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TMI Blog1988 (10) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... hip permit No. 282 and 313 dated 24th September, 1985 and 25th July, 1985 respectively stated to be containing wool waste/Viscose staple fibre, but actually most of the bales containing polyester fibre, were lying at the internal container Depot Customs, Pragati Maidan, New Delhi on November 20, 1985. No bill of entry had been filed by the appellant in respect of these containers. However, the goods were examined by DRI officers on 20th November, 1985 and 21st November, 1985 in the presence of two independent witnesses and the representative of the Shipping Lines. On visual examination most of the bales were found to be containing goods other than those as declared and representative samples of each of the bales were drawn for chemical test and goods were seized by DRI officers under Section 110 of Customs Act, under a reasonable belief that the same were liable to confiscation under the provisions of the Customs Act, 1962. As per the chemical examination report of the chemical examiner, Central Revenue Control Laboratory, the goods under seizure (as per representative samples of goods tested) were found to be as under :- S l. No. Containers No. No. of Bales Description of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r omission would render such goods liable to confiscation under Section 111 of the Customs Act, 1962 or abets the doing of omission of such an act is liable to penal action under Section 112 of the Customs Act, 1962. It appeared that 21 bales of polyester fibre imported in container No. SRIU 2752912 and 34 bales of polyester fibre imported in container No. SRIU 4167010 and SRIU 1226252, collectively valued at Rs. 25,13,220/- (market value) have been imported into India without a valid import licence in contravention of the prohibitions cited above, by M/s. Sriyansh Woollen Mills, Ludhiana and by not getting the goods manifested and by not filing the bill of entry, contravened the provisions of Sections 32 and 46 of the Customs Act, 1962 respectively, rendering thereby the said goods liable to confiscation under Section lll(d) and lll(f) of the Customs Act, 1962. By stating and misdeclaring the contents of 55 polyester fibre bales as under import to be as wool waste and viscose staple fibre the importers rendered these goods liable to confiscation under Section 111(m) of the Customs Act, 1962. Further 7 bales of wool waste imported in containers No. SRIU 2752912 and 14 bales of wool ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till under the custody of the customs authorities and it was clear that the appellant did not take any steps to import the goods into India; that as such the appellant had not done any act or omission rendering the goods liable to confiscation and were, therefore, not liable to a penalty; that the import of polyester fibre was allowed under OGL to the actual users. It was further stated that out of 76 bales, 55 bales were found to be different from what had been invoiced, so that 21 bales were in order, but in the show cause notice these 21 bales have also been proposed to be confiscated under Section 118 of the Customs Act. It was also mentioned that there was no evidence to indicate that these 21 bales were used to camouflage the other bales and there was no mention to this effect in the panchanama and Section 118 of the Customs Act was not applicable, inasmuch as each bale was a different package and container was not a package imported by them nor the 21 bales were found in any manner used to camouflage the remaining 55 bales and coming to the question of wrong shipment of the goods, it was argued on behalf of the appellant that after the seizure of the goods, they had come to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, the fact of shipment of polyester fibre was not mentioned in the import manifest as required under Section 32 of the Customs Act, 1962 and as such 55 bales of polyester fibre were liable to confiscation under Section lll(f) of the Customs Act, 1962. The learned adjudicating authority had agreed with the contention of the appellant that 21 bales of wool waste and viscose staple fibre were stacked to camouflage the remaining bales of polyester fibre. It was difficult to conclude at that stage that the contention of the DRI to camouflage all the 21 bales was established. He had ordered the release of 7 +14 bales of wool waste and viscose staple fibre as manifested and stuffed inside the containers and was of the view that only 21+34 bales of polyester staple fibre were not covered by the import licence and not mentioned in the import manifest were liable to confiscation under Section lll(d) and 111(0 of the Customs Act, 1962. The rate of duty on polyester fibre was 145% +9/Kg. + 40% + Rs. 45/Kg. +15% as against the rate of nil/100% + 40% + Rs. 37.50/Kg +15% applicable on wool waste/viscose staple fibre. He was of the view that the duty difference was around Rs. 16 lacs. The value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd lll(f) of the Customs Act. The rate of duty on polyester fibre was 145% +9/Kg+40%+Rs. 45/Kg. +15% and that of acrylic fibre 110% + 40% + Rs. 91- per kg. as against the rate of nil applicable on wool waste. The duty difference was around Rs. 14 lacs, and the value of the offending goods mentioned in the show cause notice for the entire lot was the market value. The CIF value would, therefore, be much less. On a rough estimate, the CIF value of 13 +18 bales was about Rs. 2.12 lacs. He ordered the confiscation of 13 +18 bales of polyester fibre and acrylic fibre under Section lll(d) and lll(f) of the Customs Act, 1962. However, he had given an option to redeem the same after payment of fine of Rs. 1,10,000/- and had also imposed a personal penalty of Rs. 3,50,000/- on M/s. Khazan Industries Pvt. Ltd. under Section 112 of the Customs Act, 1962. 6. Being aggrieved from the aforesaid orders, the appellants have come in appeal before the Tribunal. 