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M/s CHAWLA TRADING CO AND M/s MANASA ENTERPRISES Versus COMMISSIONER OF CUSTOMS (EXPORTS) , NHAVA SHEVA

2016 (1) TMI 876 - CESTAT MUMBAI

Addendum to show-cause notice after receipt of the reply to show-cause - Export of other rice in the name of Basmati Rice - export of Non-Basmati Rice was prohibited - Confiscation of goods - Held that:- the learned Commissioner has erred in issuing addendum to show-cause notice after receipt of the reply to show-cause notice dated 18.12.2009. The addendum is also vitiated on the ground that there is no reference in the show-cause notice of any samples being forwarded for test. Further, the find .....

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d. - the goods (rice under export) was not liable to confiscation - Decided in favor of assessee - Decided against the revenue. - Appeal No.C/444 & 643/10 and C/602 & 639/10 - Final Order Nos. A/2306-2309/2015-WZB(SMB) - Dated:- 12-9-2015 - Anil Choudhary, Member (J) For the Appellant: Shri N D George, Adv., and Shri J R Sharma, Supdt. (AR) For the Respondent: Shri J R Sharma, Supdt. (AR), Shri N D George, Adv. JUDGEMENT Per: Anil Choudhary: Both the Exporters and the Revenue have filed the cros .....

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nd exported 7126230 dt. 27.2.09 3 -do- Detained. Back to town allowed on bond & Bank Guarantee- As rice not appeared to be Basmati. 7134204 dt. 2.3.2009 5 -do- Detained. Back to town allowed on Bond & Bank Guarantee. As rice not appeared to be Basmati. Thereafter, the balance 8 containers in the aforesaid two shipping bills were examined under Panchnama dated 23.3.2009/24.3.2009 and samples were drawn. It appeared to the Revenue that prima facie the rice is not Basmati rice under export. .....

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were allowed to be taken back to town on or about 3.6.3009. The show-cause notice dated 18.12.2009 was issued on the exporter Chawla Trading Company alleging therein that as per the statement of Shri Daulatram Laxmandas Chawla, Proprietor of M/s Chawla Trading Company, it was stated that they had engaged CHA - M/s M.K. Shipping Services to handle clearance of the goods and the goods were stuffed in the said container. Further, he had placed order for Basmati Rice to his supplier M/s Balaji Agro .....

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main at one point. Further, the exporter was a regular exporter and they did not notice anything adverse about them. Further, there was a load shedding in the area and stuffing continues till late hours and due to over burden of work, there was a possibility that the exporter might have taken advantage of the situation and manipulated/replaced the goods as in the same godown, there were locally saleable items including rice, always available in the same godown. As per the statement of the CHA- M .....

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oods being 3150 kg of Basmati Rice should not be confiscated along with 193965 kg of non-basmati rice valued at ₹ 43,32,552/-. Further, why no penalty be imposed under Section 114(i) of the Act and further why not Bank Guarantee submitted be enforced and appropriated. 2.1 The appellant contested the show-cause by filing reply dated 6.2.2010 and filed a further reply dated 12.10.2010. The show-cause notice was adjudicated vide the impugned order, It was held that the exporter have attempted .....

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asmati rice and further reliance was placed by the Commissioner on statements of the Customs Officers, who had stated that due to heavy workload they could not supervise loading through out, and further due to load shedding in the warehouse, hence there was possibility of manipulation. Relying on the same, the learned Commissioner held that the exporter have tried to export non-basmati rice, as basmati rice. 2.2 So far the examination as to test report is concerned, the learned Commissioner reli .....

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rement of testing is only to identify whether the goods are as declared by the exporter or otherwise and accordingly, held the report dated 27.8.2009 brought on record by the Addendum to show-cause notice dated 25.3.2010, is acceptable. It is further observed that the importer has no where disputed the fact that the consignment contained non-basmati rice and accordingly, held the basmati rice in question is liable to confiscation under Section 113(i) read with Section 119 and non-basmati rice li .....

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Revenue authorities. Further, no reference was made in the show-cause notice dated 18.12.2009, that any samples were forwarded for testing. Further reliance is placed on Division Bench ruling of this Tribunal in the case of Mahindra & Mahindra Ltd. vs. Commissioner of Central Excise- 2006 (190) ELT 92 (Tri-Mum),wherein this Tribunal has held that no corrigendum or addendum to show-cause notice can be issued after receipt of reply to the notice or the original show-cause. (ii) Vide DGFT's .....

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Circular No. 33/08 refers to earlier Notification No. 39 dated 16.9.2008 which provides that export of basmati rice is allowable based on the size of the grain, length of more than 7 mm and grain length to breadth ratio of more than 3.6 is allowable. Further, export of non-basmati rice PUSA 1121" having grain length of more than 7 mm and grain length to breadth ration of more than 4.0 has been allowed. The notification further prescribes that Customs shall allow export of consignment of ri .....

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whole proceedings is vitiated. Further, as it is evident from the lab report, belatedly brought on record, that the size prescribed has not been considered, as prescribed by DGFT Circular and as such, the report is vitiated on this issue also. (iv) Further ground raised is that the Customs Officers, who supervised the stuffing, have stated that they found the rice in question as Basmati rice and as such the whole proceedings are vitiated. It is further urged that in the facts and circumstances, .....

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that the export of non-basmati rice has been prescribed by DGFT's Notification No. 38/07 and accordingly, the goods under export were fit for absolute confiscation and as such the learned Commissioner have erred in not confiscating the consignment absolutely and giving option to redeem. 4.1 Further ground raised is that if it is found that the goods are liable for confiscation absolutely, the Revenue could have earned the actual value of the rice by way of auction. Accordingly, the redemptio .....

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