| SooperKanoon Citation | sooperkanoon.com/1802 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai |
| Decided On | Aug-27-1984 |
| Reported in | (1985)(5)LC1854Tri(Mum.)bai |
| Appellant | Manoharlal T. Punjabi |
| Respondent | Additional Collector of Customs |
2. The brief facts necessary for the disposal of this appeal may be stated as under : The Officers of the Preventive (Intelligence) Unit of the Bombay Customs House searched the premises styled as 'Sainath Motors' on 6th December, 1978 and seized notified goods valued at Rs. 11,063/- and non-notified goods valued at Rs. 15,815/-. The shop Sainath Motors stood in the name of Sort. Bina wife of the appellant Shri M.T. Punjabi. According to the appellants he was looking after the affairs of the shop as Manager. The seized goods consisted of car cassettes, cassette tapes, speakers, stereo and motor parts. As the premises was not notified as a place of storage for notified goods and as the goods were displayed for sale and as some of the goods were imported as baggage of passengers and were cleared under the exemption admissible under the TTC regulations, a show cause notice was issued to the appellant and his wife as to why the seized goods should not be confiscated and why personal penalty should not be imposed on them. In her reply, Smt. Bina stated among other things that she was the owner of the shop but her husband Was doing all the business and he would give all the explanation. The appellant replied stating that the non-notified goods worth Rs. 15,815/- were regularly imported into the country and therefore, they are not liable for confiscation. The appellant explained that he purchased non-notified goods valued at Rs. 12,980/- in the open market and he produced bills for the goods valued at Rs. 8374/- and for the goods valued at Rs. 4606/- he submitted that the bills were not available.
In respect of the remaining goods of the value of Rs. 1,625/- he submitted that they were purchased from the passengers who have cleared them on payment of duty.
As regards the notified goods, the appellants submitted that goods worth Rs. 918/- were covered under Baggage receipt which the passengers cleared on payment of duty and fine. Excepting the goods worth Rs. 850/- the remaining goods he purchased from the passengers who have paid duty. He, however, did not give any explanation in respect of goods valued at Rs. 850/-. He also submitted that all the notified goods were acquired recently for sale and he was making inquiries as to the procedure for notifying them.
The Additional Collector of Customs (Preventive) who held the inquiry released all non-notified goods except the goods valued at Rs. 1625/- covered by passenger's baggage receipt. He, however, ordered absolute confiscation of the entire notified goods under Section 111(p), (d) and (o) of the Customs Act. He also ordered absolute confiscation of the non-notified goods of the value of Rs. 1675/- under Section 111(o) of the Customs Act. He did not impose any personal penalty on Smt. Bina but imposed a personal penalty of Rs. 10,000/- on the appellant. On appeal as stated earlier, the Board confirmed the order passed by the Additional Collector Feeling aggrieved, the appellent preferred a Revision Application before the Central Government which statutorily stood transferred to the Tribunal for being heard as an appeal.
3. During the hearing of the appeal, Shri J.B. Raichaadani, the learned Advocate for the appellant urged the following grounds. The learned Additional Collector was unjustified in ordering the absolute confiscation of the non-notified goods of the value of Rs. 1675/- for violation of the Baggage (Conditions of Exemption) Rules, 1975 (to be hereinafter .referred to as the Rules). He urged that the non-notified goods were available in the market. As a matter of fact the learned Additional Collector had released non-notified goods of the value of Rs. 4606/- even though they were not covered by purchase bills. He contended the Rules do not authorise confiscation of the goods valued at Rs. 1675/- because the passengers who cleared the goods had paid duty and they were not exempted from payment of duty.
4. Out of the goods of the value of Rs. 11,063/- goods valued at Rs. 9,873/- were covered by Customs receipts and they were cleared on payment of duty and as such they cannot be absolutely confiscated.
Further, the goods valued at Rs. 918/- were also covered by Customs receipts and they were cleared on payment of fine and duty and as such they cannot be confiscated. The confiscation, if at all could have been ordered only in respect of the goods valued at Rs. 850/- which were not covered by any bills. It was farther submitted by Shri Raichandani that there were technical breach committed by the appellant in not notifying the place of storage and such a breach did not call for absolute confiscation and imposing of personal penalty of Rs. 10,000/-. He, therefore, prayed that the goods ordered to be confiscated absolutely may be released on payment of fine and the personal penalty may be set aside.
