TMI Blog2003 (9) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... s and placed an order with M/s. Easmesco International Corporation, Hong Kong (hereinafter referred to as the "Suppliers" for short) for an aggregate quantity of 91 M.T. i.e. 7 containers of 13 M.T. each of Cassia of Chinese Origin. 3.Out of the total quantity of 91 M.T., the order of 2 containers (26 M.T.) was placed on behalf of M/s. Agro Impex, order of 1 container (13 M.T.) was placed on behalf of M/s. Oriental Containers and order for the balance 4 containers (52 M.T.) was placed on behalf of the petitioners. As regards the 3 containers booked in the name of M/s. Agro Impex and M/s. Oriental Containers, the Suppliers insisted upon the payment by irrevocable letter of credit. However, since the petitioners had imported a consignment of citric acid from the same Suppliers somewhere in January, 1988 on payment on document basis i.e. without a letter of credit, the Supplier agreed to ship Cassia without insisting upon the letter of credit being opened by the petitioners. On 29th September, 1988, the Supplier issued proforma invoice in favour of the petitioners for 4 containers aggregating 52 M.T. of Cassia of Chinese Origin being confirmation of the order placed on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28th November, 1988 and the impugned public notice was dated 29th November, 1988, the Customs Authorities by show cause notice dated 16th March, 1989 alleged that the actual date of shipment of the said goods was 19th December, 1988 and not 28th November, 1988 as endorsed on the relevant bills of lading, as such the import of the said goods was not covered by OGL and, therefore, considered the said import as unauthorised. It was also alleged that the petitioners had obtained and presented antedated bills of lading and, thereby, were liable for penal action. In support of the allegations made in the show cause notice, the Customs Authorities purportedly relied on a letter dated 18th February, 1989 of the steamer agents of the shipping company M/s. Orient Shipping Agency Private Limited, Bombay. 8.On 20th March, 1989, the petitioners by their Advocate's letter replied to the said show cause notice, inter alia, submitting that the letter dated 18th February, 1989 on which the Customs Authorities were relying upon revealed that the said goods were delivered to the agents of shipping company on 27th November, 1988 and were due for shipment to Bombay on vessel "City of Edinborough", bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for the suppliers, but with development of trust and credit-worthiness between the parties to the transaction, letter of credit can be dispensed with. In the Instant case, since the petitioners already had transaction with the Suppliers on Documents on payment basis, there was no need for the parties to the contract to provide for opening of a letter of credit. He submitted that a contract without letter of credit is as good commitment as a contract with letter of credit. A letter of credit is not a sine qua non for establishing confirmed commitment. 13.Learned Counsel for the petitioners submits that in the instant case the proforma invoice was dated 29th November, 1988. The permits, which were issued by a Department of Government of India, were dated 26th October, 1988 and 3rd November, 1988. These permits were mandatory and condition precedent for import of the said goods. Besides this, there were third party documents in the form of letters of steamer agents, carriers and forwarders and the correction advice of the shipping company to show that the said goods had left China, which in the country of origin, for their destination i.e. Bombay on 27th November, 1988 and were i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Authorities merely because their imports were against a letter of credit. This was in spite of the fact that both of them had imported the goods under bills of lading dated 18th November, 1988 and on the same vessal "Ocean Strength". He submits that the confiscation of goods and imposition of redemption fine on the said goods in the case of petitioners is discriminatory and hence contrary to the fundamental rights guaranteed under Article 14 of the Constitution. He submits that condition as regards opening of a letter of credit amounts to imposition of unreasonable restriction on the petitioners' fundamental rights to carry on trade and business. He submits that as long as the import of the said goods by the petitioners and/or transaction relating thereto is genuine, real and based purely on commercial considerations, the petitioners cannot be compelled to open an irrevocable letter of credit and face penal consequences for failure to do so. 17.Learned Counsel for the petitioners further submits that admittedly the said goods are of Chinese origin. It is also evident, that the said goods had left Sherzan in China for the destination to Bombay on 27th November, 