9911796707
TMI Blog2025 (3) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed for the following reliefs : "a. That this Hon'ble Court may be pleased to hold and declare that i. the investigation carried by the office of Respondent No.2 is not just and fair and the conduct of the Respondents against the Petitioner herein in pursuance to F.No.GEN/INT/MISC/26/2023, is unwarranted and illegal; ii. that the continuous provisional attachment of the Petitioner's Bank Account No.6311621118 and Petitioner's Proprietor's Bank Account No. 7211434006 is without any authority of law; b. That this Hon'ble Court may be pleased to issue a Writ of Mandamus or Writ in the nature of Mandamus or any other appropriate Writ, Order or Direction directing Respondents, their servants, subordinates, and agents: i. to withdraw Summons dated 07.06.2024 bearing F.No. F.No. GEN/INT/MISC/26/2023 (Annexure - C) and any subsequent Summons issued to the Petitioner; ii. to refrain from issuing further Summons to the Petitioner seeking for documents related to M/s S.T. Electricals; iii. to defreeze the Petitioner's Bank Account No. 6311621118 and Petitioner's Proprietor's Bank Account No.7211434006 held with Respondent No.4 bank; c. That t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments such as purchase/sale documents in respect of M/s. S. T. Electricals, books of accounts, ledger, Bank Accounts details and called upon the petitioner to remain present to tender the oral statement. Another summons dated 07.06.2024 was also issued upon the petitioner seeking the same documents. 4.5. The petitioner thereafter, by letter dated 14.06.2024 sent via Email dated 15.06.2024 addressed to the respondent No.3 raised objections against issuance of summons contending that the respondent No.3 has no jurisdiction to investigate the local purchases made under appropriate invoice and after due payment of local taxes by the petitioner. The petitioner also requested to withdraw the summons. 4.6. The petitioner thereafter, by Email dated 21.06.2024 along with letter dated 12.06.2024 (inadvertently dated as 12.06.2024 instead of 21.06.2024) submitted copies of invoices and ledger in respect of M/s. S. T. Electricals. 4.7. The petitioner has thereafter preferred this petition. 4.8. Learned advocate Dr. Sujay Kantawalla for the petitioner, at the time of hearing on 01.08.2024, submitted that the respondent could not have continued the provisional attachment of the Bank Accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon beneficiaries. Moreover, overseas suppliers M/s Recon Metals GMBH-Germany, M/s MIKO Trading GMBH-Germany, which are common in present case, were also the suppliers in the case of M/s Naravan Power Solution, who dealt with the Petitioner to supply sub-standard CRGO Steel along with forged Mill Test Certificates. 6. That, the above facts, transactions, purchase of substandard CRGO Steels from M/s ST Electricals by the Petitioner therefore require further investigation which cannot be ascertained in absence of oral evidences, therefore Summon dated 17.05.2024 and 07.06.2024 under Section 108 of the Customs Act, 1962, for submission of documents as well as providing statement/Oral Evidences have been issued to the Petitioner. The Petitioner has not appeared in-person before the investigating officer, resultantly not complied with the Summons. Instead of cooperating in the investigation, the Petitioner has approached this Hon'ble Court with clear intent to avoid the investigation. The petitioner, vide its letters, has itself concluded the investigation, that he has no role in the matter and summons issued are unwarranted. The Petitioner has been found to have deep business c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: "2. That, it is to submit that it is revealed during the Investigation that Directorate of Revenue Intelligence, Mumbai had booked a case during FY 2018-2019 against Shri Narendra Tarachand Purohit (Proprietor of M/s. Shree Chamunda Enterprises) and others with exactly similar modus operandi involving similar suppliers. During that investigation, Shri Narendra Tarachand Purohit, Proprietor of M/s. Shri Chamunda Enterprises had inter-alia stated in his statement dated 21.02.2019, recorded under Section 108 of the Customs Act, 1962 that his sister Rinku Purohit managed the accounts i.e. sale and purchase of the CRGO steel both in international and domestic market, of all importing companies being run by them; that his brother-in-law Jagdish Purohit (who is proprietor of the present Petitioner M/s. Pacific Powertech Solutions) looked after the sale of the imported CRGO steel in local