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TMI Blog2023 (10) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... upees Four Lakh Twenty Seven Thousand One Hundred and Twenty Two Only) based on reassessed value, duly seized, imported vide container No. TEMU 6929879 and Bill of Entry No.4228874 dated 01.12.2017 under Section 119 of the Customs Act, 1962 as they are used to conceal smuggled goods. 3. I order Shri. C. Solomon Selvaraj being the beneficial owner importer, to pay the demand of total differential duty of Rs. 4,56,00,374/- (Rupees Four Crore Fifty Six Lakh Three Hundred and Seventy Four Only) leviable on the goods imported vide container No. TEMU 6929879 including the Anti-Dumping Duty, under Section 28(4), 28(8)of the Customs Act, 1962 read with Section 46(4) ibid. 4. I confirm the demand of the interest leviable on the total differential duty under Section 28AA of the Customs Act, 1962, and payable by Shri. C. Solomon Selvaraj being the beneficial owner importer, under Section 28(8) of the Customs Act, 1962. 5. Considering the involvement and gravity of offence, I impose a penalty of Rs. 4,56,00,374/- (Four Crores Fifty Six Lakhs Three Hundred and Seventy Four only)along with interest applicable as at (4) above on M/s. R.M.Enterprises under Section 114A of the Customs Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ysian Core Veneer and after obtaining bail, started doing customs clearance work for various importers of commercial goods consignments with weight difference/quantity mis-match. (ii). Shri. Salomen Selvaraj owns a firm by name M/s. The Sea Shipping Forwarders and is its sole proprietor entered in to a conspiracy with Shri. Vishal, whose actual identity is unknown, to smuggle goods from China by concealing them behind declared goods to evade duty or prohibitions on the import of goods and landing the containers having such shipments/consignments at Kattupalli Port only to avoid scanning of the containers. (iii). Shri Salomen Selvaraj informed that Shri. Vishal is involved in sourcing and arranging such shipments/consignments from China and engages Shri. Salomen Selvaraj for clearing such shipments/consignments from Customs and Shri. Salomen Selvaraj undertakes such works on lump sum basis i.e. including all incidental charges and the Customs Duty. (iv). Shri Salomen Selvaraj informed that Shri. Vishal sourced and arranged to ship the container TEMU 6929879 with goods declared as 3B Glass Top Gas Stove (Unbranded/Unpopular brand) and Glass spare part for three burner gas stove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance work at CFS and R. Chandrakumar accordingly attended to the said work.as instructed and obtained the Out of Charge Order for the Bill of Entry under reference. (xi). The container TEMU 6929879 was then detained by DRI, CZU and examined again wherein undeclared goods viz."steel measuring tapes" and "sewing machine needles" were found concealed behind the declared goods and there was a shortage in quantity of the declared goods. (xii). A total of 2,01,13,000 Pieces of sewing machine needles of various sizes of Brand "Organ" and "Flying Tiger and d 70,200 Pieces of "measuring tapes" of various sizes were found which were not declared in any of the documents submitted for clearance of the goods including invoice and packing list. (xiii). There were two models of "Organ" Brand needles found in the consignment viz. DBx1 and HAx1 were found to be labelled with "Organ Needle Co. Ltd." and "Made in Vietnam",manufacturer as M/s. Organ Needle (Vietnam) & Co. Ltd., the importer as M/s. Sunny International, Kolkata, MRP, "Home Use"etc., respectively. The "Flying Tiger" Brand needles were found be to labelled with details like "Made in China", the manufacturer as M/s.Jiangsu Flying Ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Valuation(Determination of value of Imported Goods) Rules, 2007 as not a transaction value read with Explanation (1) (iii) (d) and Explanation(1)(iii)(f) to the Rule 12 of the said Rules. (xxiii). The value of the undeclared goods of description sewing machine needles of Vietnam and Japan origin of Brand Organ is to be re-determined in terms of Rule 4 ibid read with Rule 3(4) ibid, as given in the Annexure-III based on the contemporaneous value of the identical goods i.e. Same description, brand and country of origin available in ICES 1.5 as given in Annexure-II, in terms of Rule 2(d) ibid. (xxiv). As there are no contemporaneous records of imports of sewing machine needles for home use of the Brand"Flying Tiger" and country of origin as China in ICES 1.5. the value of the undeclared goods of description sewing machine needles for home use of the Brand "Flying Tiger" is to be redetermined in terms of the contemporaneous value of unknown brands of sewing machine needles for home use and of country of origin China available in ICES 1.5 as given in Annexure-II, as per Rule 5 ibid read with Rule 3(4) ibid, which are similar goods in terms of Rule 2(f) ibid, as given in the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods liable for confiscation (xxxiii). Penalty