1. This Rectification of Mistake (ROM for short) application has been filed by Revenue seeking rectification in the Final Order No.CI/1418/WZB/2002, dated 18-5-2002, of this Bench.
2. The Bench, after elaborate discussion of the material on record had held, vide that order, as follows : (a) The Commissioner's order regarding extension of time under Section 110(2) of the Customs Act, 1962 for issue of notice was not to be interfered with; (b) The Petitioner was required to file necessary modification to the Bill of Entry for provisional release of the goods under seizure and for this purpose they should produce SIL licences to cover the above said provisional release of goods after assessment of the goods under seizure; "(C1) The detention letter to the Custom have been issued by D.R.I, on 2-3-2001 and the cloves were ordered to be withdrawn from the custodians Auction List vide letter dtd. 28-6-2001 No. DRI/BZU/0/21/2001 of Deputy Director DRI-Mumbai. The 'detention' of the goods covered by subject BE filed on 26-2-2001 referred to DRI vide their repeat letter dated 2-3-2001 therefore effected, much more than 6 months prior to the date of the Show Cause Notice dtd.
28-1-2002 and much earlier to the formal examination and seizure under Panchnama dtd, 8-8-2001. The amount of Rs. 20 lakhs was also taken possession by the DRI officers on or before 11-5-2001 and deposited in the treasury. We cannot uphold detention of this large amount as 'Voluntary payment' as urged by the department, if that was so, the finding and plea of non-cooperation by the appellants made by the D.R.I and found by the Adjudicator is not correct. We believe, no one will voluntarily part with such large sums, that too without a written demand under law, much less a man of commerce, who is alleged to be an evader of taxes. The appellant's plea of Coercion towards recovery of this amount is more acceptable. We would, following the instructions of the Ministry of Law in the 'Central Appraising Manual' 'Vol. V - Chapter 2, Paras 3a, 4(a), 4(a)(ii), 4(a)(iii) conclude, There is no basis for the assumption that Custom Act undirectly permits detention prior to seizure. The Notice for the cloves should have therefore been issued much earlier to 2-3-2001. The proceedings are bad ab initio. There are however no proceedings initiated to extend the time limit for the retention of amount of Rs. 20 lakhs'. Recorded seizure is not essential, and hold whatever is 'detained' or 'taken/seized' has either to be adjudicated or released within the time frame a Section 110(2).
Therefore Cloves and amount of Rs. 20 lakhs stands released from seizure/detention." "11. The department says and submits that the order of Hon'ble CEGAT, manifests a mistake apparent on the face of the record. It is respectfully submitted that the said amount was a voluntary deposit by the party in relation to the earlier 27 consignments which were already cleared and diverted prior to the present action. Huge duty evasion is suspected therefore the party made the said voluntary payment of Rs. 20 lakhs against the said liability. The department respectfully submits that the said payment was not at all procured by coercive means as is evident from records. In fact that duty evasion was not the subject matter of the impugned order for extension. The said DD's were voluntarily deposited by importers through the Bank on 11-5-2001, whereas the same was deposited by Respondents only on 31-5-2001. Even during this period, in between the said dates, there was no objection or resistance on the part of the appellants. If the said amount was coer-cively procured by the department the appellants could very well have taken legal recourse before the same was deposited in the Government Treasury.
12. It is evident from the Tribunal's order dated 18-5-2002 itself, that at page No. 13 of the said order it was discussed by the Hon'ble Tribunal; 'We find there is considerable force in and reason to accept the submissions made, that the DRI in this matter, investigating into the aspects of-- (i) The case relating to alleged removal of raw material from E.O.U. M/s. Aroma International and diversion and disposal of the same in the domestic market.
(ii) The case related to alleged under valuation of a consignment of cloves covers by B/E filed for warehousing.
The two aspects are independent and need not be clubbed. The outcome of (1) need not wait the clearance of cloves under seizure in (ii) at least it could be on provisional assessment.' Thus the Hon'ble Tribunal had itself come to the conclusion that the issue of diversion of imported goods from 100% EOU and the issue of undervaluation of the live consignment were different and distinct issues to be dealt with separately.
13. The department says and submits that the said amount of Rs. 20 lakhs were paid by the party by two separate demand drafts as follows : The said demand drafts were deposited in the Government Treasury on 31-5-2001 i.e. much before the seizure of the current consignment was effected on 8-8-2001. Therefore, it is evident that the said payment of Rs. 20 lakhs cannot be linked with the consignment under the seizure and definitely the said amount was paid by the party as part of the duty evaded by them in respect of 27 earlier consignments. A noting to this effect is appearing in the official note sheets of the DRI dated 2-7-2001. The department will produce the said note sheets before Hon'ble Tribunal at the time of hearing.
