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TMI Blog2015 (11) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... unacceptable. Mere quoting of another Section in the show cause notice when the appropriate Section has also been quoted does not make the confirmation of interest and penalty illegal. - Decided against assessee. - Application No. C/MA(ORS)95445/2013-Mum & Application No. C/S/95444/2013-Mum. In Appeal No. C/87027/2013-Mum. - - - Dated:- 27-8-2015 - Mr. P.S.Pruthi, Member (Technical) And Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri K. R. Bulchandani, Advocate For the Respondent : Shri M.K. Sarangi, Joint Commissioner (A.R) ORDER Per : P.S. Pruthi This case arises out of Order-in-Appeal dt. 18.3.2013 under which the Commissioner(Appeals) upheld the order of the adjudicating authority confirming demand of duty of ₹ 3,61,21,722/- under Section 72(1) of the Customs Act 1962 on goods remaining in the warehouse beyond the expiry of Bond period. Penalty of ₹ 1 lakh was also imposed under Section 117 and the request for relinquishment of title to the goods under Section 68 was rejected. Miscellaneous application is also filed praying for restraining Customs from initiating any recovery proceedings pending the hearing and final dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly a show cause notice for recovery of duty was issued by the Assistant Commissioner on 1.10.2010 demanding duty under Section 72, interest under Section 47 and penalty under Section 117 of the Customs Act. Under Order-in-Original dt. 28.6.2011, the duty of ₹ 3.61 Crores was confirmed. In appeal the Commissioner (Appeals) directed them to make pre-deposit of 60% of the entire demand. The appellant challenged this order before Mumbai High Court which disposed the case vide order dt. 8.5.2012 asking the Commissioner to hear the case. Finally the Commissioner passed impugned Order dt 18-03-2013 against which the Appellant are in appeal before us. 3. Heard both sides. 4. The Ld. Advocate appearing for the appellant raised some preliminary objections. He stated that Section 122 of the Customs Act limits the powers of Assistant Commissioner/Deputy Commissioner to adjudicate only where the value of goods does not exceed ₹ 2,00,000/- whereas in this case the value is in Crores. Secondly, copies of Demand notices under Section 72(1) and 72(2) of the Customs Act, as mentioned in the relied upon documents in Annexure to the show cause notice dt. 1.10.2010 were never supplie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Kesoram Rayon Vs. Commissioner of Customs 1996 (86) ELT 464-SC., he stated that the Apex Court considered deemed removal only in the context of determination of rate of duties under Section 15(1) (b) of the Act and did not hold that deemed improper removal is an offence. Deeming provisions have to be strictly construed. He relied on K.S. Dharma Data Vs. Central Government 1997 (4) SCC 204. Arguing strongly that no offence has been committed in terms of second proviso to Section 68 he stated that Sections 132 to 135A of the Act (Chapter XVI) categorized the various offences under the Act. In these provisions deemed removal of bonded goods is not categorized as an offence. Deemed removal cannot be construed as an offence because the custody of goods remains with the department. Therefore second proviso to Section 68 will not apply their case so as to prevent them from relinquishing the title to the goods. 4.3 Ld counsel distinguished the case of Commissioner of Central Excise Mysore-II Vs. Decorative Laminates (I) Pvt. Ltd. 2010 ((257) E.L.T. 61 (Kar.) relied upon by the Ld A.R. He contended that this case was dealing with Remission of duty under Section 23 and not with the reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bond period. According to him, the provisions of Section 122 regarding value limits apply only to confiscation. And for penalty, Section 117 is rightly invoked. 5.1 On the merits of the case, he relied on Videocon International Ltd. Vs. Union of India 2003 (155) ELT 25 (Bom.). As regards reliance placed by the appellant on the case of i2 Technology Software Pvt. Ltd. (supra) it was stated that a similar argument ( as made in that case) was made by the counsel in the case of Videocon International Ltd. (supra) which was not accepted by the Hon ble Mumbai High Court. According to him, the views of jurisdictional High Court will prevail. The Kartanaka High Court in i2 Technology Software Pvt. Ltd. (supra) distinguished the Apex Court decision in Kesoram Rayon case by observing that in the said case the demand notice was issued by the department after the request of the company for extension of bond. In the present case, the relinquishment has been sought after the issue of demand notice. The Ld. AR relied on the case of U.K. Paint Industries Vs. CC 2014 (306) ELT 284 (Del.) which held that, by deeming fiction, the Customs duty becomes immediately payable under Section 72 even whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the knowledge of the Honble High Court including their request for permission to re-export the goods under Shipping Bill No. 12373 dt. 25.7.2002. The Honble High Court found the plea untenable in their Order dt. 24.9.2002. Therefore to raise such a plea after 12 years of the High Court decision is a feeble attempt to rake up a matter on flimsy grounds and an attempt to somehow bypass the High Court Order. It is an unnecessary attempt to delay the judicial process. We firmly believe that this objection is to be rejected. 