under Section 112 of the Customs Act, 1962 is imposable on Shri Vishal for rendering the goods liable for confiscation. (xxxiv).Penalty under Section 112 of the Customs Act, 1962 is imposable on Shri.Sunil Saran Proprietor, M/s. Saran Enterprises for abetting the smuggling of the goods liable for confiscation. (xxxv).Penalty under Section 112 of the Customs Act, 1962 is imposable on M/s Asian Shipping Agencies, Customs Broker for omission to comply with Customs Brokers Licensing Regulations,2013 abetted the smuggling of the goods liable for confiscation. (xxxvi). Penalty under Section 114A of the Customs Act, 1962 is also imposable on M/S. R.M. Enterprises for short levy of duty. (xxxvii). Penalty under Section 114A of the Customs Act, 1962 is imposable on Shri Vishal for short levy of duty. (xxxviii). Penalty under Section 114A of the Customs Act, 1962 is imposable on Shri Salomen Selvaraj for short levy of duty. (xxxix).Penalty under Section 114AA of the Customs Act, 1962 is also imposable on Shri. Salomen Selvaraj for submitting false documents to Customs. (xl). Penalty under Section 114AA of the Customs Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eventy Four Only) leviable on the goods imported vide container No. TEMU 6929879 including Anti-Dumping Duty, should not be demanded under Section 28(4) of the Customs Act, 1962 read with Section 46(4)ibid. ii. Interest leviable on the total differential duty should not be demanded under Section 28AA of the Customs Act, 1962. iii. Penalty should not be imposed on them under Section 114A of the Customs Act, 1962 for short levy of duty." 4. Paragraph No.28 of the Show Cause Notice dated 18.06.2018 bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017, issued under Sections 124 and 28 of the Customs Act, 1962 reads as under: "28. As the smuggling under reference had been attempted in the name and IEC of M/s.R.M. Enterprises as importer on record with Shri Saloman Selvaraj as the beneficiary by virtue of his effective control over the imported goods and Shri Vishal as the actual owner of the goods; M/s. R.M. Enterprises, Shri. Vishal and Shri. Saloman Selvaraj are all appear to be importers for the purpose of this smuggling attempt read with Section 2(26) of the Customs Act, 1962." 5. The petitioner has given a reply on 15.10.2018 and thereafter, additional submission on 09. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition also does not disclose all of the relevant facts of the case. For better appreciation of facts, the following background facts are stated. 13. It is submitted that based on specific intelligence, the Directorate of Revenue Intelligence, Chennai Zonal Unit had conducted a preliminary investigation and found that an importer namely one M/s.R.M.Enterprises, Nellore (IEC No.0915015056), Rep. by its Proprietor Ramesh Menon had concealed and imported "Steel Measuring Tapes" and "Sewing Machine Needles" along with declared goods viz., "gas stoves" and "spare parts for gas stoves" from China vide Bill of Entry No.4228874 dated 01.12.2017 the container bearing number TEMU6929879. This was done with an intention to evade payment of high anti-dumping duty and customs duties. 14. It is submitted that upon conducting detailed investigation and examination on 22.12.2017, it was found that there were a total of 1,01,12,000 pieces of sewing needles of various sizes which were not declared in any of the documents (including invoice and packing list) submitted before the Customs for clearance of the goods. Since the importer namely M/s.R.M.Enterprises had concealed goods with an intention t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner had approached him and promised to give 10 to 20 consignments per month and had negotiated to pay Rs. 2000 per consignment. b. The check list for filing Bill of Entry was sent by him to the Petitioner and a confirmation was received from one Ms. Lizzy from the same email id. c. The Petitioner had got the Self-Assessment verified in the concerned Assessment Groups and had used his employee Mr.Chandrakumar at the time of examination of subject goods. d. The Petitioner had informed him that he would take care of the activities such as duty payment, examination, getting delivery order, transportation, etc. 18. It is submitted that based on the statement of Mr.Prem Kumar, intelligence was gathered about the Petitioner. It was found that the Petitioner was a proprietor of M/s. Sea Shipping Forwarders and was earlier remanded by DRI, Chennai in 2016 for smuggling 70,00,000 Sticks of foreign origin Djarum Black Cigarettes valued at Rs. 7 Crores in the consignment imported in the name of his company M/s. Thivya Agencies 19. It is submitted that the Petitioner was summoned to appear to record statement under Section 108 of the Customs Act. In his voluntary statement, the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is further submitted that summons were also sent to Mr Sunil Saran as per the address proof in the bank records and the same was undelivered with the remark "Not Known". 