1.The present appeal is against the order passed by the Commissioner of Customs, Calcutta vide which he has confiscated consignment of goods imported by the appellants on the ground that the same were not the goods declared in the bills of entry and air way bill filed by the appellants under section 111(m) and 111(o) of the Customs act, 1962. He has however given liberty in the appellants to redeem the goods upon payment of redemption fine of Rs.5 crores and to either clear the goods for home consumption upon payment of customs duty or to re-ship the goods to the supplier without payment of customs duty. Apart from above personal penalty of Rs.3 crores have also been imposed upon the appellants under the provision of section 112(a) of the Customs Act.
2.2 The appellants had ordered for a consignment of Information Technology Software of a specified kind for use in Telephone Exchanges under the Department of Telecom, Govt.of India. The appellant had been supplying Electronic Digital Switching System(EWSD) to the Ministry of Communications, Department of Telecommunications, Govt.of India, New Delhi, against orders received on acceptance of the appellants' tenders since 1993. The subject Software was required for being used in the said system.
2.3 As per the appellants, the goods ordered by the appellant, i.e., APS Software (Information Technology Software) loaded in CD ROM (Computer Disc Read Only Memory) were air freighted in 18 packages from Frankfurt vide flight No.BA 143 dt.27.2.99 Rot No.676/99 Line No.25 against Airway Bill No.125-0608/6075 dt.24.2.99 HAWB No.FCS 96604 259 dt 24.2.99. The weight of 18 packages containing the ordered goods was shown as gross 90 Kgs.. The goods shipped were covered by 18 invoices numbering 3406-5791 to 3406-5808, all dt.23.2.99. The description of the goods given in the invoices read as Information Technology Software and their total value declared was DM 4556379.88 CIF.2.4 Upon the goods arriving at the Calcutta airport, the appellant filed the Bill of Entry for home consumption in respect of the said goods. The description of the goods stated in the bill of entry was "Information Technology Software", on the basis of invoice description.
The total value thereof as per invoice was also declared in the bill of entry to be DM 4556379.88 CIF. The goods were classified under tariff sub-heading 8524.99 of the Customs Tariff. The appellant claimed duty exemption on the said goods in terms of Notfn.20.99-CUS dt.28.2.99, Serial No.231.
2.5 However, the clearance of the goods was withheld by the Directorate of Revenue Intelligence (DRI) on alleged suspicion as to the true nature of the contents of the import packages. According to the DRI, the goods were not Information Technology Software but were actually simple documents.
2.6 Thereafter, the DRI authorities conducted enquiry in the course of which the appellant's officers were summoned and their statements were recorded under section 108 of the said act. During the course of such recording of the statements and also otherwise the DRI authorities made it clear to the appellant's officers concerned that the subject consignment did not contain the goods as described in the bill of entry, invoices and the other relevant shipping documents. In the premises, the appellant, by a facsimile dt.10th May 1999 informed Siemens A.G., the foreign supplier, that it was abandoning the goods in question and would not be responsible or liable in any manner whatsoever in respect of the same. In the said facsimile message the appellant further informed Siemens A.G. that it was arranging return of the relevant invoices issued by Siemens through its bankers. It was further made clear that the loss in revenue arising due to the above would be that of Siemens A.G..
2.7 Thereafter, on 11th May 1999, Siemens AG, Germany by a facsimile message to the commissioner of customs and the Directorate of Revenue Intelligence referring to the appellant's aforesaid communication that the goods sent against invoices dt. 23rd February 1999 did not allegedly contain APS Software as was ordered by the appellant and that the appellant had allegedly decided to abandon the goods, requested permission for re-export of the goods back to Germany.
2.8 Thereafter, the appellant returned the subject invoices to Siemens AG, Germany and no payment was effected in respect of the subject consignment. The foreign supplier thereafter supplied the ordered goods, i.e. Information Technology Software (APS Software) loaded with CD ROM against the appellant's original order which were duly allowed clearance upon the appellant's filing bill of entry therefor by the customs authorities at Calcutta between 18.8.99 and 14.9.99.
2.9 Subsequently the appellants were issued a show cause notice dt.25.10.99 alleging contravention of provision of Customs Act, 1962 and proposing to confirm demand of duty of customs against the appellants as also the confiscation of the goods and imposition of penalty upon them. The said show cause notice, after the adjudication, culminated into the impugned order, passed by the Commissioner.
3. Dr.Samir Chakraborty, ld.adv. appearing for the appellant assailed the above order of the Commissioner on the ground that though the adjudicating authority has allowed re-export of the goods, he had no jurisdiction or power to impose any redemption fine or penalty upon them. In support of his above contention he relies upon the following decisions.
3.2 The ld.adv. argues that as per section 125(1) of the Customs Act, 1962 no redemption fine could be paid on imported goods allowed to be reexported. Therefore, it follows that such goods are not liable to be confisfcated as once the goods are confiscated they can be allowed to be set free only upon payment of redemption fine in terms of the said section.
3.3 The ld.adv. submits that the Commissioner has erred in law as well as on facts in imposing the penalty on the appellant under section 112(a) ibid. The purported finding of the Commissioner is that the appellant had intended to clear the said goods by misdeclaring the same as Information Technology Software and claiming exemption from duty not entitled, is wholly erroneous and contrary to the materials on record.
The relevant records including those detailed in show cause notice and in the order impugned would show that the appellant had at no point of time access to the said goods to ascertain whether or not the packages containing the said goods contained the goods ordered for by the appellant. Ld.adv. is quite emphatic that the appellant had placed the order for Information Technology Software (APS Software) with foreign supplier. The relevant records including those relied upon by the department themselves in issuing the show cause notice and passing the said order would also show that there is nothing on record to establish that the appellant had ordered for some other material in the garb of APS Software. Evidence on record, submits the ld.adv., clearly goes to show that the foreign supplier had informed the appellant in all relevant material documents that the goods shippied were as per the appellant's order and were APS Software ordered for by the appellant.
