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TMI Blog2022 (6) TMI 1092X X X X Extracts X X X X X X X X Extracts X X X X ..... section 124 of Customs Act, 1962 and is to be invoked upon seizure with due acknowledgement of legislative intent to which we may now bring our attention to bear. Disposal by the empowered officer under the authority of section 110(1A) of Customs Act, 1962 is not restricted to sale and it is trite that such sale does not erase the taint of prohibition that attaches to seized goods; therefore, it is abundantly clear that the impugned goods are not prohibited, or even restricted, for import and that it is compliance with section 47 of Customs Act, 1962 that is in dispute here. The power to seize goods, and, that too, only in the reasonable belief of liability to confiscation under section 111 of Customs Act, 1962, is accorded by section 110 of Customs Act, 1962 - The denial of provisional release appears not to have considered the legal framework for exercise of authority laid down in section 110 to section 126 of Customs Act, 1962 and, instead, has been sought to be justified in terms of section 150 of Customs Act, 1962. A perusal of this provision leaves no room for doubt that section 150 of Customs Act, 1962 is a procedural enablement for distribution of sale proceeds of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position as the owner deems fit. Shipping bills, filed for declaration of intent to export, is to be dealt in accordance with section 51 of Customs Act, 1962 for which responsibility vests with the supervisory establishment of the customs administration. This advisory is enunciated as a reminder that legislative intent must be adhered to at all times. The impugned order declining provisional release is modified to allow provisional release upon execution of bond for value of impugned goods and furnishing revenue deposit of ₹ 5,00,00,000 not later than seven days of service of this order. Entry for export under section 50 of Customs Act, 1962, as and when filed, shall be disposed off expeditiously in accordance with section 51 of Customs Act, 1962 - Appeal disposed off. - CUSTOMS APPEAL NO. 86259-86260 OF 2022 - A /85594-85595/2022 - Dated:- 23-6-2022 - MR C J MATHEW, MEMBER (TECHNICAL) AND MR AJAY SHARMA, MEMBER (JUDICIAL) Shri Prakash Shah, Advocate for the appellant Shri Ramesh Kumar, Assistant Commissioner (AR) for the respondent ORDER Appellant has filed two appeals against order no. CAO No. CC- PVNSB/04/2022-23/Adj-(I) ACC dated 24th May 2022 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clared as memory cards of different specifications also comprised of 1705 nos. iPhone 13 Pro' of different specifications. The failure to disclose these phones was the bone of contention in the investigation as well as in the show cause notice issued thereafter and, according to the notice, the total value of both undeclared and declared goods in the two consignments is ₹14,81,96,804.73 and ₹ 12,86,96,766.83 respectively. The duty liability, arising from integrated tax at 18% on the declared goods and of customs duty at 20%, besides cess at 10% thereof, with integrated tax at 18% on the undeclared phones amounts to ₹5,88,19,004.85 and ₹ 5,31,71,052 respectively. 4. It is contended by Learned Counsel for the appellant that there is no justification for discriminatory treatment accorded to the impugned goods which, being freely importable, are neither prohibited not restricted for import. Even if the phones had not been declared in the bill of entry, the breach is, according to him, at worst, procedural and that they could not have declared goods that were neither ordered by them nor usable in India in the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the empowerment claimed for declining the request of the appellant. However, some of the submissions merit separate consideration as they are unorthodox. It is improper on the part of Revenue, or its representatives, to contend that recourse to appellate process in accordance with law, as settled, is abuse of process. By that logic, even applying for provisional release, adjudicated upon by the impugned order, is abuse of process. Such a proposition borders on contempt for the law which no agent of the executive can be allowed except at risk of continuation as public servant. Likewise, the plea that the appellant has not been attending to summons, and presumably in justification of declining the request for provisional release within the framework of the law, is irrelevant to the proceedings and we can safely state that law exists for enforcing summons without having to compromise in compliance with the law offering facilitative measures. 7. The scope of appellate disposal of appeal against outcome of request for provisional release under section 110A of Customs Act, 1962 had come up before the Tribunal in Amglo Resources Pvt Ltd v. Commissioner of Customs (NA-III), Nhav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for confiscation. 8. In re Its My Name Pvt Ltd, the Hon ble High Court of Delhi had, before it, a challenge from the customs authorities against order of the Tribunal permitting release, subject to terms, under section 110A of Customs Act, 1962 upon denial of such by the adjudicating authority in which the response of the adjudicating authority to the directions of the Hon ble High Court that In view of the above mentioned citations on restricted and prohibited goods, it appears that it would be premature to arrive at any conclusion, about provisional release of seize goods, before completion of adjudication proceedings. was taken note of thus 57 .To us, this finding is completely inscrutable, and is, on the face of it contradictory interns. There can be no question of provisional release of season goods, after completion of adjudication proceedings. Section 110 A of the Act specifically empowers provisional release pending the order of the adjudicating authority . It is impossible, therefore, to conceive provisional release consequent adjudication, or to understand how the ADG chose to opine that it would be premature to arrive at any conclusion about provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 AIR 496], noticing the necessity of elaboration in the context of submissions relevant to the issue in dispute and, in response to the reliance on the meaning assigned in a law lexicon, observed that This however might be the meaning in particular contexts when used in the sense of the cognate Latin expression Seized while in the context in which it is used in the Act in s. 178 A it means take possession of contrary to the wishes of the owner of the property . No doubt, in cases where a delivery is effected by an owner of the goods in pursuance of a demand under legal right, whether oral or back by a warrant, it would certainly be a case of seizure by the idea that it is the unilateral act of the person seizing is the very essence of the concept. In the light of this elucidation, it can surely be conjectured that every adjudication, and every consequent appeal, need not necessarily have been preceded by such unilateral act which, as a curtain raiser in any proceedings for permanent deprivation either of the goods or of a determined monetary equivalent, is also a detriment of itself. Hence, there could be appeals in which the impugned goods had never been seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acceptable only if in accord with the legislative intent of section 110A of Customs Act, 1962. 13. Though power to seize has inhered, and as it should, in Customs Act, 1962 from the very beginning, and, indeed, as legacy carried over from section 178 of Sea Customs Act, 1878, for close to a century and half, it was only by section 26 of Taxation Laws (Amendment) Act, 2006, incorporating section 110A in Customs Act, 1962, that provisional release of seized goods by Commissioner of Customs pending order of the adjudicating officer found acknowledgment in law. The transition from statutorily mandated continuation of unilateral deprivation of custody till conclusion of adjudication to that of reverting custody can only be described as facilitating. Undoubtedly, it was intended to benefit the importer but it was not at the cost of disadvantage to the State. The composition of consumer goods in the product portfolio had dwindled; with increased codification procedural breaches came to dominate offence statistics and, with unfettering of industrial oversight, raw materials and inputs took centre stage. The cost of holding such goods under seizure with eventual redemption on paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandate of release within six months, extendable by another six months under notice of intendment, to be inoperative upon provisional release. Despite these amendments, the tenor of the provision, bereft of any restrictive stipulations, remains unchanged. 15. The stage was, in the meanwhile, firmly set for issue of circular no. 35/2017-Cus dated 16th August 2017 of Central Board of Excise Customs (CBEC), seemingly drawing support from the decision of the Hon ble High Court of Madras in Malabar Diamond Gallery Pvt Ltd v. The Additional Director General [2016 (341) ELT65 (Mad)] holding that breach of policy restrictions justifies continuation of seizure and from the decision of Hon ble High Court of Delhi in Mala Petrochemicals Polymers v. The Additional Director General of, Directorate of Revenue Intelligence [2017 (353) ELT 446 (Del)], distinguishing provisional assessment under section 18 of Customs Act, 1962 and provisional release under section 110A of Customs Act, 1962, to curtail and regiment the exercise of discretion even as it was noted in re Mala Petrochemicals Polymers, that 22. Ultimately, each case turns on its peculiar facts. There can never be a blanket ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has been issued, not under the authority of empowerment under section 110A of Customs Act, 1962 but, presumably, under SECTION 151A. Instructions to officers of customs. - The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the classification of goods or with respect to the levy of duty thereon, 22[or for the implementation of any other provisions of this Act or of any other law for the time being in force, insofar as they relate to any prohibition, restriction or procedure for import or export of goods] issue such orders, instructions and directions to officers of customs as it may deem fit and such officers of customs and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board: Provided that no such orders, instructions or directions shall be issued (a) so as to require any such officer of customs to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the Commissioner of Customs (Appeals) in the exercise of his appellate functions. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 of Central Board of Excise Customs banning the exercise of such authority for certain categories of imports and establishing the floor limits of bond and bank guarantee to be prescribed for allowing provisional release. 19. In the present instance, we are not concerned with such authority having been sought in the impugned order. Nonetheless, the emphasis placed by the judgement on exercise of discretion conferred by section 110 A of Customs Act, 1962 is not to be lost sight of; it is the propriety in the exercise of discretion that falls to us to examine in the appellate jurisdiction. Such exercise of discretion must not only demonstrate itself to be fair and equitable but must also be in accord with the spirit of the legislation that customs authorities have come to regard as one more weapon handed over for the purpose of safeguarding revenue. We cannot subject the exercise of discretion to scrutiny in the absence of elaboration of legislative intent. 20. Before doing so, it would be apposite for us to take note of the decision of the Tribunal in Pushpak Lakhani v. Commissioner of Customs (Preventive), New Delhi [final order no. 50001/2022 disposing of appeal no. 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Customs Act would be rendered otiose; xi. The reliance on the allegations made in the show cause notice for denying provisional release is improper as in every case there would be allegations of contravention and section 110A of the Customs Act would be rendered otiose; and xii. Statements, before being admitted by following procedure under section 138B of the Customs Act, cannot be used straightaway. 21. Consequently, those submissions that, inevitably, concern adjudication of the show cause notice are not only irrelevant to the present proceedings but it would be gravely inimical to jurisdictional restraint even to consider them in the context of the impugned order; for that is tantamount to acknowledging that the adjudication authority has been influenced by such and, thereby, compromising the adjudicatory obligation to decide upon the limited issue of provisional release of seized goods. Seizure, and its reasonableness, does not fall within the appellate competence of the Tribunal save through the first appellate authority; indeed, section 110A of Customs Act, 1962 does not offer scope for presuming that an impugned seizure is anything but valid. And yet, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erritorial confines; the commencement of pre-trial disposal by sale admits that breach by the importer of the impugned goods has only commercial implications. There is no suggestion that any policy has been contravened in the import. The sum and substance of the alleged breach is the failure to declare the goods with intent to evade duty for which restitution lies in section 28 of Customs Act, 1962. 25. Before section 110A was incorporated in Customs Act, 1962, seized goods offered for repossession, by operation of common practice , could be saddled with fine in lieu thereof by retention of confiscatory interest. Over the years, the quantification of fine has been placed within the practical framework of offsetting the potential for windfall deriving from the breach for which the goods are confiscated. Rarely would it be the value of goods; some proportion thereof suffices. There can be no golden formula for it and it is here that the discretion of the authority is called for. Moreover, appeal against adjudication orders no longer require deposit of the full extent of the detriment laid at the door of the importer; section 129E of Customs Act, 1962 prescribes the extent of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adequately safeguarded by execution of bond for the value of the goods and by deposit of a further ₹ 5,00,00,000/- as condition for release of the remaining goods to the appellant. It has been demonstrated by the respondent themselves that there is considerable risk in holding the goods and it is only appropriate that this order be implemented within seven days of its receipt subject to compliance with the conditions specified above. 28. The appellant seeks to export the goods. It has been submitted by Learned Authorized Representative that the impugned goods had never been intended by the manufacturer for use in India. Our attention was also drawn to the correspondence recovered by investigators that have been ascribed to cover up of real intent to smuggle these into the country. These two submissions appear to contradict each other. The plea of the appellant that goods had been mistakenly consigned to them, thus, bears some resemblance of verity which, in the absence of tenable evidence to the contrary, must be addressed and by the competent authority. 29. Ownership of the goods, denied by the adjudicating authority and contested by Learned Authorized Representat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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