24. It is submitted that since the packages of sewing machines needles which were found concealed in the consignment had a mention of one M/s. Sunny International, with address in Kolkata, investigations were also initiated against them by the Officers of DRI, Kolkata Zonal Unit on 17.03.2018. However, no incriminating documents were found. 25. It is submitted that a perusal of the aforementioned facts clearly demonstrate the role of the Petitioner in relation to the smuggled goods. Hence, the contention of the Petitioner that he was left in the lurch to face authorities in relation to the import made by M/s.R.M. Enterprises/Vishal without even having knowledge about who were all involved in the smuggling network does not hold any substance and the same are denied as false and baseless. 26. It is submitted that the averments in para 6, 7, 8 and 9 of the affidavit pertains to the statement of facts and as such does not warrant any response. 27. It is submitted that the contention of the Petitioner that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued by the Respondent. Hence, the impugned order issued is perfectly sustainable under law. 34. It is submitted that the argument that impugned order has imposed insurmountable amount of duty and penalty on the petitioner and therefore, even the appellate remedy under Section 129-A of the Customs Act, 1962 has become illusory is irrelevant. 35. The learned Junior Standing Counsel for the respondent would further submit that there is no scope for bye-passing an appeal remedy merely because the amount involved is huge. It is submitted that the petitioner cannot plead financial hardship and therefore, the petitioner should be directed to file statutory appeal against the impugned order if the petitioner desires so. In this connection, the learned Junior Standing Counsel for the respondent has relied on the decision of this Court dated 09.01.2018 in Sunmac Enterprises Vs. The Commissioner of Central Excise, in W.P.No.285 of 2018, wherein it has been held as follows: "4. .... The inability to pay the mandatory pre-deposit cannot be a ground to entertain a writ petition. Secondly, with regard to the decision in Enam Service Private Limited, prima facie, the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that charge levelled against the petitioner cannot co-exist with the finding that the petitioner is the only person solely responsible for the alleged smuggling. 43. It is submitted that there is violation of principles of natural justice and therefore, the petitioner cannot be forced to avail the alternate remedy and prayed for allowing the Writ Petition. 44. I have considered the arguments advanced by the learned counsel for the petitioner and the learned Junior Standing Counsel for the respondent. 45. I shall first deal with the preliminary objection of the petitioner that the impugned Order-in-Original No.76206/2020 dated 28.09.2020 was non-est in law and is time barred in view of Section 28(9) of the Customs Act, 1962. 46. The petitioner was issued with the Show Cause Notice bearing reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017 was issued by the Additional Director General, Directorate of Revenue Intelligence on 18.06.2018 in respect of goods attempted to be smuggled along with the goods declared in the Bill of Entry No.4228874 dated 01.12.2017. 47. Section 28(4) of the Customs Act, 1962 was invoked in the said Show Cause Notice read with Section 46(4) of the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been treated as a "beneficial owner". 52. As per Section 28(9)(a) of the Customs Act, 1962, wherever a show cause notice is issued without invoking the ingredients of Section 28(4) of the Customs Act, 1994, the proper officer has to determine the amount of duty or interest under Sub-Section (8)of the Customs Act, 1962, within a period of six months from the date of notice. 53. On the other hand, in respect of cases filing under Section 28(9)(4) of the Customs Act, 1962, the proper officer has to determine the amount of duty or interest under Sub-Section (8)of the Customs Act, 1962, within a period of one year from the date of the notice. 54. Ordinarily, the said Show Cause Notice bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017 dated 18.06.2018 ought to have adjudicated by the proper officer on or before 17.06.2019 in terms of Section 28(9)(b) of the Customs Act, 1962. 55. Under proviso to Section 28(9) of the Customs Act, 1962 after amendment, any officer senior in rank to the "proper officer" may extend the period specified in clause (a) by a further period of six months and the period specified in clause (b) by a further period of one year having regard to the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (RUD) which forms the basis of the Show Cause Notice bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017 dated 18.06.2018, issued under Sections 124 and 28 of the Customs Act, 1962. 64. The petitioner appears to have given additional reply on 09.08.2019. This was after 17.06.2019, being one year from the date of Show Cause Notice dated 18.06.2018 bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017, issued under Sections 124 and 28 of the Customs Act, 1962. 