The Gujarat High Court has restrained the customs dept. to probe against the buyer of the alleged imported sb-standard/bogus CRGO Steel Strips.
The bench of Justice Bhargav D. Karia and Justice D.N.Ray has observed that when the petitioner has filed the detailed reply in response to the summons issued under Section 108 of the Customs Act, no further purpose would be served to continue the investigation qua the petitioner by the customs department.
The petitioner is engaged in the business of trading of (Cold Rolled Grain Oriented) CRGO Strips, Sheets, etc. During Financial Year 2023-24, the petitioner made purchase and sale transactions with one M/s. S. T. Electricals for “CRGO Strips”.
The petitioner has purchased the CRGO strips imported by M/s.S.T. Electricals who had imported such goods which are alleged to be prohibited goods. Commissioner of Customs (Prevantive), Jaipur carried out the investigation against M/s.S.T.Electricals and in turn, against the petitioner and M/s.Mayur Enterprise to whom such goods have been passed on by purchase and sale.
It is the case of the petitioner that on 12.07.2023, the petitioner found that its Bank Accounts with Kotak Mahindra Bank Limited were put under a “Debit Freeze” by the Kotak Mahindra Bank.
Mr. Sugrive Meena, Commissioner of Customs (Preventive) who initiated the proceedings against the petitioner who was supposed to joined in his personal capacity, filed an affidavit instead of remaining present either in person or through authorised person in response to the notice issued by this Court reiterating what is stated in the affidavit which was filed earlier by him in his official capacity.
The affidavit affirmed refers to the modus operandi of M/s.S.T.Electricals and the past imports made by M/s.S.T.Electricals of CRGO Strips which were found to be on the basis of forged/fake MTC submitted before the Customs Authority and mis-declaring the description of the goods for circumventing the restriction/prohibition imposed on sub-standard CRGO Steel strips.
The affidavit stated that the petitioner being one of the beneficiaries, summons were issued as purchase of sub-standards CRGO Strips by the petitioner requires further investigation which cannot be ascertained in absence of statements.
As per the affidavit the petitioner has purchased the subject goods from M/s.S.T.Electricals amounting to Rs.3,28,78,942/- which were undervalued and therefore, the Bank Accounts were provisionally attached which are now released in view of the provisions of Section 110(5) of the Customs Act as the Bank Accounts attached provisionally are deemed to be defreezed after six months from the date of attachment as no further extension was given by the competent authority.
M/S PACIFIC POWERTECH SOLUTIONS V/SUNION OF INDIA
The counsel for the petitioner, Dr. Sujay Kantawala contended that the respondent could not have continued the provisional attachment of the Bank Accounts of the petitioner after expiry of one year and relied upon the instruction No.19/2024-Customs dated 22nd July, 2024
The counsel for the petitioner, Dr. Sujay Kantawala contended that the petitioner has purchased the goods from the local market which is stated in the reply filed by the petitioner pursuant to the summons issued under Section 108 of the Customs Act and that the department lack the jurisdiction to question or investigate local purchases made against proper invoices and after duly paying the local taxes.
Dr. Sujay Kantawala contended that the department has continued the investigation only with a view to harass the petitioner which is also evident from the reply filed by the Commissioner of Customs (Preventive) who has been joined in his personal capacity.
Dr. Sujay Kantawala, submitted that the basis of the allegations made against the petitioner by the Commissioner of Customs (Preventive) in the affidavit upon multiple investigations is nothing but an attempt to mislead the Court and divert the attention from the primary issue of jurisdiction raised in the petition. The goods purchased by the petitioner was already cleared for home consumption and therefore, it ceases to be imported goods, more particularly, when the petitioner has produced the documents with the reply.
The court noted that the respondent department, only with an ulterior motive, is trying to harass the petitioner under the guise of exercising its powers under Section 108 of the Customs Act. In spite of issuance of notice of this Court, the Commissioner of Customs (Preventive) has not remained present in person or through authorised person and has tendered the affidavit through the learned advocates for the respondent-Authorities. When this Court has joined the Commissioner of Customs (Preventive) in his personal capacity, it was incumbent for him to appear and make submissions qua the allegations levelled against him by the petitioner instead of filing an affidavit in reply through the advocate appearing for the Customs Department.
The court while allowing the petition held that the primary allegation of importing the goods are on ST Electricals and the role of the petitioner is confined only to that of a seller.
Case Details
Case Title: M/S Pacific Powertech Solutions Versus Union Of India & Ors.
Case No.: R/Special Civil Application No. 10754 Of 2024
Date: 04/03/2025
Counsel For Petitioner: Dr Sujay Kantawalla With Mr Anupam Dighe With Mr Kartikey D Kanojiya
Counsel For Respondent: Mr Devang Vyas Additional Solicitor General With Mr Siddharth Dave With Mr Cb Gupta
Read More: DRI Busts Major Gold Smuggling Racket With Seizure Foreign-Origin Gold Worth Rs. 12.56 Crore
