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TMI Blog2003 (3) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... r and on behalf of various carpet manufacturers and has claimed to have dealt with, in all, ten consignments for the appellants, out of which six are reported to have been cleared and handed over to one Mr. Pravinchandra Shah, whereas four other consignments were lying in docks awaiting clearance. He stated that all the importers used to send the original documents directly but other supporting documents were being supplied by Mr. Pravinchandra Shah, who also paid the CHA charges and other expenses in cash and gave instructions as to delivery of the goods or dispatch to the godowns. All such importers including Mr. Badruddin Ansari of the appellants-firm, had given standing instructions to deliver all consignments of dyes, formic acid and PVA to the said Mr. Pravinchandra Shah of M/s. Vipul Dyes. No documentary evidence to substantiate that any instructions were received from the appellants, or that he had actually effected delivery of the consignments to said Mr. Pravinchandra Shah, are alleged to have been produced. Mr. Pravinchandra Babubhai Shah of M/s. Vipul Dyes is reported to have admitted having purchased DEEC Pass Books from various carpet manufacturers, including the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on various different dates, through various transporters, the adjudicating authority seems to have got some further enquiry made, but intimation of such enquiry and the alleged outcome thereof, was not brought to the Notice of the appellants and the appellants were not given any opportunity to provide any explanation or to establish the contrary. The fresh adjudicating authority thereafter passed the impugned order, wherein while dropping the demand to the extent of Rs. 10,25,854/- for two consignments, he has confirmed the demand for the balance amount of Rs. 29,74,086.50 on the 4 consignments pending clearance and also ordered confiscation of these seized consignments under Section 111(d) of the Act with an option to pay fine of Rs. 2,00,000/- in lieu of confiscation and a penalty of Rs. 5,00,000/- has been imposed on the appellants under Section 112(b)(i) and (ii) of the Act. Being aggrieved by the impugned order, the appellants filed this appeal. 2. After hearing both the sides and considering the submissions, we find that - (a) The Collector of Customs (Appeals) while setting aside the order of the Additional Collector of Customs (Preventive), Mumbai had upheld as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice dated 4-4-94 which was issued by Collector of Customs (Preventive), Mumbai. The perusal of the show cause notice issued in the earlier proceedings namely show cause notice dated 28-8-91 issued by the Assistant Collector of Customs (Prev.) Marine and Preventive Wing, Mumbai and the present show cause notice resulting the present impugned order, indicates on facts, there is no new material in the second show cause notice issued by the Collector of Customs (Preventive) for the same period and only the extended period for and a demand under Section 28 of the Customs Act is invoked, on account of wilful misstatement and suppression of facts by them i.e. M/s. Orient Arts and Crafts in collusion with other notices; while first show cause notice was for the normal period without invoking the extended period as it appears in the findings of the Collector of Customs (Appeals), Mumbai (supra). Since a second show cause notice, on identical facts only invoking the extended period was not held to be valid by the Tribunal in the case of Delux Carpet Co. Ors. v. CC (Prev.), Mumbai reported in 2002 (146) E.L.T. 80 (T) = 2002 (52) RLT 234 (CEGAT-Mum.), we do not hold the same, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed free of duty in violation of the provisions of exemption Notification No. 117/88, dated 30-3-1988 and fabrication of documents to show receipt and consumption in their premises. These acts and omissions thus rendered the goods liable for confiscation under the provisions of the Customs Act, 1962 and the Customs (Preventive) Commissionerate created for the purpose of prevention of smuggling and detection of cases of smuggling including commercial frauds is thus competent to investigate and adjudicate the case. The order No. 87/95-A in the case of M/s. M.D. International pertained to a case decided by the Commissioner of Customs (Preventive), Mumbai and the jurisdiction of this Commissionerate was upheld by the Hon'ble Tribunal. In the light of charges against M/s. Orient Art and Crafts it cannot be said that import having been caused against passbook, the offence could not be investigated or adjudicated by the Preventive Commissionerate. In the light of above position that the charges against M/s. Orient Arts and Crafts amount to smuggling, the judgment in the case of Sharad Himatlal Daftri v. Commissioner of Customs, Calcutta, 1988 (36) E.L.T. 468 is inapplicable to the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding clearance in the Mumbai Customs Port House Docks area on which orders under Section 47 were yet to be passed. While we have no hesitation to uphold the view that the Collector of Customs (Prev.), Mumbai and officers have jurisdiction to investigate into the matter of smuggling, the question of determination of liabilities under Section 111(o) and consequent demands and orders for original assessment of the goods required to be made on the Bills of Entry, cannot be usurped by them. In this connection, it is found, that a Division Bench of the High Court of Punjab and Haryana at Chandigarh in the case of Kenapo Textiles Pvt. Ltd. Another v. State of Haryana Others [1992 (84) STC 88] has upheld this concept of community of court. In this case, the Excise and Taxation Officer, Faridabad was the assessing authority, who had taken up the case for assessment of Sales Tax in respect of the two petitioners, while such proceedings were pending before the aforesaid officer, one Excise and Taxation Officer was designated as Excise and Taxation Officer-cum-Assessing Authority (Anti-Evasion Squad) for entire State of Haryana, including Faridabad. This Anti-Evasion Squad Officer, issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding decisions, it has to be concluded that the Commissioner of Customs (Prev.) cannot derive authority to take over the goods covered by Bills of Entry and to make assessment thereon when they were pending before the proper officer of the Commissionerate of Customs of Mumbai Customs House, without taking recourse to the transfer of the such cases to the Commissioner of Customs (Prev.) on the orders of the Central Board and Excise of the Customs. No such transfer order was produced. In this view of the matter, when the Commissioner of Customs (Prev.) had no jurisdiction in this case to order of the assessment of pending Bills of Entry, we cannot uphold the liability of confiscation arrived at under Section 111(o) or 111(b) of the Customs Act, 1962. (d) Since we find the second show cause notice issued is not valid for demanding the duty and it is not upheld, the demand is set aside. Consequent orders for confiscation cannot be upheld. They are required to be set aside. The Bills of Entry which have not been assessed by 'a proper officer' shall have to be remitted to such proper officer, for passing an order of assessment on the pending Bills of Entry. In the proceedings of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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