65. The petitioner has clearly stated that the petitioner is a poor person and is not even having an Income Tax Assessee and has been wrongly assessed as customs duty and penalty and if the real culprits are arrested and made to reply, the duty was to be recovered from them and not from the petitioner. 66. The petitioner has given a further reply on 10.09.2020, wherein the petitioner has stated that he was not aware of the contents of the container, as that he was unaware of the fact that the imported container contained needles and measuring tapes, attracting huge customs duty and anti-dumping duty. The petitioner specifically stated that the petitioner is not the "beneficial owner" of Section 2(26) of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Relaxation and Amendment of Certain Provisions) Ordinance, 2020. 76. Section 6 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020 reads as follows:- "6. Notwithstanding anything contained in the Central Excise Act, 1944, the Customs Act, 1962 (except sections 30, 30A, 41 , 41A, 46 and 47), the Customs Tariff Act, 1975 or Chapter V of the Finance Act, 1994, as it stood prior to its omission vide section 173 of the Central Goods and Service Tax Act, 2017 with effect from the 1 51 day of July,2017, the time limit specified in, or prescribed or notified under, the said Acts which falls during the period from the 20th day of March, 2020 to the 29th day of June, 2020 or such other date after the 29th day of June, 2020 as the Central Government may, by notification, specify, for the completion or compliance of such action as- (a) completion of any proceeding or issuance of any order, notice, intimation, notification or sanction or approval, by whatever name called, by any authority, commission, tribunal, by whatever name called; or (b) filing of any appeal, reply or application or furnishing of any report, document, return or statement, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, tribunal, by whatever name called; or (b) filing of any appeal, reply or application or furnishing of any report, document, return or statement, by whatever name called, shall, notwithstanding that completion or compliance of such action has not been made within such time, stand extended to the 30th day of September, 2020 or such other date after 30th day of September, 2020 as the Central Government may, by notification, specify in this behalf: Provided that the Central Government may specify different dates for completion or compliance of different actions under clause (a) or clause (b)." 81. That apart, Notification No.G.S.R.418(E) [R.No.CBEC- 20/06/08/2020-GST] was issued under Section 6 of The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Ordinance, 2020, it has been clarified as under:- "In exercise of the powers conferred by section 6 of the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (2 of 2020), the Central Government hereby specifies that, - (i) the 29th day of September, 2020 shall be the end date of the period during which the time limit specified in, or prescribed or notified under, the Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utation of time (1) Where, by any 1 [Central Act] or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open: Provided that nothing in this section shall apply to any act or proceeding to which the 6 Indian Limitation Act, 1877 (15 of 1877), applies. Limitation Act, 1963 (2) This section applies also to all 2 [Central Acts] and Regulations made on or after the fourteenth day of January, 1887. 85. Proviso to Section 34(3) of the Arbitration and Conciliation Act, 1996 was interpreted by the Hon'ble Supreme Court in Assam Urban Water Supply and Sewerage Board Vs. Subash Projects and Marketing Limited, (2012) 2 SCC 624. It was held as under:- "14. Section 2(j) of the 1963 Act defines: "2.(j).'period of limitation' which means the period of limitation prescribed for any suit, appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of 45 days from the date of communication of the order of the Tribunal on 19.12.2019. The normal period of limitation of 45 days expired on 02.02.2020 from 19.12.2019. The extended period of 45 days limitation from 02.02.2020 expired on 18.03.2020. The appeal was however filed before NCLAT only on 20.07.2020. 91. Therefore, the appeal ought to have been filed latest by 18.03.2020 by giving proper and sufficient reasons to condone the delay. Instead, the appeal itself was filed only on 20.07.2020, after lockdown was imposed with effect from 24.03.2020 due to outbreak of Covid-19 pandemic. 92. To get over the limitation, the appellant therein relied upon the decision of the Hon'ble Supreme Court in Cognizance For Extension of Limitation, IN RE, rendered dated 23.03.2020. By the aforesaid order, the Hon'ble Supreme Court had extended period of limitation with effect from 15.03.2020. The said order was passed in the exercise of power under Article 142 read with 141 of the Constitution of India. 