market. Therefore, essence of submission of respondent was that since petitioner has dealt with such goods in similar modus in that similar matter too. Moreover, the concerned noticees of the said SCNs are sister concerns/related parties to the petitioner as well as are in common in the present case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the authorities before the Rajasthan High Court in Writ Petition No. 10480 of 2023, which is stated to be pending. The Customs Authorities, during the investigation, found that M/s ST Electricals had sold these goods to GST Technology, who, in turn, has sold to Pacific and Pacific has sold goods to the petitioner and the petitioner has further sold these goods in the market." 4.14. Thus, it is clear from the aforesaid order that the petitioner-M/s. Pacific Powertech Solutions purchased goods from GST Technology and sold the goods to M/s. Mayur Enterprise. 4.15. The Hon'ble Bombay High Court in case of M/s. Mayur Enterprise after considering the submissions of the parties held as under: "11. Submissions of the Petitioner: The petitioner has contended that he has not imported the goods and that he is a bonafide purchaser in the chain of sale and purchase transaction starting from sale by M/s ST Electricals, who was the original importer. The petitioner submits that since he is not the importer of the goods, the impugned action cannot be initiated against him. The petitioner has further contended that the goods, which were purchased by him from Pacific, have been sold to Naray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y imported by M/s ST Electricals. The respondents themselves admit in the reply that goods purchased by the petitioner, which were originally imported by M/s ST Electricals, are already sold by the petitioner. If that be so, then the said goods cannot be of the ownership of the petitioner. Therefore, the respondents are not contending that they have detained the same goods, which were imported by M/s ST Electricals, but are of similar description which matches with purchase invoice of the said similar description goods. Thus, in our view, on such admission by the respondents the impugned action of detaining goods of the petitioner, would be rendered without jurisdiction. 15. In the context in question it is necessary to note the relevant provisions of the Customs Act. 16. Section 2(14) of the Act defines "dutiable goods" to mean any goods, which are chargeable to duty and on which duty has not been paid. Section 2(15) defines "duty" to mean a duty of customs leviable under the Customs Act. Section 2(22) defines "goods" to include vessels, aircrafts, vehicles, stores, baggage, currency, negotiable instruments and any other kind of movable property. Section 2(25) defines "importe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by the said importer and the said goods have changed hands in open market and is also out of the possession of the petitioner. The respondents in their affidavit in reply have referred to the communication from Jodhpur Customs authorities dated 8 July 2023 and 12 July 2023 wherein the Jodhpur authorities have directed the respondents to seize the very goods imported by M/s ST Electricals. In the said reply, the respondents have stated that these very goods have been sold by the petitioner to Narayan Power Solutions. In our opinion, the situation would have been different if the Customs were to bring some materials to show that the goods in question were being allegedly dealt by M/s. ST Electricals in connivance with the petitioner or that the petitioner was not a bonafide third party purchaser. If this be the case, then the action of detaining the goods of the petitioner was contrary to the revenues own stand and this would hold good for attachment of the bank account. Thus, in our view, on the facts of the present case, the impugned action in detaining the goods in question (some other goods of the petitioner) is contrary to the provisions of the Act as noted by us more so wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable. the provision of Section 111 provides for confiscation of improperly imported goods. Prima facie, the petitioner being a third party purchaser of the goods in question, this provision also may not be applicable. 23. We may also observe that if the case of the respondent is accepted, that the department can detain any goods in the hands of subsequent purchaser of the goods who has purchased them from the open market, then it would lead to an anomalous and chaotic situation. Illustratively, where Mr. A who imports goods and sells them to third parties which are subject matter of various transactions leading to Mr. Z who is a third party purchaser from the open market, such goods cannot be subject matter of any detention by the Customs Authorities merely because import of goods by Mr. A is being investigated. 