ORDER
T.K. Jayaraman, Member (T)
1. This is an appeal against OIA No. 51/04, dated 30-3-2004 passed by the Commissioner of Customs (Appeals) Bangalore. The brief facts of the case are as follows :
2. The appellant imported the goods and warehoused them under Section 61 of the Customs Act. For some reason or to other they were not able to clear the goods on payment of duty by availing the facility of extension of warehousing period provided under the Customs Act. The appellants were given time up to 31-3-1999 for clearing the goods as per law. It is seen that the imported goods are computer parts and due to high rate of obsolescence in information technology and also consequent to the slow down of the economy, they were not able to sell the imported goods. Under these circumstances, they applied to RBI for permission to re-export the goods after getting some orders from foreign buyers at a much reduced price. The appellants contend that prior to expiry of the extended warehousing period i.e. 31-3-1999, they requested the department for further extension of the period so that they could export the goods after getting RBI’s permission. They sent a letter dated 22-3-1999 addressed to the Additional Commissioner of Customs for seeking permission to export the goods. According to the appellant, there is no response from the department for the above letter. There was further correspondence with the department when the RBI permitted them to re-export the goods. There was no response at all from the Customs Department. However on 12-10-2000, they received a letter from the O/O the Deputy Commissioner of Customs, asking them to pay a penalty of Rs. 5,000/- per bond totally amounting to Rs. 85,0007-. The appellant paid the amount promptly. The text of the above mentioned letter dated 12-10-2000 is as follows:
lR;eso t;rs
Hkkjr ljdkj
GOVERNMENT OF INDIA
foÙk ea=ky;
MINISTRY OF FINANCE’
lhek’kqYd mi vk;qä dk;kZy;
OFFICE OF THE DEPUTY COMMISSIONER OF CUSTOMS
lhek’kqYd izHkkx / CUSTOMS DIVISION
29/2, – 560 001.
29@2] olos’koj Hkou] ØkslsaV ekxZ csaxywj
& 56001
29/2, BASAVESWARA BUILDING, CRESCENT ROAD, BANGALORE-560 001.
No. VIII/40/04/2000 CWC fnukad @ Dated : 12-10-2000 To, M/s. Microland Limited, 58, 80 Feet Road, .. Block, Koramangala, Bangalore - 95 Gentlemen, Sub :- Customs - Re-export of Warehoused goods - Reg.
Please refer to your letter dated 16-8-2000 filed by your consultants, B.V. Kumar, Law Associates on the above subject seeking permission to export of time barred warehoused goods covered under Show Cause Notices Nos. : No. VIII/40/105/99 – VIII/40/121/99 all dated 22-12-1999.
In this regard, as directed by the Deputy Commissioner of Customs, Customs Division, Bangalore, you are hereby requested to pay a penalty of Rs. 5,000/- per Bond totally amounting to Rs. 85,000/- under Section 117 of the Customs Act, 1962 in respect of 17 Bonds covered under the aforesaid Show Cause Notices.
Yours faithfully
Sd/-
Superintendent of Customs
Customs Division
Bonded Warehouse,
28/2, Crescent Road,
Bangalore – 560 001
3. In view of the above letter, the appellant believed that the department is going to consider their request for re-export and therefore they promptly paid the amount demanded as penalty on 13-10-2000. However the Dy. Commissioner issued an order dated 19-10-2000 demanding duty on warehoused goods along with interest. There was no reference to the amount of Rs. 85,000/- paid by them on a direction from the Department on 12-10-2000. Aggrieved over the order of the Dy. Commissioner, they appealed to the Commissioner (Appeals) who in his Order-in-Appeal No. 24/03-Cus., dated 20-1-2003/23-1-2003 remanded the matter to the original authority with the following observations :
“I have carefully gone through the facts of the case and the written & oral submissions made by the party. I find merit in the argument of the Appellant’s that their request for re-export on the basis of a firm order should have been considered by the Department as the application had been made well before the expiry of the extended warehousing period (31-3-1999). From the facts on record, it is also seen that the Department had considered the request for re-export in their letter dated 12-10-2000 in which the assesses were directed to pay a total penalty on the 16 bonds of Rs. 85,000/-under Section 117 of the Customs Act. On the basis of the said order, the Appellant’s paid the penalty amount under the express assumption that the re-export permission was being given subject to payment of penalty. I therefore find that this is a fit case for reconsideration of the findings in view of the facts presented and this is a case for de novo adjudication. On de novo adjudication, it has been contended that the Appellate Authority under the present legal dispensation does not have the authority for remanding the case for de novo adjudication. I do not agree with this. In the case of Union of India v. Umesh Dhamode [reported in 1998 (98) E.L.T. 584 (S.C.)] the Hon’ble Supreme Court, inter alia, pronounced that the Appellate Authorities having powers under Section 128 for passing orders confirming modifying or annulling the decision on orders appealed against it, would have powers to remand since an order of remand necessarily annuls the decision, which is under appeal. In view of this, I remand the case for de novo adjudication with the specific direction indicated supra.”