5. Shri Krishan Kumar for the Respondent Collector, however, contended that the order passed by the learned Additional Collector and confirmed by the Board is legal and does not call for any interference. He urged that admittedly the appellant had not notified the place of storage of the notified goods and thus, violated the provisions of Chapter 1V-A.Further, the sale of goods cleared as baggage were subjected to certain restrictions and therefore, the purchase of the non-notified goods of the value of Rs. 1675/- from the person who cleared them on payment of duty became liable for confiscation as import was subject to certain conditions and the sellers have not complied with that direction.
6. Considered the submissions made by both sides. From the order passed by the learned Additional Collector and confirmed by the Board it is clear that the notified goods valued at Rs. 11,063/- were ordered to be absolutely confiscated under Section 111(p), and also under Section 11 l(d) and 11 l(o), and that Non-notified Baggage items valued at Rs. 1675/- were ordered to be confiscated absolutely under Section 111(o).
That a personal penalty of Rs. 10,000/- was imposed under Section 112 of the Act.
7. The reasons given by the Additional Collector for ordering confiscation of the non-notified goods of the value of Rs. 1675/- reads : "A further quantity of Rs. 1675/- has been claimed to be duly duty paid. The passengers are permitted to import specified quantities of bag-I gage items of specified value on payment of duty. The condition at the time I of importation on duty is that such goods should not be sold for a period I of 5 years after the importation or up to such time as the value thereof I does not depreciate to 50% or more. The panel-mama does not indicate I that the goods are old. The baggage recently presented by him covering the baggage items are recently dated. The quantity of baggage items valued at Rs. 1675/-, therefore, is liable to confiscation under Section 111(o)." Thus, it. is seen that the Additional Collector ordered absolute confiscation of the non-notified goods of the value of Rs. 1675/- for violation of the conditions of import. In the show cause notice issued to the appellant, there was no reference to the conditions of the import which were alleged to have been violated by the appellant. On the other hand, it was stated that the goods were imported as passenger's baggage and sold in contravention as Baggage (Conditions of Exemption) Rules, 1975 and therefore, liable for confiscation under Section 111 (o) of the Customs Act. That apart, the learned Additional Collector did not record a definite finding as to whether the goods became Jivtble for confiscation because the same was before the expiry of the period of 5 years or on account of the value of the goods having not depreciated to 50%. Before ordering absolute confiscation, the adjudicating authority was required to record a clear finding as to the conditions violated. The reasons such as that panchnama does not indicate that the goods are old that the baggage receipts are recently dated are wholly insufficient to arrive at a conclusion that the value of the goods did not depreciate to 50% at the time of sale or purchase.
Further, the confiscation was ordered for non-compliance of the condition of import. But then, the law did not permit absolute confiscation when the violation was only non-compliance of the conditions of import. Non-compliance was a post-import act. or an act which took place subsequent to the import. The import was valid. It was not prohibited. Section 125 of the Customs Act requires an adjudicating authority to grant option to the owner of the goods to pay in lieu of confiscation such fine as the officers think lit in the case of goods the importation of which is not prohibited under the Act or under any other law for the time being in force. As has been stated earlier, the import of the non-notified goods of the value of Rs.. 1.675/- was not prohibited either under the Customs Act or under the I.T.C. As a matter of fact, the Baggage Exemption Rules and the Import Trade Control Order did permit the import but subjected to certain conditions and the conditions were to be fulfilled, after the import. In the said circumstances, the learned Additional Collector committed an, error in ordering absolute confiscation of the non-notified goods of the value of Rs. 1675/-. He ought to have given an option to the appellants to pay in lieu of confiscation such fines as he thought fit. The Board apparently overlooked this aspect of the case. Therefore, I set aside the order of absolute confiscation of the non-notified goods of the value of Rs. 1675/-. As has been noticed earlier, the finding of the Additional Collector was also vague as to whether the conditions violated was the period or as to the depreciated value. Further, even when the appellant had not produced receipts for the goods valued at Rs. 4,606/- of similar nature, the Additional Collector had directed release on the ground that such goods are very well available in the market and there was no restriction for the purchase. In the said circumstances, I direct release of the non-notified goods of the value of Rs. 1675/- unconditionaly.
