Judgment:
1. The above captioned appeals have been preferred by the appellants against the common Order-in-Original dated 23-11-2000 vide which the Commissioner of Customs had ordered confiscation of their goods, imposed redemption fine and also disallowed drawback, as detailed in the order itself.
2. The appellants sought export of certain consignments of ready-made garments under claim for duty drawback. But on receipt of information, the officers of the Directorate of Revenue Intelligence (in short DRI) detained those consignments for detailed examination while lying in the export shed and awaiting customs clearance. The consignments of appellant No. 1 were examined on 7-1-99 and 12-1-99. While of appellant No. 2 were examined on 18-1-99 and 25-1-99. Similarly, consignments of appellant No. 3 were examined on 14-1-99 and 8-2-99. All the examinations were conducted in the presence of the independent witnesses. The consignments contained garments of various types. The samples were also drawn from the consignments and were shown to Manoj Kumar and Garish Sahni who disclosed that the market value of the garments was much less than the amount of drawback due reflected in the shipping bills, by the appellants. All the appellants were served with show cause notices vide which they were informed that goods are liable to be confiscated under Section 113(d) and 113(i) read with Section 76(1)(b) of the Customs Act. The disallowance of the drawback was also proposed in the show cause notices. After getting their replies and after affording them opportunity of hearing, the Commissioner passed the impugned order, detailed above.
3. The learned Counsel while challenging correctness of the impugned order, has raised twofold contentions. Firstly, that there is no evidence on record to prove that the market value of the impugned goods was far less than the amount of drawback due reflected in the shipping bills. Secondly, even otherwise, the goods could not be confiscated under Section 113(d) and 113(i) of the Customs Act, being not prohibited goods in terms of Section 2(33) of the Customs Act.
Therefore, impugned order, according to the Counsel, deserves to the set aside.
4. On the other hand, the learned SDR, has simply reiterated the correctness of the impugned order of the Commissioner.
6. The impugned goods has been ordered to be confiscated under Section 113(d) and 113(i) of the Customs Act on the ground that their market price, on enquiry, had been found to be far less than the amount of the drawback due reflected in the shipping bills. For coming to the conclusion that the market value of the goods was much less than the amount of the drawback due reflected in the shipping bills, reliance has been placed soley on the testimony of Manoj Kumar of Young Mode Fashion Fvt. Ltd. and Garish Sahni of M/s. Life Time Wears to whom the samples taken from the consignments were shown in the office of DRI at CGO Complex. But the occular testimony of both these witnesses, in our view, being vague and general could not be accepted as gospel truth for arriving at the conclusion that the market value of the goods was much less than the amount of drawback claimed by the appellants in the shipping bills. Both these witnesses have only on eye examination, given market value of the goods. According to the Manoj Kumar, local wholesale and market price of the garments which were lady skirts, tops, blouses was not more than Rs. 18/- per piece and of ladies long dress it was not more than Rs. 40/- per piece. He claimed to had experience of 10 years in the trade of readymade garments. Similarly, Garish Sahni, in his statement, gave the price of lady suits, tops, blouses etc. as not more than Rs. 20/- per piece and of ladies long dress not more than Rs. 45/- per piece. He also claimed to had 8 years experience in the readymade garments. But both of them, in their respective statements, did not state that they had ever purchased on such price, similar garments, from the market. They also did not disclose that at such price they ever exported similar goods. No document whatsoever had been produced by them to corroborate their statements. Therefore, their opinion based on visual examination of the samples regarding market price of the impugned goods could not be blindly accepted without seeking corroboration from the other source.
7. It is not the case of the customs authorities that FOB value of the goods declared in the shipping bills was in any manner exorbitant, excessive or that the goods were not marketable. No adverse findings against the appellants in this regard, had been recorded by the Commissioner. There was thus apparently no misdeclaration of any material facts in the shipping bills by the appellants so as to empower the Commissioner to order confiscation.
8. Apart from this, the confiscation of the goods even if market value of the goods was found to be less than the amount of drawback claimed, could not be ordered under Section 113(d) and 113(i) of the Act, as the goods did not fall within the ambit of prohibited goods.
9. The expression 'prohibited goods' stands defined in Section 2(33) of the Act as under :- "'Prohibited goods' means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with".
Admittedly, the export of the impugned goods was not prohibited under this Act or any other law. The export of the impugned goods was rather permissible and it was sought under the drawback scheme. Therefore, apparently the impugned goods did not fall within the ambit of definition of 'prohibited goods' under Section 2(33) of the Act.
10. Section 76 speaks of prohibition and regulation of drawback in certain cases. This section enacts that no drawback shall be allowed in respect of any goods the market price of which is less than the amount of drawback due thereon. This section nowhere speaks of confiscation of the goods besides disallowing drawback when the value of the goods had been found to be less than the amount of drawback claimed by the exporter. Therefore, the Commissioner in the instant case, after finding that the market value of the impugned goods was less than the amount of drawback claimed, could only disallow the drawback. He could not, under this section, order confiscation of the goods.
11. Similarly, no aid of the provisions of Clause (d)(i) of Section 113 of the Act, could be taken in the instant case by the Commissioner for ordering confiscation of the goods. This section sets out the circumstances under which the goods attempted to be improperly exported shall become liable for confiscation. Clause (d) of this Section, makes the goods liable for confisca- tion when the goods are attempted to be exported or brought within the limits of any customs area, contrary to any prohibition imposed by or under this Act or any other law for the time being in force. There is nothing on record to suggest if the impugned goods were sought to be exported contrary to any prohibition.
The export of the goods was permissible at the relevant time and no prohibition under this Act and no other law for the time being was in force under which the export was not permissible. Therefore, under this Clause (d) the confiscation of the goods could not be ordered.
12. Similarly, under Clause (i) of this Section, the goods became liable for confiscation when these did not correspond in any material particulars, with the entry made under this Act or in the case of baggage, with the declaration made under Section 77 in respect thereof.
There is no material on the record to suggest that the impugned goods did not correspond in any material particulars with the entry made in the shipping bills. The correctness of the FOB value and description of the goods declared in the shipping bills had not been questioned and disputed. Non-rnarketability of the impugned goods had also not been made basis by the Commissioner for confiscating the goods. The confiscation has been ordered by the Commissioner, as is evident from the perusal of the impugned order, solely on the ground that market value of the goods, on enquiry, was found to be far less than the amount of drawback claimed. But it has been fairly conceded by the learned Commissioner in the impugned order that the market value of the goods was not required to be disclosed or declared under any column of the shipping bills and the appellants also did not disclose the market value of the goods in any of the shipping bills. Therefore, no mis-declaration of any material facts in the shipping bills in respect of the goods sought to be exported, could be attributed by the Commissioner, to the appellants, for ordering confiscation of the goods under Clause (i) of Section 113 of the Act. The Commissioner had not invoked the penalty provisions of Section 114 of the Act in the present ad-judication proceedings.
13. In view of the discussions made above, the impugned order of the Commissioner cannot be legally sustained and is ordered to be set aside and the goods are ordered to be released to the appellants in accordance with law. All the appeals of the appellants accordingly stand allowed with consequential relief, permissible under the law.