BHAGYANAGAR METALS LIMITED SECUNDERABAD Vs. DEPUTY COMMISSIONERLEGAL CUSTOMS AND CENTRAL EXCISE HYDERABAD

JUDGEMENT

(1.) This petition under Section 482 Cr.P.C, seeks quashing of the proceedings in C.C.No.l of 2000 on the file of the Special Judge for Economic Offence, Hyderabad in which the petitioners are sought to be prosecuted for an offence under Section 135 of the Customs Act, 1962, for contravention of the provisions of Section 111 (o) of the said Act. It would appear that the first petitioner- Company are the manufacturers of Jelly filled Cables and they imported certain machinery for the purpose of the said manufacture. The petitioners sought to take advantage of the concessional customs duty in terms of the Notification No. 315/ 83-CUS dated 26-11-1983 issued by the Central Board of Excise and Customs. Under this notification when the plant and equipment for the manufacture of electronic items are imported into India, such items shall be liable for customs duty at the reduced rate of 25%. This however, is subject to the condition that an officer not lower in rank than the Director in the Department of Electronics, Government of India or any Industrial Advisor in the Directorate General of Technical Development of Government of India or Deputy Director General in the Department of Telecommunications of the Government of India, on being satisfied, certifies to the fact that the plant and machinery in question are required for the purpose of manufacturing electronic items.

(2.) It appears that in this case such a certificate was issued by the Deputy Director General in the Department of Telecommunications of the Government of India, who is one of the prescribed authorities under the said Notification in 1993. The plant and machinery were imported in 1995. It appears that during inspection of the premises of the petitioners, it was found that the plant and machinery for the manufacture of jelly filled cables were in operation without paying the full- prescribed duty. A show-cause notice was issued thereafter on 31-3-1997 alleging that the petitioners wilfully suppressed the facts in declaring the end products as electronic in nature and thus they were required to show-cause as to why an amount of Rs.17,11,381/- erroneously refunded should not be paid by them under proviso to Sec. 28 of the Customs Act,1962 and as to why an amount of Rs. 9,13,890/- which was short levied should not be paid by them, The show cause notice also mentions about the payment of interest on the amount sought to be recovered. It also mentions about the penalty to be levied on the petitioners for contravention of the provisions of Section 111(o) of the Customs Act. The petitioners, sent a reply to the said show- cause notice on 2-7-1997 denying that there was any wilful suppression on their part and pointing out that the competent authority interms of the notification referred to above had certified that the jelly filled cables were electronic goods. The Commissioner of Customs did not accept this explanation submitted by the petitioners and passed an adjudication order dated 28-11-1997 confirming the show-cause notice.

(3.) It is on this ground the petitioners are sought to be prosecuted for the offence under Section 135 of the Customs Act. Alleging that the petitioners were in possession of the goods which are liable to be confiscated under Section 111(0) of the Customs Act.