TMI Blog1991 (1) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... lates to imposition of penalties on the aforesaid appellants with regard to import of the same consignment declared to be electronic spares for VCRs consigned in the name of the appellant M/s. Borivli Hosiery Mills, Bombay. At the outset, it is necessary to mention that the goods ordered absolute confiscation are not claimed by any of the appellants herein before us and the Department earlier moved a miscellaneous application seeking permission of this Bench for disposal of the goods ordered absolute confiscation. This miscellaneous application was heard by this Bench after giving due notice to the present appellants. In the hearing, which took place on 8-6-1990, all the aforesaid three appellants herein duly represented by the Advocates S/Shri Balani and Shroff clearly indicated that they were not interested in the goods and they had no objection for the disposing of the goods by the Department. Based on the submissions, Order No. 899/90 was passed allowing the application of the department and permitting them to dispose of the goods, in accordance with the law. It is also not disputed that no Bill of Entry has been filed by M/s. Borivli Hosiery Mills, in whose name the goods ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported without a valid licence and hence? they are liable to confiscation and the appellants herein, who were concerned with the import are also alleged to be liable to penalty. In the adjudication proceedings held by the Collector of Customs Central Excise, Rajkot, the goods valued at CIF value Rs. 4,39,317/- were ordered absolute confiscation and the following penalties were imposed on the appellants :- Name of appellant Penalty amount (i) M/s. Borivli Hosiery Milk Rs. 2.00 lacs (ii) Shri Jamnadas G. Merchant Rs. 1.00 lac (iii) Shri Nilesh V. Shah Rs. 1.00 lac (iv) Shri Suresh V. Shah Rs. 1.00 lac The present appeals confine only to the imposition of penalties on the aforesaid appellants, since they have categorically indicated that they are not interested in the goods. 6. Shri Anil Balani, the Ld. Advocate on behalf of the appellants M/s. Borivli Hosiery Mills and Shri Jamnadas G. Merchant contended that they imported the goods only at the behest and on behalf of M/s. Nilesh V. Shah and Suresh V. Shah, Partners of M/s. Jolly Enterprises. He referred to the sale contract, before import of material, dated 31-7-1986 to point out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder their licence No. 3148243 which is valid for import of OGL items under Para 263(1)(b) of the AM Policy 1985-88 in which case there cannot be any illegality of import of the goods at Kandla against that licence. Since the import is not illegal, there cannot be any penalty imposed on any person behind the import. Shri Jain also vehemently opposed the claim of the other appellants M/s. Borivli Hosiery Mills that the indent was placed by his clients. He also produced the original of the order placed by M/s. Borivli Hosiery Mills. On a query, he indicated that originals of these orders were in the possession of S/Shri Nilesh V. Shah and Suresh V. Shah since long. However, he pleaded that all the import documents were recovered from M/s. Borivli Hosiery Mills only. Even the contract cited by M/s. Borivli Hosiery Mills, though dated 31-7-1986, has been accepted by Shri Nilesh V. Shah only on 7-8-1986 and even before this, the goods have arrived at Kandla. Moreover, the contract is for sum of Rs. 2,86,500/-, whereas the payments are reported to have made to the extent of Rs. 3.75 lacs. The contract is for future import and is not in respect of the present import. They are only buyers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... components minus PCBs have been imported alongwith the original packing cartons of the Japanese manufacturers and also the operating manual instructions. It is also an undisputed fact that no Bill of Entry has been filed for the clearance and no valid licence claiming for import under OGL have been made before the original authority. It is also affirmed before us that none of the appellants herein are interested in the goods and after hearing them, this Bench has permitted the department to dispose of the goods ordered for absolute confiscation. Even accepting the argument of the Ld. Advocate Shri A.K. Jain that equal number of PCBs sets imported at Ahmedabad cannot be clubbed together for purpose of confiscation or for assessing penal liability, fact remains undisputed that these goods cannot be cleared without a valid licence or a valid claim for OGL made on a declaration in the Bill of Entry. In the circumstances, the goods become liable to confiscation under Sec. 111(d) of the Customs Act, since no such B/E containing OGL claim or production of import licence is noticed. The Collector s order on this ground, even if not on any other ground, has to be sustained. It is not the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if these are imported as spares (as claimed by them) there was no need to get the operation manuals and original cartons of VCRs of equal number. Moreover, spares as claimed to be covered by the licence held by M/s. Borivli Hosiery Mills, have a special connotation and meaning in the ITC Policy; spares mean an assembly, part or sub-assembly etc. ready to replace an identical worn out parts/assembly etc. The complexion of the present import in 325 sets of all the parts of VCR (minus PCBs) but with equal number of packing cartons and operating manuals, does not appeal to us about the claim of bona fide of import against this licence claimed to be in their possession. However, as we have already stated, when the licence has not been produced before the adjudicating authority and no claim for clearance against such a licence has been considered by the original authority, we, at the appeal stage, would not like to go into this hypothetical question in greater detail for giving a positive finding. We also note that the order placed does not indicate any licence number and the supplier s confirmation states as OGL item . These factors do not inspire confidence even on the face of it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a carrier. Even this argument does not convince us because of the fact that the appellants admittedly were in possession of even the original purchase orders to keep track of the goods. No explanation is forthcoming as to why they have not handed over these documents to Customs House Agent. Hence the conclusion is inescapable that these appellants received import documents for clearance of goods. Thus, we are lead to conclude that M/s. Jolly Enterprises have entered into pre-import contract with M/s. Borivli Hosiery Mills and were party to the import, though not directly in their name but as an abetter. Hence penalties on the partners of M/s. Jolly Enterprises are to be upheld. 12. An argument was advanced that the show cause notice did not indicate the relevant sub-section of Sec. 112 of the Customs Act and hence the order passed by the Collector under Sec. 112 (a) is not legally sustainable. We are not much impressed with this argument, because of the fact that the adjudication order clearly indicate the sub-section (a) of Sec. 112 for imposing penalty. The show cause notice gives sufficient materials and the evidences on the basis of which the proposed penal action is taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and when fitted in PCBs, 325 VCRs would come into existence. Emphasising on the fact that the items are imported as spares , and considering the word spares as defined in the Policy Book for the relevant period, the only rational conclusion that can be drawn is that imported items were complete sets without PCBs, as otherwise, one has to stretch the imagination beyond limitation that the importers wanted to have the same number of each of the component, notwithstanding their durability and future necessity of replacement, to be kept as spares. The uniformity in number of each part leads to an only inevitable conclusion that they were intended to be converted into distinct sets we get fortified in the said conclusion by the facts that besides the said items, the import is also made of equal number of operational manuals and cartons, which, unless the complete sets are intended to be put in the markets, are absolutely unnecessary. Undisputedly, those operational manuals and cartons do not fall within the category of spares . We have therefore no hesitation in concluding that the subject import cannot be styled as import of electronic spares but is of all parts and assemblies of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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