Hari Jot Industries Vs. Cc, New Delhi - Court Judgment

Excerpt:
2. the appellants are manufactured and exporters of bicycle parts. they filed shipping bill dated 12.10.2000 for export of bicycle parts namely, handle stem and seat under a claim of drawback. the fob value of seat stay (1,26,000 pieces) was declared in the shipping bill as rs.10,01,170.80 and a total drawback of duty of rs.3,84,300 was claimed thereon. on examination of the goods, it was discovered that the goods declared as 'seat stay' under dbk serial no. 87.111 were really 'seat fittings' falling under dbk serial no. 87.116, for which drawback was admissible only @ 5% of fob value, amounting to rs. 50,058.54. the customs authorities alleged that the appellants had mis-declared seat fittings as 'seat stay' for claiming drawback at higher rate than what was admissible. they, further, held the goods to be "prohibited goods" under section 2(33) of the customs act and to be liable to confiscation under clauses (h) and (i) of section 113 of the act. they also maintained that the appellants had rendered themselves liable to penalty under section 114 of the act. upon being informed of this position, the appellants waived show-cause notice and pleaded for sympathetic consideration of their case, in their letter dated 6.11.2000 submitted to the deputy commissioner of customs. in that letter, the appellants admitted that, due to a mistake on the part of their packing labourers, the seat fittings (which were meant for some other foreign buyers) happened to be packed, instead of seat stay, for purpose of export under the above shipping bill. the appellants, in that letter, also requested the dy. commissioner to allow them to amend the shipping bill or, in the alternative, to permit them to withdraw the entire lot. subsequently, as requested by the party, the jurisdictional commissioner of customs gave a personal hearing to the appellants and thereafter passed order dated 23.11.2000 confiscating the goods under section 113 (h) and (i) of the customs act, with option to the party to redeem the same on payment of a fine of rs.15 lakhs, and imposing on them a penalty of rs.50,000/- under section 114 of the act. hence the present appeal.4. ld. advocate, sh. v.k.gupta submitted that clauses (h) and (i) of section 113 of the customs act were not applicable to the appellants goods in question, that the commissioner did not consider the appellant's request for permission to amend the shipping bill or alternatively to withdraw the entire lot, that since the goods were not liable to confiscation in terms of the aforesaid provisions of section 113 of the act, there was no reason for imposition of any penalty on the appellants under section 114 of the act and that, at any rate, the quanta of redemption fine and penalty were very much on the higher side. in support of his argument that clauses (i) of section 113 was not applicable to the goods in question, ld. counsel cited the decision of the calcutta high court in the case of anita international vs.collector of customs [1993 (65) elt 201 (cal.)]. he also relied on the tribunal's decision in the case of united timber industries vs.commissioner of customs [1999 (107) elt 704] in support of the contention that since the impugned goods, whether described as seat stay or as seat fittings, were not prohibited for export, the mere fact of mis-declaration would not render them liable to confiscation. ld.advocate, therefore, prayed for setting aside the impugned order and allowing the appeal.5. ld. jdr, sh. s. kumar reiterated the findings of the adjudicating authority and prayed for rejecting the appeal.6. i have carefully examined the submissions. it is not disputed that the appellants mis-declared seat fittings as 'seat stay' in their shipping bill. but the question before me is whether such mis-declaration would render the goods liable to confiscation in terms of clauses (h) and (i) of section 113 of the customs act. the appellants case is that the goods were neither dutiable nor prohibited and hence not liable to confiscation in terms of clause (h) or (i) of section 113 ibid. the commissioner has not recorded any finding on this aspect. what appears from the impugned order is that the adjudicating authority considered the goods to be liable to confiscation under section 113 (h) and (i) by the mere reason of mis-declaration admitted by the party. this appears to be against the case law stated by the calcutta high court in anita international (supra), wherein it was held that the goods would not be liable to confiscation under clause (i) of section 113 of the customs act, it they were neither dutiable nor prohibited. it was without examining the question whether the goods were dutiable or prohibited that the commissioner held them liable to confiscation under section 113 (h) and (i). it is further noted that the appellants had requested the customs authorities to permit them either to and the shipping bill or to withdraw the entire lot. the adjudicating authority did not entertain this request.7. in the light of the findings recorded above, i observe that this is a fit case for remand. accordingly, i set aside the impugned order and allow the appeal by way of remand, directing the commissioner to apply his mind to all the submissions of the party and pass a speaking order, after affording an opportunity of personal hearing to them.

