PHONIX TRADERS Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) THE present ROM stand filed by the applicant in terms of Order Nos. A/860 -863/WZB/AHD/2011, dated 18 -5 -2011, vide which the confiscation of the rice was upheld along with confirmation of redemption fine and penalty imposed by the lower authority.

(2.) LD . Advocate appearing for the applicant has submitted that the Tribunal, while disposing of the appeal, has not considered the ground of limitation raised in the memo of appeal. Though, we find that ld. Advocate has not pleaded and not placed any evidence on record to show that the plea of limitation was raised at the time of hearing of the appeal, nevertheless, we propose to decide the said issue in view of the fact that the same was raised in the memo of appeal. We, accordingly, pass the following order on the point of limitation, by adding following paragraphs in between Paragraphs 8 and 9 of the said order. 8.A1 It stand pleaded before us that the rice was detained by the Customs officers on 15 -3 -2010 and Show Cause Notice stand issued on 23 -9 -2010, the same is barred by limitation, having been issued beyond the period of 6 months from the date of detention of the goods. For the above proposition, the ld. Advocate Shri P.V. Sheth has relied upon the Honble Kolkata High Court judgment in the case of E.S.I. Ltd. v. UOI - 2003 (156) E.L.T. 344 (Kolkata). 8.A2 On the other hand, the ld. DR appearing for the Revenue submits that the issue involved is mis -classification of rice and attempt of exporters to export non -Basmati rice in the guise of Basmati rice. As such, there being mala fide on the part of the assessee, the period of 6 months cannot be made applicable. In any case, submits the ld. DR that the goods were actually seized on 25 -3 -2010 under a proper Panchnama and the Show Cause Notice having been issued on 23 -9 -2010 within a period of 6 months from the date of seizure, is required to be considered as within time. 8.A3 After hearing both sides, we find that the facts are not in dispute. The 350.00 MTs cargo of rice was carted at Warehouse No. 2 of the Containers Freight Station, on the basis of check list dated 12 -3 -2010, filed by the CHA. On a prima facie view and with a purpose to examine the quality of rice to find out as to whether the same is Basmati rice or non -Basmati rice, samples were drawn and rice was detained under Panchnama on 15 -3 -2010. It is subsequently on receipt of the test report showing that the cargo was of non -Basmati rice and not Basmati rice, the same was seized under a Panchnama on 25 -3 -2010. Thereafter, a Show Cause Notice issued within 6 months from the date of seizure. 8.A4 The question which arises for consideration is as to whether the Show Cause Notice issued within 6 months from the date of seizure is in accordance with the provisions of Section 110(2) of the Act. The applicant has strongly relied upon the judgment of Honble High Court of Kolkata in the case of E.S.I. Ltd. referred supra, in support of his submission that the Show Cause Notice is required to be issued within 6 months from the date of detention. We have seen that the said decision of Honble High Court of Kolkata. Briefly stated, the facts in that case were that the goods were first detained on 9 -11 -2010. Subsequently, the room where the detained goods were kept, was sealed on 22 -11 -2000. Formal seizure of the goods was made on 1 -3 -2001, under a proper Panchnama. Honble High Court of Kolkata held that while sealing the goods on 22 -11 -2000, the dominion over goods, passed out of hands of assessee and tantamounted to seizure for all practical purposes. Accordingly, they held that Show Cause Notice should have been issued within 6 months from 22 -11 -2000. It is seen that the Honble High Court of Kolkata in above order has not held that the Show Cause Notice should have been issued within 6 months from the date of detention of the goods on 9 -11 -2000. By taking into account the peculiar fact that the room where the goods were placed was put under seal on 22 -11 -2000, thus debarring all access to the appellant to the goods, 22 -11 -2000 is to be treated as date of seizure. The facts in the present case are altogether different. The date of detention in the present case is 15 -3 -2010. The goods continued to remain in Warehouse No. 2 of the Containers Freight Station. They were formally seized on 25 -3 -2010. As such, there is no question of any sealing by the Customs officers in the present case so as to treat the date of sealing as the date of seizure. In this view of the matter, the ratio of law declared by Honble High Court is not applicable to the facts of the case. 8.A5 Even otherwise also, we note that Honble Supreme Court in the case of Chaganlal Gainmull v. CCE - 1999 (109) E.L.T. 21 (S.C.), has held that if the Show Cause Notice is not issued within 6 months from the date of seizure, only consequence would be that the person from whom the goods were seized, would become entitled to their return. The Honble Supreme Court also observed that there is no time limit for issuance of Show Cause Notice under Section 124 of Customs Act, 1962. The period laid down under Section 110(2) is of seizure of goods and not the validity of the notice. As such, by applying the ratio of law as declared by Honble Supreme Court, even if it is considered that the notice does not stand issued within 6 months from the date of seizure as envisaged by Section 110(2) of Customs Act, 1962, the effect of the same would be that the appellant would become entitled to return of the goods. However, it is seen that the goods were already carted by the appellant in CFS and continued to lie there even during the period of detention and after the seizure was formally made. They never applied for return of the rice. As such, it has to be held that the seizure continued till the Show Cause Notice was issued. The same cannot be held to be barred by limitation. 8.A6 In view of the above, the applicants plea of limitation is also rejected.

(3.) IN view of the above, Rectification of Mistake application is rejected.