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TMI Blog2021 (2) TMI 524X X X X Extracts X X X X X X X X Extracts X X X X ..... lls of Entry by the petitioner. It was incumbent on the part of the petitioner to have brought to the Notice of the CESTAT that apart from 53 metric tons of imported scrap which missing, 297.06 metric ton out of 453 metric tons of the seized and confiscated had gone missing during the pendency of the appeal before the Tribunal. Instead, the petitioner suppressed these facts and has later filed an application for compensation before the respondent - It must be also recalled that, on the date of the Mahazer (24.1.2003), the Managing Partner of the petitioner was informed to not to deal with the seized goods except with the prior written permission of the Special Investigation and Intelligence Branch of the Customs Department. The market value of the seized goods was estimated to be approximately 3 crores on the date of the seizure. The seized quantity of the scrap was allegedly in the custody of the petitioner at the petitioner s premises between 3.12.2002 and 28.12.2002 when the petitioner s premises was inspected on a suspicion that about 59 metric tons of bonded goods had been allegedly diverted into the local market without payment of Customs duty by the petitioner and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as eventually closed by the Judicial Magistrate based on the report of the police on 24.11.2006. Petition dismissed. - W.P.No.17003 of 2018 - - - Dated:- 9-2-2021 - Honourable Mr. Justice C. Saravananan For the Petitioner : Mr.S.Murugappan For the Respondent : M/s.Hema Murali Krishnan Sr.Standing Counsel ORDER The Petitioner has filed this writ petition for the following relief:- (i) to call for the records of the respondent culminating in the issue of Order-in-Original No.12417/2010 dated 15.07.2010 passed by the respondent from File No.S4/639/2001-BONDS and quashing the same. (ii) direct the 1st respondent to give compensation of ₹ 1,96,68,874/- together with interest from 01.12.2006 to the petitioner for loss of 297.06 MTS of scrap . 2. The petitioner had imported 453 mts. of mixed scraps for being re-exported after segregation. The seized mixed scraps were stored in a ware house/Godown of the petitioner and was seized by the Commissioner of Customs Office during November-2002 and thereafter seizure mahazar was drawn on 24.01.2003. At the time of seizure on 24.01.2003, the Managing Partner of the petitioner had given an undertaking dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 of the Assistant Commissioner of Customs (Bonds) came to be challenged in W.P.No.1917 of 2008. The writ petition was dismissed on 17.03.2008 while extending the interim relief pending disposal of the appeal before the Commissioner of Customs (Appeals). The said appeal is said to be pending before the Commissioner (Appeals) as on date. 8. Meanwhile, the petitioner sent a representation dated 09.04.2008 and a filed written submission and requested the respondent to compensate it for the loss suffered by it on account of theft of 297.06 Metric Tonnes of mixed scraps of imported stock for being segregation and for re-export. In this background, the impugned Order-in-Original No.12417 of 2010 dated 15.07.2010 came to be passed by the respondent in compliance of the directions of this Court in W.P.No.26948 of 2008 dated 27.04.2010. 9. Aggrieved by the same, the petitioner had earlier filed an appeal in C.A.No.348 of 2010 before the CESTAT, Chennai which came to be dismissed vide its Final Order No.40880 of 2018 dated 16.02.2018 by CESTAT, Chennai on the ground that it had no jurisdiction to entertain an appeal under Section 129(A) of the Customs Act, 1962. In view of the same, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atutory functions which are referable and based on the delegation of the sovereign powers of the State. The learned counsel urged with reference to the decision of the Supreme Court in Kasturi Lal v. State of U.P ; reported in A.I.R. 1965 SC 1039, that the action for damages for loss caused by tortuous act will not lie if the tortuous act is committed by a public servant in discharge of statutory functions which are referable to the sovereign powers of the State. In our judgment, the assumption of Shri Desai that the powers of seizure are referable to the sovereign powers of the State is fallacious. The power to seize is under the statutory provision, i.e. Section 66(1) of the Gold (Control) Act, and it is impossible to suggest that a power to seize is based on the sovereign power of the State. The gold ornaments were seized because the Superintendent of Central Excise felt that the petitioners were holding the ornaments in violation of the statutory provisions of the Gold (Control) Act. There is no inherent power to seize gold ornaments de hors the provisions of the Gold (Control) Act and consequently the power to seize is not referable to the sovereign power of the State. In o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the premises itself was under the custody of the petitioner and that the petitioner was a custodian of the seized goods which were eventually confiscated. It is submitted that, even after confiscation was ordered, the petitioner exercised a lien over the goods on behalf of the 1st respondent and therefore the petitioner cannot take advantage of his own mistake. Under these circumstances, the learned counsel for the 1st respondent prayed for dismissal of the writ petition. 13. I have considered the arguments advanced by the learned counsel for the petitioner and the respondent. The petitioner, a 100% Export Oriented Unit had imported 1914.256 metric tons of scrap under 77 Bills of Entry and had allegedly cleared the same in violation of Letter of Permission and In Bond Manufacturing License and that the imported goods did confirm to the description of the items allowed to be imported by the petitioner as per the aforesaid Letter of Permission/In Bond Manufacturing License issued to the petitioner. 