4. The department went in appeal to CESTAT on the ground that the Commissioner (Appeals) does not enjoy the power of remand. The Tribunal remanded the matter to the Commissioner (Appeals) to pass an appropriate order in accordance with law. The Commissioner (Appeals) had passed an order No. 51/04, dated 20-3-2004 consequent to CESTAT’s direction of remand. In the remand order, the Commissioner (Appeals) while upholding the order of the original authority demanding duty and interest has made the following observations.
“I have carefully gone through the facts of the case including the written & oral submissions made by the Appellants. This is a case where the Appellants warehoused the goods under a number of end use bonds with the Central Warehousing Corporation in terms of Section 59 (1) of the Customs Act, 1962. The goods were imported in 1995 and after the expiry of one year period, the goods were allowed to be bonded up to 31-3-1999 on the basis of the special permission given by the Chief Commissioner. In spite of the extended period given, the Appellants failed to clear the warehoused goods (even after the period of four years). The Appellant’s main contention is that their request for allowing the goods for re-export was not allowed, and therefore the duty liability imposed on them was unfair. I do not agree with this argument. The permission to re-export the goods is an independent one, and is not a matter of right, and does not any way extinguish the course of action flowing from the non-fulfilment of warehousing condition laid down under Section 61 (1) of the Customs Act. The Hon’ble Supreme Court in the case of Kesoram Rayon v. Collector – 1996 (86) E.L.T. 464 (S.C.) held that where the goods are not cleared within the warehousing period, penal action, in terms of Section 72(1)(b) would follow. I find that in this case, sufficient opportunity was given for the Appellants to remove the warehoused goods. In view of this, I hold that the order of the original adjudicating authority confirming the demand and the interest on end use bond wise, is proper and legally correct. I find no reason to interfere with the same and uphold the Order-in-Original 84-99/2000/CD/DC, dated 19-10-2000 and set aside the appeal.”
5. The appellants have come before this Tribunal aggrieved over the above mentioned order of the Commissioner (Appeals).
6. Shri K.S. Ravi Shankar learned advocate appeared for the appellants and Smt. Shoba L. Chari learned JCDR appeared for the Revenue.
The learned advocate submitted that it was not correct on the part of the department to confirm the demand when their request for permission to export the goods was pending before the department. Further the department directed the appellant to pay the penalty even before the adjudication. The appellant was made to believe that he would be getting the permission for export. However, the Dy. Commissioner passed the order without any reference to his previous instruction to deposit the penalty of Rs. 85,000/- He also explained the circumstances under which the appellants were not able to clear the goods or re-export the same. He relied on the decision of CESTAT in Phoenix International v. CC, Chennai – 2004 (165) E.L.T. 527 (Tribunal) = (2004 (62) RLT 181 CESTAT-Chen.) wherein it was held that the confirmation of duty demand without waiting for a decision on the pending application for extension of warehousing period is not legal and proper. Further he relied on the decision of the CESTAT in Pradeep Ullal v. CC, Bangalore – 2001 (133) E.L.T. 428 wherein it was held that the Commissioner was duty bound to consider the extension application for warehousing even though the same was belatedly made. He also pointed out the inconsistency in the findings of the Commissioner (Appeals) in his two orders. Quoting from “Brooms Legal Maxims” he said that no man can take advantage of his own wrong.
7. The learned JCDR said that there is absolutely no infirmity either in the Order of the original authority or that of the Commissioner (Appeals). She said that the appellant was being given repeated extensions and once the warehousing period expires, they are bound to discharge the duty and interest liability. She relied on the decision of the Hon’ble S.C. in the case of Kesoram Rayon v. CC, Calcutta – 1996 (86) E.L.T. 464 (S.C.) = 1996 (66) ECR 201 S.C.
8. We have gone through the rival contentions. It is on record that the department had not taken any action on the request of the appellants for export of the goods even though such request was made prior to 31-3-1999. It is also seen that the appellant was asked to deposit an amount of Rs. 85,000/- as penalty pending decision his request for re-export of the goods. Under these circumstances the department should not have confirmed the demand, even without any reference to the penalty amount paid by the appellants before adjudication. Further the Commissioner (Appeals) in the two orders passed within a period of two months has given findings diametrically opposed to each other. A classic case of blowing hot and cold indeed. There is no evidence indicating that the appellants have deliberately not cleared the goods or re-exported the same. In view of the obsolescence in information technology and the vicissitudes of business environment, the appellant could not export or clear the goods bonded in time. Therefore, the request of the appellant requires a sympathetic consideration. In any case, as the department had not taken action on the request for re-export before demanding duty after directing the appellants to pay the penalty, in the interest of justice and fairplay, we have no other option but to set aside the OIA. We direct that the Original Authority shall take necessary action on the request of the appellant for re-export of the goods in accordance with law. The matter is remanded to the Original Authority in the above terms.