M/S Mpm Gold House vs. The Commissioner Of Customs (Preventive) - Kerala High Court, 17 February 2021

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR WEDNE AY, THE 17TH DAY OF FEBRUARY 2021 / 28TH MAGHA,1942 WP(C).No.4078 OF 2021(H) PETITIONER/S: M/S MPM GOLD HOUSE, DOOR NO.71/81, PANAMKUKKATH HOUSE, POOCHIANIPADAM, REPRESENTED BY ITS MANAGING PARTNER P.M.MANIKANDAN AGED 48 YEARS, S/O. SRI MADHAVAN, R/O. PANAMKUKKATH HOUSE, POOCHIANIPADAM, URAKAM P.O., THRISSUR-680 562. BY ADVS. SRI.P.A.AUGUSTIAN SMT.SWATHY E.S. RESPONDENT/S: 1 THE COMMISSIONER OF CUSTOMS (PREVENTIVE), 5TH FLOOR, CATHOLIC CENTRE, BROADWAY, COCHIN-682 031. 2 THE ASSISTANT COMMISSIONER OF CUSTOMS (PREVENTIVE) ST NAGAR, THRISSUR DIVISION, URAKAM P.O., THRISSUR-680 001. SC- SRI SREELAL N,WARRIER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 17.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.4078 OF 2021 2 JUDGMENT Dated this the 17th day of February 2021 Heard learned Counsel for the petitioner. The petition is with the following prayers: a) issue a writ in the nature of certiorari or any other appropriate writ, order or direction to call for the records of proceedings leading to Exhibit P13 SCN and quash the same. b) Issue a writ of mandamus or any other appropriate writ, direction or order, directing the respondent to release the gold covered under Exhibit P13 to petitioner. c) Grant such other reliefs that this Hon'ble Court may deem fit and proper in the facts and circumstances of the case.

Ext.P13 is a Show Cause Notice issued by the respondent Customs Department to the petitioner under Section 124 of the Customs Act, 1962, for confiscation of the gold as well as for imposing

WP(C).No.4078 OF 2021 3 penalty.

Learned Counsel for the petitioner drew my attention to the impugned Show Cause Notice at Ext.P13 and more particularly, to paragraph Nos.21, 27 and 41 of the same notice. With this, learned Counsel for the petitioner argued that, in the prolong enquiry for about one year, the respondent department could not found out whether there is any smuggler who has smuggled the gold. It is not alleged that the petitioner is a smuggler of the gold. Learned Counsel for the petitioner further argued that there is no iota of evidence on record of the respondent authority to show that the petitioner has dealt with smuggled gold. There is no name of smuggler who allegedly supplied gold to the petitioner in the Show Cause Notice. As per submission of learned Counsel for the petitioner, the allegations made in the Show Cause Notice are vague allegations without any corresponding data.

I have considered the submissions so advanced and perused the Show Cause Notice at Ext.P13. WP(C).No.4078 OF 2021 4

The respondents are empowered to confiscate the goods and impose penalty by issuing Show Cause Notice after considering the representation as well as on hearing the affected persons.

The Show Cause Notice at Ext.P13 contains an allegation that the petitioner had carried gold weighing 94 kgms during the period from 01.07.2019 to 15.10.2019 by train. The international value of the gold is stated to be 1,21,01,80,608/-. The Show Cause Notice names two carriers allegedly engaged by the petitioner. Averment in the Show Cause Notice is to the effect that the petitioner has engaged in the illegal act of bringing gold received from different jewellers and shop persons without documents from Chennai and other parts of Tamil Nadu, through his five regular carrier passengers. It is further averred that the petitioner is engaged in illegal transaction of smuggled gold in huge quantity under the shadow of gold manufacturing and he has devised a modus operandi to deal in smuggled gold by engaging regular carrier passengers. According to the

WP(C).No.4078 OF 2021 5 respondent department, the petitioner has avoided all sort of accounting practices by keeping the transactions strictly to “gold to gold” basis in smuggled gold and thereby evading all duties and applicable taxes. It is the case of the respondent department that the petitioner is engaged in carrying the smuggled gold with the form changed under the shadow of jewellery manufacturing and he seems to be a part of well established smuggling syndicates. There are other ground enumerated in the Show Cause Notice issued to the petitioner asking him to show cause as to why the goods should not be confiscated and penalty should not be imposed. The Show Cause Notice further elaborates the legal provisions under which the action is sought to be taken against the petitioner, for which an opportunity of hearing is being accorded to him in pursuant to the provisions of Section 124 of the Customs Act, 1962. 7. In this view of the matter, the petition itself is premature. It is just at the stage of show cause. Petitioner is free to advance all his

WP(C).No.4078 OF 2021 6 contentions before the competent authority of the respondent Customs Department. In this view of the matter, I am of the considered opinion that the petition as framed and filed, challenging the show cause notice, cannot be entertained. The petition is therefore dismissed. Needless to mention that the petitioner is free to raise all his contentions, which is sought to be raised in the instant petition, before the concerned authority of respondent department. Accordingly, the writ petition is dismissed. A.M.BADAR JUDGE uu 17.2.2021

WP(C).No.4078 OF 2021 7 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE APPELLATE ORDER DATED 30.5.16 IN KVAT APPEAL NO.KCATA 485/2016. EXHIBIT P2OF THE GST REGISTRATION DATED 10.7. 17. EXHIBIT P3OF THE VOUCHER DATED 14.10.2019. EXHIBIT P4OF THE MAHAZAR DATED 16.10. 19. EXHIBIT P5OF THE ASSAY CERTIFICATE DATED 17.10. 19. EXHIBIT P6OF THE LETTER DATED 1.11. 19. EXHIBIT P7OF THE LETTER DATED 25.10. 19. EXHIBIT P8OF THE LETTER DATED 30.10.19 WITH COPY OF THE TAX INVOICE AND GOLD DELIVERY CHALLAN ISSUED BY INDIAN OVERSEAS BANK. EXHIBIT P9OF THE LETTER DATED 4.11. 19. EXHIBIT P10OF THE ORDER DATED 29.9.2020 IN CMP NO.1847/2020. EXHIBIT P11OF THE LETTER DATED 29.9.2020 RETRACTING THE STATEMENT. EXHIBIT P12OF THE LETTER DATED 26.10.2020 RETRACTING THE STATEMENT. EXHIBIT P13OF THE SCN DATED 24.11.2020. EXHIBIT P14OF THE LETTER DATED 12.12.2020. EXHIBIT P15OF THE JUDGMENT DATED 15.12.2020 IN WPC NO.24510 OF 2020. EXHIBIT P16OF THE NOTIFICATION F.NO.450/61/2020-CUS. IV (PART-1) DATED 30.9.2020.