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TMI Blog2015 (12) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... goods or things. The provisions of the Code of Criminal Procedure, 1898 (5 of 1898), relating to searches shall, so far as may be, apply to searches under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word Magistrate, wherever it occurs, the words Commissioner of Customs were substituted. - It is evident from perusal of the panchanama dated 6.12.2013 that no condition precedent as required under Section 110 of the Act, is recorded at the time of detaining the goods/assets found to the effect that subject goods are liable for confiscation under the provisions of the Customs Act. Further no satisfaction have been recorded as required under sub-section 3 of the Section 110 to the effect that the documents or things detained will be useful or relevant to any proceeding for detaining seized assets under the Customs Act. Revenue had sufficient time for conducting inquiry and or issue of show-cause notice under Section 124 within a period of six months from the date of detention of the goods. It is evident on the face of record that the investigation officers have done practically very little or nothing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of the said notice dated 13.1.2014. We further direct the Revenue to keep the said amount detained in a separate Bank account/PD account bearing interest pending adjudication. - Decided partly in favour of appellant. - Appeal No. C/88658/2014 - Final Order No. A/1445/2015-WZB/CB - Dated:- 5-6-2015 - SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) AND SHRI P.S. PRUTHI, MEMBER (TECHNICAL) For the Petitioner : Shri Rizwan G. Merchant, Advocate For the Respondent : Shri M.S. Reddy, DC (AR) ORDER Per: Anil Choudhary The appellant, Shri Parminder Singh Sabharwal, has preferred this appeal against Order-in-Original No. 02/2014-15 dated 5.6.2014 passed by the Commissioner of Customs (Exp), JNCH, Dist. Raigad, wherein the learned Commissioner has been pleased to extend the time for issue of show-cause notice, to detain the assets recovered from the appellant and his family members on 6.12.2013, by a further period of six months w.e.f. 5.6.2014 in terms of the provisions of Section 110(2) of the Customs Act, 1962. 2. The brief facts of the case are that the appellant is a transporter and the Director of the company, namely, M/s Acer Logistics Pvt. Ltd. The Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty under Section 114AA of the Act be not imposed and it was further observed in the aforementioned show-cause notice that financial investigation in respect of the case, including the appellant, are in progress and separate show-cause notice covering these aspects to be issued in the course of time. There was no proposal to confiscate the items recovered and taken under detention from the premises of the appellant on 6.12.2013. The appellant was subsequently released on Bail by the Honble Bombay High Court vide order dated 14.2.2014 imposing the condition that the appellant shall attend the office of the DRI, Mumbai between 10 a.m. to 12 noon on every Monday until further direction. Accordingly, the appellant was regularly attending the office of the DRI, Mumbai and has been assisting in the investigation. The appellant preferred miscellaneous application No. 29/N/2014 to 33/N/2014 before Additional Chief Metropolitan Magistrate, 8th Court, Esplande, Mumbai for return of Passport and for return of articles taken charge under Panchanama dated 6.12.2013. After receiving notice from the Court of Magistrate, Esplanade, the officers of DRI moved Miscellaneous Application before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also appeared on the same date before the Commissioner of Customs (Export). Opposing the prayer for extension by the Revenue, the appellant had stated that the goods were detained on 6.12.2013 without any recording of reasonable belief under which the goods were taken charge of and/or detailed. Further, the Panchanama does not spell out that the detained goods were seized for the purpose of enquiry under the Customs Act. Consequently rendering the entire detention or the seizure as illegal and bad in law. It was further stated that granting extension of time as prayed by the DRI for issue of show-cause notice would amount to endorsing and legalizing the said illegal detention. It was further contended that the appellant was in judicial custody for almost 60 days and no attempt was made to record statement and to investigate from the assessee about the aforementioned goods in detention. Even after a large number of bills etc. were filed during the regular visit and/or attendance of the appellant in the office of the DRI, no inquiry or investigation was made for several months. It is further stated that necessary information and explanation have been made to the investigating offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urement of the said goods, the DRI may not have detained the seized goods for further investigation and accordingly held the detention to be justified, legal and tenable. It was further observed that the appellant have provided several documents (invoices etc.) on 2.6.2014 to the DRI authorities, which needs to be verified and the same cannot be completed within 2-3 days and hence, there is need for extension of time for issue of notice. Further it is observed that there would have been no reason and the appellant and/or the relatives did not submit the invoices etc. at an earlier dated in order to facilitate the completion of investigation in time bound manner. The ld. Commissioner has further observed that the statement of the appellant was recorded on 26.5.2014 by the DRI, wherein he was asked to explain sources of the cash deposit, for which the noticee had sought time to provide the details. Thus, there is no force in the allegation of the appellant that the department has not utilized stipulated time for completion of investigation with regard to the detained goods. 2.7 As regards the stand of the appellant that the details have been provided much earlier in Feb/March, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal is whether the impugned order extending the time limit under Section 110(2) is legal and proper and whether the officers of DRI had sufficient time and opportunity for investigating into the details of the assets detained vide Panchanama dated 6.12.2013, and further investigation only a few days before the issue of show-cause notice for extension of further time for issue of show-cause notice, vide notice dated 2.6.2014. 