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TMI Blog2017 (11) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... cate upon the same, it is now not permissible for the respondent authorities to proceed further to adjudicate upon the same controversy in another parallel proceeding. Confiscation of goods - Held that: - though there may be additional proposals in the subsequent show cause notice, the basic proposal relates to confirmation of duty and interest based upon the allegation of diversion, which has already been adjudicated upon pursuant to the show cause notice dated 18-12-2008. The adjudicating authority having already adjudicated upon the issues, it is not permissible for it to keep the proceedings of the show cause notice dated 6-9-2007 in abeyance till the culmination of the proceedings arising from the show cause notice dated 18-12-2008. The continuance or otherwise of the show cause notice dated 6-9-2007 cannot be contingent upon the outcome of the proceedings arising out of the show cause notice dated 18-12-2008 - further proceedings pursuant to the show cause notice dated 6-9-2007, which relate to a subject matter which already stands adjudicated, stand vitiated - SCN do not sustain. Petition allowed - decided in favor of petitioner. - Special Civil Application No. 20016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to as the Act ) and proposing to recover customs duties amounting to ₹ 71,57,744/- (calculated in the same manner as calculated in the order dated 9-3-2007 of Finalisation of Provisional Assessment) not paid at the time of clearance of the goods into DTA with interest and imposition of penalty under Sections 114A and 112(a) of the Act. 4. Being aggrieved, by the above order dated 9-3-2007, unilaterally finalizing their assessment, the petitioners preferred an appeal before the Commissioner of Customs (Appeals), who, by an order dated 20-3-2008, set aside the order of final assessment on the ground that while finalizing the assessment, the adjudicating authority had placed reliance upon the report dated 16-10-2003 of the Kandla Customs Laboratory, a copy whereof was not furnished to the petitioners, and remanded the matter for finalization after following the principles of natural justice. Pursuant to the order dated 20-3-2008 passed by the Commissioner of Customs (Appeals), a show cause notice dated 18-12-2008 came to be issued to the petitioners by the Deputy Commissioner of Customs, to show cause as to why (i) the declared classification should not be changed and while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the show cause notice dated 6-9-2007, the second respondent fixed personal hearing on 8-9-2016, for which a notice of hearing dated 11-8-2016 was issued from his office. In response thereto, the petitioners filed their substantive reply. Thereafter, the petitioner company through its advocates, appeared before the second respondent at Kandla on 8-9-2016, wherein various submissions were made by the petitioners advocates during the course of personal hearing, when the second respondent stated that he would not conclude the hearing and adjudication of the show cause notice, but the same would be kept pending until the Appellate Tribunal decided the Revenue s Appeal No. C/11604/2016. It is the case of the petitioners that though the petitioners advocate requested for formally withdrawing the show cause notice dated 6-9-2007 because it was nothing but duplication and repetition of Revenue s case, wherein the orders have already been passed by the competent authorities including the Appellate Commissioner, but the second respondent did not agree to such submission and request, and has kept the show cause notice dated 6-9-2007 in abeyance. It is in this backdrop that the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings before the Appellate Tribunal, it would not be permissible for them to demand such customs duty by merely placing reliance upon the show cause notice dated 6-9-2007. It was urged that therefore, continuing with the show cause notice dated 6-9-2007 is illegal and without authority of law. 9. Opposing the petition, Mr. Jaimin Gandhi, learned Senior Standing Counsel for the respondents submitted that the show cause notice dated 18-12-2008 related to a dispute regarding (i) classification of goods imported by Bill of Entry No. 2376, dated 25-9-2003, and (ii) valuation of goods imported by Bill of Entry No. 2376, dated 25-9-2003. It was submitted that the said show cause notice dated 18-12-2008 resulted into an adjudication order dated 12-11-2015, wherein it was held that the goods imported by Bill of Entry No. 2376, dated 25-9-2003 were falling under Chapter Sub-Heading 5407 82 90 of the Customs Tariff Act and unit price declared was undervalued to evade customs duty and accordingly, it was enhanced. It was submitted that the first show cause notice dated 6-9-2007 was issued in the context of Bill of Entry No. 2376, dated 25-9-2003 but on different issues, and the same