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TMI Blog2023 (10) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case are that the importer company had imported Brass Scrap "Pallu" for its business vide Bill of Entry (BOE) No.6601963 dated 09.12.2021, which was filed at ICD (Inland Containers Depot), Concor, Kanakpura, Jaipur under the provisions of Section 46 of the Customs Act, 1962 through Kodiak Containers Lines Pvt. Ltd., Code No.AADCK2481PCH001 having assessable value of Rs.90,23,371/- as the tariff value fixed for Brass Scrap (all grades) under CTH 74040022 @ 5691 USD/MT vide Notification No.95/2021 - Customs (N.T.) dated 30.11.2021 and classification of the same was made under CTH (Customs Tariff Heading) 74040022 and duty was self-assessed BCD(Basic Customs duty) @ 2.5% + SWS (Social Welfare Surcharge) @ 10% + IGST @ 18%. 3. The importer company had uploaded documents regarding its BOE No.6601963 i.e. Bill of Lading bearing reference no.SASLNH21715 dated 28.11.2021, Container No.SVWU9892740/40, Seal No.017410, Port of Lading JEBEL ALI (UAE) along with Pre-Shipment Inspection Certificate (PSIC) issued by Pre-Shipment Inspection Agency (PSIA) bearing certificate No.WFZE/SHJO/9959/2021 dated 13.11.2021, which duly mentioned type of scrap - unshredded, Country of Origin - UAE, Plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 4. 5173059 24.08.2021 7412945 5. 5407130 11.09.2021 7443238 6. 6430842 27.11.2021 8715980 8. That in follow-up action, premises of Mr. Abdul Kader Bombaywala, Indenter of the importer company was searched and statements of Mr. Abdul Kader and Shri Kailash Vittal Mhatre, Sr. Manager, M/s. Hub and Links India Pvt., Ltd. were recorded. As the Importer Company was found to have mis-declared the country of origin as UAE instead of Pakistan with intent to evade customs duty and mis-classified the goods under CTH 74040022 instead of 98060000, the goods imported were seized by the Customs officers under Section 110 of the Customs Act, 1962 (the Act). Accordingly, show cause notice dated 15.06.2022 was issued to the Importer Company and its Directors, which was duly replied by them. 9. Having examined the matter, the Adjudicating Authority passed the order-in-original dated 24.02.2023, whereby the imported goods were confiscated under Section 111(m) and the Importer Company was allowed to redeem the goods for re-export on payment of redemption fine of Rs.10 lakhs under Section 125 of the Act and also imposed penalty of Rs.3 lakh each under Section 112(a)(ii) and Section 114 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities. (d) The information obtained from PICT website is not authentic and reliable and relied on the decision of the Apex Court in M/s. Hewlett Packard India Pvt. Ltd. - 2023 (1) TMI 700, which says that online sources such as Wikipedia should be used with due caution to support the conclusion of the investigation. (e) Re-exporting the goods would serve the purpose sought to be achieved by the Government of India in imposing BCD at 200% on the goods originating in Pakistan and referred to the decision in M/s. Raj Grow Impex LLP & Ors. - 2021 (377) ELT 145, whereby the Apex Court allowed re-export of the imported beans, peas and pulses, though they were held to be prohibited. The redemption fine and penalty in case of re-export of the goods is not imposable. (f) The goods are not liable to confiscation under Section 111 (m) of the Act. (g) Penalty under Section 112(a)(ii) and Section 114 AA of the Act are not sustainable. 12. The learned Authorised Representative for the Revenue has seriously challenged the decision of the lower authorities both on account of allowing re-export of the goods on payment of meagre amount of redemption fine as well as on the quantum of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with seal No. 017410 relating to Bill of Entry No. 6601963 dated 9.12.2021 was verified from the website of Pakistan International Container Tracking Portal (PICT) https:/pict.com.pk/en/online-Tracking and it revealed that the seal No. affixed on the said container was the same as originated from Pakistan. Further, on physical examination of the goods some worn and torn PP bags filled with brass scrap were found on which the words Karachi, Pakistan, Government of Punjab, Korangi Industrial Area etc. were found printed. Coupled with this, the tracking details also revealed the actual arrival date of the said container, i. e. the B/L from Karachi to JEBEL ALI was issued on 18.11.2021 at Karachi and B/L from JEBEL ALI to Nhava Sheva was issued on 28.11.2021 and the container was found to be intact with the same seal throughout from Pakistan to India. This only reflects that there could not have been any inspection at Sharjah, UAE as per the PSIC Certificate dated 13.11.2021 issued by PSIA and therefore the necessary corollary is that the PSIC was fake and forged. This also points to the fact that the container in question originated from Pakistan. 