Mr. Zakir Hussain vs Commr. Of Customs, Patna

(Arising out of the Order-in-Appeal No.217/PAT/CUS/APPEAL/2005 dated-22/08/2005 passed by the Commissioner of Customs & Central Excise (Appeals), Patna) For approval and signature of:

SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER

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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 ?

Mr. Zakir Hussain APPELLANT(S) VERSUS Commr. of Customs, Patna

RESPONDENT(S)

APPEARANCE

Sri B.N. Chattopadhyay, Consultant

FOR APPELLANT(S) Sri S. K. Naskar, A.C. (A.R) FOR THE RESPONDENT(S)

CORAM: SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER

DATE OF HEARING : 11/09/2015

ORDER NO : FO/A/75495/2015 Per SHRI H.K. THAKUR

This appeal was listed for final hearing in view of order dated 8/07/2015 passed by Honble High Court of Jharkhandin in Tax Appeal No. 37 of 2006. Honble High Court has remanded the case to CESTAT by making following order:

9. We, hereby, quash and set aside the order passed by CESTAT dated 08.06.2006 mainly for the reason that CESTAT has arbitrarily arrived at the market value of the goods at Rs.5.00 Lacs and, therefore, reduced the redemption fine from Rs.3.00 Lacvs to Rs.1.5 Lacs. This market value of the goods seized which is at Rs.5.00 lacs may not be a correct looking to the explanation given by this appellant which is referred in paragraphs 18.1, 18.2, 18.3 and 18.4 of the order passed by the Joint Commissioner of Customs, while passing Order-in-Original dated 1st April, 2005.

2. Shri B.N. Chattopadhyay, Ld. Consultant appearing on behalf of the appellant argued that appellant has procured mobile phone from various traders and is also undertaking job of repairs of mobile telephones. He made the Bench to go through annexure A of the Panchnama to emphasize that the goods listed in the Pnchnama dated 17/09/2003 are the goods for repair as well as the goods purchased from other traders in India. It was pointed out by the Ld. Consultant that the country of origin of these mobile phones has nowhere been indicated in the Panchnama. That the goods seized are not notified under Section 123 of the Customs Act, 1962 and therefore, the onus does not lie with the appellant to establish that the goods are not smuggled. That Commissioner (Appeal) has wrongly relied upon the judgment of Honble Supreme Court in the case of Krishna Vs. State of Punjab [1993 (67) ELT 17 (SC) where the goods were seized under the reasonable believe that the same are smuggled goods. It was the case of the appellant that there is no indication in the records available that goods were of foreign origin and also that the goods are not notified under Section 123 of the Customs Act, 1962. It was further argued by the Ld. Consultant appearing on behalf of the appellant that all the required documents under which the seized goods were purchased were given to the Department as mentioned by the adjudicating authority in paras 18.1, 18.2, 18.3 and 18.4 of the order-in-original dated 1/04/2005. That the Honble High Court while remanding the case back to CESTAT has observed that appellants case should be examined in view of the above submissions made before the adjudicating authority and if the goods seized are covered by the documents furnished, then the same should be released to the appellant.

3. Shri S.K. Naskar, A.C. (A.R.) appearing on behalf of the Revenue argued that the issue of confiscation has not been decided by Honble High Court. That in para 9 of the order dated 8/7/2015 passed by Honble Jharkhand High Court, it is only observed that the redemption fine imposed by CESTAT is not proper in view of the explanation given by the appellant in paragraphs 18.1, 18.2, 18.3 and 18.4 of the order dated 1/4/2005 passed by the adjudicating authority. Ld. A.R. strongly defended the orders passed by the lower authority.

4. Heard both sides and perused the case records. It is observed from the directions contained in paragraph 9 of the order dated 8/7/2015 passed by High Court that the only issue remanded by Honble High Court is that the market value of the seized goods fixed at Rs.5.00 Lacs by CESTAT may not be correct looking to the explanation given by the appellant in paragraph 18.1 to 18.4 of the Order-in-Original dated 1/4/2005. There is no direction by the Honble High Court on the issue of applicability of Section 123 of the Customs Act, 1962 and on the aspect that if the documents furnished by the appellant are in order then the goods should be released. It has been observed by Honble High Court that market value of the seized goods has been arbitrarily arrived at by CESTAT. Regarding determination of redemption fine, the same is required to be based on the basis of prevailing market value of the goods. Secondly, redemption fine imposable also has a bearing on the margin of profit (MOP) of the seized goods. Value of seized goods indicated in annexure A dated 17/09/2003 are also basis on the market value prevailing at the time of seizure. However, appellant has furnished certain invoices before the adjudicating authority which also represent the market value of the seized goods. Even if, the documents furnished by the appellant were not considered proper documents to cover the seized goods but the same will also represent the prevailing market price of comparable goods.

5. Ld. Consultant appearing on behalf of the appellant could not furnish comparable price of the seized goods in view of the price indicated in the invoices furnished by the appellant and those contained in the Panchnama. For verification and arriving at the market value of the seized goods, at the time of making seizure, is required to be determined by the adjudicating authority in order to arrive at the quantum of redemption fine and penalty to be imposed. Accordingly, the case is remanded back to the adjudicating authority for determination of appropriate market value of seized goods prevailing at the time of seizure and impose reasonable redemption fine and penalty after giving an opportunity of personal hearing to the appellant. Appeal filed by the appellant is allowed by way of remand to the adjudicating authority.

(Operative part of the order already pronounced in the Court) Sd/- (H.K. THAKUR) TECHNICAL MEMBER k.b/-

Customs Appeal No. CSM/117/2005

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