Case Law Details
CA Bimal Jain
Goods imported at Chennai Port and cleared by Customs Authorities at Chennai, cannot be alleged as mis-declared by Mumbai Customs House as the latter lack jurisdiction
During the search of the premise of Tina Sales Agency (“Appellant 1”) velvet cloth was found. The Appellant 1 contended that velvet was imported from Shri Adarsh Veer Jain (“Appellant 2”). In the course of search, Statement of the Appellant 2 was recorded, in which it was confirmed that Appellant 2 had imported lining material under advance license at Chennai port which are subsequently sold to Appellant 1. Since, the goods found in the premise of Appellant 1 were velvet cloth and goods declared by Appellant 2 was lining material which were found as flocked fabrics, proceedings in Mumbai Custom House were initiated against both Appellant 1 and Appellant 2 (collectively referred as “the Appellants”).
After due adjudication, in second round of litigation, imported goods were confiscated and penalties were imposed on both the Appellants. Being aggrieved, the Appellants preferred an appeal before the Hon’ble CESTAT, Mumbai.
The Hon’ble CESTAT, Mumbai relying upon the decision of the Hon’ble CESTAT, Delhi in case of Costa Foods Vs. Collector of Customs [1989 (43) E.L.T 279 (Tri. – Delhi)], which was further upheld by the Hon’ble Supreme Court in Union of India Vs. Ram Narain Bishwanath [1997 (96) E.L.T. 224], allowed the appeal in favour of the Appellants and held that Mumbai Customs House has no jurisdiction to raise demand alleging mis-declaration of imported goods, when the goods were imported at Chennai port and Customs Authorities at Chennai had cleared goods holding that the description of the goods has not been mis-declared.
It was further held that the SCN has been issued by invoking the extended period of limitation without alleging fraud, collusion, misstatement, suppression of fact or contravention of provisions of Act/ Rules with an intent to evade duty.
Hence it is barred by limitation. Accordingly, penalties imposed on the Appellants were set aside.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
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