Judgment:
2. The appellants are manufactured and exporters of bicycle parts. They filed shipping Bill dated 12.10.2000 for export of bicycle parts namely, Handle Stem and Seat under a claim of drawback. The FOB value of Seat Stay (1,26,000 pieces) was declared in the Shipping Bill as Rs.10,01,170.80 and a total drawback of duty of Rs.3,84,300 was claimed thereon. On examination of the goods, it was discovered that the goods declared as 'Seat Stay' under DBK Serial No. 87.111 were really 'Seat Fittings' falling under DBK Serial No. 87.116, for which drawback was admissible only @ 5% of FOB value, amounting to Rs. 50,058.54. The Customs authorities alleged that the appellants had mis-declared Seat Fittings as 'Seat Stay' for claiming drawback at higher rate than what was admissible. They, further, held the goods to be "prohibited goods" under Section 2(33) of the Customs Act and to be liable to confiscation under Clauses (h) and (i) of Section 113 of the Act. They also maintained that the appellants had rendered themselves liable to penalty under Section 114 of the Act. Upon being informed of this position, the appellants waived show-cause notice and pleaded for sympathetic consideration of their case, in their letter dated 6.11.2000 submitted to the Deputy Commissioner of Customs. In that letter, the appellants admitted that, due to a mistake on the part of their packing labourers, the Seat fittings (which were meant for some other foreign buyers) happened to be packed, instead of Seat Stay, for purpose of export under the above Shipping Bill. The appellants, in that letter, also requested the Dy. Commissioner to allow them to amend the Shipping Bill or, in the alternative, to permit them to withdraw the entire lot. Subsequently, as requested by the party, the jurisdictional commissioner of Customs gave a personal hearing to the appellants and thereafter passed order dated 23.11.2000 confiscating the goods under Section 113 (h) and (i) of the Customs Act, with option to the party to redeem the same on payment of a fine of Rs.15 lakhs, and imposing on them a penalty of Rs.50,000/- under Section 114 of the Act. Hence the present appeal.

4. Ld. Advocate, Sh. V.K.Gupta submitted that clauses (h) and (i) of Section 113 of the Customs Act were not applicable to the appellants goods in question, that the Commissioner did not consider the appellant's request for permission to amend the Shipping Bill or alternatively to withdraw the entire lot, that since the goods were not liable to confiscation in terms of the aforesaid provisions of Section 113 of the Act, there was no reason for imposition of any penalty on the appellants under Section 114 of the Act and that, at any rate, the quanta of redemption fine and penalty were very much on the higher side. In support of his argument that clauses (i) of Section 113 was not applicable to the goods in question, ld. Counsel cited the decision of the Calcutta High Court in the case of Anita International Vs.

Collector of Customs [1993 (65) ELT 201 (cal.)]. He also relied on the Tribunal's decision in the case of United Timber industries Vs.

Commissioner of Customs [1999 (107) ELT 704] in support of the contention that since the impugned goods, whether described as Seat Stay or as Seat Fittings, were not prohibited for export, the mere fact of mis-declaration would not render them liable to confiscation. Ld.

Advocate, therefore, prayed for setting aside the impugned order and allowing the appeal.

5. Ld. JDR, Sh. S. Kumar reiterated the findings of the adjudicating authority and prayed for rejecting the appeal.

6. I have carefully examined the submissions. It is not disputed that the appellants mis-declared Seat Fittings as 'Seat Stay' in their Shipping Bill. But the question before me is whether such mis-declaration would render the goods liable to confiscation in terms of clauses (h) and (i) of Section 113 of the Customs Act. The appellants case is that the goods were neither dutiable nor prohibited and hence not liable to confiscation in terms of clause (h) or (i) of Section 113 ibid. The Commissioner has not recorded any finding on this aspect. What appears from the impugned order is that the adjudicating authority considered the goods to be liable to confiscation under Section 113 (h) and (i) by the mere reason of mis-declaration admitted by the party. This appears to be against the case law stated by the Calcutta High Court in Anita International (supra), wherein it was held that the goods would not be liable to confiscation under clause (i) of Section 113 of the Customs Act, it they were neither dutiable nor prohibited. It was without examining the question whether the goods were dutiable or prohibited that the Commissioner held them liable to confiscation under Section 113 (h) and (i). It is further noted that the appellants had requested the Customs authorities to permit them either to and the shipping Bill or to withdraw the entire lot. The adjudicating authority did not entertain this request.

7. In the light of the findings recorded above, I observe that this is a fit case for remand. Accordingly, I set aside the impugned order and allow the appeal by way of remand, directing the Commissioner to apply his mind to all the submissions of the party and pass a speaking order, after affording an opportunity of personal hearing to them.