Judgment:
1. Shri K.K. Anand, the ld. Counsel appearing for the appellants, submits that the appellants are actual users of some bulk drugs and entered into an agreement with a Hongkong Supplier for supply of Sulphadiazine BP 80; Furazolidone BP 80 and Theophyl-line Anhydrous BP 80. He submitted that the appellants in the instant case placed orders for supply of Furazolidone BP 80 and Theophylline Anhydrous BP 80. The goods came by air and Bill of Entry dated 1-11-1993 was filed for clearance of the goods; that clearance of goods was allowed by endorsing the Bill of Entry 'out of Customs charge'; that the goods were detained while being taken on 2-11-1993 on the ground that some investigations are required. He submits that since they came to know that there might be a mixup in the supply, they contacted their Hongkong Supplier on 8-11-1993 and received reply through a fax message dated 8-11-1993 stating that a mistake had occurred in the Supplier's Warehouse; that due to new staff at the warehouse, they have exchanged the drums and have wrongly sent to appellant company NORFLOXACIN AND VITAMIN B-2. The foreign Customer requested for re-export of the said consignment as the same was required to be sent to West Germany. The ld. Counsel submitted that the Department started investigations only when they made a request for re-export of the goods under their letter dated 8-11-1993. He submitted that it was a genuine mistake; that the appellants were actual users; that they were importing the goods from time to time for their own use; that as soon as the mixup came to their notice, they informed the Customs and requested the Customs Authorities to permit the Indian Importer to export the goods; that since the foreign supplier was in a hurry in view of the fact specifically that the goods had very short span of life and were perishable, therefore, the appellants waived Show Cause Notice, but requested for a personal hearing and request for re-export was repeated. He submits that the Department during investigations did not find any incriminating documents at all in their business or residential premises; that there was no evidence forthcoming or placed on record to show that the Appellants had manipulated with the foreign supplier in any manner. The ld. Counsel submitted that the appellants made an alternate plea that in case re-export of the goods was not permitted, they were abandoning the goods. He submitted that since the permission to export the goods was not given, therefore, from their point of view, they should be deemed to have abandoned the goods and since the goods were abandoned, there was no question of levy of any penalty on the firm or other personnel of the firm.
2. The ld. Counsel very strongly putforth the point of denial of natural justice. He submits that the charges were not explained to the Appellants, that the Show Cause Notice was waived only in respect of the Firm and not in respect of others, that not only the Firm, but also S/Shri V.K. Jain, Simon J. Paul and S.K. Bose have been penalised with different amounts. He submits that since no opportunity was given to the appellants nor the appellants had waived the issue of show cause notice Jior were they given an opportunity of being heard in person, therefore, the imposition of penalty on the above said three persons was not justified. Summing up his arguments, the ld. Counsel submits that since the goods were not supplied at the instance of the appellants and since no evidence has been brought on record to prove that the appellants have actually placed orders for Vitamin B-2 and Norfloxacin. He submitted that in view of the above submissions, the appeal may be allowed.
3. Shri P.K. Jain, the ld. SDR countering the arguments of the ld.Counsel for the appellants, submits that the goods were detained on 2-11-1993 as there was specific information; that samples were drawn in the presence of the appellants; that on testing of the samples, the goods were found to be Norfloxacin and Vitamin B-2 as against their declaration of Furazolidone and Theophylline Anhydrous. The ld. SDR submitted that the labels on the drums and tags on the container clearly described the goods as those indicated in the Bill of Entry. He submits that the goods in question were medicines and carelessness in their packing cannot be easily admitted nor can there be any mixup insofar as filling of the drums is concerned. He submits that labels and tags on the drums clearly show that there was no mixup, but the goods were misdeclared. He submitted that the fact was further borne out by the statement of Shri S.K. Bose and Shri Simon J. Paul who admitted that the goods were misdeclared. He submitted that the mis-declaration, therefore, in the Bill of Entry was intentional. The ld. SDR also contradicted the statement of the Appellants that they were actual users inasmuch as it was admitted by Shri V.K. Jain that earlier also they had sold the goods in the open market and that no accounts were maintained in the factory. He submitted that the two persons, viz. Shri Simon J. Paul and Shri S.K. Bose also testified that on earlier occasions after clearance of the goods, the same were not delivered to their factory in Faridabad, but were actually delivered in Delhi. The ld. SDR submitted that all these facts when put together clearly indicate that there was no mixup and that the mixup indicated in the basis of the fax message was clearly an afterthought. On the question of imposition of penalty, the ld. SDR submitted that all the 4 persons were concerned with the illegal import of the goods and misdeclaration thereof. The ld. SDR also drew our attention to para 6 of the stay order, contending that the tentative view of the Tribunal on issue of Show Cause Notice in respect of Shri V.K. Jain was that it was not necessary inasmuch as the same was waived.
4. Heard the submissions of both sides. After careful consideration of the submissions made and the evidence on record, we find that the first issue to be dealt with by us is whether penalty can be imposed on S/Shri V.K. Jain, Simon J. Paul and S.K. Bose. We find that no doubt show cause notice was waived by the Firm viz. M/s. Caplet Pharmaceuticals and Shri V.K. Jain has signed that letter for the Firm.
We note that Shri V.K. Jain was working as a Representative of the Firm and if it was at all to be alleged that he was a party to the illegal import of the products mentioned above, then a specific show cause notice should have been issued to him or a letter should have been obtained from him requesting for waiver of the Show Cause Notice as he was only acting as a Representative of the Firm. Thus, we find that Show Cause Notice was necessary. In the absence of the Show Cause Notice, the imposition of penalty on Shri V.K. Jain was not sustainable and we hold accordingly.
5. Insofar as the imposition of penalty on S/Shri Simon J. Paul and S.K. Bose is concerned, we find that there is no letter waiving the issue of Show Cause Notice to these two persons. From the evidence placed before us, we do not see anything to prove that they participated in the personal hearing. In the absence of show cause notices issued to these persons or waiver thereof, we set aside the order of imposition of penalty on Shri Simon J. Paul and Shri S.K.Bose.
6. The second issue is whether the declaration in the Bill of Entry was a mis-declaration or whether such a mis-declaration was intentional.
From the evidence on record and the submissions made before us, we find that there was specific information. We also note that the goods were detained before the appellant submitted a copy of the fax message from the foreign supplier indicating that there was a mixup and the consignment meant for Germany has been sent to India. This contention does not convince us inasmuch as the foreign supplier was supplying medicines and therefore the question of wrong labelling or wrong packing list does not arise. The tags on the containers also were manipulated inasmuch as they did not indicate the correct description of the goods. The contents were thus misdeclared. The fax message submitted to the Department before the lower authorities, therefore, appears to be an afterthought. No doubt, investigations were conducted only after the submission of the fax message by the Indian Importer to the Customs authorities. But this perhaps was the method adopted by the Customs for reaching the truth and finding more details about Indian Importers, indulging in this type of imports. Thus having regard to this aspect coupled with the fact that Shri Simon J. Paul and Shri S.K.Bose admitted that they were working at the instance of Shri V.K. Jain and that they had misdeclared the goods and had known that the contents of the imported containers were not the same as declared in the Bill of Entry convinces us in arriving at the conclusion that the goods were misdeclared and such misdeclaration was intentional. In this view of the matter, we hold that the goods were misdeclared and that the misdeclaration was intentional. In the circumstances, we do not see any reason to interfere with the order of the ld. Collector in regard to the confiscation etc. of the goods. We do not see any reason to interfere with the penalty imposed on the firm.