M/S Intersales vs The Commissioner Of Customs
2021 Latest Caselaw 1482 Kant

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 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 29TH DAY OF JANUARY 2021

                         PRESENT

        THE HON'BLE MR. JUSTICE ALOK ARADHE

                            AND

  THE HON'BLE MR. JUSTICE NATARAJ RANGASWAMY

                  C.S.T.A. NO.3 OF 2017
BETWEEN:

M/S. INTERSALES
REPRESENTED BY ITS PARTNER
SHRI. MUKESH BHANSALI
NO.18, R.N. MUKHERJEE ROAD
8TH FLOOR, KOLKATTA-700001.
                                            .... APPELLANT
(BY MR. RAGHAVENDRA B. HANJER, ADV.,)

AND:

THE COMMISSIONER OF CUSTOMS
PB NO.5400, C.R. BUILDING
QUEENS' ROAD, BANGALORE-560001.
                                          ... RESPONDENT
(BY MR. JEEVAN J. NEERALGI, ADV.,)
                             ---

     THIS C.S.T.A. IS FILED UNDER SEC. 130 OF THE CUSTOMS
ACT, ARISING OUT OF ORDER DATD 05-10-2016 PASSED IN
FINAL ORDER NO.20905/2016 BY THE APPELLATE TRIBUNAL IN
APPEAL NO.C/373/2006, PRAYING TO DECIDE THE QUESTION OF
LAW AS FRAMED HEREIN ABOVE IN FAVOUR OF THE APPELLANT
AND   THEREBY    ALLOW     THE   APPEAL   IN   FULL  WITH
CONSEQUENTIAL RELIEF IF ANY. SET ASIDE THE FINAL ORDER
NO.20905/2016 DATED 05-10-2016 PASSED BY THE HON'BLE
APPELLATE TRIBUNAL IN APPEAL NO.C/373/2006 (PRODUCED AT
ANNEXURE-A) AND THEREBY DIRECT THE RESPONDENT TO PAY
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THE MAHAZAR VALUE OF RS.28,26,001/- ALONG WITH INTEREST
AT THE RATE OF 18% PER ANNUM TO THE APPELLANT & ETC.

     THIS C.S.T.A. COMING ON FOR HEARING, THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:

                          JUDGMENT

Mr.Raghavendra B.Hanjer, learned counsel for the

appellant.

Mr.Jeevan J.Neeralgi, learned counsel for the

respondent.

This appeal under Section 130 of the Customs Tax Act,

1962 (hereinafter referred to as 'the Act', for short) has been

filed by the appellant against the order dated 05.10.2016

passed by the Customs, Excise and Service Tax Appellate

Tribunal (hereinafter referred to as 'the Tribunal' for short).

2. Facts leading to filing of this appeal briefly stated are

that the appellant is the holder of import export code and is

engaged in the business of import and export of earth

moving equipments. The appellant imported earth moving

machinery parts from USA through Bangalore Airport and

filed two bills of entry bearing No.004350 dated 19.02.1993

for clearance through their customs house agent M/s. Pavan

Enterprises. However, the officers seized the goods on

19.03.1993 on the allegation that the imported goods have

been manufactured by KOMATSU in Japan and the appellant

has failed to produce the country of origin certificate. The

appellant thereafter filed a writ petition before this Court

namely W.P.No.9028/1993 seeking a direction for release of

goods seized during the course of investigation. This Court,

by an order dated 12.04.1993, ordered for release of goods

on provisional basis on payment of appropriate duty

determined within two weeks. However, it is the case of the

appellant that the aforesaid order was not complied with, by

the Department and the Assistant Commissioner of Customs,

Bangalore, vide communication dated 22.04.1993,

determined the duty liability at Rs.29,67,700/- has asked the

appellant to execute provisional duty bond for the differential

duty of Rs.17,01,610/- with surety. However, no specific

order was passed in respect of bills of entry for releasing of

the seized goods.

2. The appellant vide communications dated

14.06.1993, 27.06.1993 and 30.06.1993 requested the

Assistant Commissioner to release the goods immediately.

