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TMI Blog2017 (4) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... Shah is of sealing of premises. 2. Our attention is invited to Customs Act, 1962 by Mr. Shah and particularly Section 110 thereof. He would submit that the power and which flows from several provisions contained in Chapter XIII of the Customs Act, 1962, titled as Searches, Seizure and Arrest denote that seizure contemplated is of goods. It is upon satisfaction that they are liable to be confiscated under the Customs Act. It is only upon such satisfaction that goods may be seized. There is no power under the Act to seal the immovable property. Mr. Shah would submit that law envisages sealing and seizing to be two distinct powers. They cannot be assumed only because there is power of seizure. In this case, there is seizure of an immovable property and that is impermissible in law. 3. For meeting these contentions, Mr.Jetly would seek time. At his request, we place this matter and high on board on Monday, 3rd April 2017. 4. On our pointed query as to how from page 22 of the paper book can one decide whether it is only a sealing of a machine/goods and not of the premises, Mr. Jetly on taking instructions from the official of Customs present in Court makes a statement that it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rization should also be indicated in Shipping Bills." 7 It is the case of the petitioners' that this condition has to be complied with within a period of six years. That period is yet to come to an end. The petitioners state that the said period would come to an end only in August 2017. 8 In respect of this import, the petitioners have relied upon the Bill of Entry dated 14th October, 2011, evidencing execution of a Bond in the sum of Rs. 17,87,500/-, being the duty saved on the said import. The petitioners submit that they have also furnished a Bank Guarantee for the said sum. 9 This condition, as reproduced above, is claimed to have been complied with by the petitioners. They have set out this fact in paragraph No.6 of the petition in great details and they have relied upon Annexure-B to the petition, which is a copy of Redemption Letter dated 7th October, 2014. Then, by accepting this compliance on 4th December, 2014, the second respondent returned the Bank Guarantee so also the Bond duly cancelled. 10 Now, in 2016, certain investigations, allegedly, initiated by the Customs, Nhava Sheva, in relation to the import of this second-hand printing machine have commenced. The sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 17,87,489/- is computed. The investigations are underway. The investigation would reveal as to how the fraud systematically perpetrated by the parties like the petitioners results in a huge loss of revenue. The investigation presently reveals that the goods covered under these Shipping Bills were manufactured at the factory premises of M/s. Riddhi Enterprises and not by using the capital goods imported by the petitioners. This fact is confirmed from the statement of one Kamal Kishor Parekh, Partner of M/s. Riddhi Enterprises. He has admitted that the export goods against the EPCG licenses were manufactured in their factory using indigenous machines and not by utilizing the capital goods imported under the EPCG license, namely, 'offset machine'. 15 It is in these circumstances that the fraud, as revealed from the further statement of the petitioners' Partner Shri. Vipul Shah, has enabled the respondents to seal the factory premises of the petitioners and seize the machine as well. 16 We have perused the affidavit-in-reply filed by the respondents. 17 Mr. Shah, appearing on behalf of the petitioners, states that the petitioners proceed on the basis of denials. 18 Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find any document or any act, which would enable us to hold that the Customs Department has doubted fulfillment of the export obligations by the petitioners. We are of the opinion that if the petitioners were involved in a systematic fraud, by conniving and in collusion with M/s. Riddhi Enterprises, two years period was enough and, in this case, to unearth such a fraud. If the fraud is perpetrated by the petitioners and the capital goods were never utilized by the manufacturer, then, we do not see any reason as to why, after completion of two years, those documents were never questioned, nor the petitioners or third party or any other party interrogated. That is why when in 2017 the Customs Department has woken up and is questioning the export fulfillment, then, the step that it has taken even before concluding that the petitioners are liable to make good the amount of customs duty, interest and penalty of sealing of the premises was drastic. If the seizure is resorted vide the power conferred in that behalf, then, even that power has been exercised purportedly in this case after the documents emanating from the Customs Department themselves were holding the field for two years and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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