TMI Blog2017 (9) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... ere are clear procedural contraventions of the customs law and the rules made thereunder by the appellant in case of the subject goods. Therefore, the appellant is liable for the penalty u/s 112 (a) of the Customs Act, 1962 Considering overall facts including the negligence and consequential contravention of customs law, which is in the nature of contravention a penalty of ₹ 2,45,145/- is imposed u/s 112 (a) of the Customs Act, 1962. Appeal allowed - decided partly in favor of appellant. - C/72/2008 - A/12581/2017 - Dated:- 15-9-2017 - Dr. D. M. Misra, Member (Judicial) and Mr. Ashok K Arya, Member (Technical) For the Appellant : Shri P. M. Dave, Shri Amal Paresh Dave, Advocate For the Respondent : Shri J. Nagori, Authorised Representative ORDER Per: Ashok K Arya M/s Arcadia Shipping Trading Company is in appeal against OIO NO.02/Commissioner/2008 dated 15.01.2008 passed by Commissioner of Customs, Jamnagar, whereunder, interalia, the demand of customs duty of ₹ 24,51,459/- alongwith interest and equivalent penalty has been confirmed against the appellant. The impugned order also confiscates the subject item, namely, Grabs valued at &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements of various peoples. Thereafter, Commissioner of Customs (Preventive), Jamnagar issued SCN dated 07.03.2007 to the appellant Ors. The SCN, interalia, stated the following:- (a) It appeared that the said grabs were unloaded by M/s Arcadia from M.V. Slovenjia upon execution of the Bond without payment of duty as envisaged under Notification No. 27/2002-Cus dated 01.03.2002, according to which 15% of customs duty was to be paid in cash and rest of 85% was to be given in the form of Bank Guarantee, which was not done so. (b) That the Superintendent, Porbandar seized the said grabs alongwith its accessories under reasonable belief that they were liable for confiscation under the provisions of Act vide Panchnama, dated 13.10.2006. (c) That M/s Arcadia vide their letter dated 21.11.2006 requested for provisional release of the said seized grabs and further stated that M/s Martrade vide their letter dated 20.04.2006 had desired to keep the grabs in question at Bedi Port for repair maintenance and using for loading and unloading of goods on their ships; that they had vide application dated 29.04.2006 requested Superintendent, Jamnagar to grant them permission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use but to be sent back on their vessel. (h) It further appeared from the various statements of Shri Arvind K. Shah and their letter dated 21.11.2006 that they have not mentioned words repairing and maintenance in their letter and Bond submitted to Superintendent, Jamnagar; that no permission of proper officer was taken to load the said grabs onto the vessel M.V. Antarios Breeze; that the said grabs were unloaded as ships stores to be loaded again on the another foreign going vessel; that they had vide letter dated 06.09.2006 requested Superintendent, Jamnagar to send the grabs being Ship stores and had placed the same on the vessel and delivered to Master and no shipping bills were filed for its exportation; that the imported grabs were used for loading the goods into M.V. Antarios Breeze, that no procedure as prescribed under the Notification No. 153/94-Cus dated 13.07.1994 was followed. (i) It appeared that Section 85 of the Cusotms Act provides for warehousing of stores without assessed to duty. Thus, for warehousing the stores under Section 85 of the Act the Warehousing Bill of Entry for the same had to be filed accompanied with the declaration and/or Bond which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reeze without filing/declaring the same in Export General Manifest under Section 41 of the Act readwith Export Manifest (vessels) Regulation, 1976 and therefore had rendered the goods liable for confiscation under Section 113 (h) of the Act. (s) That M/s Arcadia had tried to export the said imported grabs without filing shipping Bills under Section 50 of the Customs Act and without an order of proper officer under Section 51 of the Act and therefore, had rendered the goods liable for confiscation under Section 113 (d) of the Act. (t) M/s Arcadia, who had attempted to export the said imported non duty paid grabs M.V. Antarios Breeze without filing/declaring in Export General Manifest under Section 41 of the Act readwith Export Manifest (vessels) Regulation, 1976 without filing Shipping Bills under Section 50 of the Act and without an order of proper officer under Section 51 of the Act, appeared to have rendered the goods liable for confiscation under Section 113 of the Act as aforesaid are hence were also liable for penalty under Section 114 of the Act. (ix). Based on the above, the SCN issued to the appellant and others called upon to show cause to the Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the conditions, and the purpose of the Notification was satisfied. In support following decisions are relied upon:- (a) Commissioner, Chandigarh Vs. JCT Electronics Ltd. - 2010 (261) ELT 267 (Tri.