FLEMINGO DFS PRIVATE LIMITED Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE petitioner is in the business of running duty free shops 'Flemingo' at airports and seaports. This writ petition is filed assailing the Order-in- Original (O-in-O) No.03/2010, dated 30.09.2010, (dispatched on 07.10.2010) of the respondent. By the said impugned O-in-O, the respondent in exercise of powers under various provisions of the Customs Act, 1962 ordered confiscation of sale proceeds of duty free goods diverted to local markets, imposed penalty and ordered cancellation of Private Bonded Warehouse licence (the licence, for brevity). THE petitioner had obtained licence dated 10.09.2005 under Section 58(1) of the Customs Act issued by the Assistant Commissioner of Customs (Bonds), Visakhapatnam.

(2.) THE officers of revenue intelligence of customs house gathered information with regard to misuse of licence and improper/ unauthorized removal and sale of goods in the local market in the guise of sales to crew members of foreign going vessels. On 22.01.2008, the merchant vessel MV.Hope Star was searched and in it was found non-duty paid fifty cartons of Cigarettes and fifteen cases of beer, branded as ship stores on the master's request. THEy were removed by the petitioner from the bonded warehouse. THE Inspecting Officials recorded the statements of the local manager and, on further investigation, they found that the petitioner had allegedly removed the non-duty paid goods from the bonded warehouse without following prescribed procedures and in gross violation of the conditions of licence besides manipulating the documents by forging wrong/additional entries in the duplicate and triplicate copies of the sale vouchers so as to account for more quantities than what was actually shown as sold to the crew members of the vessel as per original copies. THErefore, summons were issued under Section 108 of the Customs Act to the sales executive, location manager and seaport operational manager. THE depositions of the bond officers were also obtained. From all these the respondent, having come to an opinion that the petitioner had removed non-duty paid bonded goods without keeping account and had resorted to re-export, issued a show cause notice being F.No.CO1/2008-RI and I, dated 21.07.2008 to the petitioner and their location manager, operational manager and sales executive to show cause as to why customs duty on the non-duty paid bonded goods should not be demanded under Section 72(1) of the Customs Act, as to why interest should not be levied, as to why the non-duty paid bonded goods should not be confiscated and as to why penalty should not be imposed besides cancelling the licence. THE petitioner sent reply on 18.10.2008 denying various allegations. THEy also sought personal hearing to the adjudication by the respondent. Another show cause notice dated 19.01.2009 was issued, this time invoking section 28(1) of the Act. THE petitioner replied again on 08.10.2009 duly requesting for personal hearing.

(3.) THE Deputy Commissioner of Customs in the office of the respondent filed counter affidavit denying petition averments. It is stated that the adjudicating authority had provided adequate opportunity under Section 122A of the Customs Act, and that the petitioner resorted to delays in the proceedings as a result of which, the respondent had no option but to adjudicate the case as it is pending since long. It is further averred that the adjudicating authority had given opportunity to the petitioner on two occasions, which were not utilized by him in a proper manner. THErefore, the written reply to the show cause notice as well as written arguments were considered and the impugned order was passed.