ROTOFLEX INDUSTRIES Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) This is an application under Article 226 of the Constitution of India, inter alia, praying for an order for withdrawing, cancelling and/or rescinding the order of adjudication being Order No. 61/91, dated 9-10-1991 and for other reliefs.

(2.) The petitioner No. 1 is carrying on business of importing goods from several manufacturers and shippers from United States, West Germany and Belgium. After importing the goods the petitioner No. 1 converts them in accordance with the customers' specification and requirements. The petitioner No. 1 is a holder of REP Import Licence No. P/L/1475801/C/XX/88, dated 23-3-1989, duly transferred in favour of the petitioner No. 1 for valuable consideration and entered into a contract to purchase 40 pallets of the said goods with M/s. Colpack International Ltd., Herts, England. On 10th July, 1990 upon receipt of the copy of the shipping documents, Bill of Lading, Invoices, Certificate of Insurance, Certificate of origin and Packing List, the petitioner's Clearing Agents, M/s. New India Corporation, Calcutta, duly filed a Bill of Entry for warehousing under Section 59 of the Customs Act together with the shipping documents as also the import licence. On 7th August, 1990, 20% of the said goods, i.e., 8 pallets were opened in the presence of the Assistant Collector of Customs, N.S.D. and Assistant Collector of Customs, S.I.B. by the concerned Shed Appraiser. The said goods were physically checked and verified and were found to be a mixed sizes and qualities, as declared on behalf of the petitioner.

(3.) The petitioner No. 2 received a summons under Section 108 of the Customs Act on 10th September, 1990 from the Special Investigation Branch in connection with the importation of Polypropylene Packaging Film Rolls, and the petitioner No. 2 was asked to appear before the authorities on 13th September, 1990 at 11 A.M. The petitioner No. 2 duly appeared and gave a statement. Thereafter the petitioner No. 2 was asked to submit an undertaking that he will not ask for release of the goods until investigation by the Special Investigation Branch is completed. On 5th October, 1990 the bill of entry for warehousing was provisionally assessed under Section 18 of the Customs Act, 1962 the customs duty amounting to Rs. 8,50,478/- with the endorsement "No ex-bond clearance till the finalisation by S.I.B.". On 16th October, 1990 the petitioner No. 1 executed a bond and the goods were ordered to be warehoused on 16th October, 1990. Petitioners' further case is that the Customs Authorities were not making the final assessment under Section 17 of the Customs Act in spite of repeated requests by the petitioners by their letters dated 13th December, 1990 and 25th June, 1991. Thereafter bill of entry was filed by the clearing agent on 13th August, 1991 and the petitioners made diverse representations before the Customs Authorities; but the goods were not released though identical goods were released by the authorities concerned under identical import licence produced by the petitioners. On 10th September, 1991 the petitioners received a notice dated 3rd September, 1991 from the Assistant Collector of Customs Import Bond Department, inter alia, threatening to sell the warehoused goods in terms of Section 72(2) of the Customs Act. In the said notice it was stated that the petitioners have not discharged the demand notice issued under Section 17(1) of the said Act. In the said notice it was further stated that if the sale proceeds are not found sufficient enough to cover full amount of the duty, interest, warehouse rent and all other charges, the petitioners would be liable to pay the deficit amount in terms of the bond executed by the petitioners. Petitioners' further case is that the petitioners never received any notice dated 1st March, 1991. The petitioners made an application under Article 226 of the Constitution of India praying for release of the goods. By an order dated 17th September, 1991 passed by Suhas Chandra Sen, J. the matter was directed to be listed on 19th September, 1991 on which date the said application was disposed of and the customs authorities were directed to decide the matter within three weeks as to whether the goods are covered by licence and in the said order it was provided that if the goods are not covered by licence, the respondents will be at liberty to proceed in accordance with law. On 28th September, 1991, the petitioners received a letter dated 20th September, 1991 from the Assistant Collector of Customs for Appraising Group 2. On 1st October, 1991, the petitioners received a show cause notice dated 26th September, 1991 to show cause as to why the goods should not be confiscated under Section 111(d) and penal action should not be initiated under Section 112 of the Customs Act, 1962 within 7 days. On 21st October, 1991 the petitioners received an order of adjudication being order No. 61 of 1991 dated 9-10-1991. The case of the petitioners is that the goods which are imported have been wrongfully and illegally detained by the authorities concerned and the demand of Rs. 1,25,235/- towards interest on leviable customs duty is wrongful, illegal, arbitrary and without any authority. Further case of the petitioners is that the customs authorities have no power or authority or jurisdiction to confiscate the goods under Section 111(d) or to impose any penalty under Section 112 of the Customs Act. The order of adjudication was passed ex parte without considering the matter in accordance with law.