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TMI Blog2019 (7) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... as far as absolute confiscation of the goods are concerned and there is no violation of the provisions of Section 110(2) read with Section 153 of the Customs Act. Imposition of penalty of ₹ 8 lakhs under Section 112 - HELD THAT:- The imposition of penalty of ₹ 8 lakhs is on the higher side and therefore, the penalty reduced to ₹ 1 lakh on each of the appellant. Imposition of penalty under Section 114AA of the Customs Act, 1962 - HELD THAT:- The penalty under Section 114AA can only be imposed if the person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular - in the present case, the appellants have not made intentionally any false sign or declaration, incorrect statements or declarations to attract penalty under Section 114AA of the Act. Appeal allowed in part. - C/20823-20824/2018-SM - Final Order No. 20526-20527 /2019 - Dated:- 2-7-2019 - SHRI S.S GARG, JUDICIAL MEMBER For the Appellants : Shri M.S. NAGARAJA, ADV For the Respondent : Smt. Kavita Podwal, Superintendent(AR) O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants all dt. 15/10/2015 wherein the appellants admitted the guilt and factum of concealment. A showcause notice dt. 12/04/2016 was issued to both the appellants proposing to confiscate the seized bold bars and further to impose penalty under Sections 112 and 114AA of the Act. After following due process, the original authority vide Order-in-Original dt. 27/12/2016 absolutely confiscated the gold bars totally valued at ₹ 53,89,377/- under Sections 111(d), 111(i), 111(l), 111(m) and 119 of the Act and also imposed penalties of ₹ 8 lakhs under Section 112(a) and ₹ 5 lakhs under Section 114AA of the Act on both the appellants. aggrieved by the said order, appellants filed appeals before the Commissioner(Appeals) who rejected the appeals. hence the present appeals. 3. Heard both sides and perused records. 4.1. Learned counsel for the appellants submitted that the impugned order is contrary to the facts and the law and the binding judicial precedents. He further submitted that both the authorities have based their findings on retracted statements of the appellants without any corroboration and secondly both the lower authorities have not fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. He further submitted that in the present case, the goods were seized on 15/10/2015 and the period of six months as per Section 110(2) of the Act expired on 14/04/2016 but the showcause notice was admittedly received by the appellant on 18/04/2016 which is beyond the period of six months from the date of seizure of the impugned goods. He further submitted that the Department has not adhered to the time limit as prescribed under Section 110(2) of the Act and therefore the impugned order is void and not sustainable and consequently the goods seized are required to be returned to the appellants unconditionally. He further submitted that the Commissioner(Appeals) has however relied upon Section 153(a) and CBEC General Circular no.52/2004 dt. 06/08/2004 and has held that mere dispatch of the show-cause notice within six months from the date of seizure would be sufficient compliance of law as provided in Section 110(2) of the Act. To counter this finding, the learned counsel submitted that it is well settled law that mere issuance or dispatch of the notice to the appellant would not amount to giving of the show-cause notice as stipulated both in ordinarily sense as also in law as st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titution Bench of the Hon ble Supreme Court in the case of IJ Rao, Asst. Collector of Customs Vs. Bibhuti Bhusan Bagh [1989(42) ELT 338 (SC)] while interpreting the provisions of Section 110(2) of the Act, has held as under:- 9 . It is apparent that goods liable to confiscation may be seized by virtue of Section 110(1) but that those goods cannot be confiscated or penalty imposed without notice, opportunity to represent and to be heard to the owner of the goods or the person on whom penalty is proposed. This notice must be given within six months of the seizure of the goods, as envisaged by Section 110(2) of the Act, and if it is not, the goods must be returned to the person from whom the goods were seized. The proviso to Section 110(2) of the Act allows the period of six months to be extended by the Collector of Customs for a period not exceeding six months on sufficient cause being shown to him in that behalf. 4.4. He further submitted that the CBEC circular dt. 06/08/2004 relied upon by the Commissioner(Appeals) is contrary to the judgment of the Apex Court and the High Court of Delhi as per the settled law, the circulars contrary to the statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been sent by registered post within six months time, then the date of receipt is immaterial. She further submitted that the decision of the Delhi High Court in the case of Purushottam Jajodia cited supra which is heavily relied upon by the appellant has been stayed by the Hon ble Apex Court by virtue of an order dt. 11/09/2014 in SLP (C) No.24478/2014 and the stay order is continuing and this fact has been recorded by the Delhi High Court in the case of Pankaj Lakhani Vs. CC (Preventive) [2017(346) ELT 381 (Del.)]