Thus, it would be seen that the said Rs. 20 lakhs were not collected by the department under any coercive methods." 4. After considering the ROM application and hearing both sides it is found : (a) As regards recovery of Rs. 20 lakhs, and its subsequent payment as duty, the findings arrive in the para by the Tribunal by its order, as extracted hereinabove, and the findings recorded in para C 2 of the very same order which as follows : "(C2) (i) From the facts on record and findings arrived at in the impugned order to the effect that the-- 'I find that there is non-cooperation, which itself is leading to delay in issuing Show Cause Noticei They should have come clean. It is not so. They are evasive. There is non-compliance even of summon.
The purchasers name and the payment still not found out in investigation due to non-cooperation.' It appears to us that the investigation in this case cannot be stalled, however, non-cooperation as alleged and found cannot be got converted into a cooperation by sitting on perishable goods and not clearing the same. The fear of the goods deteriorating in value and the deprivation of the same to the importer, would constitute an undue influence of the investigator on the importers, if not harassment of the Importers. We cannot be a mute spectator to the same. Non-clearance of the goods, covered by the subject Bill of Entry, which are perishable items liable for deterioration and spoilage in quality, could be causing an uncalled for pressure. This is also apparent from the fact, that the appellants produced Rs. 20 lakhs on 11-5-2001 or thereabout without any demand of duty or otherwise made in writing, made over the same. Not only they produced this large sum of money but without demur and parted it to the D.R.I.; The DRI officers deposited it in the treasure. This is indicating to us, that the appellants were sufficiently motivated by the investigating officer undue influences. The facts that the notice issued for extension of the time period, did not contain whisper about this deposit of Rs. 20 lakhs, made, on 11-5-2001 which is 3 months earlier to the seizure of cloves, nor does the order speak as what was to be done with this deposit, induce us, to be conclude that this deposit would amount to a deprivation of use and thus a seizure; which has to be released as it cannot be retained by the Revenue. The retention not been approved/extended by the Commissioner. It is therefore required that this plea of the appellants, that the said 20 lakhs Rupees should be returned to them has to be granted. We would therefore order that the said Rs. 20 lakhs should be returned to the appellants without any further delay.
(ii) We find that there is considerable force in and reason to accept the submissions made, that the D.R.I, is in this matter, investigating into aspects of - (1) The case relating to alleged removal of raw material from E.O.U. (Aroma International) and diversion and disposal of the same in the domestic market.
(2) The case related to alleged under valuation of a consignment of cloves covered by B.E. filed for warehousing." It would therefore be amply clear that Rs. 20 lakhs were found to be goods seized and they were coercively reduced by a challan, by the departmental officers, as deposit of duty.
(b) The Tribunal had come to its own finding as regards nature of Rs. 20 lakhs under the dispute. The Tribunal had also observed that there was no application regarding extension of time limit, in the proceedings, before the lower authorities as regards the seizure of this Rs. 20 lakhs.
(c) That order has been arrived at, after considering the facts on record and the submission made by the DRI. It is found that there is no error apparent on record brought out in the said ROM application now filed by Revenue.
(d) The Revenue has totally mis-construed the scope of ROM application. By filing such an application, for rectification of mistake, it has to be shown that the facts recorded in the order are incorrect. When the Tribunal records the submissions of the Revenue the same could not be construed as incorrect fact. The ROM application repeatedly stresses on the point that the said payment was not with reference to the goods under seizure but with reference to the investigations in progress. As regards the alleged improper utilization of 27 consignments the ROM application makes a reference to noting dated 2-7-2001 appearing in the official note sheet of DRI (refer para 13 of the ROM application) and it is submitted before us that this note would clarify the position as regards the conduct of the investigating officers about the payment of Rs. 20 lakhs.
Thereafter a case purported to be made out that had the same be placed on record and considered by the Hon'ble Tribunal the position in the order would be different. This fact itself indicates that the said note was not before the Tribunal and there was no question of suggesting or coming to a conclusion that the Tribunal was in error in not correctly appreciating the said note. When the note as submitted was not before the Tribunal there cannot be an error on the face of the record based on which the order was passed.
(e) It was submitted on behalf of the Respondent in the ROM application that even if the note was before the Tribunal, that should not be the basis for arriving at the conclusion that the payment of Rs. 20 lakhs was in respect of the previous 27 consignments. Be that as it may. The finding of the Tribunal as regards Rs. 20 lakhs is that it was an amount taken possession of by the DRI officers on 11-5-2001 and deposited by them in the treasury.
The Tribunal comes to a further conclusion that no man of commerce much less an alleged evader of tax, as alleged, would voluntarily part with large sums, that too, without a written demand under law, and thereafter accepted the plea of coercion towards recovery of this amount made before them. Thereafter relying on the instructions of Ministry of Law - Central Apprising Manual Volume V, Chapter II Paras 3(a), 4(a)(ia), 4(a)(ii), 4(a)(iii) they concluded that for this sum there was a seizure and also held that recorded seizure was not essential. It further concluded, it was required to be adjudicated or released within the time frame of Section 110(2) which was not done.
5. In this view of the matter and the findings arrived at by the Bench, no grounds are found to sustain the ROM application.