15. We also find that statement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court in Hewlett Packard (supra) which is clearly distinguishable from the facts of the present case. The department having found that the goods originated from Pakistan was not wrong in re-classifying the goods under CTH 98060000 as per Notification No. 5 /2019-Cus dated 16.2.2019. Nothing further was required to be done at the end of the department as pleaded by the importer company. The justification or non-justification of procuring the goods i. e., Brass scrap "Pallu" from Pakistan was on the importer company which they failed to substantiate by any valid supporting evidence. The burden was exclusively on the importer company and not on the revenue to place on record positive evidence in support of their submissions. Responsibility of the Importer Company: 16. Having determined the country of origin of the containers in question we would now examine the defence taken by the learned Counsel for the appellant that they had no knowledge about the country of origin being Pakistan and that they have no connection with the supplier in Pakistan and therefore they have neither mis-declared nor misled the department. In fact the importer company had gone to the extent of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation given in PSIC. In case of any mis-declaration, they shall be liable for penal action under Foreign Trade (Development & Regulation) Act, 1992, as amended." 17. The next contention of the appellant is that they have submitted all the requisite documents showing the country of origin as UAE. As noted above, there is complete discrepancy as the PSI Certificate dated 13.11.2021 shows the date of inspection as 11.11.2021 at Sharjah, UAE whereas the containers itself departed from Pakistan on 18.11.2021 as per the B/L from Karachi to JEBELALI, therefore the only logical conclusion is that the certificate is fake or has been forged and no inspection was actually conducted at Sharjah, UAE. We find that the authorities below have rightly observed that in terms of Para 2.32 of FTP 2015-2020 read with para 2.54 of Handbook of Procedures, such PSI Certificate is not valid and no reliance can be placed thereon. Confiscation of Goods: 18. We now come to the issue whether goods are liable to confiscation under section 111 (m) of the Act. Having considered in extenso that the country of origin of the containers in question is Pakistan, the same are covered by the notification No. 05/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for contravention of the provisions of the Customs Act, 1962 read with FTP 2015-20. The conclusions arrived at by us gain support from the decision in Collector of Customs, Bombay Vs. M/s Elephanta Oil & Industries 2003 (152) ELT 257 (SC), wherein the Apex Court distinguishing the provisions of section 112 (a) imposing penalty and section 125 providing for redemption fine, upheld the imposition of penalty under section 112 of the Act, observing : "10. From the aforesaid two sections, it is apparent that both operate in different fields, namely, one requires imposition of penalty and other provides for confiscation of improperly imported goods. Section 111 provides that goods brought from the place outside India are liable to confiscation if the goods are improperly imported as provided therein. In cases where goods are liable to confiscation, discretion is given to the authority to impose penalty. Further, Section 125 empowers confiscation of such goods and thereafter, confiscated goods vest in the Central Government. The Section further empowers the authority to give an option to the owner or the person from whom goods are seized to pay fine in lieu of such confiscation for retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt is in consonance with the underline object of issuing the notification dated 16.02.2019 under section 8A of the Customs Tariff Act. We may now consider whether the request of re-export has been rightly allowed by the authorities below as well as on the issue of imposition of redemption fine when the goods are allowed to be re-exported back. The department has raised an objection that permission for re-export on a request made by the importer company is not within the purview of the adjudication proceedings in view of the decision of the Tribunal in Hemant Bhai R. Patel V Commissioner of