JINDAL VIJAYANAGAR STEEL LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) As a follow -up action on registering an offence case against the Appellant for alleged clandestine removal of imported goods stored in the Customs Bondec Warehouse, maintained by the Central Warehousing Corporation, located in their premises, the officers of Directorate of Revenue Intelligence, Zonal Unit, Bangalore verified the past import/warehousing and other private records pertaining to imports under EPCG Scheme. They made detailed investigations regarding bearings covered by Bond No. 10/95 -96 dated 7.3.96 and 2/96 -97 dtd. 19.4.96. On 22.11.97 alongwith independent witnesses to inspect the installation of the goods covered under the abovementioned bonds, verified the same in the presence of Shri K. Sarovar, the Chief General Manager of the Appellant's plant. The said Mr. K. Sarovar identified the bearings which were mounted on the installed machines. The appellant at that time, on being pointed out the various alleged lapses of their part with respect of clearance of bearings covered by Bond Nos. 10/95 and 2/96, paid customs duty of Rs. 43,18,783, interest of Rs. 14,12,877 voluntarily vide TR -6 challan dated 22.11.97. Besides sum of Rs. 43,18,783 was also deposited by the appellant, vide challan dated 25.11.97 towards further possible liability. Thereafter a Show Cause Notice dated 21.5.98 was issued to the appellant and others, culminating in the order of the Commissioner of Customs, Bangalore dated 7.5.99 confiscating the goods with an option to redeem on payment of fine of Rs. 12 lakhs confirming duty of Rs. 43,18,783 under Section 72, interest of Rs. 14,12,988 and penalty of Rs. 60 lakhs on the appellant and dropped penalty proceedings of Mr. Singhal and Mr. Kedia. CEGAT while hearing the Stay Application by their order dated 31 .99 disposed of the appeal itself and remanded the matter for de novo consideration to the Commissioner of Customs. While passing the order CEGAT observed as follows: We also find that the statement of Shri K. Sarovar does not directly admit that the specified number of bearings were cleared on a date prior to the date of the ex -bond Bills of Entry because the dates mentioned therein are the dates with regard to the completion of the erection of the basic equipment on the foundation in the appellants premises and it is quite possible the same dates may be different from the date on which the bearings are actually removed. There is no analysis or evaluation of any evidence as to exactly on what date the clandestine removal took place. We also note that as against this the appellants had also submitted before the original authority that the removal had been in terms of EPCG licence and only after following the due procedures i.e. after submission of the ex -bond Bills of Entry. We find on this submission there is no order in the Order -in -Original impugned. In view of this, we are clearly driven to the conclusion that the Order -in -Original impugned is not a Speaking Order. They also specifically directed, that the Commissioner in the de novo proceedings should take into consideration all the submissions of the appellant and their observation and pass a speaking order expeditiously.

(2.) The Commissioner (Mangalore) due to changes in the jurisdiction, passed the order impugned before us. He confirmed the demand of duty of Rs. 43,18,783 under the provisions of Section 72 of the Customs Act, 1962, confiscated the goods under seizures made on 21.1.97 under Section 111(d)/111(j) of the Customs Act, 1962 and gave an offer of redemption on a fine of Rs. 12 lakhs. Interest was demanded on the duty determined. A penalty of Rs. 60 lakhs under Section 112(a) of the Customs Act, 1962 was imposed on the appellants and the proceedings of penalty on the others, 'was dropped.

(3.) The appellants have taken the grounds: