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TMI Blog2016 (5) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of Rs. 39,99,930/- and conspires by preparing bogus transport documents to show dispatch to factory at Bhadohi, but in fact were sold in the local market by the appellant Shri Pravinchandra B. Shah with the assistance of Shri Kushabhau B.Bangar of M/s. New Bright Services and M/s. Super Roadlines, in contravention of the provisions of Import Export Policy 1988-91 and also in violation of provisions of Customs Act, 1962. The show cause notice was adjudicated vide Order-in-Original No. 135/92 dt. 4.8.1992 whereby the goods were confiscated, demand confirmed and penalty of Rs. 4 lakhs was imposed on the appellant apart from the penalties imposed on the other noticees. The appellant preferred an appeal before the Collector (Appeals), who rejected the appeal vide Order-in-Appeal No. 87/93-BP dt. 14.5.1993 for want of pre-deposit. Aggrieved by this, appellant filed an appeal with CESTAT which was decided vide Order No. 2204/07/93/WRB dt. 28.10.1993 directing for pre-deposit of Rs. 2 lakhs. Consequent to the payment of pre-deposit of Rs. 2 lakhs. The Collector (Appeals) vide Order-in-Appeal No. 74/95-BP dt. 28.12.1995 while rejecting his appeal did not find any reason to interfere with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal order in the case of M/s. Orient Arts and Crafts Vs. Commissioner of Customs (P) Mumbai 2003 (155) ELT 168 (Tri.-Mumbai) wherein the entire duty penalty and confiscation was dropped. This decision of the Tribunal was upheld by the Hon'ble Bomaby High Court by dismissing the Revenues appeal as reported in 2012 (282) ELT A108 (Bom). The entire demand of duty, penalty and confiscation has been dropped against the main party i.e. M/s. Orient Arts & Crafts . The present appellant on whom only penalty under Section 112 of the Act was imposed as a consequential to the case of demand of duty. In such case when the demand was not sustained the consequential penalty on the appellant will also not survive. For this reason also the penalty imposed on the appellant is liable to be set aside. The Ld. Counsel further submits that the present show cause notice was issued by the Assistant Collector who was not the proper officer to issue the show cause notice as per the prevailing old Section 28 of the Act. According to which, it was the Collector of Customs (Appeals), who was competent to issue the show cause notice and not the term proper officer was their in Section 28 of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proper officer in view of the clear wording of Section 28 was the Collector of Customs. In the instant case, the show cause notice has been issued by the Asstt. Collector. The proper officer to issue the show cause notice during the relevant period was the Collector of Customs and not the Asstt. Collector. The Asstt. Collector could have issued the show cause notice if the short-levy or non-levy was within six months. In the instant case the show cause notice has been issued after six months of the relevant date. As the show cause notice is issued after six months after the Order of clearance of goods given by the proper Officer. Although not specifically stated, it appears that the totality of the show cause notice indicates that there is clear suppression and mis-statement for availing Notfn. No. 117/88-Cus., dated 30th March, 1988. That being the case, the show cause notice should have been issued by the Collector of Customs. In view of this clear legal position and also in view of the order of the CEGAT which is applicable in this case referred to above, I decide that in view of undisputed position that alleged evasion of duty is consequent to diverting the imported raw mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollector of Customs-II, Bombay [1998 (98) E.L.T. 821] (ii) Sharad Himatlal Daftary v. Collector of Customs [1988 (36) E.L.T. 468 (Cal.)] (iii) Informatika Software v. CC (P), Calcutta [1997 (73) ECR 348 (Tribunal)] (iv) Ramnarain Biswanath v. UOI [1988 (34) E.L.T. 202 (S.C.)] (v) Canepo Textiles Pvt. Ltd. v. State of Haryana [1992 (84) STC 88] (vi) Grand Slam International v. Collector of Customs [1992 (57) E.L.T. 161 (Tribunal)] (vii) CCE v. Poona Rollers [1997 (89) E.L.T. 604] (viii) Shri Balaji Rice Mills Co. v. Commissioner of Taxes [1984 (55) STC 292 Andhra Pradesh] (ix) UOI v. Ram Narain Biswanath [1997 (96) E.L.T. 224 (S.C.)] We find there is substantial force in the arguments on jurisdiction as made by the learned C.A. for the appellants. The demands of duty under Section 28 of the Customs Act, 1962 have to be made by the proper officer and not by any Officer of Customs, since proper officer of Customs was designated by law. Interpretation on jurisdiction, as arrived at by the learned Adjudicator to assume the jurisdiction in this case, as per his findings are as under - "It is not disputed by M/s. Orient Arts and Crafts that by virtue of Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclude that determination of demand of duty under Section 28 of the Customs Act, 1962 is not made by the proper officer as per law, same therefore is not upheld. We also rely on the decision in the case of Pune Rollers as reported in 1997 (89) E.L.T. 604 and M/s. Bakemans Home Products Pvt. Ltd. v. CC as reported in 1997 (95) E.L.T. 278 to hold the demands to be not determined by the proper officer for the goods cleared and also for the goods under clearance covered by the Bills of Entry, which were yet to be assessed. (c) The theory of "committee of courts" postulates that when there are two or more courts having parallel jurisdiction over the same matter, as in the present case, i.e. the Commissioner of Customs in whose jurisdiction, the Bills of Entry were filed, assessed and cleared and the Commissioner of Customs (Prev.), Mumbai who derived his concurrent parallel jurisdiction by virtue of an appointment vide Notification No. 250/83 to exercise the powers of a Customs Officer then in such case the jurisdiction of the second and any other authority are deemed to be ousted, when any one of the authorities having a concurrent parallel jurisdiction has taken cognizance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer so appointed shall also have the jurisdiction to frame the assessment. "3.In case any one of the aforesaid two officers starts the assessment proceedings, the other officer shall not be entitled to start the same and the moment the officer who started the proceedings; later on get the information that the proceedings have already been started by the other officer, he will have to stay his hands. However, the authority named in Rule 7 will have the jurisdiction to transfer the pending proceedings to the other officer and until such an order is passed, the officer who started the proceedings first will continue to have jurisdiction to frame the assessment and the other officer will not have the jurisdiction to do so. If this rule is not followed, there is likelihood of conflict of opinion between officers of co-ordinate jurisdiction and in law such a course would be avoided as far as possible." (Emphasis supplied) The Tribunal in the case of Ramnarain Biswanath - 1988 (34) E.L.T. 202, which has been upheld by the Apex Court, had held - "80......In fact if one Collector starts disregarding the action taken by another, chaotic conditions will prevail and a citizen would ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proper officer. Appeal is disposed of in the above terms. From the above decision, it can be seen that even after issuance of the second show cause notice, the show cause notice was held invalid accordingly demand of duty, penalty and confiscation was set aside. Since in the present proceedings, the only issue is of penalty under Section 112 of the Customs Act, 1962 which can be imposed only for confiscation of goods and dealing with goods which are liable for confiscation, that means the penalty is consequential to demand of duty and confiscation of goods. In the present case, the proceeding of demand of duty and confiscation was made against the main party M/s. Orient Arts & Crafts, wherein finally the demand of duty and confiscation was dropped, accordingly the present appellant is also not liable for penalty under Section 112 of the Customs Act, 1962. In view of above undisputed fact, I am of the view that the appellant is not liable for penalty under Section 112 of the Customs Act, 1962. Since the penalty is being set aside on the above factual aspects, I do not feel to address the legal issue of jurisdiction. The impugned order is set aside and appeal is allowed. (Pronounc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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