Back
2009 Supreme(Mad) 1379
High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN & THE
HONOURABLE MR. JUSTICE T.S. SIVAGNANAM
Commissioner of Customs (Sea)
Versus
Customs Excise & Service Tax Appellate Tribunal & Another
C.M.A. Nos.166 of 2005
Decided on : 24-04-2009
For the Petitioner:S. Udayakumar, Sr. Standing Counsel for Customs. For the Respondent:B. Satish Sundar, Advocate.
The main legal point established in the judgment is that a false declaration by the importer invalidated the license, rendering the goods liable for confiscation and penalty under the Customs Act.
Headnote:
Customs Act - Violation of Advance Licence - 48/99 - Section 11(o), Section 112(a) - Summary of Acts and Sections: The court discussed the violation of conditions of the Advance Licence under Customs Notification No.48/99, the liability for penalty under section 112(a) of the Customs Act 1962, and the interpretation of the relevant legal provisions. The court's decision was influenced by the interpretation of the conditions of the exemption notification, the fulfillment of export obligations, and the validity of the license.
Fact of the Case:
The second respondent imported copper scrap under an Advance Licence with Actual User Condition. The Department alleged that the importer did not have a valid manufacturing unit and made a false declaration to obtain the license. The Adjudicating Authority ordered confiscation of the goods and imposed a penalty. The Tribunal held that the proceedings were premature as the importer had time to fulfill the export obligation, and the goods were not liable for confiscation or penalty. The Department appealed against the Tribunal's order.
Finding of the Court:
The court found that the importer's false declaration rendered the license null and void, and the goods were liable for confiscation and penalty under the Customs Act. The court rejected the Tribunal's decision and held that the importer's past conduct was relevant to the investigation. The court allowed the Department to appropriate the bank guarantee towards the duty and penalty demanded.
Issues: The issues involved the validity of the Advance Licence, the fulfillment of export obligations, and the liability for confiscation and penalty under the Customs Act.
Ratio Decidendi: The court held that the importer's false declaration invalidated the license, rendering the goods liable for confiscation and penalty. The court emphasized the relevance of the importer's past conduct and the fulfillment of export obligations in determining the liability under the Customs Act.
Final Decision: The court set aside the Tribunal's order, allowing the Department to appropriate the bank guarantee and initiate proceedings for recovery of the balance amount from the importer.
T.S. SIVAGNANAM, J.
Heard Mr.S.Udayakumar, learned Senior Standing Counsel for the Customs and Mr.B.Sathish Sundar, learned counsel for the second respondent.
2. The above appeal has been filed against the order passed by the CESSTAT in final order No.107/03 dated 112. 2003. At the time of admitting this appeal, the following questions of law were framed for consideration: 1. Whether in the circumstances of the case, the violation of conditions of the Advance Licence r/w customs Notification No.48/99 is not an offence committed under section 11
(o) of the Customs Act 1962 and whether goods are not liable for confiscation.
2. Whether the second respondent is not lilable to pay penalty and under section 112(a) of the Customs Act 1962.
3. The relevant facts of the case is as hereunder:
The second respondent had imported four consignment of Copper Scrap totally weighing 86.963 Mt.Tonns in four containers and filed four Bill of Entries on 20.11.2001. They availed the benefit of the Notification No.48/99 ‘CUS dated 24. 1999, which permitted import of goods free from Duty of Customs. The said notification pertains to an exemption in respect of import against Annual Advance Licence with Actual User Condition.
4. The allegation against the second respondent was that they were not entitled to the benefit of notification No.48/99 and therefore were liable for payment of duty for the goods imported. A show cause notice dated 3. 2003 was issued by the Deputy Director, Directorate of Revenue in Intelligence, Chennai, (hereinafter referred as DRI), calling upon the second respondent to show cause within thirty days of receipt of the notice as to why the benefit of notification No.48/99 - Customs DATED 24. 1999 should not be denied for 86.963 metric tons of copper scrap valued at Rs.48,73,614/-imported by the second respondent for under the annual Advance Licence dated 7. 2001, in view of the fact that the licence was obtained by giving a false information that they have a factory for manufacture of the export product, which was according to the Department a non existing factory and hence they are not eligible to obtain the Annual Aadvance licence in question.
5. The second respondent was further called upon to show cause as to why the duty amounting to Rs.30,63,748/- on the goods seized weighing 86.963 metric tonns should not be demanded under section 28(1) of the Customs Act (hereinafter referred as the Act) and as to why the goods under seizure should not be confiscated under section 111(o) of the Act and penalty not be imposed under section 112 (a) of the Act.
6. The second respondent submitted their reply dated 4. 2003, inter alia contending that they have been holding a valid DEEC licence and the Department has delayed the assessment and clearance as the investigation into earlier imports done by the second respondent was in progress. It was stated that the allegation regarding utilisation of the past clearances are not required to be answered in respect of the present show cause notice.
7. It was further stated in the reply that the goods are not liable for confiscation under section 111(o) of the Act, as there is no mis-declaration in the bill of entry or other import documents and prayed for dropping the confiscation proceedings. It was the case of the respondent that if the goods are not liable for confiscation, then the question of payment of penalty does not arise. The second respondent requested the Appraising Group to assess the goods on merit and facilitate the clearance after the discharge of the duty assessed.
8. The case was adjudicated by the Appellant and an order- in-original dated 6. 2003 came to be passed, holding that the name and address of the factory given by the second respondent was found to be non existent and the building was never used for any manufacture of copper items and that without a factory and without an ancillary, the importer cannot fulfill the conditions of the said Advance Licence. The Ad
