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TMI Blog2015 (12) TMI 1578X X X X Extracts X X X X X X X X Extracts X X X X ..... signment shipping bill/Invoice No.0014643, dated 18.08.2014 and delivered gold jewellery made by the Petitioner to the order of M/s.Kundan Jewellery LLC., Dubai and they were instructed to collect Gold Bullion Bars, weighing 12 kgs from the aforesaid entity and bring it back to India as baggage as per SEZ Rules. As there was no sufficient stock, they had to wait till about 9.00 pm (IST) on 22.08.2014, for such delivery. By the time they received the Gold Bullion and started back, they were not in a position to send the advance intimation by fax to the Respondent Department, as mandated under the Trade Facilitation Notice No.02/07 dated 3.3.2007. On 22.08.2014, on arrival at Chennai Airport, the said officers, who bought 12 kgs of gold Bullion, went to the Customs Authorities and declared the same and wanted clearance on NIL duty, as the imports were made under the scheme for the Jewellery to be manufactured at MEPZ and exported. However, the Customs Authorities have detained the Gold Bullion under DR No.5533/2014-AIU-AIR for violation of Rule 29(5) of SEZ Rules, 2006, dated 22.08.2014. The said DR was issued in the name of the authorised passenger/employee of the petitioner company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the passenger and the Petitioner, by considering all the above facts. In the appeal, without considering the above facts, the appellate authority passed the impugned order, dated 12.8.2015, for confiscation of the goods and imposed penalty on Abhishek Betala and the Petitioner as well. There is an effective alternative remedy under Section 129(DD) of the Act. The communication of the appeal papers and the opportunity to file cross objection is to be treated as adequate serving of notice. Therefore, there is no violation of principles of natural justice. In such facts, these Writ Petitions are not maintainable. 4. The learned Senior Counsel for the Petitioner, praying to implement the order dated 12.3.2015, by quashing the order dated 22.8.2014, contended that the lower adjudicating authority concluded that there was no violation of the provisions of the Act, but the order of the Appellate Authority is in clear violation of principles of natural justice and the mandate of Section 128A(3) of the Customs Act, 1962, which provides for the procedure to be adopted by the authority in exercising the appellate powers. The learned Senior Counsel further contended that the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al preferred by the Respondent Department, the Appellate Authority, by the impugned order dated 12.08.2015, valuing the impugned goods at Rs. 3,38,54,000/-, confiscated the same and imposed a penalty of Rs. 1,00,00,000/- each on the Employee (1) and the Petitioner and as there was no proposal for penalty against the Employee (2) in the show cause notice, no penalty was imposed on him. 8. The main contentions of the Petitioner are that the impugned order of the Appellate Authority is in clear violation of principles of natural justice and the mandate of Section 128A(3) of the Customs Act, 1962 and the impugned order has been passed without proper appreciation of the evidence and material, including the CCTV footage and contrary to the provisions of Section 51 of the Act, which provides for overriding effect over the other laws. 9. On the other hand, it is the case of the Respondents that since the Employee (1) was not an authorised passenger as per the provisions of the Rule 29(5) of SEZ Rules 2006, which mandates for prior intimation in advance to be given to the authorised officer, the goods were confiscated and penalty was imposed. 10. At this juncture, it is relevant to refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Commissioner (Appeals) is of opinion that any duty has not been levied or has been short-levied or erroneously refunded, no order requiring the appellant to pay any duty not levied, short-levied or erroneously refunded shall be passed unless the appellant is given notice within the time-limit specified in section 28 to show cause against the proposed order. 12. Rule 28(5) of the SEZ Rules, 2006 reads as under:- (5) The goods imported by the Unit or Developer shall be allowed to be transferred from the port or airport to the Special Economic Zone without examination by the Customs Authorities at the port or airport, as the case may be. 13. Rule 29(5)(i) of the SEZ Rules, 2006 reads as under:- (5) The units may import goods including precious goods namely gold or silver or platinum or gem and jewellery as personal baggage through an authorized passenger subject to the following procedure, namely: (i) the authorized passenger bringing the precious goods shall declare the goods with the customs authorities at the airport in the arrival hall in the declaration form as specified by Commissioner of Customs in charge of the airport along with a duly acknowledged copy