8. Now coming to the notified goods, the confiscation was ordered under Section 111 (p) mainly and (d) (o) of the Customs Act. The relevant provisions read : "(p) any notified goods in relation to which any provisions of Chapter IV-A or of any rule made under this Act for carrying out the purpose of that Chapter have been contravened ; (d) any goods which are imported or attempted to be imported or are brought within the Indian customs water for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force ; (o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer." 9. The reasons given by the Additional Collector for ordering absolute confiscation of the notified goods read : "Goods valued at Rs. 11,063/- (cif) under seizure are notified items. It has been admitted by M/s. Sainath Motors that the goods were acquired for sale by M/s. Sainath Motors. A claim was made at the time of personal hearing that M/s. Sainath Motors were aware of the fact that the goods were notified and that they were exploring the methodology by which they could get themselves notified. It was also claimed that the goods were recently acquired and that, they have had no time to get themselves notified. The defence is weak at its best and I have no hesitation to reject this contention. I hold that the notified goods under seizure are liable to confiscation under Section 111(p) of the Act. Out of these goods, goods valued at Rs. 9,873/- are imported on payment of duty only. These goods are, therefore, liable to confiscation under Section 11 l(o) also. In the case of goods valued at Rs. 850/- no receipts have been tendered.
These goods are, therefore, liable to confiscation under Section 11 l(d) also." 10. Now, so far as the goods valued at Rs. 850/- are concerned, the appellant did not produce any receipt showing licit import. The appellant also did not contend that they are not goods of foreign origin. In the said circumstances, the order passed by the learned Additional Collector cannot be successfully challenged. But then in respect of the remaining goods of the value of Rs. 9,875/- they were yalidly imported because they were covered by duty paid receipts. Even according to the Collector, they became liable, firstly, for non-compliance of the provisions of Chapter IV-A and secondly, because of the non-fulfilment of the conditions of import. The order of the Additional Collector nowhere indicates which are the conditions of import which were not fulfilled by the appellant. Even if the goods became liable to confiscation for violation of the provisions of Chapter 1V-A and Clause (o) of Section 111 of the Customs Act, the Additional Collector could not order absolute confiscation because Section 125 required him to give an option to the owner to pay in lieu of confiscation such fine as he thought fit in the case of goods the importation of which was not prohibited under the Act or under any other law for the time being in force. The Collector did not record a finding that the importation of goods valued at Rs. 9,873/- was prohibited under the Customs Act or under any other law for the time being in force. Therefore, he was duty bound to give an option to the owner to pay in lieu of confiscation such fine as he thought fit to impose. The Board also overlooked this aspect. 1, therefore, set aside the absolute confiscation of the notified goods of the value of Rs. 9,873/-. Since the appellant had admittedly not complied with the requirements of provisions of Chapter IV-A and having regard to the object behind the introduction of Chapter IV-A, I direct release of the notified goods of the value of Rs. 9,873/- on payment of fine of Rs. 9,873/-.
11. The only other aspect that remained for consideration is about the penally of Rs. 10,000/- imposed on the appellant. The appellant had not indulged in the activity of smuggling. Excepting the goods valued at Rs. 850/-, all the other goods were validly imported in that they were either exempted from payment of duty or duty had been paid. In other words, they are not smuggled goods. No doubt, there was breach of the provisions of Chapter IV-A but that did not call for imposition of a penalty of Rs. 10,000/- I, therefore, reduce the penalty to Rs. 2.000/- (Two thousand only). In the result, this appeal is allowed, in part.
The non-notified goods valued at Rs. 1675/- shall be released to the appellant unconditionally.
12. The notified goods of the value of Rs. 9,873/- which were imported on payment of duty shall also be released to the appellant on payment of fine of Rs. 9,873/-.
14. In other respects, the order of the Additional Collector confirmed by the Board is hereby confirmed.
15. The appellant shall be granted the consequential relief within three months from the date of communication of this order.