BEST AND CO. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The appellants had imported from M/s. Kalo Holdings Corpn., LLC (USA), 1,000 pieces of what was claimed to be "Online Computer Hardware", and had filed Bill of Entry, dated 21 -4 -2003 for their clearance. The goods were valued at EURO 5,50,000. The Bill of Entry was accompanied by a copy of invoice, dated 31 -3 -2003 issued by the said company, wherein also the value of the goods had been shown as EURO 5,50,000. The department subsequently gathered a copy of another invoice, dated 27 -3 -2003 issued by an Italian company viz. M/s. Technost Systemmi, wherein the value of the goods had been shown as EURO 17,90,000 and the goods were described as "Online Computer Hardware and Software". The "Supply Agreement" between the appellants and their supplier referred to the goods as "Online Lottery Terminals". From the documentary evidence gathered, it appeared to the Department that the appellants had misdeclared the value of the goods and filed the invoice with lesser value with intent to evade payment of Customs duty. Therefore, the goods were seized under Section 110 of the Customs Act. Subsequently, statements of the Chief Executive of the appellant -company were recorded under Section 108 of the Act, wherein he stated, inter alia, that the invoice dated 31 -3 -2003 pertained to hardware only whereas the invoice dated 27 -3 -2003 was for both hardware and software. Pending further investigations, the seized goods were released provisionally to the appellants against Bond and cash deposit of over Rs. 3.6 crores on 21 -5 -2003. Later on, show cause notice dated 7 -10 -2003 was issued to the appellants by the Commissioner of Customs (Preventive) under the proviso to Section 110(2) of the Customs Act directing the party to show cause why the period for issuance a show cause notice under Section 124(a) of the Act for confiscating the goods should not be extended by a period of six months w.e.f. 21 -10 -2003. The show cause notice dated 7 -10 -2003 was resisted by the party on numerous grounds. In adjudication of the dispute, the Commissioner, under the proviso to Section 110(2), ordered extension of the period for issuance of show cause notice under Section 124(a) by six months w.e.f. 20 -10 -2003. It is this order of the Commissioner that is under challenge in the present appeal.

(2.) We have examined the records and heard both sides.

(3.) Ld. Counsel for the appellants submitted that, as the goods in question were provisionally released to them against Bond and cash security and were not available for confiscation, it was not open to the Commissioner of Customs to issue any show cause notice under the proviso to Section 110(2) of the Customs Act. In this connection, ld. Counsel, relied on the Supreme Court's judgment in Lokenath Tolaram v. B.N. Rangwani [1983 (13) E.L.T. 1520 (S.C.)]. Counsel also relied on the Tribunal's decision in Uttam Laminates Pvt. Ltd. v. CCE [1996 (81) E.L.T. 238], wherein Lokenath Tolaram (supra) was followed. Finally, Counsel relied on the Tribunal's decision in Vimal International v. Commissioner of Customs [2002 (146) E.L.T. 576].