24. The respondents have also relied upon the provisions of Section 135 to justify their actions. Section 135 deals with evasion of duty and it provides for prosecution, if any person in relation to any goods in any way knowingly is concerned with mis- declaration of value or in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the respondents in detaining the goods in question and attaching the bank account of the petitioner without there being any demand due from the petitioner or any proceedings pending is without jurisdiction and without any authority of law. Accordingly, we pass the following order: ORDER (i) We declare that the detention of the goods described in Table A of the panchanama dated 26 July 2023 is illegal and the same shall be revoked on a copy of this order being presented by the petitioner to the concerned authority; (ii) The respondents are directed to return the documents which are mentioned in Table-B of the panchanama dated 26 July 2023; (iii) The respondents shall defreeze Savings Account No. 809510264 of the petitioner held with Indian Bank and intimate the communication of the said defreezing to the bank; (iv) Needless to observe that the petitioner shall co-operate with the respondents, in connection with proceedings against M/s ST Electricals is concerned; (v) The petition is allowed in terms of the above order. No order as to costs." 4.16. Thus, from the above, it is clear that the goods in question have already been sold and passed on to M/s. Mayur Enterpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the respondent No.5 who has been joined in his personal capacity. 5.3. It was submitted by learned advocate Mr. Kantawalla that the basis of the allegations made against the petitioner by the respondent No.5 in the affidavit upon multiple investigations is nothing but an attempt to mislead the Court and divert the attention from primary issue of jurisdiction raised in the petition. It was submitted that the goods purchased by the petitioner was already cleared for home consumption and therefore, it ceases to be imported goods, more particularly, when the petitioner has produced the documents with the reply. 5.4. It was therefore submitted that the respondent No.5 has issued the letter dated 08.10.2024 informing the respondent No.4-Bank to unattach the bank account of the petitioner clearly shows the malafide of the respondent, as the bank accounts were ordered to be unattached during the pendency of the petition. 5.5. It was therefore submitted that the investigation initiated against the petitioner are liable to be dropped and impugned summons are required to be quashed and set aside in the facts of the case. 6.1. Per contra, learned Additional Solicitor General Mr. Devang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscation under Section 111(d), (m) and (o) of the Act. 6.7. Learned Additional Solicitor General Mr. Devang Vyas along with learned advocate Mr. Siddharth Dave explained in detail the modus operandi of M/s. S.T. Electricals and others including the petitioner by referring to the bill of entries filed by M/s. S.T. Electricals for import of such goods to show that the petitioner has transferred the amount prior to purchase of the goods to pay the duty by M/s. S.T. Electricals. It was therefore submitted that M/s. S.T. Electricals is nothing but a conduit to import the goods by the petitioner so as to avoid the further investigation by the customs. 6.8. It was further pointed out that the goods imported vide Bill of Entry No.5525864 was uploaded on the route and sold to M/s. GSD Technology, Mumbai who in turn shifted the goods to the petitioner at Vapi and petitioner sold the goods to M/s. Mayur Enterprise at Maharasthra with a same truck number without unloading of the goods. It was therefore tried to be demonstrated that on analysis of movement of vehicles for goods imported by M/s. S.T. Electricals which are prohibited goods, the petitioner is a beneficiary of import of such proh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held that in view of Sub-section (3) of Section 108 of the Act, all persons summoned are required to attend either in person or by an authorized agent before the Officer and therefore, the petitioner ought to have appeared pursuant to the summons in person before the respondent No.2 and therefore the prayer made by the petitioner to quash the summons cannot be entertained in view of the decision of the Hon'ble Apex Court in case of Commissioner of Customs, Culcutta & Others versus M. M. Exports & Another reported in (2007) 212 ELT 165 wherein, it was held that High Court should not interfere at the stage when the Department has issued summons except in exceptional cases. 