Zakir Hussain vs Union of India

Dhirubhai Naranbhai Patel, J.—This appeal has been preferred against the order passed by CESTAT, Eastern Zonal Bench, Kolkata in Custom Appeal No. CSM 117/2005, dated 8th June, 2006 whereby the redemption of fine has been reduced from Rs. 3.00 Lacs to Rs. 1.5 lacs and the penalty of Rs. 50000/- has been maintained. Against this order, this Tax Appeal has been preferred. Having heard learned counsels for both sides and looking to the facts and circumstances of the case, it appears that several items were seized by the respondents when the search was carried out at the premises of this appellant on 17th September, 2003 who is dealing with mobiles and other electronic items.

Order in Original was passed on 1st April, 2005 after recording the statement under Section 108 of the Customs Act, 1962 and thereafter notice was issued and adequate opportunity of being heard was also given to this appellant. At length there is a discussion about the goods seized from the premises of this appellant in the Order in Original dated 1st April, 2005 and ultimately redemption fine was imposed of Rs. 3.00 Lacs and a penalty upon this appellant was imposed of Rs. 50000/-.

It appears that against this order, appeal was preferred by this appellant before the CESTAT in which without appreciating paragraphs 18.2, 18.3, 18.4 of the order by the Joint Commissioner of Customs, CESTAT, who has appreciated the market value of the items as Rs. 5.00 lacs, the redemption fine has been reduced from Rs. 3.00 lacs to Rs. 1.5 lacs while maintaining the penalty of Rs. 50000/-.

It appears that for certain goods, there is an explanation, whereas, for rest of the goods, there is no explanation with this appellant. At length, the counsel for both sides have argued out about several mobile phones, hand-camera, etc.

We, therefore, thought it fit to remand the matter to the CESTAT to decide the explanations for several mobile phones given by this appellant for which the invoices have already been annexed with this memo of Tax Appeal.

It further appears that the order passed by the Joint Commissioner of Customs dated 1st April, 2005 has also been taken in review under Section 129(d) of the Customs Act, 1962 by Commissioner of Customs, Patna and the direction has been given to the Joint Commissioner of Customs that if the seized goods are found to be in possession of this appellant in violation of Section 111 of the Customs Act, then custom duty ought to have been levied from this appellant and without demanding the custom duty, an order was passed by the Joint Commissioner of Custom and the Commissioner of Customs, Patna has further directed to prefer appeal against the Order in Original passed by the Joint Commissioner of Customs dated 1st April, 2005.

We, therefore, remand the matter to the CESTAT, Eastern Zonal Branch, Kolkata that Custom Appeal No. CSM 117 of 2005 is reviewed to its original file as the order passed by the CESTAT dated 8th June, 2006 has not been taken into consideration the detailed explanation given by the appellant about several mobile phones, etc.

We, hereby, quash and set aside the order passed by CESTAT dated 8-6-2006 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 Lacs to Rs. 1.5 Lacs. This market value of the gods 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.

With the aforesaid directions and observations, this Tax Appeal is disposed of. Petitioner will remain present before the CESTAT, Eastern Zonal Bench, Kolkata on 12th August, 2015 and the CESTAT will decide the appeal preferred by this appellate as early as possible and practicable, preferably within a period of six months from the date of receipt of a copy of this order.