Customs 2003 (153) ELT 226 (Tri. - LB). We find that the goods declared as Brass Scrap "Pallu" are neither restricted nor prohibited goods and are freely available for import. We would like to refer to the relevant part of Para 2.54 of Handbook of Procedures 2015-2020, which reads as :- "2.54 Import of Metallic Waste and Scrap Import Import of any form of metallic waste, scrap will be subject to the condition that it will not contain hazardous, toxic waste, radioactive contaminated waste / scrap containing radioactive material, any type of arms, ammunition, mines, shells, live or used cartri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow, however, we have already held that the same cannot be accepted. We, in arriving at the conclusion that the appellant having paid the redemption fine is entitled to redeem the goods and it is permissible to seek re-export thereof, are supported by the decisions of this Tribunal as well as of the superior Courts. Our view is substantiated by the decision in Escorts Herion Ltd. - 1997 (107) ELT 599 (Tribunal), referred to by the learned Authorized Representative, where the Tribunal specifically stated - "5. The other contention is not of any significance to the fact of the present case. By applying the ratio of the decision in Padia Sales Corporation v. C.C. all that would happen is that the permission granted for reexport to be set aside. The goods in other words would have to be cleared on payment of fine for home consumption. We are however told that the goods have already been exported. Apart from this, we do not find it possible to say that there is no provision in the law to permitting goods to be re-exported subsequent to their confiscation. 6. Section 125 of the Act does not specifically provide that an option may be given to redeem the goods for re-export. It empow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 161 where the Supreme Court has affirmed re-export of imported goods. After rejecting the contention of the Revenue that if an importer intends to export the goods imported he should clear them for warehousing and then proceed in terms of Section 69..." Similarly, the case law referred by the Revenue of Preeti Exim Vs. CC, New Delhi - 2007 (214) ELT 555 (Tribunal-Delhi), wherein the contention of the Revenue was that importer has to first redeem the goods by paying redemption fine and, thereafter, the customer can re-export the goods. The Tribunal observed as under:- "5. I find that the issue raised by the appellant whether the imported goods are liable for fine and penalty in case the order regarding re-export was granted is answered by the Larger Bench of the Tribunal in the case of A.K. Jewellers (supra), after relying upon the decision of Hon'ble Supreme Court in the case of Collector v. Elephanta Oil & Industries Ltd. reported in 2003 (152) E.L.T. 257 held that power to levy the penalty under Section 112 of Customs Act for improper importation of goods is different from the power of confiscation of goods under Section 125 of Customs Act. The same view is taken by the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere he is not able to take the goods straightaway outside the customs area. There is nothing in the provisions of the Act to compel an importer even before or when importing the goods, to make up his mind whether he is going to use or sell them in India or whether he proposes to re-export them. Again, there may be cases where he has imported the goods for use or sale in India but subsequently receives an attractive offer which necessitates an export. It would make export trade difficult to say that he cannot accept the export offer as the goods, when imported, had been cleared for home consumption. S. 69, therefore, should be only read as a provision setting out the procedure for export of warehoused goods and not as a provision which makes warehousing an imperative pre-condition for exporting the imported goods. The second reason for not reading Ss. 68 and 69 as supporting the Revenue's interpretation is even more weighty. That interpretation would mean that imported goods can be re-exported after being warehoused for some time (even a day or few hours) but that they cannot be exported otherwise. Such an interpretation has no basis in logic or sense and makes mincemeat of the broa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs that wrong goods had been shipped because of suppliers mistake and the importer had disclosed the fact to the department even before the examination of the goods. Thus, fine in lieu of confiscation has been found to be in consonance with the provisions of section 125 of the Customs Act, 1962 as an option to the importer to redeem the goods which have been confiscated and has not been made as a condition for re-export which had been allowed in response to the request made by the appellant therein. 