Murarka Cables and Conductors Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....remitted back to original authority for redetermination for the duty due in this case. (b) in the remand proceedings, now or ordered the question of duty on the grounds urged by the importer as to be considered, along with the remission if due have to be granted this will be also subject to the out come of the theft case and also the recovery of stolen goods, if any, the matter is thereafter required to be re-examined by the appropriate authority. in facts of this case, no liabilities to penalty as arrived at can be arrived until and unless the importer/ warehouse keeper can be or found to be involved with the theft or the plea of theft is not found to be true. for this purpose also the matter is required to be remitted back.3.2 in view of the findings the appeal is allowed as remand to the commissioner to consider the request of remission and redetermine all duty and penalty liability, if any, after ascertaining the outcome of theft goods case registered by the police. appeal allowed by way of remand in above terms.

Judgment:

1.1 Appellant herein, M/s. Murarka Cables & Conductors Ltd. had a unit in KANDLA FREE TRADE ZONE as manufacturer and exporters of Aluminium & Copper Conductors and Cables.

1.2 They were importing the goods by availing benefit of Exemption No.77/80-Cus Dt. 17-4-80. They imported goods vide Bill of Entry Dt.

28-6-91, & kept them in bounded warehoused. Customs authorities extended the warehousing period from time to time.

1.3 In the year 1994, the unit was closed down due to financial & other problems on 8-2-1996 the Gandhidham Police intimated the appellant that few thieves arrested by them have confessed to a theft in the appellants factory. A complaint was lodged with the police on 9-2-1996.

The police authorities also recovered part of the goods. A chargesheet was filed in the Criminal Court and accused of theft were put to trials.

1.4 This was also, reported by the appellant, to Customs Officials who on verification noticed that "6.5 Mts of Polidan" was stolen. A SCN was issued, & demand of duty of Rs. 10,91,294/- was confirmed and penalty of Rs. 5 lakhs was imposed denying the benefit of Notification No.77/80-Cus dt. 17-4-1980 on the ground that "-it is the negligence of the appellant who set to safeguard the non duty paid imported goods lying with the appellants." This notice was issued Ignoring the fact that the KFTZ was surrounded with the full proof security of the Customs department.- The Commissioner Appeals also confirmed the finding of the lower authority. Hence this appeal.

2.1 The appellants plead that Notification No. 77/80-Cus 5 to 9 Dt.

17-4-1980 was rescinded by issue of Notification No. 133/94 Dt.

26-4-94. The Clause 5(2) of the Notification No. 133/94 only saves "any thing done or action under notification so rescinded." Since no action was initiated during the pendency of Notification No. 77/80-Cus Dt.

17-4-1980, the present SCN Dt. 27-3-1996 is without authority of law.

The appellant is relying on Hon'ble Apex Court judgment in the case of M/s. Rayala Corporation v. Director of enforcement = New Delhi . Clause 7(a) of Ntfn No. 77/80-Cus authorizes the "Collector of Customs" to demand the duty. However in the present case the demand of duty notice is issued by Asst. Commissioner, which is without authority of law. Hence demand is not sustainable.

b) The Clause 9 of Ntfn No. 7/80-Cus is applicable to the present case. Which provides that on the goods lost or destroyed not due to any willful act, negligence or default of the importer, his employee or agent", no duty is liable to be paid if Collector of Customs is satisfied about the bonafides of the importer. The appellant submits that since 1994 the factory was non operational, yet it was, secured by putting locks on all entry points, while factory is located within the KFTZ, an area provided with full proof security of the customs department. Thus appellant had taken all necessary care. The thieves found entry by removing roof sheet of the Bounded Warehouse.

The appellant claim for benefit of Clause 9(a) of Notification No. 77/80-Cus and by the decision of Hon'ble Tribunal in in the matter of M J Electricals v. CCE. c) It is also pleaded in the present case, since the goods is lying in the bounded warehouse, hence duty cannot be levied on goods stolen from the warehouse before clearance, as held by Hon'ble Calcutta High Court in 1996 (62) ECR 32 (Calcutta) Sushil Kumar Kayan v. Asst. Collector Customs & in the matter of Tata Engineering & Locomative v. Collector of Customs.

d) It is held by numerous Hon'ble Apex Court and Tribunal decisions that "Theft" has to be given a general meaning and remission should be granted.

2003 (152) elt 136 (Tri-Del) GK Entp v. CCE-Noida 1979 ELT J-282, Bavji & Motibhai v. Insp. Ce Ram Printing Mills v. CCE 1993 (49) ECR 707(Tri) CCE v. GTC Inds Ltd. 1979 ELT J-29 Siakot Inds v. UOI and Ors.

e) The SCN proposes the demand based on rate of duty applicable on the date of Bonding of goods on 28-6-1991 and SCN Dt. 27-3-1996 is clearly time barred as much as no allegation of extended period Under Section 28 is invoked.

f) Alternately it is also submitted that appellant if at all duty is liable, it will be at rate applicable on the date of "last stock taking date" and not on date of Bonding of goods.

g) They also plead since SCN is issued by Asst. Commissioner, "answerable to Addl. Commissioner". But without any corrigundem or any authority, the adjudication is completed by Dy. Commissioner which is not in tune with the settled position of law. Hence order is bad in law.

h) It is submitted that penalty of Rs. 5 lakhs Under Section 112 of the Customs Act is not imposable for the following reasons: i) The allegation is "abetment of offence" is applicable to an individual and not to the company, the appellant relying on 2000(122) ELT 73(Tri) Liladhar Pasoo Forwarders v. CC-Mumbai.

ii) The SCN, vaguely invoked Section 112 of Customs Act, without pointing out its limbs (sub-section), hence no penalty is imposable as held by Hon'ble Calcutta High Court in AIR 1968 Calcutta 28 in the matter of Charndas Malhotra v. A.C Customs.

iii) As no goods are liable or held to be confiscated no penalty can be imposed Under Section 112 of Customs Act as held in KK Manufacturing Co v. CC Mumbai.

(a) The date of theft can be established and rate of duty, if any, will have to be determined not on the date of bonding of the goods but under the provisions of Section 15B of the Customs Act 1962, and for this purpose the matter will have to be remitted back to original authority for redetermination for the duty due in this case.

(b) In the remand proceedings, now or ordered the question of duty on the grounds urged by the importer as to be considered, along with the remission if due have to be granted this will be also subject to the out come of the theft case and also the recovery of stolen goods, if any, the matter is thereafter required to be re-examined by the appropriate authority. In facts of this case, no liabilities to penalty as arrived at can be arrived until and unless the importer/ warehouse keeper can be or found to be involved with the theft or the plea of theft is not found to be true. For this purpose also the matter is required to be remitted back.

3.2 In view of the findings the appeal is allowed as remand to the Commissioner to consider the request of remission and redetermine all duty and penalty liability, if any, after ascertaining the outcome of theft goods case registered by the Police. Appeal allowed by way of remand in above terms.