6.14. It was therefore submitted that the language of Sub-section (3) of Section 108 of the Act is very clear that if the Officer directs the petitioner to appear in person, the petitioner is bound to appear in person or through authorised agent if such option is given. It was therefore submitted that in view of the order of release of the provisional attachment, the petition has become infructuous and may be rejected as the summons issued by the respondent No.2 cannot be quashed and set aside as the investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the affidavit which was filed earlier by him in his official capacity. The affidavit filed by the respondent No.5 affirmed on 08.10.2024 refers to the modus operandi of M/s. S.T. Electricals and the past imports made by M/s. S.T. Electricals of CRGO Strips which were found to be on the basis of forged/fake MTC submitted before the Customs Authority and mis-declaring the description of the goods for circumventing the restriction/prohibition imposed on sub-standard CRGO Steel strips and it was tried to contend that the petitioner being one of the beneficiaries, summons were issued as purchase of sub-standards CRGO Strips by the petitioner requires further investigation which cannot be ascertained in absence of statements. 9. It was contended by respondent No.5 that the petitioner has approached the Court with an intention to avoid the investigation. It was pointed out that the petitioner has been found to have deep business connections, banking transactions, goods transaction with Shri Sohan Lal Sharan, proprietor of M/s. S.T. Electricals, Jaipur and Mumbai and therefore, the role of the petitioner is subject to investigation. 10. It was also contended that the petitioner cannot th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apacity of respondent No.2 has exceeded his jurisdiction insisting upon the personal presence of the proprietor of the petitioner firm for the reasons best known to him without there being anything on record which requires further investigation qua the petitioner, more particularly, when the petitioner has sold the goods imported by M/s. S.T. Electricals to M/s. Mayur Enterprise, which is duly recorded in the judgment and order passed by the Hon'ble Bombay High Court as reproduced hereinabove. 15. Therefore, it is very clear that the respondent No.2/5, only with an ulterior motive, is trying to harass the petitioner under the guise of exercising its powers under Section 108 of the Act. It is pertinent to note that in spite of issuance of notice of this Court, the respondent No.5 has not remained present in person or through authorised person and has tendered the affidavit through the learned advocates for the respondent-Authorities. When this Court has joined the respondent No.5 in his personal capacity, it was incumbent for him to appear and make submissions qua the allegations levelled against him by the petitioner instead of filing an affidavit in reply through the advocate app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27AOAPP2471C1Z 8 /MAYUR ENTERPRISES 27CYOPP 7727H1Z P/ NARAYAN POWER SOLUTIONS KALAMBOLI/ 410218 Rabale MIDC, Navi Mumbai/400701 271616194942- 09/07/23 13:22:00 271616536409 27AOAPP2471C1Z 8 / MAYUR ENTERPRISES 27AATFT 5852A1Z W/ TRANSEL ENGINEERS KALAMBOLI/ 410218 Tata Talav/412108 271616536409 10/07/23 15:36:00 "Although it is possible that the goods consigned by M/s. Mayur Enterprises are the same which were imported by M/s. S T Electricals vide Be No. 5525864 dated 15.04.2023, however without enquiry it is not possible to ensure that these are the same goods which have been purchased/received from M/s. Pacific Powertech Solutions. Further, as per direction, bank account details of the following firms have been obtained and the same are as under :- 1. M/s. GSD Technologies Mumbai - Bank Name : Kotak Mahindra Bank Ltd. - A/c No. :2414037894 2. M/s. Pacific Powertech Solutions - Bank Name: Kotak Mahindra Bank- A/c No. : 6311621118 3. M/s. Mayur Enterprises - Bank Name : Indian Bank-A/c No.6010527667." Thus the primary allegation of importing the goods are on ST Electricals and the role of the petitioner is confined only to that of a seller. Note No.138 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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