ARAVIND KUMAR, J. - (1.) THE Commissioner of Customs has preferred this appeal questioning the order dated 29 -8 -2003 passed by the Customs, Exercise & Service Tax Appellate Tribunal, South Zonal Bench, Bangalore in Appeal No. C/40, 48, 49, 57, 65 and 66/2002 whereunder the Tribunal has allowed the appeals filed by the appellants and has set aside the order of the Adjudicating Authority dated 5 -12 -2001 passed in Order -in -Original No. 35/2001 and remanded the matter back for adjudication by the competent jurisdictional authority after due investigation of the facts by holding that Adjudicating Authority at Bangalore had no jurisdiction. Further, the order of the adjudicating authority passed by invoking the powers of Section 28 of the Customs Act, 1962 has also been set aside. It is this order which is under challenge before this. Court by the revenue.
(2.) THIS matter has been admitted on 28 -2 -2007. Following substantial questions of law are framed for consideration and decision of this Court: (i) Whether the Tribunal has committed an error in holding That the Department cannot confiscate the smuggled goods without establishing the point where the customs barrier is breached? (ii) Whether the Tribunal has committed an error in holding that the order of confiscation is not an "action -in -rem"? (iii) Whether the Tribunal has committed an error in holding that the smuggled goods cannot be confiscated wherever such goods are found? (iv) Whether the Tribunal has committed an error in remanding the matter to the competent authority without specifying the details of the authority as to who should decide the matter? The following facts would be of necessity to traverse the contentions raised in the appeal memorandum which are not disputed by the respondents. On 30 -5 -2000, 25 bales of Mulberry raw -silk yarn of Chinese origin valued at Rs. 23,54,100/ - which had been described as waste cloth/old chindi cotton/old waste doth (as described in the goods consignment notes) were seized from godown of M/s Deluxe Roadlines No. 79, 4th cross, Narasimharaja Road, Bangalore -560002 by the Directorate of Revenue Intelligence, Bangalore. Four days prior to that, the very same goods had been intercepted by the Karnataka State Commercial Department at the check -post demanding penalty of Rs. 49,140/ - for non -declaration of 300 K.Gs foreign origin silk yarn in respect of LR No. 120900 dated 26 -5 -2000 - The first respondent claiming to be the consignee had deposited the penalty on 28 -5 -2000 in the office of the Karnataka State Commercial Tax Department and had got the goods released. When the Directorate of Revenue Intelligence had seized the said goods at Bangalore and from the godown of 6th respondent it was found by the authorities that said goods contained labels which described the goods as blossoms, white steam filature, China National Silk Import and Export Corporate Made in China and JINDING, China National Silk Imp and Exp. Corp. Sichuan Branch. During the Course of investigation by the authorities statements of all the respondents under Section 108 of the Customs Act came to be recorded and some of the respondents have retracted the said statement subsequently. It was the admission of the respondents in the said statement that they are only recipients of the goods and they had not imported the goods to the territorial waters of India and as such they are not liable to pay the Customs Duty. They further stated, that the goods were being supplied by Ashok Kumar Shroff and Subrata Mondal of Kolkata. Notice issued to these persons did not yield any result inasmuch as they were all fictitious persons. It is to be noted that the clerk of M/s Deluxe Roadlines, Private Limited, Bangalore, from which godown the goods came to be seized through its Manager Sri. Manjegowda, the delivery clerk had given a statement under Section 108 of the Act admitting there under that apart from the required routine work he was also asked the delivery parcels against slips issued from the office and those slip number contained number of parcels and they were entered on the right side of the delivery register and the said slips were sent back to the office. He also stated that he knew that the said bundles were silk yarn and he had delivered some of the silk bales. The said statement was also endorsed by another delivery clerk by name Sri. Neelappa Gowda. Department issued a show -cause notice