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TMI Blog2003 (12) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... vices of M/s. Far Port International, Chennai, a proprietary concern of one Shri D. Ramesh. (c) (i) The appellants used to pay the duty in the form of crossed demand drafts, favouring the Commissioner of Customs A/c. Hetero Drugs in respect of the imports and receive the goods as mentioned and under the cover of Bills of Entry. The appellants were also taking Modvat credit on the strength of these Bills of Entry. These Bills of Entry were regularly scrutinised and defaced by the jurisdictional Central Excise authorities. (ii) For consignments that were warehoused in Bond, the appellants used to provide necessary instructions and duty demand drafts to the clearing agent for bonding and debonding. Goods after being debonded were being received by them under the cover of ex-Bond Bills of Entry. (d) In and around September 1999, when the appellants wanted to bond certain imported goods, permission was refused; as certain goods in their account were lying uncleared in the Bonded Warehouse. (e) On enquiries made by the appellants, it was revealed that Shri D. Ramesh, Proprietor of M/s. Far Port Internationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice. They also specifically requested for cross-examination of the bond officers, the escort officers and the officials of the accounts department who were in service in the department during the period in question. (h) A personal hearing was held before the Commissioner of Customs on 13-11-2001 and one more written submissions was filed by the Appellants on 15-11-2001. (i) The Commissioner passed the impugned Order-in-Original and confirmed the entire demands and imposed penalties both on the Company and its General Manager. Hence these appeals. 3. After hearing both sides and considering the material on record :- (a) Out of the 68 Bills of Entry impugned, in these proceedings while in respect of 52 Bills of Entry, the departments case is that the cash numbers indicated in the Bills of Entry for payment of duty relate to other importers and not to the appellants; in respect of the remaining 16 Bills of Entry the departments case is that the amount of duty has either been paid partly by the Clearing agent at the time of clearance or in full by the clearing agent subsequent to the clearance of the goods. (b) The Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was adjusted by them for payment of duty relating to the other importers. (ii) It is submitted that Revenue has not taken into account the total number of DDs sent by the appellants to the CHA. They have made a chart for those demand drafts, out of the total number which were utilised by the CHA for discharging duty for the imports made through the Sea Customs and the Air Customs as below : Total amount sent by way of DDs : Rs. 5.43 crores Total No. of Bills of Entry - 526 Bills of Entry pertaining to Sea Customs - 179 Amount diverted by CHA from Air Customs Account to Sea Customs Account : Rs. 2.74 crores Total amount available in the Sea Customs account : Rs. 8.1 crores Bills of Entry pertaining to Air Customs - 347 Total Rs. 18.44 crores (Pcs. 347 to 396) 260 Bills of Entry 87 Bills of Entry Duty paid by way of cash deposit and duty free clearances Duty paid by way of DDs favouring CC-A/c. Hetero Drugs : Rs. 12.44 crores Total amount deposited : Rs. 6 crores approx. Rs. 9.8 crores deposited by CHA at SBI, Meenambakkam - for Air Customs B/Es Rs. 2.74 crores deposited by CHA for Sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is a chart indicating the advice given by the appellants to the CHA for warehousing the goods. The advice given by the appellants in respect of these 9 Bonds is summarized as under :- S. No. Bond No. & Date Sl. No. in Appendix-23 Advice given by the appellants 1. 3596, dt. 15-6-95 1 Home consumption 2. 4086, dt. 5-7-95 2 Immediate clearance 3. 4980, dt. 14-8-95 3 Immediate clearance 4. 5433, dt. 5-9-95 4 Immediate clearance 5. 6078, dt. 6-10-95 6 Immediate clearance 6. 606, dt. 29-1-96 8 Immediate clearance 7. 3582, dt. 27-5-96 9 Immediate clearance 8. 9709, dt. 11-12-96 19 Immediate clearance 9. 649, dt. 24-1-97 23 Immediate clearance From the above it will be evident that in respect of the 9 Bonds, instructions given by the appellants were to clear the goods whereas the CHA in so far as the appellants were concerned, appears to have implemented the instructions by dispatching the goods to the factory of the appellants under the cover of a Home consumption Bill of Entry. As far as the customs was concerned, the CHA appears to have misused his position, filed an into Bond Bill of Entry and sought permission to warehouse the goods. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also pertain to bond No. 5627, dt. 12-9-95 7. 4686, dt. 1-7-96 13 Bonding Ex bond B/E No. 1260, 1391 and 1392, dt..... with the duty endorsement of Rs. 24,02,320 Into Bond B/E Rs. 8,63,102 was paid towards duty on 29-5-99 along with an amount of Rs. 3,31,526 towards interest paid on 29-5-99 under ex-bond B/E No. 1261, dt. 2-7-96 From the above chart it is evident that in these cases the appellants had either advised the CHA to immediately clear the goods, which were duty complied with by the CHA or after initial Bonding had instructed him to effect ex-Bond clearances. In all these cases the demand drafts have been issued by the appellants either on the date of the Bill of Entry or immediately thereafter whereas the CHA appears to have paid the duties subsequently almost four years thereafter. This payment has been made by the CHA making use of the demand drafts sent by the appellants for the subsequent imports. 7. When into Bond and ex-Bond procedures have to be necessarily undertaken by under the supervision of a Customs Preventive Officer, then it is strange that the collusion and or negligence of these officers is not ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, the purchaser is not entitled to ask the Bank to stop payment to the payee. Reference in this regard is made to the commentary in Pages 540 to 543 of the Negotiable Instruments Act, Seventeenth Edition by Bhashyam & Adiga, accepted with approval by the Tribunal in the case of Wall Street Finance Ltd. v. Commissioner of Customs (Prev.), Mumbai reported in 2002 (147) E.L.T. 112 (Para 7, Page 120) and relying on the same, the payment of duty in due discharge for goods impugned, have to be upheld as far as the appellants as concerned. 10. That the amounts in question has gone into the Consolidated Fund of the Union of India is evident from the fact that even according to the show cause notice, the amounts deposited by the appellants have been permitted to be used by the CHA for payment of duty for the other importers, if that be so, the officers who allowed the same should be held liable not the importer, i.e. appellant herein. 11. In view of the above, when a demand draft is on par with a cheque that is not dishonoured, then following the Larger Bench of the Tribunal in the case of CCE, Jaipur-I v. Genus Overseas Electronics Ltd. reported in [2003 (155) E.L.T. 541 (Tri.-LB) = 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the status of an importer under Section 147(3) of the Customs Act, 1962. (b) The opening portion of Section 147(1) of the Customs Act, 1962 refers to those actions which the Customs Act requires an importer to do. For instance, Section 46 of the Customs Act, 1962 requires an importer to file a Bill of Entry for home consumption of the goods or for warehousing in the prescribed form. Section 59 of the Customs Act, 1962 requires the importer to execute a bond in case the goods are to be entered for warehousing, for an amount equal to twice of the duty assessed on the goods and to observe all attendant formalities. The acts of the CHA and or others unknown in substituting the goods and in faking the Bill of Entry are not acts which an importer was expected to do under the Customs Act, 1962. In this case, as could be seen from the factual position narrated in the show cause notice itself, the activity undertaken by M/s. Far Port International in substituting the goods or in forging the documents were acts done by Shri Ramesh on his own or in assistance with persons other than the importer. The department having come to the conclusion that the mala fide act has been committed by Shri ..... 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