MANOJ AGARWAL Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The Commissioner of the Customs, Cochin, vide his Order impugned in this appeal, after relying upon the confessional statement of Shri Manoj Agarwal, the proprietor of the importing firm, and corroboration of the same by the Manager and Driver of the Lorry carrying the imported containers which were intercepted by the Officers of DPI at Chennai and other places, concluded that all the goods covered by the 5 Bills of Entry were permitted by Customs to be moved to the importer's declared premises on the importer's request for de -stuffing and detailed Customs examination by the Central Excise Authorities and out of Customs charges were required to be given only thereafter and thus Section 47 order permitting clearance of goods for home consumption was not passed and therefore, payment of duty and demands under Section 28(2) of Customs Act could not be made and to that extent there was a serious technical discrepancy in the Show Cause Notice. Further, the Commissioner held that as the goods were not cleared from Customs, appropriate duty has to be paid after final assessment/re -assessment before clearance under Section 125(2) of Customs Act, takes care of confiscated goods. The Commissioner also held that in respect of 331.220 M.T. of goods already cleared to the declared premises at Chennai, there were some delay in submitting end -use certificate and request for extension of time and extension was needed by importer and the same was not refused and should be considered as deemed to have been granted by the Department. Pleaded by the importer and also for filing end -use certificate at later point and in respect of two later consignments under clearance, it was sufficient to conclude that the Department has started investigation not for the delay in submission of end -use certificate for which there is full 6 months time from the date of bond, but on account of information regarding clandestine import and disposal of other goods like brass scrap by breaking open the Customs seal before presenting the goods to Central Excise authorities for detailed examination and there was, thus, a violation of Section 111(m) of Customs Act, 1962. Since the extension sought by the importer was not on record and two months have elapsed after the first three Imports, there was no delay and these arguments were made only to confuse the issue and were not tenable on facts and law. He also held that the adjudication has to be proceeded with as per Hon'ble High Court of Kerala Order dated 31.1.2002 in a writ petition, filed by the appellants as regards challenging the authority to issue the SCN, which has been dismissed vide Order dated 31.1.2002.

(2.) The Commissioner also found that the seizure of the goods was covered vide Bills of Entry Nos. 363 and 432. in the Bill of Entry No, 363 dated 24.1.01, the importer clearly declared that they had a factory at Sadyankuppam Village, Chennai -13 and on request from the importer, in the Bills of Entry Nos. 281 and 363, they had also mentioned about having a factory at Chennai. From the records, it appraised to him, the appellants had no desire that the goods were to be examined in the presence of Central Excise Officers. He also held that since the offence was established by way of material evidence like breaking of Customs seal without the presence of Central Excise Officers and smuggling of brass by concealing in HMS scrap in a premeditated, pre -planned malafide action. Therefore cross -examinations of the persons were not required. The Commissioner, thereafter concluded and demanded duty on 40 MT of brass scrap cleared through three earlier Bills of Entry. As regards the connection that seized CR sheets of 12.82 MT were in small pieces of different sizes and it contains bubbles and these were to be treated as HMS scrap. He relied upon the Mahazar which records that the container contains rectangular shaped CR sheet of approximately 1 ft. x 2 ft. apart from HMS scrap were found. They were segregated from load containers and weighed. CR Sheets weighed 3.63 MT, 4.38 MT and 4.83 MT out of total weight of 17.04 MT, 14.86 MT