9911796707
TMI Blog2007 (8) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the impugned order. A brief summary of the order is set out in the tabular column given below Appeal No. Appellant Respondent Order-in- Original No. Duty/Penalty Representative for the appellant C/37/2006 M/s. Big Bags India Pvt. Ltd. CC, Bangalore OIO No. 24/2005 dated 16-12- 2005 Customs Duty of Rs. 21,71,073/-; Excise Duty of Rs. 19,24,942/- & Penalty of Rs. 6/- lakh under Customs Act under Rs. 12/- lakh Central Excise Shri K. Ravi Sharikar, Advocate C/38/2006 Smt. Rekha Ravish Kamath, Managing Director, BBIPL -do- -do- Penalty of Rs. 2/- lakh -do- C/39/2006 Mr. Ravish Kamath, Chief Executive Officer -do- -do- Penalty of Rs. 5/- lakh -do- C/47/2006 Suresh Kumar Ramsisaria, Director of M/s. Chakrapani Vyapar Pvt. Ltd. -do- -do- Penalty of Rs. 1/- lakh Shri B. N. Gururaj, Advocate C/31/2006 Syed Raqumuddin, Owner of the truck No. KA 184554 -do- -do- Fine of Rs. 30,000/- -do- C/42/2006 Naray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruraj, learned advocates appeared for the appellants. The following points were urged. (i) The CBEC Circular No. 122/95-Cus., dated 28-11-1995 requires that on issues relating to interpretation of statutory provisions or the scope of Notification, the matter should be referred to CBEC. In the present case, the issue involved is the eligibility of the appellant to the benefit of exemption Notification No. 52/2003-Cus. dated 31-3-2003 and also Notification No. 22/2003-C.E. Other interpretations of statutory provisions related to private bonded warehouse were also involved. Therefore, it was the duty of the learned Respondent to refer to the Board for further clarification before issuing the Show Cause Notice and saddling the appellant with the demand. The following case laws were relied on to hold that before taking an action the Development Commissioner should have been consulted. (a) Vishal Footwear Ltd. v. CC -1999 (114) E.L.T. 60 (T). (b) ABN Granites v. CC - 2001 (133) E.L.T. 483 (T) (c) Transparent Technologies Pvt. Ltd. v. CCE - 2006 (200) E.L.T. 118 (Tri.-Bang.) (d) T. Gayathri Reddy v. CC - 2003 (159) E.L.T. 1034 (T) (e) Verifone India Pvt. Ltd. v. CC - 2005 (192) E.L. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be permitted to view a document in a one-sided manner but should appreciate the same in totality. If the Revenue had taken into consideration the inwards column of the register, it would be apparent that the worksheets of ,,the Show Cause Notice are based on arbitrary mathematical models having ignored inward receipts of material and taken only outwards en tries. In the inwards in kg in "Material In and Out Register" shows a total of 3,80,376 kgs. This figure has been totally ignored by the department and the investigations which vitiates the worksheets to the Show Cause Notice in their entirety. (xii) According to the appellant, the quantum of stock as per books was 2,19,689.93 kg. The stock purportedly made out by DRI being 2,90,505.80 kg. There should have been an excess stock of 70,815.87 kg and there would have not been any shortage of stock. This has not been appreciated by the Respondent. (xiii)The Respondent has erred in holding against the appellant merely because the department at one stage refused job work permission. Removal of goods under documents such as Annexure-JI, Form 39C, delivery challans etc., shows that the goods were accounted for and removed by the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leaded. Only owners have been impleaded. Since owners were not present at the time of engaging the vehicles or loading of goods or movement of vehicles, they did not possess the guilty knowledge that the goods were contraband. (iii) The drivers also did not have guilty knowledge of nature of goods. In the first appellant's case, the tempo was hired from tempo stand at SJP Road, Bangalore. In the second appellant's case, one of the intermediary parties engaged the vehicle and instructed the driver to proceed to Big Bags. Neither person could have known the non-duty paid nature of plastic granules. (iv) When neither owner nor driver had the guilty knowledge, the Commissioner was wrong in ordering confiscation of vehicles. Burden of proof not discharged by the Revenue. (v) Appellants rely on ratio of Upendra Singh v. CC - 2002 (145) E.L.T. 111 (Tri.- Kol.) when the drivers do not have guilty knowledge, then confiscation and penalty are liable to be set aside. (vi) Vehicles released provisionally and bank guarantees encashed. Appellants pray for setting aside the confiscation of vehicles ordered under Section 115 and consequential relief of refund of redemption fine of Rs. 30,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant unit had fulfilled the export obligations and even the Development Commissioner had allowed the unit to exit from the EOU scheme. He said while demanding duty, the Adjudicating Authority has not taken into account the receipt of the raw materials. Further he submitted that on the basis of the DRI investigation, the Development Commissioner issued a Show Cause Notice and the same is still pending. In view of these submissions, he urged that the demand of duty is not sustainable. 