mainly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the impugned goods into DTA should not be demanded and recovered from them with interest in terms of the proviso to section 28(1) of the Act, Section 28AB of the Act as well as in terms of the bonds executed by them, and (iii) as to why penalty should not be imposed upon them under the provisions of Section 114A /112(a) of the Act. 11. It may be noted that at the time when the petitioners cleared the goods, provisional assessment was made, however, the final assessment whereby the assessable value of the Synthetic Fabric was enhanced, was based upon a test report obtained by the adjudicating authority. However, such report had not been furnished to the petitioners. The order of final assessment came to be challenged by the petitioners before the Commissioner (Appeals), who by an order dated 20-3-2008, set aside the order and remanded the matter for finalization of assessment after following the principles of natural justice. A perusal of the record further reveals that in the remand proceedings, the adjudicating authority instead of confining the proceedings to the determination of the assessable value of the Synthetic Fabric, issued show cause notice dated 18-12-2008, calli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of ready-made garments duly stitched. Enhancement of value by the adjudicating authority is unsustainable and demand of duty and interest are also unsustainable. I also hold that this order is confined to demand of duty for import of the concerned materials, and not for any other case for diversion, if any, of imported materials in DTA or otherwise any contravention of other provisions of the Act and the law applicable by the appellant. 14. The Commissioner of Customs, Kandla has challenged the above order of the Commissioner (Appeals) before the Appellate Tribunal, which has condoned the delay in filing the appeal, and at present the appeal is pending before the Appellate Tribunal. 15. However, at this stage, a notice of hearing dated 11-8-2016 came to be issued to the petitioners in connection with the previous show cause notice dated 6-9-2007, in response to which, the petitioners requested the adjudicating authority to drop the proceedings as two parallel proceedings in respect of the same cause of action are not permissible. However, the adjudicating authority refused to accept such request and has kept the show cause notice dated 6-9-2007 in abeyance pendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not arise, as the unit has not utilized the said imported goods in their authorised operations even when not eligible for import of such goods nor utilized for their intended purpose. The adjudicating authority has thereafter referred to diversion of the goods imported and has stated that it restrains itself to the issue, as the issue of diversion of goods in original form without subjecting to any manufacturing process in DTA in the original form was investigated by DRI and is being separately dealt with in the form of show cause notice being adjudicated by the Commissioner of Customs, Kandla. However, on the basis of the findings recorded by it, the adjudicating authority has held that the petitioners are not entitled to the benefit of Notification No. 137/2000, dated 19-10-2000. The adjudicating authority has further recorded that there is a clear violation of the provisions of the Notification No. 137/2000-Cus. and has thereafter worked out the assessable value of the imported goods and has held that higher duty of ₹ 71,57,744/- is leviable and in the operative part of the order, classified the goods mentioned in Bill of Entry No. 2376, dated 25-9-2003 under sub-heading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscation) and impose penalty, the question of confiscation of the goods and levy of penalty would be dependent on the adjudication of the issue regarding diversion of the imported goods to the DTA. As noticed earlier, though the show cause notice dated 6-9-2007 was issued prior in point of time, pursuant to the subsequent show cause notice dated 18-12-2008, the adjudicating authority has proceeded further and has recorded findings on the question of diversion and has held against the petitioners; the order passed by the adjudicating authority was subject matter of challenge before the Commissioner (Appeals); and the petitioners having succeeded before the Commissioner (Appeals), the matter is pending before the Appellate Tribunal at the instance of the Commissioner (Appeals). Therefore, the issue of diversion has already been adjudicated upon and the matter is pending at the stage of Tribunal. 19. In the opinion of this Court, once the question of duty liability based upon the allegation of diversion of the goods to the DTA in relation to the goods imported vide Bill of Entry No. 2376, dated 25-9-2003 has already been adjudicated upon, it is not permissible for the respondents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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