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TMI Blog2004 (7) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The appellant's submission that the warehouse goods were removed under cover of ex-bond bill of entry and after proper officer has passed the order to out of customs charge. This is also discussed by the Commissioner in paras 26 to para 29. We find that once it has been established from the records that impugned goods were cleared clandestinely between July to October 1996, clearance of same goods under ex-bond bill of entry on 22-11-1996 becomes manipulated. This has been discussed by Commissioner in Para 26 of the Order as to how packages were cleared without opening the same. Only marks number of packages with reference to invoice were seen. Contents of the packages were not examined. Since the clearance of contents of packages which were originally warehoused as done clandestinely, and packages were again placed back in the warehouse after removing the bearings as discussed earlier, and contents of packages were not examined when Ex-bond bill of entry was filed, hence it cannot be said that clearance under ex-bond bill of entry was of the bearings. Since the appellants have used fraudulent method for removal of the goods, there was no need of review of order of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the present case the appellants had deposited the Customs duty of 43,18,783/- and interest of Rs. 14,12,877/- voluntarily as of the show cause notice. Therefore these amounts were paid before the issue of show cause notice. Now following the decision of Larger Bench in case of CCE v. Machino Montell (I) Ltd. [ 2004 (4) TMI 101 - CESTAT, NEW DELHI] , we set aside the penalty imposed on the appellants and interest demanded under the Customs Act. Rest of the order of Commissioner is upheld. Ordered accordingly. - S/Shri S.L. Peeran, Member (J) and K.C. Mamgain, Member (T) [Order per : K.C. Mamgain, Member (T)]. - This appeal is filed against Order-in-Original No. 2/03, dated 9-5-2003 passed by the Commissioner of Customs, Bangalore. 2.Shri Habibulla Basha Senior Advocate and Smt. Rukmini Menon appeared for the appellants and Shri L. Narasimha Murthy learned SDR appeared for the Revenue. 3.The appellants have a public bonded warehouse in their premises operated by Central warehousing corporation where machinery and spares imported are warehoused pending clearance. On following up intelligence of irregularities, officers of DRI Bangalore visited their premises took stock of m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The High Court in W.P. No. 22391-22392/2002 vide order dated 18-2-2003 had set aside the Order No. 01/2001, dated 30-3-2001 of Commissioner Mangalore and Order 419/2002, dated 22-3-2002 of Tribunal. The Commissioner was directed to follow the direction of the Tribunal contained in Para 6 of the Order dated 31-8-1999 passed by the Tribunal and to complete the proceeding by 30-6-2003. Accordingly Commissioner of Customs Mangalore passed the impugned order which was again challenged by the appellant in the High Court of Karnataka. The High Court in their order dated 22-3-2004 in W.P. No. 32291/2003 (T-TAR) directed the appellants to file appeal before the Tribunal within 4 weeks and Tribunal was directed to consider appeal without insisting on limitation. The Tribunal was further directed to consider legality/validity of the impugned order passed by Commissioner in the light of specific finding and specific direction in terms of para 6 of the Tribunal's earlier order dated 31-8-1999 and to complete the proceedings within four months from the date of filing the appeal. 4.Shri Habibulla Basha, Senior advocate, pleaded that the appellants have set up a steel plant at Toranagallu Bellar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the goods have been bonded and thereafter ex-bond bill of entry have been filed and out of custom charge has been given, it means that proper officer has applied his mind and allowed the clearance of goods after satisfying himself, then there is no jurisdiction vested in the Commissioner to go beyond the bill of entry and hold that the goods were removed clandestinely. (vi) Once the goods have been removed after scrutiny by the proper officer, no show cause can be issued in respect of the same. If the department wants to set aside that order it can only proceed under Section 129D of the Customs Act. Since no action has been initiated under that provision, show cause notice and subsequent proceedings were without jurisdiction. The Supreme Court in the case of Shipping Corporation of India Ltd. v. C.L. Jain Woollen Mills reported in 2001 (129) E.L.T. 561 (S.C.) has held that all warehoused goods would be subject to control of proper officer of Customs as provided under Section 62 and the owner of the goods is required to pay rent and warehousing charges fixed by the Commissioner of Customs as provided under Section 63 of the Customs Act. Section 68 provides procedure which an imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Minister of Karnataka and the appellants were not having EPCG licence for clearance of the said goods without payment of duty but they cleared the goods clandestinely and subsequently when they received the EPCG licence they filed the bill of entry for nil rate of duty and shown clearances of the goods, DRI officers started investigation. During investigation they checked the various documents at bonded warehouse and recorded the statement of various officers of the appellant Company and found that there were irregularities in clearance of the goods from the warehouse and the goods were removed from the warehouse without the knowledge of the Officer in charge of CWC bonded warehouse and Customs officers in the night by the appellants with the help of cranes from the open bonded warehouse, area of which was demarcated by barbed wires and which was in the premises of the appellants and under the security of the appellants. The warehouse was an open yard which was only surrounded by barbed wires and was illuminated with halogen lamps during the night time. There was sufficient place around the warehouse where the trucks and cranes can be moved and goods could have been taken ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal is to be seen whether the Commissioner has decided the case in terms of the directions given in para 6 of the Tribunal's order. 