7. Shri Harbans Singh, the learned advocate, has appeared on behalf of the appellants and has stated that since the facts of both the appeals are similar and as such he would advance common arguments. Shri Harbans Singh, the learned advocat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . U.K., he had immediately rang up Mr. Narendar Nath Sharma not to file the bill of entry till he learns the clear position from Mr. Khurana. Shri Harbans Singh, the learned advocate, has argued that the imposition of penalty under Section 112 was unwarranted as there was no evidence on record to the effect that the appellant was in conspiracy for the supply of wrong material with the supplier. The goods which were sent by the supplier were not ordered by the appellant. He has referred to the invoice which appears on page 3 of the paper book and the description given in the invoice is viscose staple fibre first quality and the invoice is from M/s. Walbrad Wool Trading Co. Ltd., Bradford. He has also referred to another invoice from M/s. Mainz & Co. Ltd., dated 20th June, 1985 which appears on page 9 of the paper book and the description of the goods has been given as 28 bales of soft wool waste (wool contents about 70%). He has also referred to the panchnama which appears on page 32 of the paper book and test report of the chemical examiner which appears on page 38 of the paper book. Shri Harbans Singh has argued that the charge under Section lll(m) was dropped and charges under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the consignments and no act of omission on the part of the appellant is proved in any way and no penalty can be levied. He has referred to the judgment of the Hon'ble Supreme Court in the case of Badri Prasad and Others reported in AIR 1971 Supreme Court 1170 and it cannot be presumed that there was a conspiracy of the appellant with the supplier unless there is any evidence on record. He has argued that the appellant has already suffered too much. The goods arrived in 1985 and it is 1988. The appellant is incurring a demurrage of about Rs. 3500/- per week. The difference in the market price of the goods imported is not much. Redemption fine is highly excessive. He has pleaded for the deletion of the penalty and redemption fine. In the alternative, he has again pleaded that the redemption fine is highly excessive. 8. Miss Renuka Mann, the learned senior departmental representative who has appeared on behalf of the respondent has relied on the order-in-original and statements recorded by the revenue. In support of her argument she has referred to the judgment of the Hon'ble Supreme Court in the case of D.Bhoormull reported in 1983 (13) E.L.T. 1546 where the Supreme Court had held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fibre were stacked in front of 55 bales of polyester fibre in the containers in such a manner that bales of polyester fibre would not be visible from outside. However, in the absence of any such mention in the Panchnama or any other corroborative evidence, it is difficult to conclude at this stage that the contention of the DRI in this respect is established. From the records also it is observed that the containers were not destuffed in the presence of the importers. On the other hand, as per panchnamas, the containers were first destuffed and then the bales examined." Similar were the observations in the case of M/s. Khazan Industries Pvt. Ltd. Top para from internal page 12 of the order is reproduced below :- "It is a fact, as contended by the counsel for the notices, that Panchnama does not give any indication that 9 bales of wool waste were stacked to camouflage the remaining 31 bales of polyester and acrylic fibre. Going by the mode of stuffing of similar goods in containers as detected recently by the Department in other cases, it may be plausible to hold that in the present case also, 9 bales of wool waste were stacked in front of 31 bales of polyester and acrylic fibre in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable against them which would indicate their culpability in wrongful importation of the goods. Nevertheless, there are certain circumstances which go against the appellants' innocence. Firstly, the appellants' plea that the suppliers have wrongly sent the goods and they themselves have been cheated is not borne out by the subsequent action taken by the appellants against the suppliers. Apart from writing letters to the suppliers, which alone have been brought forth on record by the appellants, no subsequent legal action has been taken by the appellants against the suppliers to prove their bona fides. It is yet another coincidental circumstance that the two different suppliers who sent the goods committed the mistake of sending them wrongly in identical manner i.e. polyester fibre being sent partly in lieu of wool waste by one supplier and again polyester fibre being sent by the other supplier partly in lieu of viscose staple fibre (see last but one question and answer in Ajit Kumar's statement dated 24-11-1985). Further it is also evident from the statement of Ajit Kumar Jain that the deal was struck by him directly with the suppliers although for the sake of formality, indentor w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable on wool waste/viscose staple fibre. The Additional Collector in his order has mentioned that duty difference in the case of M/s. Sriyansh Woollen Mills is Rs. 16 lakhs and the duty difference in the case ofM/s. KSiazan Industries Pvt. Ltd. was around Rs. 14 lakhs. Undoubtedly, the importation of polyester fibre bales is unauthorised and the appellant is not the actual user. The learned Additional Collector has observed that the appellant is the actual user only of woollen waste acrylic fibre / and viscose fibre and polyester fibre was not used by the appellant. Accordingly, we agree with his conclusions that the importation of polyester fibre was unauthorised and liable to confiscation under Section lll(d) of the Customs Act, 1962. During the course of arguments, Shri Harbans Singh, the learned advocate for the appellants had mentioned that the importation was made in the year 1985 and the appellant is incurring a demurrage of Rs. 3500/- per week. The demurrage for three years will approximately work out to Rs. 5,46,000/-. In the case of M/s. Muddeereswara Mining Industries Co., Bangalore v. Collector of Customs, Bangalore, in appeal No. C/3531/87-A, order No. 197/88-A dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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