TMI Blog2014 (2) TMI 1015X X X X Extracts X X X X X X X X Extracts X X X X ..... l of entry was filed by M/s. Krishna Enterprises and as such he has to be held as importer of raw silk in question. As per domicile certificate produced before the Commissioner, he has been shown a person living along the Indo-China border. Import was made by a person living along the Indo-China border and as such can be safely concluded as a border trade. Further, as per the authority for the advance rulings, there is no restriction on the sale of the goods after import. As such, even if Revenue’s allegation as regards the sale of the raw silk by M/s. Krishna Enterprises to M/s. Elegant Industries is accepted to be correct, the same are very much in the legal frame work of law. Levy of anti-dumping duty - Revenue’s allegation of misdeclaration of the Mulberry Raw Silk - Held that:- even if part of raw silk imported by the appellants is held to be of grade 2A, even then no anti-dumping duty is leviable, inasmuch as the Notification No. 106/2003, dated 10-7-2003 levies anti-dumping duty on Mulberry Raw Silk of grade 2A and below, if the landed value of consignment is less than US$ 27.97 per Kg. Admittedly, in the present case the landed value of consignment is US$ 28.18 per Kg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbyal, proprietor of M/s. Krishna Enterprises in his statement recorded on 21-10-2005 stated that his firm was established in July, 2005 only; that the raw silk was made available to him from Tibet through Shri Ajeet Kumar Gupta, proprietor of one M/s. Elegant Industries; that his job was to manage the import from Tibet to Dharchula; that the sale of the said raw silk was to be managed with the cooperation of M/s. Elegant Industries, Delhi, where a good profit can be earned; that the profit earned in the business was to be shared with M/s. Elegant Industries, Delhi in the ratio of 50:50. 5. Summons were also issued to Shri Ajeet Kumar Gupta, proprietor of M/s. Elegant Industries, who vide his letter dated 22-12-2005 stated that there was no violation of law inasmuch as the only issue to be decided was whether the benefit of duty under Notification No 38/96-Cus., dated 23-7-1996, can be extended or not. He also referred to the writ filed by them before the Hon ble High Court and submitted that as the matter was sub-judiced, he was unable to give further details. 6. Subsequently, the search of the office premises of M/s. Elegant Industries, at Delhi was conducted on 19-5-2006, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he confiscated the same with an option to Shri Krishna Singh Garbyal to get the same released on payment of redemption fine of Rs. 7.5 lakhs. He also confirmed duty of Rs. 1,09,08,448/- in respect of the said consignment by denying the benefit of exemption of notification. In addition, penalties of Rs. One lakh each was also imposed on Shri Krishna Singh Garbyal and Shri Jagdish Chander Gupta and Rs. 2.5 lakhs on Shri Ajeet Kumar Gupta, in terms of the provisions of Section 112 of Customs Act, 1962. Penalty of Rs. 5,000/- was imposed on each of the noticee under Section 117 of the Customs Act, 1962. The said order is impugned before us. 9. After hearing both the sides duly represented by Shri Prabhat Kumar, learned Advocate appearing for the appellants and Shri Sonal Bajaj, learned SDR appearing for the Revenue, we find that Commissioner has primarily held against the appellants on the ground that Shri Krishna Singh Garbyal is staying at a place about 80 Kms. away from the border, the import made by him cannot be held to be border trade. He has further held that the said import was made by Shri Krishna Singh Garbyal at the behest of M/s. Elegant Industries, Delhi who are the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort was made as border trade. 12. Admittedly, the bill of entry stands filed by M/s. Krishna Enterprises. The raw silk imported was duly declared in the bills of entry and the benefit of Notification No. 38/96-Cus., dated 23-7-1996, which exempts raw silk, when imported into India from China through specified land route, including Gunji land route was claimed. The conditions attached to the said notification, in respect of commodity and route specified therein, stands admittedly fulfilled by the appellants. We have seen the said notification. The same specifies certain goods to be imported from China through a specified route. Admittedly, raw silk is one of the specified items in the said notification and the Gunji Pulan (Tibet) land route is one of the specified land routes. There is no condition in the said notification referring to the fact that the goods can be imported at the said customs land station only by the persons residing along the border areas. The appellants have strongly contended that no such condition can be introduced in the said notification by the officers. They have relied upon various decisions of the Tribunal as also the Hon ble Supreme Court in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any corresponding Act or Notification, is neither justified nor warranted. The notification in question was issued in 1996 i.e. after the MoU was arrived at on 13-12-1991. If the imports through Gunji land route was meant to be only between the residents of the border areas, the notification could have spelt the same. There being nothing in the said notification, we are very clear that the MoU arrived at between the two countries, cannot be made the basis for denial of benefit of notification in question. The Commissioner has also placed reliance on ITC Public Notice No. 33/92-97, dated 17-7-1992. We have