93. The Hon'ble Supreme Court in in Sagufa Ahmed and others Vs. Upper Assam Polywood Products Private Limited and others, (2021) 2 SCC 317 concluded that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and Amendment of Certain Provisions) Act, 2020 and the Notification referred to supra. As far as specified union Tax laws were concerned, there was a special dispensation. There was a special saving of limitation. 97. In my view, the decision of the Delhi High Court in Gautam Spinners Vs. Commissioner of Customs (Import), New Delhi, (2023) 9 Centax 115 (Del.) is also of no relevance to the facts of this case. 98.In the said case, the Show Cause Notice itself came to be issued on 05.08.2021 under Section 28(4) of the Customs Act, 1962. The Court there concluded that the proceedings initiated against the petitioner therein cannot be said to be covered by the letters of the Directors of the Board dated 17.03.2021 and 16.04.2021. 99. In the light of the above, the arguments of the learned Counsel for the petitioner that the impugned Order-in-Original No.76206/2020 dated 28.09.2020 is non-est and is liable to be declared as a nullity under Section 28(9) of the Customs Act, 1962 cannot be countenanced and is therefore liable to be rejected. 100. Therefore, the preliminary issue regarding the jurisdiction of the respondent to pass the impugned order in the light of the decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as a "beneficial owner" within the meaning of Section 2(3A) of the Customs Act, 1962, on account of its inability to trace out and locate the importer in whose name the Bill of Entry was filed. 106. The order itself concludes that the said Mr.Sunil Saran of M/s.Saran Enterprises was untraceable and was not found. 107. The petitioner appears to have acted as an agent who facilitated the smuggling of the consignments of Steel Measuring Tapes and Sewing Machine Needles along with the declared consignment of 3B Glass Top Gas Stove (unbranded / unpopular brand), spare parts for three burner gas stove. Attempt was made to evade the payment of customs duty and anti-dumping duty and to have the goods cleared from the premises of the Container Station at Kattupalli Port without payment of such duty. 108. The petitioner has acted as a conduit for Shri Vishal and one Shri Sunil Saran and perhaps Shri.RameshMenon.R, the Proprietor of M/s.R.M.Enterprises. The petitioner had merely engaged services of the Customs Broker viz., M/s.Asian Shipping Agencies through one K.Faizullah, the clerk of the said Customs Broker for filing Bill of Entry No.4228874 dated 01.12.2017 for clearance of the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- into the petitioner in the petitioner's account viz., M/s. The Sea Shipping Forwarders for payment of customs duty of Rs. 4,26,188/- was untraceable. Shri.Vishal, Shri.Manikandan and Shri.RameshMenon.R are also untraceable in the absence of any information. Shri.RameshMenon.R, Proprietor of M/s.R.M.Enterprises is the ICE holder. 115. The attempt of the Department as to fasten liability on the petitioner is only on account of the inability of the Department to locate Shri.Vishal, Shri.Manikandan, Shri.Sunil Saran of M/s.Saran Enterprises and Shri.RameshMenon.R, the Proprietor of M/s.R.M.Enterprises & I.E.Code holder whose I.E.Code was used in the Bill of Entry to smuggle the goods along with the declared goods in Bill of Entry No.4228874 dated 01.12.2017. 116. Consignment of needles and measuring tapes were attempted to be smuggled. A reading of the Show Cause Notice dated 18.06.2018 bearing Reference F.No.DRI/CZU/VIII/48/ENQ-1/INT-50/2017 and the impugned Order-in-Original No.76206/2020 dated 28.09.2020 indicates that the petitioner played a small role in the attempt of the importer to smuggle the consignments of needles by filing Bill of Entry using the name and Import E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid Bill of Entry No.4228874 dated 01.12.2017 cannot be sustained. 122. The Customs Department is not handicapped. It is open to the Customs Department to trace the location from where the payment of the amount was made and the person who made such payment to the petitioner. 123. It appears that there is either an attempt to shield the persons who were actually involved in the smuggling of the imported consignment of 2,01,13,000 pieces of sewing machine needles of various sizes of Brand "Organ" and "Flying Tiger" and 70,200 pieces of "measuring tapes" of various sizes or there is no will to trace out such a person. Therefore, the impugned order is unsustainable. 124. Further, there are no direct materials to infer that the petitioner was marketing or dealing in the smuggled goods. Therefore, the petitioner cannot be declared as the "beneficial owner" of the smuggled goods within the meaning of Section 2(3A) of the Customs Act, 1962. Unless, the petitioner himself imported the goods and exercised effective control over the smuggled imported goods, the petitioner cannot be called as the "beneficial owner". 125. Therefore, while it cannot be construed that the impugned Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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