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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 ..... given an undertaking dated 24.01.2003 which reads as under:- "I, K. Saminathan, Managing Partner, M/s. SPK Impex, 5/6, Sridevikuppam Road, Kasi Industrial Estate, Valasaravakkam, Chennai-87 and assure that they will not be disposed off/removed/parted with/substituted/added to/other wise dealt with in any manner except with prior written permission of Appraiser, SIIB"( Special Investigation Intelligence Branch)". 3. The seizure culminated in a show cause proceedings dated 17.07.2003 and an adjudication order dated 20.04.2004, Order-in- Original No.2119 of 2004 of the 1st respondent (Commissioner of Customs (Seaport-Export)). 4. Aggrieved by the same, the petitioner preferred an appeal before the Customs, Excise & Service Tax Appellate Tribunal (hereinafter referred to as CESTAT) in C.A.Nos.262 to 266 of 2004 and C.A.Nos.251 & 252 of 2004 which eventually culminated in Final Order No.1150 to 1156 of 2006 dated 30.11.2006 and thus the Order-in- Original No.2119 of 2004 dated 20.04.2004 passed by the 1st respondent was set aside. 5. However, during the interregnum, the petitioner came to know that the seized goods which were earlier ordered to be confiscated by the aforesaid Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, the petitioner has now challenged the impugned Order-in- Original No.12417 of 2010 dated 15.07.2010 in this writ petition. 10. The learned counsel for the petitioner submits that as per Section 126 of the Customs Act, 1962, after the date of confiscation, the seized goods stand vested with the Central Government and therefore the question of the petitioner company being made on liable for the theft does not arise. It is submitted that the petitioner is entitled for compensation. 11. It is therefore submitted that the petitioner is entitled for compensation. In this connection, a reference was made to the decision of the Bombay High Court in Giridharlal Kalyandas Advani Vs Union of India, rendered in (1992) 58 E.L.T 453 (Bom.). "The submission is correct and deserves acceptance. The respondents have deprived the petitioners of the advantage of the value of the ornaments and the petitioners were compelled to reimburse their customers from whom the ornaments were received. In these circumstances, the respondents are bound to pay the market value of the gold ornaments as prevailing on February 22, 1983 along with interest at the rate of 12% per annum from February 22, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, the respondents were duty bound to return the gold ornaments. 3. Shri Desai submitted that as the gold ornaments seized from the petitioners were stolen, there is no compulsion under the Gold (Control) Act, to return the ornaments to the petitioners. The submission is only required to be stated to be rejected. It is not permissible for the respondents to retain the seized ornaments on a fallacious ground that there is no compulsion to return the ornaments. There is compulsion to return the seized articles when the adjudicating authority finds that seizure was on assumption which is not sustainable. In case the seized articles are not available for return, then the respondents are bound to refund the market value of the ornaments and the market value is to be ascertained with reference to the date on which the liability of the respondents arose to return the ornaments. In other words, the market value of the ornaments has to be ascertained as on the date when the Additional Collector passed the order discharging the show-cause notice and was liable to return the ornaments. It is also required to be stated that the return filed on behalf of the respondents does not indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... denied to the petitioner. The petitioner was therefore called upon to pay an amount of Rs. 1,64,80,526/-of 1156.326 Metric ton of scrap cleared under various Bills of Entry by the petitioner. 15. The show cause notice also called upon the petitioner to pay an amount of Rs. 64,56,373/- being the proportionate duty on 453 metric tons of scrap that was lying in the petitioner's bonded premises when a Mazhazer dated 24.01.2003 was drawn. 16. The respondent Vide Order in Original No.2119/2004 denied the benefit of Notification No.53/97-Cus dated 3.6.1997 to the petitioner. The operative portion of the said order reads as under: "78. In view of the above discussions, I pass the following order. a) I hold the entire quantity of 1914.256 Mts of scrap to have been imported and cleared in violation of Letter of Permit/Legal Undetaking/In-boindmanufacturing, Licence/3-17 general-Bonds as these were found to be other than the items permitted under the Letter of Permit/Legal Undertaking/In-bond-manufacturing License/B-17 general Bonds and also noit accounted and used as per the terms and conditions of the notification; b) I deny the benefit of Notification No.53/97 extended to a quanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (CRF, consigned in 7 containers and imported under B/L Nos.2237NRC00864, 2237FRC00384, 2237NRC00888 & 870200101723 under Section 111 (d) (g) (m) (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 Rs. 10 lakhs towards fine in lie of confiscation. j) I impose a penalty of Rs. 10 lakhs (Rupees ten lakhs only) on Shri Saminathan and SPK jointly and severally under Section 112 (a) of the Customs Act, 1962. k)I also impose a penalty of Rs. 1,64,80,526/- (Rupees One Crore sixty four lakhs eighty thousand five hundred and twenty six only) on Shri Saminathan and SPK, jointly and severally, along with interest on the duty demanded, under Section 114 A of the Customs Act, 1962. l) I impose a penalty of Rs. 20,00/- on Shri Vijayan of M/s.Vaishnavi Metals, Chennai under Section 112(a) of the Customs Act, 1962. m) I impose a penalty of Rs. 20,000/- on Shri Venkatachalam under Section 112(a) of the Customs Act, 1962. n) I impose a penalty of Rs. 1,00,000/- (Rupees One Lakh only) on Shri P.r.Venkataraj, the Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achalam, tranders in Scrap and Shri Venkatraju, Chartered Engineer. He also found M/s.Global Metals liable for penalty under Section 112(a) for rendering the goods contained in 15 containers liable for confiscation. 