1. In these appeals the issue involved is common therefore, these are being taken together for decision. Appeal No. C/122/2000 is filed by Surya Udyog Ltd., challenging the order of Commissioner of Customs, Visakhapatnam whereas Appeal No. C/130/2000 is the appeal filed by M/s.
Falcon Marine Exports Ltd., challenging the order of Commissioner of Customs, Visakhapatnam. In both these appeals, the appellants are exporters who filed shipping bills for exporting shrimps. M/s, Surya Udyog in the shipping bill described the product as processed, preserved and frozen headless shrimps of species white shrimp (cultured) Surya brand and M/s. Falcon described the produced as processed, preserved and frozen headless shrimps of species black tiger shrimps (penaeus monodon) (cultured), Indian origin, fresh, frozen, headless shell on white (cultured) and black tiger (cultured) shrimps "typee" and "nice" brands. During examination of the goods of M/s.
Falcon, it was found that out of 650 cartons of the goods, 550 cartons were white shrimps carton and the 100 cartons were black tiger shrimps.
On random examination of 225 master cartons of white shrimps, it appears that the 72 cartons out of the entire consignment declared as cultured white were of sea white category. Similarly, in case of M/s.
Surya Udyog Ltd., out of a consignment of 830 cartons, 148 cartons were found of sea white category as against cultured white as declared in the shipping bill. Accordingly, in both the cases, show cause notices were issued for making false declaration in violation of Section 50(2) of Customs Act with an intention to claim more DEPB benefits than entitled and proposing to confiscate the goods under Section 113(i) of the Customs Act and for taking penal action under Section 114(ii) of the Customs Act, 1962. In case of Falcon Marine Exports, the Commissioner confiscated 72 cartons of the sea white shrimps and pink brown shrimps but allowed final clearances of goods on payment of a fine of Rs. 1 lakh. He also imposed penalty of Rs. 1000/- on M/s.
Falcon Marine. In case of Surya Udyog, the goods were allowed final clearance for export on payment of a fine of Rs. 1.5 lakhs and a penalty of Rs. 1,000/- was also imposed on the exporter.
2. Shri K. Kishore Acharya, Advocate, appeared for the appellants and Smt. Radha Arun, SDR, appeared for the Revenue.
3. The ld. Advocate for the appellants, Shri K. Kishore Acharya pleaded that the samples of the shrimps drawn from consignment were subject to visual identification only by Export Inspection Agency, Chennai and their report clearly says that samples appear to be sea white. However, the Export Inspection Agency opined that complete identification of the species is possible only in the head on - shell on - tail on shrimps.
The shrimps exported in the instant case were headless, therefore, identification report of Export Inspection Agency, Chennai automatically becomes irrelevant to conclusively establish that the impugned shrimps were sourced from the sea. They had produced certificate of MPEDA, Bhubaneswar before the identification report of Export Inspection Agency at Chennai. This report was brushed aside by the adjudicating authority as 'not at all satisfactory explanation' without bringing on record contrary opinion of any other expert on the subject. They relied on the following decisions :-Bay Talkitec Pvt. Ltd. v. CC, Chennai [2003 (156) E.L.T. 980 (Tri. -Chennai)] The impugned order has relied upon the handbook on aqua farming titled as Identification of Cultivable species' as an up-to-date and authentic authority on aquaculture and quoted from the said book that 'colour of the body of cultured white prawns is creamy yellowish with minute spots of red, yellow and black uniformly distributed all over the body,' This was challenged by the ld. Counsel, Kishore Acharya on the ground that this is an incorrect quotation from the handbook, which nowhere explains the word 'cultured' while describing the identifying characters of the white shrimps. On the contrary, the handbook in its introduction at Page 2 thereof makes it clear that the purpose of the handbook is to help aqua-farmers identify and isolate the preferred species of seeds in large quantities from natural resources. This makes it clear that species and characters described in the handbook are of those available in sea and are suitable for cultivation. It is settled law that suspicion, however grave it may be, cannot take the place of legal proof. He relied on a decision of Tribunal in case of CCE v.Jayant Oil Mills [1999 (113) E.L.T. 1025 (Tri.)] and pleaded that an exporter cannot be penalised on the basis of mere suspicion. It was also pleaded that personal opinion of the adjudicating authority cannot be basis of a decision in the course of adjudication of a case and relied on this Tribunal's decision in the case of Liberty Shoes Ltd. v.CCE, New Delhi [1999 (105) E.L.T. 422]. He also relied on the clarification given by Director General of Foreign Trade vide letter No. 01/86/40/ 1541/AM98/DES-V/14/1359, dated 18-6-1998 in reply to the query of the respondents on the subject which states :- "......possibility of such varieties (i.e. Black tiger and white shrimps) coming