. She further submitted that the decision of the Apex Court which has been relied upon by the appellant is not applicable to the facts of the present case because the Apex Court did not consider the relevant Section 153 of the Customs Act and only interpreted Section 110(2) of the Customs Act. Learned AR further submitted that the appellant in the mahazar as well as in the statement recorded has categorically confessed their offence/guilt and has never retracted. She further submitted that so-called retraction by affidavit has not been filed before both the authorities and therefore it is not a valid retraction and further after the alleged retraction dt. 27/10/2015, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving as found in sub-section (2) of Section 110 of the Act would be complete only when such notice has reached the person concerned or if such notice after being tendered had been refused. The said judgment of the Delhi High Court is undisputedly pending adjudication before the Hon ble Apex Court in Civil Appeal No. 3122/15. 15 . A perusal of the said judgment would indicate that judgment rendered by the Hon ble High Court of Madhya Pradesh in the matter of Commissioner v. Ram Kumar Aggarwal reported in 2012 (280) E.L.T. 13 (M.P.) has been distinguished. The High Court of Madhya Pradesh in Ram Kumar Aggarwal‟s case while interpreting Sections 110(2) and 124 of the Act has held issuance of show cause notice by registered post before the expiry of six (6) months from the date of seizure would be sufficient compliance more particularly when the same is received by the addressee though after lapse of six (6) months. It has been further held that neither Section 110(2) nor clause (a) of Section 124 of the Act contemplates service of notice in strict sense should be within a period of six months. It is submitted that judgment rendered by the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be entitled to return of seized goods. 18 . Section 153 of the Act provides that notice issued under the Act should be served in the manner as provided under said Section. It does not even remotely suggest that such person should be served with such notice to hold service of notice as complete. Dispatching of notice by registered post would constitute a valid service. Clause (b) of Section 153 of the Act also provides that in case tendering of summons or sending the notice by registered post is not feasible or possible, then such service can also be effected by affixing the notice on the notice board. Thus, Section 153 controls Section 110(2). Thus, date of sending or dispatching the notice by registered post is the date of giving the notice as contemplated under Section 110(2) of the Act. 19 . Though Delhi High Court was persuaded by the dicta laid down by the Apex Court in the case of Jayanthi for construing the plain and simple meaning of the word given to extend the said meaning to sub-section (2) of Section 110, the High Court of Madhya Pradesh has taken note of the fact that Hon ble Apex Court was not construing the word giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in six (6) months. Hence, word given used in Sections 110(2), 124 and Section 153 should be read conjointly. The object in setting the time limit under Section 110(2) of the Act was not to harass the citizen from whom goods have been seized and keep the kettle boiling, but to ensure that proceedings are commenced or started within six (6) months from date of such confiscation. 6.2. Further I find that the jurisdictional High Court of Kerala in the case of Ambali Karthikeyan has examined Section 110(2) and Section 153 of the Customs Act and held in para 2 as under:- 2. There is no dispute that Ext. P-1 was despatched on 4-2-1970. On the question whether there was an extension of time as stated in Ext. P-8 and the circumstances under which it was extended the first respondent states as follows in paragraph 5 of his counter- affidavit: It is submitted that the then Collector Shri M. C. Das signed the draft of Ext. P-1 on 12-1-1970. Ext. P-1 is also dated the same day. It was actually despatched from the first respondent's office on 4-2-1970. The delay in the despatch of Ext. P-1 was brought to the notice of the then Colle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner provided in clause (a), by affixing it on the notice board of the customs house. The above provision shows that a notice issued under the Act can be served by sending it by registered post to the person for whom it is intended or to his agent, and that if it cannot be served in that manner it can be served by affixing on the notice board of the Customs Office. It gives an indication that in giving notice under the Act receipt of the same by the person concerned is not relevant; but what is relevant is issuing of the notice in any one of the manners provided in that section. In this view of the matter, it follows that the show cause notice in this case has been given to the petitioner under Section 110 of the Act within the prescribed period of 6 months, as it has been admittedly sent by registered post within that time. 6.3. In view of the decisions of the jurisdictional High Courts of Kerala and Karnataka cited supra which is binding on this Tribunal and by following the ratio of the said decision, I am of the considered view that there is no infirmity in the impugned order as far as absolute confiscation of the goods are concerned and there i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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