6.2 The Adjudicating Authority has examined all the points raised by the appellants thoroughly and he has given very detailed findings. Removal of duty free goods has been confirmed by Shri Ravish Kamath, CEO of the appellant firm. Shri H.N. Ananth Kumar, Manager (Excise & Customs) has also confirmed the removals. There is no allegation that the above statements have been given under duress. 6.3 On going through the records, we find that the diversion of duty free material is not a one-time affair to tide-over some difficult situation. The diversions have been taking place very regularly, that too without any permission from the department. When the goods are obtained duty free in terms of Exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No.(4)(a)(ii) of Notification No. 22/2003- Central Excise dated 31-3-2003 as amended. The point is that the goods obtained duty free have been diverted. In terms of the relevant provisions of the exemption notifications, the appellants are liable to discharge the duty. Hence, the question of time bar also does not arise. In view of these things, the objection that Section 28/Section 11A have been invoked in the Show Cause Notice is not a very strong ground for setting aside the demand. There are many rulings which hold that invoking an incorrect provision of law would not vitiate a Show Cause Notice and demand. It is also to be borne in mind that the Adjudicating Authority in his order has correctly invoked the provisions of the Notifications. Further when the goods obtained duty free are bonded in the bonded warehouse, diversions to domestic market unauthorizedly is also violation of the provisions of the Customs Act and duty is demandable under Section 72(d) of the Customs Act, which the Adjudicating Authority has correctly invoked. To make the matters very clear, we are reproducing the relevant portion of Section 72 of the Customs Act. SECTION 72. Goods improperly removed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... binding himself, (a)……………………… (b)……………………… (c)………………………. (d) to pay on demand- (I) an amount equal to duty leviable on the goods and interest at a rate as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) issued under section 28AB of the said Customs Act on the said duty from the date of duty free import of the said goods till the date of payment of such duty, if - (i)…………………. (ii) in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods for export out of India or cleared for home consumption within a period of three years from the date of import or procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow; 6.6 We do not agree with the contention of the learned advocate that in a matter like this that the Customs Department should consult the Development Commissioner for initiating action in accordance with Board's Circular on the subject. The Board's Circular d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise duty can be demanded only from the manufacturer and not on the buyers. This contention is also baseless as the appellants in the present case obtained the goods duty free in terms of the Central Excise Notification and did not use the same in the manufacture of goods to be exported but diverted it to the domestic area. In such cases the appellants are liable to pay the duty demanded in terms of the said Notifications. 6.9 The appellant has furnished the details of raw materials procured/imported/local (duty free) for the period between September 2001 and 4th September 2004 to show that when the DRI visited their premises, they had excess stock. In our view this point is not relevant. There is categorical evidence to show that the duty free materials were diverted. In the impugned order, duty has been demanded on such diverted material. The fact that some materials were borrowed from others and in order to return, the imported goods/duty free indigenous goods were diverted, has not been accepted by the Adjudicating Authority. We are also in agreement with the Adjudicating Authority on this point. He was right in ignoring the inward receipt 6.10 In fine, we confirm all the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Customs Act/Rule 25 of the Central Excise Rules, the learned Commissioner has given his findings in 107 to 109 of the impugned order. It is on record that for the transport of the imported goods of the appellant, Shri Suresh Kumar Ramsisaria had fabricated the documents because the invoice was raised in the name of M/s. Chakrapani Vypar Ltd. and Form 39C in the name of M/s. Shyam textiles, even though the goods were removed from the bonded warehouse of M/s. Big Bags India. He has also extracted from the statement of Shri Suresh Kumar Ramsisaria to establish that he had indeed knowledge of the fact of receiving duty free materials from the appellant unit. In these circumstances, the Commissioner has held that penalty is imposable on him under Section 112(b) of the Customs Act read with Rule 25 of the Central Excise Rules, 2002. The conclusion of the Commissioner is reasonable and we do not have any Strong grounds to set aside the same. Thus, we hold that penalty is imposable on Shri Suresh Kumar Ramsisaria. 6.10.4 With regard to confiscation of the two trucks, the learned Commissioner has dealt with these issues in Paras 100 to 106 of the impugned order. He has brought out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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