26. The Apex Court in Elephanta Oil and Industries (supra) rejected the contention of the appellant therein that once the imported article is re-exported there is no question of levying any penalty or redemption fine holding that confiscation of goods and thereafter permitting the respondent to re-export the same would not mean that penalty under section 112 of the Act cannot be levied. Following the said decision of the Apex Court, the Larger Bench of the Tribunal in A.K. Jewellers V Commissioner of Customs, Mumbai, 2003(155)ELT 585 dealt with similar issue:- "Whether while passing an order under section 125 of the Customs Act the authorities can direct confiscation of goods and pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct view. Further, we find that this view is also taken by the Hon'ble Supreme Court in the case of C.C. v. Elephanta Oil & Industries Ltd. reported in 2003 (152) E.L.T. 257 (S.C.) rejected the contention of the importer that once the imported article is reexported as directed by the department, there is no question of levying any penalty or redemption fine. The Hon'ble Supreme Court held that power to levy the penalty under Section 112 of the Customs Act for improper importation of goods is different from the power of confiscation of goods under Section 125 of the Customs Act. The question of law referred to the Larger Bench is answered accordingly." 27. Another Larger Bench of this Tribunal in Hemant Bhai R Patel V Commissioner of Customs, Ahmedabad (supra)distinguished the decisions of the Apex Court in Siemens Ltd V Collector 1999 (113) ELT 776 on the ground that the issue whether redemption fine could be imposed when goods are liable to be confiscated even when re-export is permitted was not an issue before the Apex Court. Agreeing with the decision in K & K Gems (Supra), Escorts Herion Ltd V Commissioner 1999(107) ELT 599, Kothari Filaments V Commissioner 2002 (144) ELT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeks to challenge the order passed by the appellate authority is no ground for non compliance of the said orders. Here, the appellant has submitted that pursuant to the order in original, they have paid the redemption fine of Rs. 10,00,000/- and penalty of Rs. 6,00,000/-towards penalty on 3.04.2023, however the department has not permitted them to re-export the goods. In view of the decision in Ajay Kumar Gupta (supra) we have no hesitation in directing the department to allow the appellant to re-export the goods once they deposit the enhanced amount of penalty as directed in the impugned order. The importer company, namely M/s Bright Metal (India) Pvt. Ltd., and its Director, namely Sanjay Porwal may deposit the balance of the enhanced amount towards penalty under section 112 (a)(ii) and under section 114AA of the Act in terms of the impugned order within a period of three weeks and on such deposit being made, the department shall forthwith release the goods for the purpose of re-export. 29. We would now like to refer to the decision of the Apex Court in the case of Union of India versus Raj Grow Impex LLP - 2021 (377) ELT 145 (SC), which has been referred to both by the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to re-export the goods is in consonance with the object and purpose with which the notification was issued, i.e. to dissuade commercial transactions with Pakistan byimposing extremely high penalty of 200%. 31. Suffice it to say, that Notification No 05/ 2019 dated 16.2.2019 in simple words provides that the goods imported having country of origin as Islamic Republic of Pakistan shall be classified under the new entry CTH 9806 0000 and BCD @200% shall be applicable on them. It nowhere says that such goods shall not be allowed to be re-exported. It is a settled principle of law that the words of the notification has to be read as they are and the contents thereof cannot be added or expanded by way of implication. Since there is no express bar for re-export of such goods in the notification, we uphold the impugned order allowing the appellant to re-export the goods. Conclusion 32. We, therefore conclude that the country of origin of the containers in question is Pakistan and therefore, the same are classifiable under the Notification No.5/2019 as per CTH 980060000. Since the goods have been imported on the basis of fake PSIC, they are liable to be confiscated in terms of Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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