M/S Rajmal Lakhichand & Anr vs Commr.Cen.Exc.& Customs Aurangabad

3. The Directorate of Revenue Intelligence [for short "the DRI"] searched the premises of the appellants on the basis of information gathered by it to the effect that large quantity of about 132 bricks of silver had been smuggled through sea route and diverted to Jalgaon. During the aforesaid search the DRI seized silver in Choursa form weighing 1913.256 kgs. Pursuant to the same, a show-cause notice was issued to the appellants dated 07.08.1993 to which they submitted their replies. The adjudicating authority took up the matter for consideration and by its order dated 30.08.1994 discharged the show-cause notices holding that the evidence collected were not convincing enough to hold the allegations as proved. The Central Board of Excise and Customs, New Delhi exercising powers under Section 129D of the Customs Act directed the collector to apply to the Tribunal for determination of the issues specified in the review order, consequent upon which, the Tribunal was approached. The Tribunal by its order dated 19th March, 1996 allowed the appeals by setting aside the impugned order and ordered for confiscation of the seized silver absolutely. The Tribunal further held that Mr. Ishwarlal Lalwani and M/s. Rajmal Lakhichand, in whose custody the seized silver was found were liable for imposition of penalty under Section 112(b) of the Customs Act. Accordingly, a penalty of Rs. 10 lakhs was imposed as personal penalty on Mr. Ishwarlal Lalwani for acquiring the smuggled silver. The Tribunal, however, did not impose separate penalty on M/s.

Rajmal Lakhichand since personal penalty on the person managing the affairs of the firm was imposed. The Tribunal also imposed penalty of Rs. 1 lakh on Mr. Sureshkumar Seth who had procured smuggled silver and delivered it to Mr. Ishwarlal Lalwani. M/s. Rajmal lakhichand and Mr. Ishwarlal Lalwani being aggrieved by the order dated 19th March, 1996 filed two reference applications in which they framed as many as 11 questions and prayed for reference to the High Court. The Tribunal by its order dated 29.09.1996 rejected the reference applications holding that none of the questions raised therein required consideration at the hands of the High Court.

4. Being aggrieved by the aforesaid order of the Tribunal rejecting the reference applications the appellants moved the High Court by way of application under Section 130(3) of the Customs Act. By filing the aforesaid applications the appellant-assessee sought for a direction to the Tribunal to refer the questions of law which the Tribunal refused to refer. The High Court took up the aforesaid application for consideration and passed an order on 17.03.1999 to the following effect: -

3. We accordingly direct the Tribunal to refer the above question to this court for opinion under Section 130(3) of the Customs Act, 1962. Rule is made absolute in the above terms."

16.We have considered the said submission of Mr. Sorabjee, but, unfortunately, we are not in a position to agree with him as it is clear on a bare reading of the said provision that the said provision came into the statute book only with effect from 2003 and, therefore, said provision is not applicable to the facts of the present case.

21.Although at one stage we were very unhappy with the language used by the deponent in the counter affidavit but since the concerned officer has tendered unqualified apology and has withdrawn the said statements made in the affidavit, we accept the aforesaid apology tendered and we do not intend to proceed any further in the matter and treat the said chapter closed.

22.In terms of the aforesaid observations and findings we dismiss this appeal leaving the parties to bear their own costs.

............................................J [ Dr. Mukundakam Sharma ] ............................................J [ Anil R. Dave ] New Delhi, July 4, 2011.