ORDER
C. Satapathy, Member (T)
1. None appeared for the respondents. Heard Shri Hitesh Shah, learned D.R. for the applicant Commissioner. The impugned order has been passed by the Commissioner of Customs-I, Mumbai withdrawing the impugned Show Cause Notice. On review the Board has found that the impugned order passed by the Commissioner is not proper and legal for the following reasons:-
“i) The judgement of Hon’ble Supreme Court in the matter of M/s Sampat Raj Dugar reported in 1992 (58) ELT 162 (SC) does not have universal application in as much as observations of the Hon’ble Supreme Court under para 19 of the judgement are quite clear which reads as
“(We may reiterate that we are speaking of a case where the import is not contrary to law.) It is only with such a situation that we are concerned in this case and our decision is also confined only to such a situation”.
Besides, it is held by the Hon’ble Supreme Court that exporter (foreign supplier) is entitled to ask for their re-export unless proved to be a party to the fraud. The ratio of the said judgement in case of M/s. Sampat Raj Dugar is not applicable to the facts of this case as the goods were originally imported in the name of a fictitious consignee not having import-export code no. which is a contravention of Section 7 of Foreign Trade (Development & Regulation) Act, 1992 rendering the goods liable for confiscation under Section 111(d) of Customs Act. For regularising this illegal import OHRI and HT were introduced into the transaction as an after thought under the pretext of re-sale to legalise the import. The original shipper i.e. DM and OHRI were also party to the fraud and hence goods cannot be allowed for re-shipment in terms of the aforesaid Supreme Court judgement.
ii) Possession of Import-Export code number is a mandatory requirement under the EXIM Policy and it is not that import could be made by any one (even if actual user) without complying with some basic requirements. Therefore any contravention of the policy is construed to be a prohibition under Section 11 and hence would attract the provisions of Section 111 (d) of the Customs Act.
iii)The finding of the Commissioner could not explain convincingly as to why two sets of B/L were issued to two different parties for the same goods (as rightly observed by CEGAT in their order dated 30.8.95). The transactions between DM and OHRI and between OHRI and HT had been created which are nothing but an after thought in order to cover up the case or legalise import and also to bail out original shipper and the fictitious consignee M/s CHG Insulators.
iv)The Commissioner in his findings has observed that OHRI in normal course of business had purchased the goods from DM and then sold the same to HT. If the transactions in this case were carried out in the normal course of business, there would not be any need for two sets of Bs/L one issued in the name of CMG Insulators and other in the name of HT. It is also difficult to believe that OHRI has purchased the goods from DM after they had been shipped and received at the port of destination. It is therefore reasonable to assume that the transactions on the basis of which ownership over the goods and their re-shipment has been sought have not been done in the usual course of international business but purely with a fraudulent intention to legalise the imports. In this connection reliance is placed on the decision of CEGAT in case of M/s Uniflex Cables Ltd. reported in 1995 (77) ELT 737 (Trib).
v) The Commissioner by not confining himself to the scope of adjudication specified by the CEGAT has on his own has taken up the order dated 19.12.93 passed by Asstt. Commissioner (Import) and held that Asstt. Commissioner was not having powers to pass the order of cancellation of noted Bs/E. The Commissioner in this case is not authorized to review the order passed by the Asstt. Commissioner which otherwise has been upheld by the Commissioner (Appeals) in order-in-appeal No. 492/95 BCH dated 25.7.95 in an appeal filed by HT.
vi)In the order dated 13.3.95 passed by Commissioner of Customs (II), M/s OHRI was not party or charged in the SCN. The Commissioner in this case has failed to consider the tainted nature of goods and adverse background of the shipper M/s DM on the basis that they were not party to the SCN. Though OHRI was also not party to the order passed by Commissioner (II), they on their own appealed to CEGAT claiming the ownership of the goods and under the said circumstances no reliance could have been placed on the SCN by the Commissioner in this case. The CEGAT in their order dated 30.8.95 made it very clear by observing that
“The Collector, after making due enquiry and after giving due opportunity of hearing may pass orders in accordance with law”.
In view of the said observation made by CEGAT, the Commissioner should have made proper enquiry into the transaction between DM and OHRI keeping in view the fraudulent background of DM and without confining himself to the boundaries of the SCN.”
2. We find that these lacunae pointed by the Board need to be gone into at the original adjudicating level. As such, we set aside the impugned order and remand the matter back to the successor Commissioner to re-adjudicate the case after giving a reasonable opportunity of hearing to both sides. The Department’s appeal is allowed by way of remand.
(Pronounced in court on 1.1.04)