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Cus - No monetary demand has been raised in order - It is, therefore, not appropriate that the department should continue to put the restriction orders against the immovable property of the director or continue to attach the petitioner's bank account: HC

By TIOL News Service

MUMBAI, DECEMBER 13, 2018. THE petitioner had exported 'Gas Injected Co-Axial Cable' ("the goods") under 53 shipping bills sometime in the year 2015.

While they were in the process of exporting the goods in June 2016 (by filing 15 shipping bills), the department intercepted the same on the prima facie belief that the petitioner had mis-declared the value of the goods.

Pending show cause notice and further investigation, the Department not only stopped the export but also-

++ Addressed a letter to the Sub-Registrar, Haveli, Pune within whose jurisdiction the immovable property of the director of the petitioner company was situated, not to alienate the same, in the interest of the Revenue;

++ Attached six bank accounts held with ICICI Bank, UCO Bank and Bank of India in Mumbai and Pune;

++ Retained a sum of Rs.1.50 Crores deposited by the petitioner.

Against the aforesaid action initiated by the department, the exported had filed the present writ petition and sought multiple reliefs.

Incidentally, during the pendency of the petition, the department issued a SCN dated 20.12.2016 calling upon the petitioner to show cause as to why the declared FOB value of Rs.23.07 crores should not be rejected u/r 8 of the Customs Valuation Rules and as to why the same should not be ascertained as Rs.32.24 lakhs in terms of rule 6; as to why the drawback claimed of Rs.45.49 lakhs should not be rejected and re-determined as Rs.64,486/- and as to why the MEIS amount should also not be re-determined as Rs.64,486/-; as to why the goods declared should not be confiscated.

The adjudicating authority upheld the allegations levelled and passed orders accordingly. As there was no proposal for imposition of penalty in the SCN, no penalty was imposed.

The High Court perused the order of the Adjudicating authority and observed -

++ Effectively, this order, therefore, merely resulted into absolute confiscation of goods which according to the department was of the value of Rs.45,49,648/-. Whatever be the reason, the petitioner has not prayed for redemption fine in lieu of the confiscation.

++ No monetary demand has been raised against the petitioner in the order of adjudication. Under the circumstances, we do not find it appropriate that the department should continue to put the restriction orders against the immovable property of the director of the petitioner company or continue to attach the petitioner's bank account.

++ The contention of the counsel for the department that the petitioner's past exports under 53 different shipping bills are also under investigation and, therefore, the attachment / seizure order must be allowed to operate, cannot be accepted.

++ The exports were made in the year 2015. Nearly four years have been passed since then. The department has so far not produced any material prima facie suggesting that there is likelihood of demand for recovery of money from the petitioner. … We are neither preventing the department from further investigation into the petitioner's past export and if found necessary, to issue show-cause notice in that respect nor are we preventing the department from taking any further action with respect to the later exports, if otherwise available under the law. At this stage, however, there being no further material on record, the prohibitory orders must be rescinded.

As regards the deposit made of Rs.1.50 crores, the counsel for the department produced a letter dated 16.05.2017 of the petitioner clarifying that the amount deposited was made voluntarily and not under protest.

The High Court, therefore, observed - "Whether the said amount was deposited under protest or voluntarily, the department cannot appropriate the same unless a legal demand is crystallized against the assessee. Admittedly, no such demand has been raised. Under the circumstances, at this stage, we would direct the respondents to refund such amount to the petitioner, however, by imposing a condition of providing bank guarantee of matching amount to safeguard the interest of the department if any such demand arises in future."

The petition was disposed of.

(See 2018-TIOL-2584-HC-MUM-CUS)


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