14. Therefore, benefit of Customs Notification No.53/97-Cus dated 3.6.1997 extended at the time of import of 1609.326 metric ton of scrap cleared under various bills of entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p should be exercised within 30 days of the receipt of the order or within such extended period as may be allowed by the Assistant Commissioner/Deputy Commissioner, SHB, Custom House, Chennai. f) The declared value of the goods at US$89943.98, imported under the 6 Bills of Entry No.435919/26.10.200, 452523, 452522, 452631, 452632 and 452633, all dated 02.01.2003 is rejected; g) The declared value of the goodfs at USS89943, 98, imported udner the 6 Bills of Entry No.43591/26.10.2002, 452523, 452522, 452631, 452632 and 452633, all dated 02.01.2003 is ordered to be fixed at USS17123247 under Ruler 8 of CVR 1988. h) In view of the mis-declaration of the value and description, I order confiscation of the goods, value of ₹ 83,36,256/- (CIF) imported under the C Bills of Entry bearing Nos.4325919/26.10.2002, 452523, 452322, 452631, 452632 snf 452633, all dated 02.01.2002 under Section 111(d)(n) (o) of the Customs Act, 1962. However, the goods were allowed to be re-exported provisionally and are not available for confiscation. Therefore, I order enforcement of the bank guarantee executed for the purpose and adjustment of ₹ 10 lakhs towards fine in lie of conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alue ₹ 2,98,86,946/- was worked out at ₹ 1,64,80,526/-. The above quantity was liable for confiscation under Section 111(d) as the same had been removed without following the procedure prescribed in Notification No.53/1997-Cus and provisions of the Customs Act. As the EOU had not segregated the scrap and had not exported the same, this quantity was liable for confiscation under Section 111(0) of the Customs Act. 10. As regards the stock of 453 M.Ts.available with the EOU, the adjudicating authority found that the EOU had not fulfilled the export obligation, especially, because export proceeds to the extent of US $ 106113.95 was pending receipt and the value addition was admittedly 12.6% as against the fixed 20%. The imported material was not only cables, transformers and motors as allowed in the LOP but mixed metals. The Commissioner, accordingly worked out the duty due on 453 M.Ts. of scrap at ₹ 64,66,373/- and on 1609.327 M.Ts.of scrap at ₹ 2,29,36,899/- . For the transactions violating various provisions of the Customs Act, which rendered the goods liable to confiscation, the adjudicating authority penalized the EOU, S/Shri Saminathan, Thenkumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed that waste/rubbish arose was destroyed in his presence by the Company and necessarily certificate issued. It was claimed that allegation of diversion of imported material was based on statements and presumptions. They had maintained clear records showing the receipts, disposal, export and balance. In the grounds of appeal the appellants alleged that the finding in the impugned order that 1136.326 M.Ts. of scrap had been cleared in the DTA had been arrived at on the basis of alleged Stuffing Report, Railway Receipts, etc. and the statements reported to have been made by transporters at Delhi. The appellants alleged that the Stuffing Report, Railway Receipt, etc. were records maintained by third parties not connected with them and appellants had maintained statutory records, certified by the Bond Officer. The transport documents showed lifting of scrap consignments from Valasaravakkam and there were other units dealing in scrap at Valasaravakkam. There was no concrete evidence linking the appellants with those scraps consignments sent to Delhi. The load sheets for transport of scrap consignments did not show the address of the appellants. The scrap buyers Shri Mahes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of wastage and confirmed the same. It would be illogical to ignore the deposition by the Bond Officer and to prefer the statements of employees. It was not necessary to destroy the waste by way of hammering it. If the waste was paper, 22 M.Ts. of waste could be destroyed in a matter of a few hours. It was submitted that the supplier had supplied scrap with higher waste contents. The finding of the adjudicating authority that 661.239 tonnes had not been exported and only 304.929 tonnes had been exported was erroneous and legally unsustainable. The Shipping Bills as well as invoices duly assessed and processed and also Bills of Lading issued by shipping agency showed the export of 661.239 Tonnes of segregated scrap. This fact could not be brushed aside. Statutory records could not be ignored and private records of uncertain value preferred. Citing the Board's Circular No.21/95-Cus. Dated 10.3.95, the appellants claimed that if the EOU became liable to pay duty for failure to fulfil any condition of Notification No.13/81 dated 9.2.81, the Board of Approval or Development Commissioner concerned had to determine that the unit had failed to export the fixed percentage of articles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date of the Mahazer (24.1.2003), the Managing Partner of the petitioner was informed to not to deal with the seized goods except with the prior written permission of the Special Investigation and Intelligence Branch of the Customs Department. The market value of the seized goods was estimated to be approximately 3 crores on the date of the seizure. 22. The seized quantity of the scrap was allegedly in the custody of the petitioner at the petitioner s premises between 3.12.2002 and 28.12.2002 when the petitioner s premises was inspected on a suspicion that about 59 metric tons of bonded goods had been allegedly diverted into the local market without payment of Customs duty by the petitioner and therefore a seizure was effected on 24.1.2003. It is not clear when the seized goods went missing. 23. The writ petition that was earlier filed before this court in W.P.No.26948 of 2008 which came to be disposed by an order dated 27.4.2010 was also belated with a view to resurrect a stale claim for compensation and perhaps to stave off liability. The present writ petition challenging the Order in Original No.12417 of 2010 dated 15.7.2010 of the respondent for the relief for compe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the petitioner. The petitioner was the custodian of the seized and confiscated quantity. The investigation caused by the Judicial Magistrate also records that RC s Final Report had been received from the police treating the case as undetected. The insurer has also dis owned the liability. 31. Further, the petitioner preferred an appeal Vide C/262 to 266 of 2004 and C/251 and 252 of 2004 against the Order in Original No.2119 of 2004 of the first respondent confiscating the seized goods. 32. It should be remembered that the authorities acting under the provisions of the Customs Act, 1962 are not covered by strict rules of evidence. They go by preponderance of probability based on the available records. In this case, the seizure was effected on 24.1.2003. It was not based on the actual weighing of the scarp that was available at the petitioner s Licensed and In Bond Manufacturing premises. The calculation was based on the value cleared and sold to third parties in breach of the conditions of import and In Bond manufacturing facilities of the petitioner. The quantum of 453 M.Ts. was arrived based on the documents and not on physical measurement. 33. In my view, the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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