"Synthetic waste is an Appx. 2 item for which no valid ITC licence has been produced. Though the value declared in the invoice could be accepted as the correct value for Synthetic waste, the rate of duty applicable for Synthetic Waste is 150% + 30% + Rs. 30/- per Kg. + Rs. 11.25 per Kg. Thus the duty that would have been evaded is more than Rs. 9,52,785.50 as shown in the show cause notice.
In the circumstances, the goods are liable for confiscation under Section lll(d) of the Customs Act, 1962 read with Section 3(2) of the Imports & Exports (Central) Act, 1947 and the importers are liable for penal action under Section 112(a) of the Customs Act, 1962.
I, therefore, order absolute confiscation of the offending goods under Section lll(d) & 119 of the Customs Act, 1962 read with Section 3(2) of the Imports & Exports (Central) Act, 1947. As no B/E has been filed and no person has come forward to clear the goods, I also order that goods be disposed of after keeping representative samples. I also impose a penalty of Rs. 1,00,000/- only (Rupees one lakh only) on importers M/s. Kiran Combers & Spinners, Ludhiana under Section 112(a) of the Customs Act, 1962." 2. Being aggrieved by the above order, the Appellants have filed the captioned appeal before us.
3. The facts leading to the appeal are that scrutiny of the BPT sale List UC. No. CHY 602 20th March, 1986, a lot of wool waste was noticed by the staff of the SIIB. Since the product was originally meant for transhipment to ICD, New Delhi, was figuring in the BPT Sale list, the lot was withdrawn and taken up for investigations. Inspection of the lot revealed that majority of the bales were of synthetic material as against wool waste declared in the IGM No. 2193 at Item No. SMTP/3.
4. Enquiries with the Shipping Agent revealed that the cargo was meant for ICD New Delhi, but some time in October, 1985, the Importers approached them to amend the IGM so as to enable them to clear the cargo at Bombay instead of at ICD Delhi. The IGM was accordingly amended. The Importers were summoned to Bombay, but they did not respond. The office premises of the importer was searched on 5-12-1986 and certain import documents pertaining to the consignment were taken over. The Statement of Shri Rakesh Kumar, partner of the firm was also recorded, who stated that he got a telephonic intimation from the Suppliers, M/s. Mainz & Co., Bradford immediately after the bill was retired, that they had made wrong shipment. He further stated that he was not aware of the actual content of the goods. The invoice No. INV 7337/8A, dated 5-8-1985 of M/s. Mainz & Co. Ltd. indicated that 48 bales of 22288 KGs wool waste, white coloured soft waste (Wool content Minimum 70%) at the rate of Pounds 0.85 per KG was supplied. The Certificate of origin and the insurance certificate also indicated the shipment of 48 bales wool waste. Investigations also revealed that the documents came through United Commercial Bank; that the United Commercial Bank had sent an intimation dated 7-9-1985 to M/s. Kiran Combers & Spinners, the present Appellants; that the documents were retired in September, 1985; that the value of the consignment was Rs. 3,15,563.23. It was also found that there was no Letter of Credit in this case and that the documents were received on collection basis.
5. No Bill of Entry was filed by the Importers. The consignment was, therefore, examined on 12-1-1987 under a Panchnama. It was found that out of 48 bales, only 5 bales contained wool waste and the remaining 43 bales contained Synthetic fibre (Acrylic fibre). Representative samples were drawn and sent to the Deputy Chief Chemist for testing. Test reports indicated that in the 5 bales, the imported goods were wool waste whereas the sample for 43 bales showed that it was White Fibrous mass, composed of all acrylic fibre. Import of Acrylic fibre is permissible to actual users under OGL. However, the Policy 1985-88 in 1 lth condition of Appendix 6 required that the actual user/importer should register their contract for import with the Textile Commissioner, Bombay prior to the import. In this case, it was observed that the Importer was not an actual user and that no contract was registered. In the circumstances, the import of the product was not permissible under OGL and a specific licence was required. The said Policy places wool waste in Appendix 2 and the import thereof required valid licence. The lower authorities, after considering the submissions made by the Importer, confiscated the imported goods and also imposed a penalty of Rs. 1.00 lakh.
6. Shri Hari Om Arora, the ld. Advocate appearing for the Importers, submitted that immediately after the documents were retired, they received an intimation from the Suppliers that some other goods were supplied by them by mistake; that because of this intimation, they did not file any document for clearance of the goods. It was also argued on their behalf that they had not committed any offence. They pointed out that the Supplier had informed them that synthetic waste was shipped in some bales. They, therefore, requested for drawal of samples afresh and also for cross-examination of the persons who witnessed the examination of the goods.