6.1 Another objection raised is that the show cause notice dt 1.10.2010 which has led to the present Appeal was issued under Section 124 whereas the demands were confirmed under Section 72(1) of the Act. We find that Section 124 is merely mentioned in the caption of the show cause notice. The body of the show cause notice clearly refers to duty payable under Section 72(1) of the Act. Even in the final para of the SCN where the demand is actually raised, duty is demanded only under Section 72(1). Therefore we find the objection has no force. 6.2 Another objection raised is that the show cause notice was made answerable to the Commissioner but was adjudicated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the owner of any such warehoused goods shall not be allowed to relinquish his title to such goods regarding which an offence appears to have been committed under this Act or any other law for the time being in force. SECTION 69. Clearance of warehoused goods for exportation. (1) Any warehoused goods may be exported to a place outside India without payment of import duty if (a) a shipping bill or a bill of export has been presented in respect of such goods in the prescribed form; (b) the export duty, penalties, rent, interest and other charges payable in respect of such goods have been paid; and (c) an order for clearance of such goods for exportation has been made by the proper officer. (2) Notwithstanding anything contained in sub-section (1), if the Central Government is of opinion that warehoused goods of any specified description are likely to be smuggled back into India, it may, by notification in the Official Gazette, direct that such goods shall not be exported to any place outside India without payment of duty or may be allowed to be so exported subject to such restrictions and conditions as may be specified in the notification. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act whereas in the present case letter was issued followed by reminders demanding duty under Section 72 of the Act. That the warehouse goods were not cleared from the warehouse within the stipulated time period laid down in Section 61 is an undisputed fact. It is also seen that the Courts have held that the goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse under the provisions of Section 72. Thus in the present case the goods have to be treated as improperly removed. In such circumstances the proper officer may demand the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable. There is no doubt about this legal provision in the Act. 7.1 But the contention of the appellant is that even in respect of such goods which have outlived their warehousing period in terms of the Bond executed, the appellant are still entitled to relinquish their title to the goods upon payment of rent, interest and other charges. And that on payment of such charges they are not liable to pay duty thereon. According to the appellant, the first pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the goods are warehoused or before the expiry of the extended date for clearance and not any period after the lapse of the afore said periods. The said expression cannot extend to a period after the lapse of the extended period merely because the licence holder has not cleared the goods within the stipulated time.When the goods are not cleared within the period or extended period as given by the authorities, their continuance in the warehouse will not attract Section 23 of the Act. In this context the decision of the Bombay High Court in the case of Videocon International Ltd. is applicable and therefore the authorities concerned were justified in making demand for payment of customs duty. Whereas the decision of this Court in i2 Technologies Software Private Ltd. are not applicable considering the facts of the present case. We find the provisions of Section 23 and Section 69 are similar. Both provide that the title to the goods may be relinquished before an order for clearance of goods for home consumption has been made. In these circumstances, the decision of the High Court leads to the conclusion that the provisions of Section 68 regarding relinquishment will not be attracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n preceding paragraphs. An argument taken by the Ld. Counsel is that no offence is committed in terms of the second proviso to Section 68 which provides that the owner of warehouse goods shall not be allowed to relinquish the title to such goods regarding which an offence has been committed. We do not think it necessary to discuss this aspect when we have already decided the issue in terms of the first proviso, basing our decision on various judgements of the High Courts and the Supreme Court. 9. The Ld. Counsel argued that interest has been demanded under Section 47 of the Act and not under Section 72(1). We find from the body of the show cause notice at para 13 that interest and penalty have been demanded under Section 72(1). In these circumstances, therefore the plea that interest and penalty have been wrongly demanded under Section 47 and 117 is unacceptable. Mere quoting of another Section in the show cause notice when the appropriate Section has also been quoted does not make the confirmation of interest and penalty illegal. 10. In view of the above discussion, the demand of duty in respect of time expired warehoused goods is confirmed. The penalty is also upheld. And t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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