Ajay Kumar Mittal, J. - (1.) THIS order shall dispose of CUSAP Nos. 8, 9 and 11 of 2014 as learned counsel for the parties are agreed that the issue involved in all the three appeals is identical. CUSAP Nos. 9 and 11 of 2014 relate to M/s. S.K. Petrochem whereas CUSAP No. 8 of 2014 pertains to M/s. Golden Enterprises. However, the facts are being extracted from CUSAP No. 9 of 2014. CUSAP No. 9 of 2014 has been preferred by the Revenue under section 130(1) of the Customs Act, 1962 (in short "the Act") against the order dated July 24, 2013 (annexure A -2) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as "the Tribunal"), claiming the following substantial questions of law: "(a) Whether the Customs, Excise and Service Tax Appellate Tribunal was justified in waiving the condition of payment of full differential duty and restricting the same to only 20 per cent? (b) Whether the Customs, Excise and Service Tax Appellate Tribunal was justified in completely waiving the condition of furnishing the bank guarantee equivalent to 25 per cent, of the full value of the seized goods taken at US $ 940 per metric tonne, in the facts and circumstances of the case specially when the premises declared by the importer in the bills of entry was not found occupied by the firm? (c) Whether the Hon'ble Customs, Excise and Service Tax Appellate Tribunal was justified in provisionally releasing the goods by waiving the condition of bank guarantee and the condition of not disputing the identity of the goods, when the goods will not be available at the time of adjudication and when the firm was found to be not existing at the given address, thus jeopardising the interest of the Revenue for recovery of duty, fine and penalty -
(2.) BRIEFLY , the facts necessary for adjudication of the controversy involved as narrated in CUSAP No. 9 of 2014 may be noticed. The Delhi Zonal Unit of the Directorate of Revenue Intelligence (DRI) had initiated investigations into imports of certain petro -chemical products being imported at ICD, Ludhiana. It was found that the imports were being made, inter alia, in the name of M/s. S.K. Petrochem, C -1/4, Krishna Vihar, New Delhi and M/s. Golden Enterprises, A -63, Deepak Vihar, Vikash Nagar, New Delhi. Acting on the above intelligence, searches were conducted on January 28, 2013 by the officers of the Directorate of Revenue Intelligence at the residential premises of Shri Mukesh Kumar Gupta, declared to be the proprietor of M/s. S.K. Petrochem situated at A. 20, Milap Nagar, Uttam Nagar, New Delhi. During the search, various incriminating documents, digital devices were recovered from the premises of Shri Mukesh Kumar Gupta. During another enquiry, the officers of the Customs Preventive Commissionerate Delhi searched the premises of M/s. S.K. Petrochem on August 29, 2013 and drawn a panchnama on the spot. As per the panchnama, no firm by the name of M/s. S.K. Petrochem existed there and further that they used to be at that premises six to seven years ago. Thus, the imports had been made by the third parties using either a front company or a non -existing company. During investigation, four consignments imported by M/s. S.K. Petrochem, New Delhi and two by M/s. Golden Enterprises were examined at ICD, Ludhiana. In all these consignments, the goods were declared as pressed distillate oil. Representative samples were drawn for testing to find out the actual description of the goods. To avoid detention charges and demurrage, an option for warehousing of the goods was given to the importer on the date of examination itself. The samples were sent to the Central Revenues Control Laboratory (CRCL), New Delhi to ascertain the actual composition of the goods. Upon testing, the Central Revenues Control Laboratory reported that all the samples except the one at Sl. No. 3, i.e., bill of entry dated January 19, 2013 had the characteristics of base oil. The sample pertaining to the bill of entry at Sl. No. 3 was found to have the characteristics of lubricating oil, which is base oil in which additives have been added to make it suitable as a lubricant. Thus, all the imported goods were found misdeclared. Since there was an attempt to evade duty, the goods were confiscated under the Act. The respondent requested for provisional release and the adjudicating authority vide the order dated April 23/25, 2013 (annexure A -1) provisionally released the goods on certain conditions. Feeling aggrieved, the respondent filed an appeal before the High Court of Delhi which was dismissed. The respondent then filed an appeal before the Tribunal. The Tribunal disposed of the appeal