7. The ld. Counsel for the appellant submitted that normally 10% of the packages are examined. But in the instant case, samples were drawn only from two packages and sent for chemical tests. It was submitted by the ld. Counsel that the goods were not Acrylic Fibre, but were synthetic waste. The Deputy Chief Chemist tested the samples and opined that the samples taken out of 5 bales was that of wool waste and the samples taken out of the bales numbering 43 it was synthetic waste. The ld.Counsel submitted that the show cause notice described the goods as Acrylic Fibre. However, the Deputy Chief Chemist's report indicated that some of the goods were not acrylic fibre, but synthetic waste. The main emphasis of the ld. Counsel for the Appellant was that they had not filed the Bill of Entry and, therefore, the question of making wrong declaration, written or otherwise, does not arise. He submitted that since the goods were wrongly sent by the foreign supplier, they were not at fault and that since the goods were not in accordance with their negotiations, they had rightly rejected the goods and rightly did not file the Bill of Entry for clearance of the goods. The ld. Counsel, therefore, submitted that alternative plea was taken before the ld.Collector of Customs for allowing them to re-ship the goods to the foreign Supplier, but the same was not admitted. In support of his contention, the ld. Counsel cited and relied upon the decision of this Tribunal in the case of Amba Woollen Mills and Anr. [1998 (99) E.L.T.353]. The ld. Counsel also relied upon the decision of this Tribunal in the case of Mehra Spinning Mills [1990 (49) E.L.T. 576] and the decision in the case of Uma Textiles [1990 (48) E.L.T. 433]. He submitted that in view of the above submissions and the case law cited and relied upon, the Appeal may be allowed.
8. Countering the arguments of the ld. Counsel, Shri P.K. Jain, the ld.SDR, submitted that the import of the goods required a licence as has been brought out clearly in the impugned order and since the Appellant did not have a licence, therefore, the goods were liable to confiscation. He submitted that the plea of the Appellant that they had not filed the Bill of Entry and, therefore, there was no mis-declaration. The ld. DR submitted that the facts of the case clearly show that the appellants had imported the goods and wanted to clear the same as Wool waste and that the 5 bales of wool waste were kept in the front only to hide the 43 bales of synthetic waste. He submitted that the Importer requested that an amendment to the IGM which showed that they knew that the goods had come. It was also submitted that the Appellants had retired the documents against payment because there was no LOC arranged by the Indian Importer and the goods were supplied against collection.
9. The ld. DR submitted that the contention of the Appellant that he had telephonically got message from the foreign supplier that there was a mix-up and a part of synthetic waste has been exported instead of wool waste. The ld. DR submitted that if there was an intimation, they should have immediately informed the Customs which they did not do for sufficiently long time and started corresponding only in 1987 though the goods had arrived in September, 1985 and documents were also retired in September 1985. He submitted that this clearly shows that the Appellant knew the contents of the consignment and wanted to clear the goods. He submitted that the goods were imported in violation of the Import Trade Control Order and also the provisions of the Customs Act and, therefore, the lower authorities have rightly confiscated them and imposed penalty.
10. Heard the submissions of both sides. On perusal of the case law cited and relied upon by the ld. Counsel, we find that in the case of M/s. Uma Textiles, the goods were found to be not according to the order placed and the goods were examined only after the fact of mix-up of goods was made known by the Importer to the Department. In the instant case, we find that the Appellant could not place on record any negotiations or order placed for the goods. Further, the Appellant did not inform the Customs Authorities about the mix-up in the consignment, though according to them, they had been telephonically intimated by the foreign Supplier about the mix-up some time in September, 1985. Hence the facts in these two cases are quite different.
11. Insofar as the case law in the case of M/s. Mehra Spinning Mills, relied upon by the Appellant, is concerned, the facts were that the Appellants did not claim the goods nor made any payment. In the instant case, though the Appellants had stated that they had not claimed the goods, but the fact remains that the payment was made and the IGM has been got amended in October, 1985, though the Appellant, according to his own admission, had retired the documents in September, 1985 and had been informed by his Foreign Supplier that there was a mix-up in the goods exported. Thus the facts in these two cases are different and the ratio of the judgment cited cannot be applied to the present case.
12. We note that in the case of M/s. Amba Woollen Mills and Anr. relied upon by the Appellant, the facts were that the Indian Importer had refused the goods and informed the Foreign Supplier as well as their banker. In the instant case, the position is quite different. Documents were retired from the Bank after making payment. Also there was no indication to prove that the order was placed only for wool waste. Here also the facts in the two cases are different.
13. The main thrust of the arguments of the ld. Counsel for the Appellant was that there was no declaration and since there was no declaration, they cannot be charged with mis-declaration. We have perused the evidence of the Bankers. We have also perused the statement of the Steamer Agent. We note that the documents were retired after making payment. We also note that the Steamer Agent had stated that the Importer applied for amendment of the IGM and the transhipment formalities were not done. We also note that immediately after retirement of the documents, according to the admission of the Appellant, they were informed by their foreign supplier that there was a mix-up in the goods exported by them. We also note that the Appellants have not intimated the Customs about this fact for a long time/but that the Appellants have got the IGM amended in October 1985 itself. Thus, there was an intention on the part of the Appellant to defraud the Government.
14. The other point that was argued before us was that when the show cause notice alleged that the goods were Acrylic Fibre and the goods on second examination were found to be synthetic waste, they were not put to notice on these. We have perused the various submissions made before the lower authorities and we note that both sides agreed and admitted that it was not acrylic fibre, but synthetic waste (Acrylic waste).
Since admittedly the goods were synthetic waste, therefore, the contention of the appellant that they were not put to notice falls through.
15. We also note that import of Synthetic waste needed a specific licence as has been observed by the ld. Collector in the impugned order. The goods were found to be imported without a licence, therefore, we hold that the goods were liable to confiscation. We also hold that the appellants are liable to imposition of penalty. In this view of the matter, the goods have been rightly confiscated and penalty has been rightly imposed.
16. In view of the above findings, we uphold the impugned order. We do not find any legal infirmity or factual mistake in the impugned order and the same is upheld. The confiscation is upheld and the penalty is also sustained. The appeal is, therefore, rejected.