4. The ld. Counsel for the appellant, Mr. Rizwan G. Merchant has raised several grounds in support of the appeal, namely: - (i) The impugned order is in violation of principles of natural justice and fair play. (ii) The jewelry found during the search at the residence and also in the Bank Locker No. 229 of Corporation Bank were only taken charge of and not seized and the provisions of Section 105 and 110 of the Customs Act did not apply to the said articles. Further, jewelry taken charge of under the Panchanama, without recording the reasonable belief that under which provisions the jewelries have been taken charge of, is illegal. (iii) The ld Commissioner of Customs further failed to appreciate that the passport of the appellant was seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter was served on by DRI on 28.3.2014 and the DRI have nowhere explained what inquiry was made during the month of January to May, 2014 and as such there being no delay and non-cooperation on part of the appellants, the extension of time by the impugned order is bad and fit to be set aside. (viii) The ld. Commissioner failed to appreciate that during the period of judicial custody of almost 60 days of the appellant, at no point of time any application was moved by the DRI before the Court, for obtaining order to record the statement of the applicant and to investigate with respect to the item detained or charge taken of. That the ld. Commissioner have further erred in not appreciating that the necessary information regarding the seized assets have already been disclosed to the investigating agency as early as in Feb, 2014 and for slackness on part of the DRI to investigate, no further extension of time could have been allowed by the impugned order. The ld. Commissioner failed to appreciate that failure on part of the investigation agency to investigate in spite of sufficient time being available, cannot be a ground for extension of time as allowed by the impugned or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Customs Act, 1962. It is further pointed out by the Counsel that it is admitted fact as recorded in para 5 of SCN dated 2.12.2014, that BMW car s invoice, value of which is ₹ 44.04 lakhs, out of which ₹ 30 lakhs was financed by HDFC Bank. For purchase of Jaguar car as per detail invoice, the price of which is ₹ 94.95 lakhs purchased by M/s Acer Logistics Pvt. Ltd., out of which ₹ 50 lakhs was financed by HDFC Bank and the appellant have been repaying the loan installment to the Bank as per agreement. It is alleged by the Revenue that neither the details/invoice for the BMW car nor for Jaguar car bears any mentioned as to the mode of down payment for the purchase of the cars in question. (xiii) In para 7.1 of the SCN dated 2.12.2014, the details of the wrist watches found and detained under the Panchanama along with the procurement value and the source of the watches have also been explained. It is further urged that the Metropolitan Magistrate has only rejected the application of the appellant for return of the detained goods only on the ground of jurisdiction, as the Magistrate observed that power to release of detained goods is with the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the item-wise details purchased by her and her daughter-in-law. In support of the claim that jewelry being acquired several years earlier as it is evident from para 3 of the show-cause notice that the appellant also submitted letters of her mother-in-law and her father-in-law in support of they have been gifted and has also submitted old valuation report dated 20.3.1986 and 22.6.1986, issued by the Govt. Approved valuer. (xvi) Further from para 16.1 of the show-cause notice, it is on record that the letter dated 30.5.2014 was received from Mr. Amarjeet Singh Sethi, who claimed that he had given various items of jewelry as gift to his daughter Gureen Kaur at the wedding and have also submitted invoice, detail for the purchase thereof. (xvii) It is further urged in para 19.4 of the SCN that the Income declared by M/s Acer Logistics Pvt. Ltd. is not commensurate with the cash deposit in the Bank account of the appellant and the family members and their firm. In response to this allegation, the Counsel for the appellant submits that Book of Account of the appellant are regularly audited and filed regular returns and as regards the financial transaction, it is jurisdiction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 111, 121 and 122. 6.1 Section 105 of the Act provides that competent officers of Customs, or in any area adjoining the land frontier or the coast of India, has reason to believe that any goods are liable to confiscation, or any documents or things, which in his opinion will be useful or relevant to any proceedings under this Act, are secreted in any place, he may himself or through other officers search for such documents, goods or things. The provisions of the Code of Criminal Procedure, 1898 (5 of 1898), relating to searches shall, so far as may be, apply to searches under this section subject to the modification that sub-section (5) of section 165 of the said Code shall have effect as if for the word Magistrate, wherever it occurs, the words Commissioner of Customs were substituted. 6.2 Section 110 (1) provides that If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods: Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ident on the face of record that the investigation officers have done practically very little or nothing in spite of the appellant being available for the purpose of inquiry right from 7.12.2013 till 10.2.2014 being the period of judicial custody. Further, during the said custody, the DRI have never sought permission to interrogate the appellant. Even after the release from the judicial custody, the appellant was attending the office of the DRI every week particularly on Monday and such other days as he may have been advised. Further, the appellant and his family members had approached the Revenue authority for release of the goods by filing a detailed representation as to the nature and their source on 24.2.2014, but no inquiry seems to be made in the matter and the investigating authority chose about two weeks prior to the end of time limit of six months, have ventured to make further inquiry about the detained assets by recording statement and asking for further details like Bank statement and other documents. 7.2 We further find that the learned Commissioner of Customs have ignored the facts and facts on record and have failed to appreciate that there is no sufficient reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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