- Del) (b) Commissioner, Chandigarh Vs. JCT Electronics Ltd. - 2011 (267) ELT 41 (P H) (c) India Infusion Ltd. Vs. Collector of Customs, - 1994 (71) ELT 707 (Tri.) (d) AUDCO India Ltd. Vs. Commissioner of Central Excise - 2013 (297) ELT 374 (Tri.-Chennai). (e) Indian Farmers Fertilizers Co-operative Ltd. Vs. UOI - 1995 (75) ELT 218 (Guj. ) (vii) The benefit of Notification No. 153/94-Cus, is also denied on the ground that the exemption was available only for repairs and return of imported goods, but not in cases where the goods were used after repairing. The Notification nowhere stipulates that goods imported for repairs cannot be used after repairing and before their actual return. In the bond (and also in application dated 29.04.2006) the appellant has disclosed that the grabs were to be unloaded for using it in the vessels coming at Bedi Port in due course, and thus the prospective use of the grabs after repairing was disclosed. (viii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Notification No.153/94-Cus dated 13.07.1994, they have been negligent in not giving a specific declaration at the time of unloading of subject goods that they were for Repairs and Return . Considering the ratio of Tribunal's decision in the case of Commissioner of Central Excise, Chandigarh Vs. JCT Electronics Ltd. - 2010 (261) ELT 267 (TRI.-DEL.) and Hon ble Gujarat High Courts decision in the case of IFFCO Ltd. Vs. UOI - 1995 (75) ELT 218 (GUJ.), we are of the view that the subject goods namely two grabs are eligible for benefit of the said Notification No.153/94 (supra). There is no dispute about the identity of the subject goods which have already been re-exported and for which the appellant had given required bond undertaking as specified in the said Notification. 6.1. The Tribunal in the case of CCE, Chandigarh Vs. JCT Electronics Ltd. - 2010 (261) ELT 267 (Tri.- Del) has interalia observed as under:- 7. We have carefully perused the records and considered the submissions. We observe that the exemption in terms of the notifications is sought to be denied on the sole ground that in respect of the impugned goods there was failure on the part of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstrued strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play has to be given to it and it calls for a wider and liberal construction. A notification has to be read in its entirety and construed as a whole. But a construction which results in inequitable results and is incongruous is to be avoided. It is thus clear that an exemption Notification has to be construed in the light of the contents thereof. As aforesaid the Notification at Annexure `A postulates three conditions for earning the exemption provided thereunder. The first two conditions have to be complied with in full in order to earn the exemption thereunder. Payment of contribution in the aforesaid fund is a condition precedent for claiming the exemption thereunder. The goods would not be allowed to be cleared unless undertaking to the effect of payment of contribution in the fund is given. The condition of giving undertaking will have also therefore to be treated as a condition precedent. So far as furnishing of proof is concerned, it is not always possible to comply with it fully within the stipulated time-limit for div ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexure `A'. That would certainly be a substantive part of the said Notification at Annexure `A'. The first two conditions thereof would therefore, constitute a substantive part. It cannot be gainsaid that this substantive part has to be complied in toto for earning the exemption thereunder. Furnishing of proof of payment would be in the nature of a procedural part. The third condition in the Notification at Annexure `A' would thus constitute a procedural part. This procedural part would require liberal construction. Substantial compliance of the third condition, being the procedural part of the Notification at Annexure `A' should be sufficient to earn the exemption thereunder. This interpretation of the Notification at Annexure `A' by us is in consonance with the aforesaid ruling of the Supreme Court in Wood Papers Ltd.'s case (supra). 7. Following the ratio of Tribunal's decision in CCE, Chandigarh Vs JCT Electronics Ltd (supra) and Hon ble Gujarat High Court's decision in IFFCO Ltd (supra), the subject goods are entitled to benefit of the Notification No.153/94-Cus dated 13.07.1994. Consequently, the demand of customs duty etc, and i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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