TMI Blog2019 (11) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... to manufacture reconditioned clothing. The project report clearly states that some of the reported garments that new and could be out of fashion in terms of time in these circumstances the conclusion of the Commissioner in the impugned order that the said T-shirts are not by letter of permission is mis-placed. Thus, the appellants are entitled to clear the goods to SEZ in terms of letter of permission and Rue 27 of the SEZ Rules. Thus, the charge under section 111(m) of the Customs Act, 1962 cannot be sustained in the instant case as the payments. As the appellants were clearly entitles to clear the said goods at SEZ at nil rate of duty. Charge under section 111(d) - HELD THAT:- Revenue has relied on Public Notice no. 12 (RE-2001)/1997-2002 dated 03/05/2001. The appellants have pointed out that the said circular permits Revenue to test goods at the time of import for pre shipment certificate. In these circumstances, confiscation can only be ordered if the goods do not confirm. In this case no testing was done by Revenue and, therefore, confiscation under section 111(d) cannot be justified. There is nothing in support for the charges made for invoking section 111(m) and sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some were given support of plastic woven fabrics inside the strips, (c) All the bales in container no. MSKU 9441168 contained Old and used Clothing, (d) 21 bales in container MSKU 9258007 contained old and used clothing and (e) 26 bales in container MSKU 9258007 contained unused T-Shirts of various colors and sizes, some with full sleeves, some with half sleeves, some with round neck, some with V neck, some being unbranded and some bearing illegible brand labels or cut labels. The T shirts carried stickers with the work Irregular and some of the shirts had holes in them. The said 26 bales were seized on the charge that the unused T-shirts were being sought to be cleared as old and used clothing rags in the said BOE. Rest of the goods, though old and used rags, were seized as goods used to hide the unused clothing. Learned Counsel for the appellant Texool Wastesavers, pointed out that the said order of the Commissioner was challenged in Tribunal. The Tribunal vide order dated 18/05/2010 remanded the matter to the Commissioner for fresh consideration and also ordered that the appellant was entitled to clear the goods on payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on report dated 16/08/2010, showed that 95% of the shirts were free from dyeing and weaving defects. He argued that only two to four shirts in each bundle was examined and conclusion made on the basis on that, 95% shirts were free from defects is totally incorrect. Learned Counsel argued that even new T-shirts from old stock of mixed and rejected T-shirts were permissible for import as per project report. He pointed out that in this circumstances, invocation of section 111(m) of the Customs Act,. 1962 is wrong. He further pointed out that the impugned order wrongly holds that new T-shirts that were surplus/assorted/defective/irregular were not classifiable under Tariff Heading 6309 00 00. He argued that the question of classification becomes irrelevant since the goods were intended for clearance from SEZ and to be re-exported after reconditioning. He argued that in this background, order of payment of duty under section 125 (2) of the Custom Act, 1962, is misplaced. He argued that in this regard, the impugned order disregards the Tribunal‟s order dated 18/05/2010. He further argued that the impugned order wrongly order confiscation under section 119 under Customs Act, 1962 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new/unused branded/unbranded T-shirts of different colours and sizes. The goods were placed in seizure for confiscation under section 111(m) of the Custom Act, 1962 also as the goods were not accompanied by pre-shipment certificate prescribed by the Public Notice no. 12 (RE-2001)/1997-2002 dated 03/05/2001. After issue of Show Cause notice, the market value of the T-shirts was ascertained. The 27 bales of alleged new T-Shirts were confiscated under section 111 (d) and 111(m) of the Customs Act, 1962. The market value of the said goods was revised to 1.44 crores at the rate of 150 per piece and redemption fine was fixed at ₹ 35 lakhs. The balance 21 bales of old and used clothing rags in the said container were also confiscated under section 111(d) of the Customs Act. The 41 bales in the second container were also confiscated indicating section 111(d) of the Customs Act, 1962. Various penalties were imposed on the appellants and the request for re-export of goods was rejected. Aggrieved by the said order, appellant‟s approached the Tribunal which remanded back the matter to the Commissioner observing the following: 4. Learned advocate for the appellant sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the remand proceeding, the Commissioner has ordered confiscation of the said goods alleged to be the new T-shirts and the same were confiscated under section 111(d) and 111(m) of the Customs Act. The market value of the said goods were fixed at ₹ 91 lakhs approximately @ 95/- per piece of cotton T-shirts and ₹ 110/- per piece for polyester T-shirts. The goods were offered for redemption on payment of fine of ₹ 25 lakhs. The balanced 21 bales in the same container and 41 bales in a different container were also confiscated under section 119 of the Customs Act and under section 111 (d) of the Customs Act, 1962 respectively and were offered for redemption of payment of ₹ 50,000 only. A penalty of ₹ 15 lakhs under section 112(a) of the Customs Act, 1962 was imposed. Penalty of ₹ 5 lakhs was imposed against Shri S.S. Sajdeh, Chairman Managing Director of the company under section 112(a) of the Customs Act. The order also rejected the request for re-export of goods. The order further directed that in terms of section 25(2) in addition to redemption fine a appellant‟s shall be liable to pay duty on 91,450 pieces of new T-shirts. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The garments, which require repair before they can be reused, will be sent to the sewing and finishing department where repairs and alterations, sewing buttons etc will be carried out before sending to the cleaning department for cleaning and pressing. This will be RE-EXPORTED as RE-CONDITIONED CLOTHING 4.2 The appellants are taking shelter of this proposal in the project report which they claim, has been approved in the letter of permission. Though we find that the said project report placed before us is un-signed and is not addressed to any particular authority Revenue has not disputed. In these circumstances, we rely on this project report. From the said project report, it is seen that the appellants were permitted to import garments that are almost new but could be out of fashion in terms of time as far as the country of production is concerned. The entire case of Revenue is based on the allegation that the part of the consignment was almost new and, therefore, it was in violation of the policy. We find that the letter of permission read with Project Report does not prohibit import of such goods. 4.3 It is seen that the Bill of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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