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TMI Blog2024 (10) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... t was provisional or final? - HELD THAT:- The adjudicating authority has clearly mentioned that not just release but assessment was also provisional under Section 18(2) of the Customs Act, 1962. The appellant requested to finalize the assessment quite a few times. All these requests to make the assessment final were made after provisional release. The letter dated 25.10.2018 is also available in case file at page number 198. The last line clearly mentions the request to finalize the Bill of Entry. Further, a letter dated 15.11.2018, submitted by the appellant to the Di, Gandhidham regional Unit is also available in case file at page number 201. This letter also requests to finalize the Bill of Entry. Therefore, as admitted by the appellant many times, the assessment of the Bills of Entry remained provisional. It was not just a provisional release but a provisional assessment also. The same fact has been recorded by the adjudicating authority in para 4.4 of the O-1-0. Though Provisional Release and Provisional Assessment are two independent concepts, in the instant case both are present. Whether Section 28(4) is applicable at all? - The adjudicating authority has held that it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings till the adjudicating authority has the power to pass an order under Section 125 which is unquestionably present with the adjudicating authority. See MERINO PANEL PRODUCT LTD. [ 2022 (12) TMI 453 - SUPREME COURT] Contention of the appellant is that since goods were released provisionally and were not available, redemption fine cannot be imposed - When the goods are released under bond, RF can be imposed under section 125 since RF is in lieu of confiscation of goods and not in lieu of goods. When the goods are liable for confiscation, RF should be imposed. See KAY BEE TAX SPIN LTD. [ 2017 (1) TMI 1223 - GUJARAT HIGH COURT] Adjudicating authority has imposed a penalty u/s 112(a) of the Customs Act, 1962 whereas the Show Cause Notice proposes penalties u/s 112(a), 114(AA) and 117 of the Act - defect in the order can be considered as omission on the part of the adjudicating authority as adjudicating authority has erred by not imposing any penalty under Section 114(AA) - We find that it is not coming out clearly as to whether the goods were provisionally released or assessment were done provisionally as the former relates to seized goods and later in part of interim ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the importer. Based on the afore-said allegations, a show cause notice dated 25.01.2021 was issued to the importer and co-noticee asking as to why customs duty of Rs. 56,60,702/- should not be demanded along with interest and why penalty should not be imposed on the importer and other co-noticees'. 2. The appellants contested the show cause notice by denying all allegations levelled against them. The importer admittedly paid total customs duty of Rs. 56,60,702 (prior to issue of show cause notice and after issue of show cause notice) along with interest and 15% penalty and requested to close the proceedings in view of Section 28(5) and 28(6) of the Customs Act, 1962. However, the learned Commissioner instead of closing the proceedings under Section 28(5) and 28(6) of the Customs Act, held that show cause notice is pre-mature for demand of duty only, therefore proceedings cannot be closed, however, it also denied the benefit of notification and imposed redemption fine and penalties on importer and co-noticee. Hence, the present appeals before this is against the impugned order. 3. The party has, inter alia, taken the following grounds before us: 3.1 PROCEEDINGS ARE LIABLE TO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is placed on the following judgements: Saharsh Distributors Pvt. Ltd. Vs Commissioner of Cus, New Delhi, 2017 (354) ELT 671 (Tri-Del.) Kevin Infotech (P) Ltd. Vs Commissioner of Customs (Port), Kolkata, 2007 (216) ELT 435 (Tri-Kolkata) A.S. Syndicate (Warehousing) P. Ltd. Vs Commissioner of Customs (Port), 2011 (267) ELT 469 (Cal.) Deep Jyoti Wax Traders Pvt. Ltd. Vs Commissioner of Customs (Port), 2016 (333) ELT 265 (Cal.) Jaju Petro Chemical Pvt. Ltd. Vs Commissioner of Customs (Port), 2017 (354) ELT 614 (Cal.) It is submitted that as far as other appellants are concerned, no penalty can be imposed. Firstly, when the proceedings are liable to be closed against the main importer, then no penalty can be imposed on co-noticee. Secondly, ingredients of respective provisions are not satisfied. In view of the aforesaid submissions, the impugned order is liable to be set aside and appeals of the appellants may be allowed. 4. The department in rebuttal on the other hand submits as follows:- Whether the assessment was provisional or final: 4.1 The basic contention of the appellant is that since the Show Cause Notice has been issued under Section 28(4) of the Customs Act, they should be g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry remained provisional. It was not just a provisional release but a provisional assessment also. The same fact has been recorded by the adjudicating authority in para 4.4 of the O-1-0. Though Provisional Release and Provisional Assessment are two independent concepts, in the instant case both are present. Whether Section 28(4) is applicable at all: 4.4 The adjudicating authority has held that it would be premature to demand duty under Section 28(4) of the Act. This is in consonance with various judicial pronouncements and it is a settled law that Section 28(4) kicks in only after final assessment. As explained in para 2, assessment was provisional, and therefore, the proceedings have been rightly concluded under Section 125. Provisions quoted in the Show Cause Notice: 4.5 Before coming to the legality of proceedings in the OIO, the relevant provisions quoted in para 9.1 of the Show Cause Notice are required to be summarized. This is necessary to determine whether all the elements required for the proceedings to be concluded under Section 125 were available or not. Relevant provisions quoted in the Show Cause Notice are as under: Section Reason 17(1) Why the self assessment under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment refers to the order in Pushpak Lakhani v. Commissioner of Customs (Preventive), New Delhi (Final Order No. 50001/2022] issued by Hon'ble Principal Bench, CESTAT, Delhi which established framework within which the adjudicating authority may exercise discretion after seizure. All the judicial pronouncements along with legal provisions of seizure, confiscation, adjudication and redemption have been put together to decide this framework. Para 20 the judgement is as reproduced below: 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. 50253 of 2021 against Order-in-Original No. VIII (CusPrev)/Adj/Commr/JWC/27/2013/9900, dated 11th September, 2020 of Principal Commissioner of Customs (Preventive), New Delhil which has elaborately dealt with the legal provisions of seizure, confiscation, adjudication and redemption as well as the several judicial decisions that, put together, establish the framework within which adjudicating authorities may exercise discretion after seizure. All these aspects were summarized thus: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visional. Mere mentioning Section 28(4) in the Show Cause Notice does not take away the right of adjudicating authority to conclude the proceedings under Section 125 when all the essential elements required to enforce it are present. Had Section 124 been mentioned in the Show Cause Notice, proceedings would have been perfect. It has been held in various judicial pronouncements that mere mentioning of wrong provisions or not mentioning of it does not vitiate the proceedings till the time statutory authority has requisite authority therefor. Relevant portions of some of the case laws are reproduced below: (a) In P.K.Palanisamy vs N.Arumugham Anr while disposing SLP (Civil) No. 2308 of 2009 Hon'ble Supreme Court in para 13 held that: It is a well settled principle of law that mentioning of a wrong provision or non-mentioning of a provision does not invalidate an order if the court and/or statutory authority had the requisite jurisdiction therefor. (b) In Ram Sunder Ram vs Union Of India Ors while disposing Appeal (civil) 2951 of 2007, Hon'ble Supreme Court held in para 20 that: It is well settled that if an authority has a power under the law merely because while exercising th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een held that when the goods are released under bond, RF can be imposed under section 125 since RF is in lieu of confiscation of goods and not in lieu of goods. When the goods are liable for confiscation, RF should be imposed. Relevant paras, para 5.4 6, of the judgement are reproduced below: Para 5.4: ............... once the confiscation of such goods was authorized, Section 125 of the Customs Act shall be applicable. However, as the goods were not available for confiscation at the time of adjudication, as the same were already released on bond and/or permitted to be warehoused without payment of duty on furnishing the bond and undertaking, redemption fine in lieu of confiscation was imposable. Para 6: For the reasons stated above, as the goods were not available for confiscation, as the goods were already diverted/permitted to be warehoused without payment of duty, on furnishing the bond and the undertaking and thereafter, the respondent-Unit clandestinely and illicitly diverted the goods to the open market, the goods which otherwise were liable to be confiscated, in lieu of confiscation, redemption fine was imposable. Appeal No C/10744/2023 5. The adjudicating authority has imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 are relevant. We find that it is not coming out clearly as to whether the goods were provisionally released or assessment were done provisionally as the former relates to seized goods and later in part of interim assessments required to be subjected to finalisation. In case demand under Section 28 (4) was applicable and duty was demandable then the party is very much entitled to claim the amnesty under Section 28 (5) and the same on following of the requisite conditions. In which case confiscation of goods and interest thereof does not get triggered nor any provisional assessment is required to be finalized to the prejudice of the party. We are therefore, remanding the matter back to the adjudicating authority to decide firstly nature of proceedings by determining the appropriate facts and if assessment was not provisional to allow benefit of provisions of Section 28(5) 28 (6) to the party on fulfilment of the conditions or otherwise to finalise assessment first and then demand duty under Section 28 (4) and allow amnesty under Section 28 (5) and 28 (6) on fulfilment of conditions. The penalties on the other parties will be subject to the amnesty being available or not to M/s. Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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