dated 24 -11 -2000 as to why: i) the seized 1569.40 Kgs. of raw silk/silk yarn contained in 25 bales valued at Rs. 23,54,100/ - should not be confiscated under Section 111(d) of the Customs Act 1962, ii) the packing material namely the gunny bags and the cloth bags in which the seized goods were packed should not be confiscated under Section 118 of the Customs Act, 1962, iii) customs duty Of Rs. 4,58,122/ - along with interest due, if -any, payable on 17 bales (1067.19 Kgs.) of smuggled silk yarn seized should not be demanded from Shri. Vikram Jain under Section 28(1) read with 28AB of the Customs Act, 1962, iv) customs duty of Rs. 2,15,584/ - along with interest due, if any, payable on 8 bales (502.20 Kgs.) of smuggled silk yarn seized should not be demanded from Shri. Ashok Kumar Shroff under Section 28(1) read with Section 28AB of the Customs Act, 1962, v) the customs duty of Rs. 27,13,548/ - is liable to be paid along with interest due on the 111 bales of smuggled silk yarn, valued at Rs. 93,24,000/ - received by Shri. Vikram Jain and sold by him in the past shall not be demanded from him under Section 28(1) of the Customs Act, 1962, read with Section 28AB of the Customs Act, 1962. vi) the customs duty of Rs. 19,55,710/ - liable to be paid along with interest on the 80 bales of smuggled silk yam, valued at Rs. 67,20.000/ - received by Shri. Ashok Kumar Shroff and sold by him in the past, shall not be demanded from him under Section 28(1) read with Section 28AB of the Customs Act, 1962, vii) the amount of Rs. 11 lakhs deposited vide TR 6 Challan dated 8.6.2000 should not be adjusted towards customs duties, fines, penalties and interest if any which would become payable on adjudication, and viii) penalty shall not be imposed on Shri. Vikram Jain, Shri. Lalit Jain, Shri. Bheemraj Jain, Shri. Ashok Kumar Shroff, Shri. S. Muralidhara, Shri. Rahul. K. Dharamshi all of Bangalore and Shri. Vikas and Shri. Ashok of Calcutta, on each one of them, under Section 112 of the Customs Act, 1962, for their roles in smuggling and subsequent disposal of the subject goods. by calling upon the respondents to show cause to the notice for proceeding further in the matter. The respondents herein submitted their written reply and after consideration of the same the adjudicating authority namely the Commissioner of Customs, Bangalore region by an order dated 5 -12 -2001 in OIO No. 35/2001 COMMR/CUS ADJN confirmed the demand made in the show -cause notice. This order came to be set aside by the Tribunal by holding that the place of importation is at Calcutta and hence the adjudication has to take place at Calcutta and accordingly remanded the matter on the said issue namely regarding confiscation. In so far as invoking the provisions of Section 28 of the Customs Act, 1962 by the Adjudicating Authority, the Tribunal set aside the finding of the adjudicating authority on the ground that there is no finding conclusively arrived at as to why the import duties in this case are being fastened on to transit handlers i.e., consignment agents at Bangalore and accordingly set aside the said finding. The Tribunal did not embark on giving a finding on other issues as it had left open to be determined by the adjudicating authorities in the remand proceedings.
(3.) SRI . Shashikantha, learned Central Government Standing Counsel appearing on behalf of the Department contended as follows: (i) The Tribunal was in error in holding that the Commissioner of Customs, Bangalore had no jurisdiction to pass the adjudicating order since the goods have been seized at Bangalore and smuggled silk yarn was recovered at Bangalore. (ii) Since both the name of consignors and consignees were fictitious the respondents were unable to produce documents to indicate importation of goods and there was mis -declaration as old waste cloth, (ill) The Tribunal was in error in holding that Department is bound to trace out the place where the customs barrier is breached since the goods are found to be smuggled goods, the place where the goods enter is immaterial. (iv) The Tribunal was in error in holding that original importers have not been traced and hence the Commissioner of customs, Bangalore was incompetent to adjudicate the goods. In support of these contentions the learned Counsel relies upon the decision in the case of Collector of Customs, Madras and Others Vs. D. Bhoormall, AIR 1974 SC 859 at paragraphs 30, 31, and 40. ;