7.He stated that the present order of the Commissioner is as per the directions given by the Appellate Tribunal in para 6 of the order dated 31-8-1999 and as per the directions of the High Court. The Commissioner has given findings in para 20.2 and 20.3, the manner in which the clandestine removal has taken place. These paras are based on the basis of evidence relied upon in the show cause notice. The show cause notice and the evidences relied upon in the show cause notice were not restricted to be used either by the High Court or by the Tribunal. The observations of the Tribunal in para 6 of their order of 31-8-1999 are not based on examinations of evidence but these are only general observations as pleaded by advocate of appellant. However in show cause notice in para 3 it is clearly mentioned that Shri P.K. Mathew Manager, Central Warehousing Corporation already deposed under Section 108 of Customs Act that officers of DRI visited his office on 23-8-1997 along with two independent witnesses and was asked to produce the warehouse register and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under provisions of Customs Act. Thereafter the Senior Intelligence officer based on the admissions given by Shri Sarovar seized the above said goods which were installed/utilized in the plant and machinery of JVSL. He also referred to the statement dated 22-11-1997 of Shri K. Sarovar wherein inter alia he has admitted that on verification of records available as on date it has been evident that certain goods pertaining to bond No. 10/95 and 2/96 have been utilized in implementation of project before they were debonded from the CWC bonded warehouse. He gave the details of these goods. Regarding observations of the Tribunal that there is no analysis or valuation of any evidence as to exactly on what date clandestine removal took place. He pointed out to paras 21, 22, 23.2, 24 and 25.2 of the impugned order. 8.Regarding the appellants claim that removal has been in terms of EPCG licence and only after following the due procedure i.e. after submission of ex-bond bill of entry the learned SDR pointed out that this issue has been considered by the Commissioner in para 26 of the impugned order. 9.He further pleaded that in the remand order it is clearly mentioned that the Commissioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o appeared for the appellants. This issue has been examined by the Commissioner in the impugned order in paras 19 to 20.7. From his findings it is clear that the warehouse premises is an open land area fenced only with barbed wire with a single gate for both entry and exit to the warehouse. All around the said premises outside the barbed wire fence, there is open space in which trucks and cranes can move about freely and normally the bonded goods after debonding are removed with the aid of cranes which would lift the debonded goods from outside the barbed wire fencing of the bonded warehoused premises. Further the gaps between the barbed wires are also wide enough for any person to enter into the bonded warehouse through them. In fact the gate of bonded warehouse is rendered useless in preventing entry of any unauthorized person. The halogen lights provided all around the bonded warehouse keep the warehouse illuminated during night. The said warehouse is being managed by CWC with one officer of the rank of warehouse manager without any supporting staff. The warehouse manager remains present in warehouse during office hours and beyond office hours no staff of CWC remains present to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basic equipment on the foundation in appellants premises and it is quite possible the same dates may be different from the date on which the bearings are actually removed. There is no analysis or evaluation of any evidence as to exactly on what date the clandestine removal took place" We find that this issue has been examined by the Commissioner in detail from Para 21 to Para 25.2. We find that Shri Sarovar in his statement dated 22-11-1997 has admitted as under - "On verification of the records available as on date, it has been evident that certain goods pertaining bond 10/95 and 12/96 have been utilized in implementation of the project before they were debonded from the CWC bonded warehouse. The details of the same are as under : Bond No. 10/95 : Details of bearings mounted on the main equipment : (a) AT 226 H 51 Nos. Installed at Furnace Run-in-Table on 28-9-1996; Furnace Run-out Table on 30-8-1996; R.M. Approach Table on 25-9-1996, 31-8-1996, 28-9-1996; Delay Table on 25-7-1996. (b) AW 222H 68 Nos. As at (a) above (c) ASW 240 H 10 Nos. R.M. Front Mill Table and RM Back Mill Table (d) AW 218 H 30 Nos. Delay Table on 31-10-1996 (e) AW 212 H 25 Nos. Run out Table on 28-9-1996 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he show cause notice. Thus if the statement of Shri K. Sarover recorded on 22-11-1997 is read with report No. 10/25-7-96, 11/31-8-96, 13/28-9-96 and 16/31-10-96 of M/s. TTG Industries then it is clear that the bearings in dispute were cleared prior to 31-10-1996 from the bonded warehouse without clearance documents and the Commissioner has therefore correctly given his findings. 11. The Tribunal in his order dated 31-8-1999 in para 6 has observed that "there is no analysis or evaluation of any evidence as to exactly on what date the clandestine removal took place. We also note that as against this the appellants had also submitted before the original authority that the removal had been in terms of EPCG licence and only after following the due procedure i.e. after submission of the ex-bond bills of entry." We find on this issue, the Commissioner has given clear finding in para 25 to 25.2 of his order relying on various decisions of the Supreme Court mentioned in the said para that department was not required to prove its case with mathematical precision, but what was required was the establishment of such a degree of probability that a prudent man may on its basis believe in the exi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not helpful to them. The statements relied upon in this case are supported by documents of the appellant's contractor whereas the clearances under ex-bond bill of entry on which appellants have relied become fraudulent once it has been established that goods were cleared much before filing the ex-bond bill of entry. Other issues raised by them are discussed from paras 30 to 39 of the impugned order. He therefore finally came to the conclusion that it is proved beyond doubt that JVSL had cleared the impugned goods clandestinely from the Govt. bonded warehouse without a valid EPCG and without filing proper ex-bond bill of entry. Thus, we find that the Commissioner has meticulously examined all the issues and considered all the observations of the Tribunal in para 6 of the order dated 31-8-1999 and after examining the evidence produced by the appellants had come to the conclusion that the appellants had contravened the provisions of the Customs Act and they are liable for penalty and also liable to pay duty and the goods are liable for confiscation. 13. The appellants in their appeal have raised various points. All these points are already considered by the Commissioner in his or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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