1988, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned and established their irrevocable letter of credit before the date of the said public notice i.e. 29th November, 1988 and for which shipments were not made within a period of 90 days from the date of the said notice, were not entitled to import, inter alia, Cassia under OGL. He submits that admittedly in the present case the petitioners did not open and establish irrevocable letter of credit on or before 29th November, 1988. He further submits that admittedly the ship carrying the goods of the petitioners sailed from Hong Kong on 19th December, 1988. He pointed out that according to the note available on record M/s. Orient Shipping Agency Pvt. Ltd. by their letter dated 18th February, 1989 informed the Assistant Collector, SIIB, Bombay that the correct date of the "loaded on Board Bill of Lading" should be read as 19th December, 1988 which was the date on which the imported goods were loaded on Board "Tokyo Bay under the Voy No. 90530". In the circumstances, he submitted that the goods imported by the petitioners were shipped on the said date i.e. 19th December, 1988 that is to say after the date of the said public notice dated 29th November, 1988. In this premise, learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners shows the date of receipt from the Shipping Lines at Hong Kong is 27th November, 1988 which was not in dispute. In the circumstances, the CEGAT was pleased to hold that it is possible that the date of issue of bill of lading is 28th November, 1988 but the date of loading has been wrongly shown by mistake on the part of the clerk endorsing loading date on the bill of lading. It is thus clear that a mistake on the part of the clerk of the Shipper has been accepted by the CEGAT. Thus finding of fact is not a subject-matter of challenge at the instance of Revenue. The finding of fact recorded by the CEGAT that there is no presentation of ante-dated bills of lading is also not challenged by the Revenue. In the result, the CEGAT was pleased to reduce redemption fine from Rs. 9 lakhs to Rs. 4.5 lakhs. In this backdrop, if there is a bona fide mistake on the part of the Shipper or the clerk of the shipping agency, we fail to understand as to how the petitioners can be penalised for that even by reducing the redemption fine. Secondly, if there was no attempt on the part of the petitioners to present ante-dated bills of lading, and on the face of the finding of fact recorded by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CEGAT having accepted the date of issuance of relevant bills of lading as 28th November, 1988 and also the import of the goods being bona fide and the delay in shipment being totally beyond the control of the petitioners, the redemption fine of Rs. 4.5 lakhs in lieu of confiscation does not meet the ends of justice. 23.In the result, for the reasons recorded hereinabove, the impugned ordor dated 9th November, 1989 passed by the CEGAT is set aside. Writ Petition No. 315 of 1990 is allowed. Rule is made absolute in terms of this judgment. 24.Since we have set aside the order of the CEGAT, it is not necessary to decide the legality and validity of the public notice dated 29th November, 1988 or the validity of Para 5 of Appendix 6 of the said Policy, though the petitioners were seriously challenging legality and validity of the said instruments on the touch stone of Article 14 of the Constitution of India. 25.Since we are allowing the petition, it will be necessary to make consequential order. Under interim order of this Court dated 21st February, 1990 the petitioners were directed to pay redemption fine of Rs. 2.25 lakhs and furnish security by way of bank guarantee in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have approached this Court and ought to have got the interim order modified. It was not open for them to read something more in the interim order and insist upon payment of interest, especially, when the matter was sub-judiced. In this view of the matter, the demand for interest was unjustified. Even, otherwise, since we have quashed and set aside imposition of redemption fine and directed refund of fine paid by the petitioners we also hold that the respondents were not entitled to charge and recover interest in the sum of Rs. 75,056/- in respect of Bill of Entry No. 003527, as such petitioners would be entitled to refund of the same amount of interest. The respondents are, therefore, directed to refund the petitioners the amount of interest paid by them in the sum of Rs. 75,056/- within six weeks from today. In the event of delay in payment of said interest amount, the same shall carry interest at the rate of 6% per annum after expiry of six weeks till payment in full and final. 28.In the result, Writ Petition No. 1551 of 1990 is allowed. Rule is made absolute in terms of the above order. Accordingly, both the petitions stand disposed of with no order as to costs. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