of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to give the detention notice to the Employee (2) who was having proper declaration form, but without hand baggage and without any gold bars. Further, according to the Employee (1), the details of the baggage were known only to Employee (2). If at all the detention notice to be issued, it ought to have been issued in the name of the Employee (1) only. Therefore, issuance of show cause notice in name of the Employee (2) and the Petitioner alone is clouded with suspicious circumstances. Further, while dropping the charges against the Employee (2) relying on the show cause notice, discriminating the Employee (1) alone relying on the same show cause notice is untenable, that too when the detention receipt was issued in the name of the Employee (2). Therefore, it is crystal clear that there was non application of mind and a procedural error crept on the part of the Authorities, while ordering for confiscation and penalty, which can also be termed as deliberate attempt for the reasons best known to them. 16. Though it is stated in the order of the Appellate Authority, a letter dated 15.5.2015 was sent to the Employee (1) alone calling for his objection, no evidence is produced on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and mere procedural lapse and technical violation will not attract confiscation and penalty. 20. It is the contention of the respondents that the local importer for whom the personal carriage of gem and jewellery parcel was brought should give prior intimation to Air Customs Officials vide Tel.No.044-22560246 and Tele Fax No.044-2256 1919. In this regard, the Petitioner explained that they contacted the officials over phone, but however, since it was late hours, they were not able to speak over phone and intimate about the baggage carried by their passengers. It is also seen from the letter dated 25.8.2014, of Sankara Kumar of M/s. J Square Logistics (Customs Broker R312), that the Petitioner contacted him over phone at 9.30 p.m. to give the required intimation and he replied that it was not possible to intimate since it was already late night and advised the Petitioner not to bring the gold bars. The Petitioner also stated in their letter dated 11.9.2014 that though they tried to contact over phone and through fax, they were not able to contact the officials to give intimation and the phone was continuously ringing and their Customs Agent also could not contact because of the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any law other than this Act. 23. As per Section 28(5) of the SEZ Rules, since the goods in questions were to be transported to the Petitioner Company, which is admittedly a SEZ Unit, the same ought not to have been confiscated and ought to be allowed to be carried to SEZ Unit of the Petitioner from the airport. Further, as per Section 22 of the Act, an investigation or search ought to have been conducted in the SEZ Unit of the Petitioner, if the authority is of the opinion that a notified offence was committed. But, only based on the telephonic information, the entire proceedings had been done. Further, the provisions of Section 51 of the SEZ Act has got overriding effect over other laws, in case if there is any contradiction or inconsistencies or conflicts between the SEZ Act and the other Acts. It is seen that there are inconsistencies between the SEZ Act, Section 51 of which has overriding effect and the other provisions of the Act relied on by the Respondents and hence, the provisions of the other Acts relied on by the Respondents can be overruled by Section 51 of the SEZ Act. In other words, the implication of section 51 of the SEZ Act is that anything inconsistent to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, before penalising the Petitioner. Production of scientific and electronic evidence in court as contemplated under Section 65B of the Evidence Act is of great help to the adjudicating authority. 27. Therefore, the order of the lower adjudicating authority cannot be simply brushed aside, wherein the charges levelled against the Employee (1) and the Petitioner were dropped, after considering the implication of Section 51 of the SEZ Act and also the electronic evidence of CCTV footage. Further, there is also a statutory compliance provided under Section 128A(3) of the Customs Act, which the Appellate Authority failed to comply with. Hence, the matter deserves reconsideration and re adjudication, as long as the SEZ Act and the Rules and the Acts relied on by the Respondents are inconsistent with each other. 28. In view of the above, the impugned orders are set aside and the matter is remanded back to the Appellate Authority for passing appropriate orders afresh. The Appellate Authority is directed to consider the matter afresh and pass orders, after giving an opportunity to the Petitioner, on merits and in accordance with law, within a period of eight weeks from the date of receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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