M/S. Srd Steel Pvt. Ltd vs C.C.E. Bhopal

[Arising out of Order-in-Appeal No. 58/BPL/2008 dated 21.05.2008 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Bhopal].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. SRD Steel Pvt. Ltd. .Appellants

Vs.

C.C.E. Bhopal .Respondent

Appearance:

Shri Abhishek Jaju, Advocate for the Appellant

Shri R.K. Grover, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing: 31.08.2015

FINAL ORDER NO. 52716/2015-EX(SM)

Per Ashok Jindal:

The appellant is in appeal against the impugned order imposing redemption fine.

2. The facts of the case are that on 29.03.2006 the Central Excise Officers visited to the premises of the appellant who is a registered dealer and trader. The Panchnama was drawn and as per the panchnama goods were detained and given on Supardinama to the appellant. Later on vide letter dated 17.04.2006 it was proposed for seizure of the goods. Later on vide letter dated 25.09.2006 the goods were seized. Thereafter, on 27.11.2006 the show cause notice was issued for confiscation of the seized goods and imposition of penalty. The ld. Counsel for the appellant submits that in this case it is an admitted fact that goods have been detained on 29.03.2006 and later on seized on 29.05.2006. The show cause notice has been issued on 27.11.2006 which is beyond the time prescribed for issuance of the show cause notice as per section 110 of the Customs Act 1962. Therefore, show cause notice is barred by limitation. Such redemption fine and confiscation of the impugned goods is illegal. Consequently redemption fine and penalty are not imposable on the appellant.

3. On the other hand, Ld. AR oppose the contention of the Ld. Counsel and submits that during the course of enquiry goods are initially detained and thereafter, if the assessee failed to provide documentary evidence, then goods can be seized. Therefore, it is only a procedure that first goods are to be detained and thereafter, if required goods can be seized and as per the section 110 of the Customs Act 1962 the show cause notice can be issued within six months from the date of seizure of the goods.

4. Heard the parties. Considered the submission.

5. As per the provision of section 110 of the Customs Act 1962 a show cause notice can be issued within six months from the date of the seizure of the goods. In this case admittedly on 29.03.2006 goods were detained and released to the appellant under superdinama with the direction not to dispose of the goods till further order of the concerned officer. As per the department goods were seized only on 27.05.2006. In fact, the goods were in the custody of the department since 29.03.2006. Therefore, as per section 110 of the Customs Act 1962 the show cause notice can be issued within six months from the date of detention of the goods i.e. on 29.03.2006 as held by the Honble High Court of Madhya Pradesh in the case of Vilayat Hussain Vs. UOI 1997 (95) ELT 19 (MP) wherein the Honble High Court has observed in para 14 as under:

14. From the facts narrated above, there is no manner of doubt that action of the Squad in sealing the five godowns and removing the books of accounts amounted to seizure within the meaning of Section 110 of the Act. Therefore, the limitation of six months has to be computed from 29.05.1978. We may also usefully refer to Shri J D Sehgal Vs. CCE New Delhi and Another 1983 (12)ELT 760 (Del) wherein a TV seized was not physically removed. The Court found that the officers seized the set, but did not physically remove the same because of the petitioners undertaking. The Court held that it was a seizure within meaning of Section 110 and there being non-compliance of Section 110(2) read with Section 124, the department as bound to return the TV set to the petitioner. On counting the limitation from 29.05.1978 we find that the respondent failed to take action within the period of six months of reform. The show cause notice dated 02.07.1979 was beyond the prescribed period. We therefore, hold that the impugned order of confiscation and imposition of penalty is within jurisdiction and must accordingly be quashed. The respondents are bound to return the articles seized to the petitioner.

6. The said view of the Honble High Court has been affirmed by the Honble Apex Court reported in UOI Vs. Vilayat Hussain 1999 (108) ELT A59 (SC). As the show cause notice has been issued beyond a period of six months from the date of detention of the goods, therefore, the show cause notice is barred by limitation. Consequently, the proceedings initiated as per the show cause notice are quashed. With these terms, I hold that the goods cannot be confiscated beyond six months from the date of detention and redemption fine and penalty is not imposable on the appellant. With these terms, impugned order is set aside. Appeal is allowed.

(Dictated and pronounced in the open court)

(Ashok Jindal) Member (Judicial)

Bhanu

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E/1882/2008-EX(SM)