11. In their appeal SPK submitted that as per LOP dated 16.11.2000, the appellants were permitted to import "worn" out goods/scrap like cables, transformers and motors for recovery of copper/brass scrap for export of copper scrap, brass scrap, aluminum scrap and zinc scrap after segregation. It was submitted that their imports had been cleared on 1st check basis after examination by the Chartered Engineer. The goods had been cleared based on the report of the Chartered Engineer and enhancements of value where necessary. They segregated waste from various metal scrap, sold iron and steel scrap locally on payment of duty and destroyed the waste in the presence of Bond Officer. They imported 1914.25 M.Ts. of mixed metal scrap under 77 Bonds. They segregated and exported 661.23 tons copper and brass scrap and cleared 279.18 Mts. of iron and steel scrap for local sale and destroyed 161.37 Mts of wastage generated. There was a balance of 512 Mts of mixed scrap in stock and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any incriminating documents. This showed that they had not purchased any scrap from the appellants. The appellant as well as alleged buyers of scrap denied despatch and receipt of the goods respectively and there were no incriminating evidence to show that despatch or receipt of any piece of scrap. Therefore, the impugned order should not have been based on the statements of intermediaries. The investigating authorities had not confronted the alleged buyers. The fact of telephone calls originating from the appellants alone did not establish anything in the absence of evidence of contents of the conversation. The local dealers of the scrap denied purchasing scrap from the appellants. The Commissioner had attributed denial of receipt of goods by Delhi dealers to their fear of action from Sales tax and Income Tax authorities. This was a needless presumption and observation. Therefore, the finding that there was evidence to suggest that 1136.327 M.Ts. had been diverted for local sales was without substance; that there were no documents to show that 279.18 Tonnes of steel scrap had been sold did not prove that such sales had not taken place. The Chartered Engineer during inspection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OU. As per this Circular the duty due should be confirmed only after a definite conclusion had been arrived at by the Development Commissioner as regards non fulfilment of export obligation etc. Therefore, the denial of the benefit of Notification No.53/91-Cus dated 3.6.97 was not in order. The quantity of 453 tonnes scrap was still in the bonded warehouse and therefore the demand of duty on the bonded goods was incorrect. It was reiterated that the certificate issued by the Bond Officer and the records maintained by the EOU showed that imported scraps had been property accounted for. Statutory records could not be thrown out giving preference to unauthenticated private records as well as third party statements. The adjudicating authority had not relied on concrete evidence to contradict the statutory records of the EOU. Therefore the finding of liability to confiscation of 1156.367 M.Ts. and 453 MTs. of scrap and imposition of Rs. 30 lakhs fine and Rs. 10 lakhs find respectively were incorrect. As regards 453 M.Ts., the orders were premature and illegal. The penalty of Rs. 10 lakhs and Rs. 1,64,80,526/- jointly and separately under Section 114A and 112(a) on SPK and Sh.Saminathan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a party who seeks compensation on the ground that out of the seized quantity of 453 metric tons of imported scrap, 297.06 metric ton of scrap was missing before the said order was passsed. 25. There is a doubt as to the exact quantity of goods that were seized. As the quantity was arrived based on the documents and not on physical verification, the value of seized quantity cannot taken a final. On one hand, the customs department had alleged that there were large- scale diversion, on the other hand, the petitioner had denied the same as it is evident from reading of the extracted passages from Final Order No.1150-1156 of 2006 dated 13.11.2006 of the CESTAT. 26. Further, a demand notice dated 6.11.2007 was issued to the petitioner by the Asst.Commissioner of Customs (Bonds) seeking to demand a sum of Rs. 42,33,841/- being the proportionate customs duty on 297 .0 6MT of out of the seized quantity of imported metal scraps which was allegedly lost from the bonded premises of the petitioner. 27. An appeal against the said order dated 3.12.2007 of the Assistant Commissioner of Customs (Bonds) confirming the demand proposed notice dated 6.11.2007 is said to be still pending before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also recalled that earlier, the bonded warehouses of 100% Export Oriented Units were a physical control of the Department. However, after 1998 the physical control was removed and therefore the responsibility of safe keeping of imported goods was with the petitioner. 34. As the respondent had not taken physical control of the seized quantity and that seized quantity which was ordered to be confiscated continued to be in possession of the petitioner, petitioner was responsible for the loss of such seized/confiscated goods. In any event, as mentioned above the jurisdiction of this court under Article 226 of the Constitution of India cannot be abused by converting it into a Civil Court to order compensation for the alleged loss with recording of evidence. 35. A Writ Court cannot be converted into a Civil Court to determine disputed question of facts and the extent of compensation to be paid to the petitioner. To claim compensation for the alleged loss suffered by the petitioner, a proper trial and recording of evidence is a sine-qua non and it is only thereafter a Court can order compensation to the plaintiff. A writ Court under article 226 of the Constitution of India is not compet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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