seen the said ITC Public Notice which only gives a list of items allowed to be imported freely on border trade with China. Admittedly, silk is one of the specified goods. It is contended by the appellants that when the said notice was issued, the import of raw silk was restricted under the trade policy and was allowed only against a licence or in accordance with the public notice issued in this behalf. It was in these circumstances that the said public notice was issued so as to allow the import of the raw silk as border trade with China, without a condition of licence. However, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts otherwise available to the appellants under the notification. If there was any such intention on the part of the Revenue to impose restriction on border trade, nothing prevented them to introduce such a condition in the notification itself. 18. At this stage we may refer some of the internal correspondence made between the department which stands placed on record by the appellant. In a letter dated 13-9-2005, written by Commissioner of Customs (Preventive), Lucknow to the Joint Secretary, Customs, CBEC, it stands recorded that though there are detailed guidelines provided in the telex dated 3-7-2005 but still ambiguity remain therein, which needs to be clarified. A reference was made to Notification No. 38/96-Cus., dated 23-6-1996 vide which the exemption of duty of customs and additional duty of customs leviable thereon under Section 3 of the Act was provided. The Commissioner observed that in the said notification the nature of trade or any other condition in this regard has not been mentioned. Absence of any specific requirement should therefore also amount to that all importers irrespective of their place of residence in India, are eligible to import through land customs s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f exemption of duty under notification. It was held that the exemption notification has no actual user condition after the specified goods are imported. As such, the objections of the Commissioner that the silk was not actually imported by M/s. Krishna Enterprises under the proprietorship of Shri Krishna Singh Garbyal but the owner of the same was M/s. Elegant Industries, thus disentitling the importer from claim of the exemption notification, does not carry any weight. The Commissioner has dealt with the said plea of the appellants and has observed that the applicant in that case had sought advance ruling in the following questions :- (a) Are we allowed to import through these stations in view of Notification No. 63/42? (b) If we import wool from these stations, i.e. Gunji in Uttaranchal or Village Namagia Shipkila in H.P., will we get the benefit of duty free import under Notification No. 38/96? (c) Is there any limitation under these notifications regarding the actual user of the goods so imported. Means, if we import duty free wool from these station, can be sell the surplus in open market, if so desired? The Commissioner has thus observed as under :- The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rises and as such he has to be held as importer of raw silk in question. As per domicile certificate produced before the Commissioner, he has been shown a person living along the Indo-China border. He being the proprietor of M/s. Krishna Enterprises, the imports effected in the name of M/s. Krishna Enterprises can be safely concluded to be made by the proprietorship concern of Shri Krishna Singh Garbyal, who is resident of the Indo-China border. As such, even otherwise also, we note that the import was made by a person living along the Indo-China border and as such can be safely concluded as a border trade. Further, as per the authority for the advance rulings, there is no restriction on the sale of the goods after import. As such, even if Revenue s allegation as regards the sale of the raw silk by M/s. Krishna Enterprises to M/s. Elegant Industries is accepted to be correct, the same are very much in the legal frame work of law. 21. We may here deal with the Revenue s allegation of misdeclaration of the Mulberry Raw Silk. It is seen that the appellants had declared the goods as Mulberry Raw Silk (20/22D - 3A/4A Grade) in both the bills of entry No. 23/05 and 54/05. After seizure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awing of the said samples. As such, the result of CSTRI, though in respect of two samples, cannot be made applicable. 23. We agree with the above contention of the learned Advocate. Our attention has not been drawn by the Departmental Representative to any Panchnama showing redrawal of the samples, in which case it cannot be conclusively said that the samples were out of the imported consignment of Mulberry Raw Silk. In any case, we find that the grade 2A was found in respect of only two samples, out of the 36 samples sent to CSTRI. The earlier samples, which were drawn at the time of seizure and in the presence of appellant s representatives, were returned back by CSTRI. 24. In any case, we find favour with the appellant s contention that even if part of raw silk imported by the appellants is held to be of grade 2A, even then no anti-dumping duty is leviable, inasmuch as the Notification No. 106/2003, dated 10-7-2003 levies anti-dumping duty on Mulberry Raw Silk of grade 2A and below, if the landed value of consignment is less than US$ 27.97 per Kg. Admittedly, in the present case the landed value of consignment is US$ 28.18 per Kg. In fact, we find that Commissioner in his im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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