RAVINDER SINGH CHAUHAN Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The question of law urged on behalf of the appellant, i.e. the assessee/importer is that the imposition of penalty under Section 114AA of the Customs Act, 1962 (hereafter "the Act") was unwarranted and illegal given that the provision was inserted in the statute book w.e.f. 13-7-2006.

(2.) The facts briefly are that the assessee was a salaried Director employed by M/s. Atlas Interactive (India) Pvt. Ltd. ('Atlas' hereafter) which imported certain quantity of goods from a Chinese supplier - M/s. ZTE Corporation to fulfil its obligation with the Bharat Sanchar Nigam Limited (hereafter "BSNL") of which it was a franchisee. The equipments were broadly telecommunication networking equipments - including supporting software. The contract with BSNL ran into trouble; the goods could not be released. Eventually the dispute with BSNL was referred to arbitration. The value of the goods - as declared was Rs. 24 crores. Somewhere after the importation and the filing of the bill of entry (which was in 2007), the assessee Atlas sought to re-export the goods - this time claiming that the consignee was its sister concern, i.e. M/s. Atlas Opportunities Ltd. (a British Virgin Islands incorporated company), which is said to have been carrying on its commercial activities in Slovakia. The Let Export Orders (LET) were issued on different dates in 2007. At that stage, the Directorate of Revenue Intelligence (DRI) suspected that the transaction was not genuine. In the meanwhile, the importer approached this court under Art. 226 of the Constitution of India - unsuccessfully urging that in the absence of a Show Cause Notice (SCN), the prolonged retention was illegal. It approached the

(3.) Mr. Gaurav Mitra, Learned Counsel for the appellant urges that the cause or occasion, so to say, for imposing penalty in this case occurred prior to the insertion of Sec. 114AA and to that extent the concurrent imposition of penalty was unlawful. It was emphasized in this regard that the Bills of Entry (BoE) were initially filed in 2005; for its own convenience, the Customs authorities asked them to split the same into 14 bills which Atlas did in 2006. It was therefore, urged that the ensuing litigation with BSNL was not of importer's (Atlas) making; consequently its request for re-export - under Sec. 50(51) was only a consequential action. In fact, the Commissioner recorded satisfaction upon full scrutiny of the material and granted the LET Order.