and 9.18 MT in each container. He held that it was clear that the CR sheets are of uniform rectangular shape liable for assessment of valued at Rs. 13,111.85 per M.T. as per the contemporaneous values of the imports available with the Customs as regards the request to assess the brass scrap. He upheld the importer's claim that there were difference between the Honey brand (yellow brass scrap) and the 'Armament Shell Scrap'and thus the price was not comparable. In these circumstances, the declared price by the importer was not acceptable for computing assessable value and duty. Therefore he held that the SCN issued by DRI was valid and determined the price of brass scrap at US 800 per M.T, and ordered that 40 M.T. of brass scrap imported vide 3 Bills of Entry earlier by concealment in the steel scrap is liable for confiscation under Section 111 (d), 111 (j), 111 (I) and 111 (m) of the Customs Act. Qty. 40.40 M.T. of brass scrap seized at Chennai and 79.375 M.T. of brass scrap seized at Cochin both in for the form of spent ammunition shells imported by concealment in the steel scrap without the required pre -shipment inspection certificate from the prescribed agencies in EXIM Policy were liable for confiscation under Section 111(d), 111(j), 111 (I) and 111 (m) of the Customs Act. Qty 12.84 M.T of CR sheets imported vide Bill of entry No. 363 dated 24.1.2001 by concealment in HMS scrap held liable for confiscation under Section 111(d), 111(j), 111(I) and 111(m) of Customs Act. Qty. 105.575 MT of steel scrap, used to conceal the brass scrap of 40.40 M.T., imported vide Bill of Entry No. 363 dated 24.1.01 and 181.695 M.T. of steel scrap, used to conceal 79.345 M.T. brass scrap, imported vide Bill of Entry No. 432 dated 29.1.01 were liable for confiscation under Section 119 of Customs Act. M/s Prakriteek Enterprises, Chennai, the importer were liable for penalty for (i) pre -planned smuggling of brass scrap by misdeclaring the same as HMS scrap and concealing the same in the HMS scrap (ii) for breaking open the Customs seal in violation of Condition No. 1 of end -use bond so as to defraud the Revenue to the tune of Rs. 60 lakhs approximately. Accordingly he ordered that the cum duty price of brass scrap worked out to Rs.104 lakhs (Rs. 62 lakhs plus Rs. 42 lakhs). He determined redemption fine could go up to Rs. 54 lakhs (sale value Rs. 96 lakhs minus duty Rs. 42 lakhs). Qty. 40 M.T. of brass scrap imported by concealment in HMS scrap wide 3 earlier Bills of Entry (Market Value Rs. 24 lakhs) is confiscated and released on payment of a fine of Rs. 4,00,000 and duty of Rs. 10,57,415. Qty. 40.04 M.T. and 79.395 M.T. of brass scrap imported by concealment in HMS scrap wide Bill of Entry No. 363 dated 24.1.01 and Bill of Entry No. 432 dated 29.1.01 (total market value of Rs. 72 lakhs) were confiscated and released on Redemption Fine of Rs. 4,00,000 (Rupees Four Lakhs only) and on a fine of Rs. 8,00,000 (Rupees Eight Lakhs only), a total fine of Rs. 12,00,000 (Rupees Twelve Lakhs only) and duty of Rs. 10,58,472 and Rs. 20,98,308 respectively. 12.84 M.T. of CR sheets were confiscated and released on Redemption fine of Rs. 25,000 (Rupees Twenty Five thousand only) and differential duty of Rs. 1,12,943 (Rupees One Lakh Twelve Thousand Nine Hundred Forty Three only). 105,575 M.T. of steel scrap and 181.615 M.T. steel scrap seized for concealment of brass scrap and violation of end -use bond condition, ordered to be confiscated and released on Redemption Fine of Rs. 30,00,000 (Rupees Thirty Lakhs only) and differential duty of Rs. 3,41,683 and Rs. 6,06,260 respectively. The differential duty of Rs. 6,96,020 payable on 291.22 M.T. steel scrap cleared on end -use bond was confirmed. Two containers under detention at Chennai were ordered to be released unconditionally. He did not invoke any provisions of Section 28AB for interest and Section 114(A) for penalty and taking into consideration of the circumstances, he imposed penalty of Rs, 7,00,000 (Rupees Seven Lakhs only) under Section 112 of the Customs Act on the importer and no penalty to Proprietor, Shri Manoj Agarwai arrived at.

(3.) After hearing both sides, we find that - -