He submits that it is on the basis of these documents that the appellant had filed the bill of entry in question on 1st March, 1999 declaring the said goods as Information Technology Software. In fact, a specific query raised by the Group Appraiser and the Asst.Commr.
concerned, the appellant furnished all the necessary documents and technical literature regarding Software ordered for. It is also on record that a doubt is being raised by the DRI/Customs authorities that the goods in question were not as described by the said bill of entry, the appellant sought clarification from the foreign supplier who issued a certificate on 24.9.1999 that the goods under import were software related items. This certificate was submitted by the appellant to the customs authorities. The ld.adv. argues that the appellant, therefore, had no occasion to inspect the subject goods to find out whether or not the said goods were as per the claim of the foreign supplier and as contained in the document/certificate issued by them. It is also clear from the records, submits the ld.adv., that as soon as the appellant became convinced that the goods were those which were not ordered for by the appellant, upon detention order passed by the DRI authorities on 29.4.1999, the appellant informed the foreign supplier as well as customs authorities about the abandonment of the said goods and sought explanation from the foreign supplier for omission or commission on their part. It is also on record that the said consignment was opened and examined by the DRI officers on 29.4.1999. As such, the appellant cannot be alleged to have been involved in any manner with the importation of wrong goods by misdeclaring the same in any manner whatsoever. He, therefore, argues that the circumstances as explained above, it is wholly erroneous on the part of the Commissioner to hold that the appellant had furnished false documentary evidence in support of their claim about the contents of the imported packages. It was wrong on the part of the Commissioner to have rejected the appellant's contention that the mistake is at the supplier's end.
3.4 The ld.adv. pleads that the finding of the Commissioner that the appellant's decision to abandon the said goods was an afterthought or an attempt to evade customs duty and benefit under section 23(2) ibid was not available, is legally not tenable. Section 23(2) ibid enables the owner of the imported goods who relinquishes his title to the goods "at any time before an order for clearance of goods for home consumption under section 47 or order permitting the deposit of goods in a warehouse under section 60 has been made" whereupon he shall not be liable to pay duty payable on the said goods. In the instant case, submits the ld.adv., that it is an admitted fact that no such order for clearance of the said goods for home consumption under section 47 or an order for permitting the deposit of the goods under section 60 ibid had been passed prior to the appellant relinquishing its title to the said goods. He further pleads the purported finding that the appellant's decision to abandon the said goods was an afterthought or after alleging an attempt to evade duty was detected by the department, was also baseless and devoid of any merit whatsoever. It would not be possible for the appellant to relinquish its title unless the appellant had physically examined the same. There is no material on record to demonstrate that at any point of time, prior to the inspection of the said goods by the DRI/customs authorities and they intimating the appellant that the goods which had arrived were not goods described in the bill of entry under the relevant document, was the appellant aware of there being a possibility of the imported goods not conforming to that ordered by the appellant. He submits that, as explained earlier, the appellant sought and obtained clarification from the foreign supplier who still insisted that the goods were Information technology Software related products and issued a certificate dt.24.9.99 to that effect which certificate the appellant duly submitted to the customs authorities. However, since the DRI/customs authorities continued to insist that the said goods do not conform to the description given in the B/E and upon being satisfied that the import consignment was not the goods ordered for by the appellant, the appellant duly relinquished its title to the said goods. He, therefore, argues that the finding of the Commissioner that the appellant's decision to abandon the said goods is with the attempt to evade customs duty is also misconceived and untenable.
3.5 In view of the foregoing submissions Dr.Chakraborty prays for setting aside the impugned order and allowing the appeal with consequential relief to the appellants.
4. We have also heard Shri V.K.Chaturvedi, ld.SDR appearing for the Revenue, who adopts the reasoning contained in the impugned order and prays for rejection of the appeal.
5. We have heard the submissions made from both the sides. During the course of the arguments the ld.adv. appearing for the appellant made it clear that the appellants have opted for re-export of the goods.
Accordingly they have challenged the order of the Commissioner imposing a redemption fine and penalty for the said re-export, which according to the appellants is not permissible to be imposed in view of the various case laws relied upon by them. It is seen that in the case of Siemens Ltd.v. CC-1999(113)ELT 776(SC), their Lordships have held that since goods have been allowed to be re-exported, neither redemption fine nor duty was required to be paid. The Tribunal in the case of HCL Hewlett Packard Ltd.-1997(92)ELT 367(T) has held that no redemption fine is imposable when re-export of the goods is allowed. To the same effect is the decision of the Tribunal in the case of Padia Sales Corpn.v.CC-1992(61)ELT 90 and in the case of Skantrons (P) Ltd.-1994(70)ELT 635. We further find that the Tribunal in the case of G.V.International and another-2000(39)RLT 272, following the earlier decisions of the Tribunal, has set aside the orders passed by the lower authorities ordering confiscation of goods and their release on payment of redemption fine and penalty. Further in the case of Commissioner of Customs, Calcutta v.J.V.(P) Ltd.-2000(39)RLT 1074, the order of the lower authorities allowing re-export of the goods without fine and penalty was upheld.6. As discussed above the issue is squarely covered in favour of the appellants by the various decisions of the Tribunal and the Hon'ble Supreme Court. Inasmuch as the Commissioner vide his impugned order has given an option to the appellants to re-ship the goods back to the supplier, we hold that the redemption fine and the penalty imposed by him was not justified. We accordingly set aside the same and allow re-export of the consignment in question without any redemption fine or penalty or duty. Appeal is thus allowed in above terms.