concluded that the conduct of the Petitioner is honest and bonafide. Therefore, the petitioner cannot be held liable for the breach committed by its Manager; (b) The Tribunal in its order held that the redemption fine is being imposed to put the fear of law in the mind of over enthusiastic employee of the petitioner who committed a mistake. In the circumstance, it is not fair to punish the petitioner by imposing redemption fine for redeeming the confiscated diamonds for acts of its Manager; (c) No redemption fine is imposable upon the petitioner as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by surreptitiously removing the cut and polished diamonds without payment of duty; (f) The quantum of redemption fine on the confiscated cut and polished diamonds is very reasonable, taking into account that the market value of seized diamonds is Rs.1.06 Crores and not Rs.35.05 lacs as urged by the petitioner. 11. We have considered the rival submissions. The Petitioner places heavy reliance upon the decision of the Supreme Court in Jain Exports Pvt. Ltd. (supra) and submit that for determining and imposing redemption fine, the conduct of a party is a relevant factor. The aforesaid decision places reliance upon the earlier decision of the Supreme Court in the matter of D. Navinchandra v. Union of India 1987 (29) ELT 492 and B. Vijaykumar v. Union of India AIR 1987 SC 1794 (Sic). The aforesaid decision in Jain Exports (P.) Ltd. (supra) while setting aside the order of the Tribunal, remanded the matter to the Tribunal to determine the quantum of redemption fine. On remand, the Tribunal came to the conclusion that the conduct of Jain Exports (P.) Ltd. (supra) was not bona fide. This order was appealed to before the Supreme Court by Jain Exports. The Apex Court considered the is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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