However, no action in the matter was taken. Thereafter, two

show cause notices dated 19.05.1993 were issued to the

appellant by the Commissioner of Customs, Bangalore

proposing to reject the declared invoice value on the ground

of mis-declaration. The appellant filed a common reply on

30.07.1993 in which the allegations in the show cause

notices were denied. The appellant thereafter submitted

various documents received from the supplier in USA along

with a communication, informing that the supplier had

extended the discount up to 60% for KOMATSU parts. The

Collector of Customs, Bengaluru, vide common order dated

04.10.1993 rejected the transaction value of the imported

goods and thereby re-fixed the transaction value by

enhancing the same by 50%. The Collector also ordered for

confiscation of the imported goods and also imposed penalty

of Rs.50,000/- on the appellant. Aggrieved by the order of

the Collector, the appellant filed an appeal before the

Appellate Tribunal. During the pendency of the appeal, the

respondents auctioned the goods on 10.10.2000 for a lesser

amount as against the value of goods mentioned in mahazar

which was Rs.28,00,000/- without any notice to the appellant

and in violation of the directions issued by this Court to

release the goods in favour of the appellant on provisional

basis. The Appellate Tribunal, vide order dated 30.01.2002,

remitted the matter with a direction to re-consider the issue

afresh on the ground of not considering the issue of country

of origin supported by the certificate issued by the

distributors / suppliers. The appellant, after remand, filed

written statement on 02.04.2004. The Commissioner of

Customs, Bangalore, vide order dated 01.05.2006, upheld

the earlier order and enhanced the penalty from Rs.50,000/-

to Rs.2,00,000/-. The appellant being aggrieved by the

order of the Commissioner, filed an appeal along with the

application for stay before the Appellate Tribunal. The

Tribunal, vide order dated 05.10.2016, dismissed the appeal

preferred by the appellant on the ground that the Tribunal

has no power to order for compensation under the appellate

jurisdiction.

3. Learned counsel for the appellant, while inviting the

attention of this Court to the order passed by the Tribunal

and in particular paragraph 4 of the aforesaid order,

submitted that the Tribunal had not adverted to the

contentions raised by the appellant with regard to the

invalidity of the confiscation proceedings and subsequent

sale. It is further submitted that the Tribunal ought to have

appreciated that under Section 129B of the Act, it has power

to pass such order as it deems fit which included the power

to pass an order for restitution of the amount of value of

goods which was illegally confiscated. In support of aforesaid

submission, reliance has been placed on the decisions in

'B.ARUN KUMAR & CO. Vs. COMMISSIONER OF

CUSTOMS' (2005) 180 E.L.T. 152 (CAL.), 'MOHAMMED

YASIN Vs. COMMISSIONER OF CUSTOMS, BANGALORE

(2005) 189 E.L.T. 56 (TRI-BANG), 'SHILPS IMPEX Vs.

UNION OF INDIA' (2002) 140 E.L.T.3 (SC), 'RATAN

LAN JAIN' Vs. UOI (2017) 349 E.L.T. 468 (CAL.), 'CC

UTTAR PRADESH & UTTARANCHAL Vs. PIDILITE

INDUSTRIES LTD. (2014) 309 E.L.T. 598 (ALL),

'COMMISSIONER OF CUSTOMS (PREVENTIVE) Vs.

ASHAN WARIS' (2017) 345 ELT 86 (CAL.)

4. On the other hand, learned counsel for the

respondent has supported the order passed by the Tribunal

and has submitted that the action of the respondent in

confiscating and in putting the confiscated goods to sale, has

been upheld by the Tribunal.

5. We have considered the submissions made on both

sides and have perused the record. From perusal of

paragraph 4 of the order, we find that the Tribunal has not

considered the issue with regard to the validity of the

confiscation of the goods and the consequent sale. The order

passed by the Tribunal is cryptic and suffers from the vice of

non-application of mind inasmuch as the Tribunal had not

adverted to the rival submissions made by the learned

counsel for the parties. In the fact situation of the case, we

deem it appropriate to quash the impugned order passed by

the Tribunal and remit the matter to the Tribunal to decide

the issue afresh. The Tribunal shall specifically advert to the

issue of validity of the confiscation proceedings and the

consequent sale by the respondent and thereupon, shall

decide the issue with regard to restitution of value of goods

to the appellant.

6. In the light of the decision rendered by various High

Courts including this Court which has been relied upon by the

learned counsel for the appellant, the Tribunal is directed to

decide the appeal within a period of two months from the

date of receipt of certified copy of the order passed today.

Accordingly, the appeal is disposed of.

Sd/-

JUDGE

Sd/-

JUDGE

RV