other than from aquaculture sources was visualized even at that time, but on account of practical difficulties which were faced in the past in drawing distinction between these varieties of shrimps obtained from acqua culture sources and similar shrimps obtained from other sources (such as sea catch), it was consciously decided not to put such a condition which would have been difficult to administer...... It would therefore, appear incorrect to deny the DEPB benefits against this entry merely on the ground that such shrimp varieties could possibly have come from other than aquaculture sources as well." This clarification of DGFT establishes beyond any doubt that minor variation in the body colour of the shrimps is not at all a factor to conclusively determine the source of white shrimps as has been done in the instant case. Shrimps are marine products and seeds are obtained from sea, sorted out in varieties and grown in the ponds under diverse geographical and climatic conditions. Therefore, cultured shrimps are bound to have characteristics of the shrimps of the sea. The possible similarity between the cultured shrimps and sea shrimps cannot establish their source of procurement, since both are from the same origin. Orissa is having long coastline and shrimps are cultured in coastal brackish water and tidal water, which is saline as the seawater. Hence, similarity in colour, if observed, between the cultured and sea shrimps is a natural phenomenon. The declaration in the shipping bill that export goods were cultured shrimps, is as a matter of fact based on the knowledge of the appellants and there is no mis-declaration in it.
5. We have carefully considered the submissions made by both sides. We find that the main issue to be decided in these appeals is whether the impugned consignments of the shrimps being exported by both the appellants were cultured shrimps or the shrimps obtained from sea.
6. We find that the Commissioner in his order has stated that the exporter had given certain markings on the cartons and he interpreted these marking as SW as Sea White shrimps, WC containing mixture of sea white and cultured white shrimps and HLWC containing pink/brown shrimps. We find that for markings on the cartons, M/s. Falcon Marine had given explanation under their letter dated 14-12-1998. According to them the markings indicate the source of procurement of cultured material as they have a number of procurement centers. This is done for internal checkup and control and to trace the source of material in case any quality problem is reported by buyers. This helps them in inspection of material at their centers and for guidance to the growers.
We find that adjudicating authority has brushed aside this explanation on the ground that on examination, goods matched with the sticker on the carton. We find that markings have been interpreted by the Commissioner without any definite evidence.
7. He also relied on the examination report of Export Inspection Agency, Chennai. We find that the examination report of export Inspection Agency, Chennai communicated under their letter No.4(5)/FFP798-99, dated 14-12-1998 is as under :- "The observation of the Panel is reproduced below for your information and necessary action.
The species appears to be of sea white and the scien-tific name of the species is "Penaeus Indicus" The species appears to be of sea white as well as cul-ture white. The scientific name of the species is 'Penaeus Indicus'.
The panel was of firm opinion that the complete identification of the sp'ecies is possible only in the head on - shell on - tail on shrimps." 8. We find that the adjudicating authority has taken a decision on the basis of part of the report of Export Inspection Agency. He has not taken into consideration the clarification given that firm opinion can only be given in the head on - shell on - tail on shrimps. Therefore, reliance on their partial opinion taken into consideration cannot lead to a definite conclusion. It can be only a suspicion that the disputed shrimps are sea white shrimps. The suspicion, however grave it may be, cannot take the place of proof.
9. We also find that the appellants have also produced a certificate from MPEDA, Bhubaneswar certifying that white shrimps (peneaeus indicus) are acquired from different aquaculture sources along the coastline from Orissa. The colour of the species varies from pinkish white to greyish white depending upon the following agro-climatic conditions :- However, this was not taken into consideration by the Commissioner. He, on the contrary, relied on the handbook "Identification of Cultivable Species" published by MPEDA, Kochi. Reliance placed by the adjudicating authority on the characteristics of white prawn given in the handbook on aqua farming titled as 'Identification of Cultivable Species' does not throw any light on the difference between the characteristics of the cultured prawn or prawn obtained from sea. Therefore, there can be a suspicion that the disputed prawns may be from the sea, but it cannot be definitely said that these are not cultured prawns.
10. In these circumstances, the benefit of doubt should go to the appellants. We, therefore, allow both these appeals.