vide the order dated July 24, 2013 (annexure A -2) directing the release of the goods provisionally subject to the deposit of 20 per cent, differential duty as sought to be assessed by the Department and upon execution of bond for full proposed value of the consignment. Hence, the present appeals by the Revenue. The learned counsel for the appellant submitted that the Tribunal had erred in ordering the release of goods on payment of 20 per cent, of the differential duty and had completely waived the condition of furnishing bank guarantee equal to the full value of the seized goods which was taken at US $ 940 per metric tonne. According to the learned counsel, the respondent was a non -existent company and was carrying on business at the behest of M/s. Om Udyog and to safeguard the interest of the Revenue, the order of the Tribunal is liable to be set aside. Support was drawn from the following averments in the present appeal: "2. (iii) That acting on the above intelligence, searches were conducted on January 28, 2013 by the officers of the Directorate of Revenue Intelligence, at the residential premises of Shri Mukesh Kumar Gupta, declared to be the proprietor of M/s. S.K. Petrochem, situated at A. 20, Milap Nagar, Uttam Nagar, New Delhi. During the said searches, various incriminating documents, digital devices were recovered and resumed from the premises of Shri Mukesh Kumar Gupta. During another enquiry, the officer of the Customs Preventive Commissionerate, Delhi had searched the premises of M/s. S.K. Petrochem on August 29, 2013 and drawn a panchnama on the spot. As per the panchnama, no firm by the name of M/s. S.K. Petrochem existed there and further that they used to be at that premises six to seven years ago. Thus, the imports had been made by third parties using either a front company or a non -existent company . . . (vii) That during the course of investigations, statement of Shri Mukesh Kumar Gupta, proprietor of M/s. S.K. Petrochem was recorded on February 19, 2013, wherein he, inter alia, stated that one Shri Jeevan Jain had informed him (Shri Gupta) that he was importing oil and grease in the name of his firm, i.e., M/s. Om Udyog and he would show high sea sales from his firm, i.e., M/s. Om Udyog to his (Shri Mukesh's) firm, i.e., M/s. S.K. Petrochem; that Shri Jeevan Jain used to get the goods cleared from customs and their further sale, and that he (Shri Mukesh Kumar Gupta) had no control over the goods imported using the name of his firm M/s. S.K. Petrochem; that all the work related to transport, clearance, etc., was looked after by Shri Jeevan Jain only; that he had not fixed any remuneration from Shri Jeevan Jain; however he used to receive Rs. 15,000 to Rs. 20,000 for allowing import in the name of his firm. This statement was subsequently retracted by Shri Mukesh Kumar Gupta on February 21, 2013, yet its evidentiary value cannot be denied as the retraction was an afterthought based clearly on legal advice which was countered by the Directorate of Revenue Intelligence on March 1, 2013. (viii) That further, statement of Shri Jeevan Jain had been recorded on April 15, 2013 wherein he had stated that he used to sell the goods on high sea sales basis to M/s. S.K. Petrochem and Shri Mukesh Kumar Gupta used to sign the high sea sales documents on behalf of M/s. S.K. Petrochem. (ix) That from the investigation conducted, it appeared that this facade of importing base oil/lubricating oil in the name of M/s. S.K. Petrochem had been created to undervalue the goods by resorting to misdeclaring it as pressed distillate oil and consequently under declaring the actual value of base oil/lubricating oil to evade the customs duty at the time of import. The description of the goods declared by M/s. S.K. Petrochem in all the aforesaid bills of entry had been found to be misdeclared in description and there was an associated misdeclaration in terms of value (USD 240 per metric tonne declared in each case which was much lower than the prevailing price of base oil/lubricating oil)."
(3.) ON the other hand, learned counsel for the respondent submitted that no such plea had been raised before the Tribunal and in such a situation, the Revenue was precluded from taking the plea before this court. In the alternative, it was submitted that in case the matter was being remitted for fresh decision, then time -bound direction may be issued to the Tribunal for adjudicating the issue as the goods are likely to be affected. Similar plea was raised by learned counsel for both the parties in respect of M/s. Golden Enterprises in connected appeal, i.e., CUSAP No. 8 of 2014.;