Judgment:
1. The appellants vide Bill of Entry dt.19.10.99 pursuant to contract dt.14.9.99 entered with the foreign supplier imported dry garlic of Chinese origin from Hong Kong at the price USD 365 per MT C&C and declared the same on the Bill of Entry filed for clearance, on OGL under heading 071290. The Custom House, pursuant to clarification dt.17.9.96 by JDGFT, ascertained the moisture content which was found to be 64% by the Custom House Laboratory and therefore, held that the goods under import were not to be considered `Dried Garlic' as declared by the importer; It was not freely importable under heading 07129004 of ITC (HS) and it would fall under 07032000 of the ITC (HS), Aligned EXIM Policy and import thereof is restricted. The value declared also did not appear to be correct, in view of the price of USD 600 per MT CIF at which such goods were cleared at Tuticorin Port. Therefore the goods were held to be liable for confiscation under the provisions of Section 111 (d) and 111(m) readwith Section 3 of Foreign Trade (Development and Regulation) Act, 1992 and value was enhanced to US $ 600. Since the goods had been released, pursuant to an order of Kerala High Court and not available for confiscation, a penalty of Rs.4 lakhs under Section 112 A of the Customs Act, 1962, was levied keeping in View the quantum of redemption fine which could be imposed.
2. We have heard both sides since the matter came up today in a Misc.
Application for modification of Interim Order No.76/2000 dt.20.1.2000.
We take up this matter for final decision, with the consent of both sides, and after considering the grounds made out by the appellants and the cross objections filed by the revenue, since the issue of import of Sum Dry White Garlic of Chinese origin is no longer Res-integra.
3. After considering the matter and the facts sent by the Advocates on record dt.6.3.2001 we find:- a) the question of classification of Sum Dried White Garlic of Chinese Origin also known as `Chinese White' was considered in view of the JDGFT clarification issued on 17.9.99 in the case of M/s .J.B.Impex and Others by the Mumbai Bench of this Tribunal and by Order No.C-11/2562-67/WZB/2000 dt.18.9.2000, the WRB which held that the said communication dt.17.9.99 by DGFT does not state as to how doubt had arisen,nor does it state as to how any question has arisen for issue of clarification and that the Customs authorities also did not state as to whether any question was referred by the appellants or the Customs authorities to the DGFT for interpretation of the policy. All along the case of the appellants was that at the time of entry into contract of import of Dried Garlic, it was a freely importable item, without any limitation regarding moisture content by volume or otherwise; this clarification made on 17.9.99 cannot therefore be treated as an amendment of the Policy in terms of Section 5 of the Foreign Trade Development and Regulation Act, it is for the Central Government to issue the change in Policy and therefore the Custom, authorities act in treating the cases on hand as coming within Section 111 (d) of the Customs Act was wrong in law. It was also held that the action of DGFT authorities in introducing certain conditions in respect of the Dried Garlic by means of a moisture content, putting in a delightfully vague stipulation of 10 percent, is absolutely wrong in law, it held "White Dry Garlic" to be under 07129004 and not restricted. We would follow this decision of the WRB,which was subseq-uently followed in 2000 (127) ELT 176 case of Raisoni Imports and find that the goods under import are classifiable under heading 07129004 and not under 0703200 of ITC (HS).
B) We therefore cannot uphold the order of Commissioner as regards confiscation under Section 111 (d). As regards Valuation we find that the Commissioner has considered the Valuation aspect and has imposed a penalty, since the goods were not available for confiscation. He compared the goods with the one of the nearest ports i.e.Tuticorin and has dis-regarded other material evidence on record. In the case of Eicher Tractors reported in 2000 (122) ELT (321) SC. The Supreme Court, has laid down the law wherein they have stipulated in Para 14 of the reported decision, "14. .....Conversely, if the transaction value can be determined under Rule 4 (1) and does not fall under any of the exceptions in Rule 4 (2), there is no question of determining the value under the subsequent Rules." We therefore would find that this case requires to be re-considered by the Commissioner as regards Valuation and for that purpose, we set aside the order and remand the same to the Commissioner to decide whether the transaction value can be disturbed and whether this case would fall under Section 111(m) of the Customs Act, 1962, rendering the goods liable for confiscation under that Section, even if value is required to be altered and thereafter determine the penalty as per law.
4. In view of our findings, the order is set aside. As regards liability for confiscation under Section 111 (d), of the Customs Act, 1962, appeal is allowed and as regards liability of confiscation under Section 111(m) and thereafter penality under Section 112 of the Customs Act, 1962, the appeal is allowed as Remand for Denovo adjudication.
Appeal disposed of in the above terms.