Orient Ceramics and Inds. Ltd. Vs. Commissioner of Customs, New - Court Judgment

Excerpt:
1. p.s. bajaj, member (j). - this appeal has been preferred by the appellants against the impugned order-in-original, dated 12-6-2001 passed by the commissioner of customs.2. the appellants are importer of porcelain tiles. they filed bill of entry dated 24-10-2000 through cha for the clearance of the goods declaring the same as unglazed porcelain tiles (in short the goods) valued at rs. 18,27,955/-. they claimed classification of the goods under tariff heading 6907.90 of the cta and sought clearance without licence under para 5.1 of the exim policy, 1997-2002. the bill of entry was assessed as per declaration made by them; and after payment of duty, so assessed, the bill of entry was presented in the import shed for physical examination where the goods were examined in the presence of the appellant's representative. on examination, it appeared that the goods were glazed tiles. such tiles were classifiable under heading 6908.90 of the tariff and being restricted for importation as per classification, could not be imported without proper licence. the appellants requested for the provisional release of the goods against p.d. test bond pending finalisation as per test report from the crcl.their request was accepted and the goods were released to them provisionally. the representative samples of the goods were drawn and sealed in their presence and sent to crcl for test. the test report revealed that the goods had the characteristics of glazed tiles.therefore, show cause notice was accordingly issued to the appellants for the confiscation of the goods and for imposition of penalty on them. the appellants, however, contested the correctness of that notice and also submitted manufacturing process of the unglazed tiles. they also requested that the goods may be sent to the central glass and ceramics research institute, calcutta, for test. the commissioner of customs, however, after considering the material on record, held the goods to be porcelain glazed tiles and ordered confiscation of the same having been imported without licence and also imposed penalty of rs. 10,00,000/- on the appellants.3. the issue in the appeal relates to the classification of the goods in question under itc policy only. there is no dispute regarding rate of duty payable thereon. but depending on the classification, the goods, will either fall under restricted list or free list of import.according to the appellants, the imported goods were only unglazed porcelain tiles classifiable under heading 6907.90 and as such, could be imported without licence.4. to substantiate this plea, much reliance has been placed on the manufacturing process supplied to the appellants by the manufacturer and the distinction between unglazed and glazed tiles, as pointed out by them in their reply to the show cause notice as well as in the letter dated 30-1-2001. the learned counsel has also sought for retest of the goods from the central glass and research institute, calcutta.but we have gone through the record and in our view, the plea of the appellants cannot be accepted. admittedly, the representative samples of the goods were drawn and sealed in the presence of the appellants.the samples were sent to crcl for test. it was opined that samples had the characteristics of glazed tiles, again on the request of the appellants, as is evident from the order itself, the second report from crcl on that samples was sought. the second report was given by the director of the crcl which was conveyed to the appellants vide letter dated 27-2-2001. "the imperviousness test and the chemical resistance test on the samples, have been concluded in this laboratory as prescribed in the astm methods and found to satisfy the conditions as laid down in respect of glazed tiles. the test for water absorption as laid down in the i.s. has also been conducted and found to absorb appreciable quantity of water. in view of above facts it is clear that the samples under reference are other than unglazed ceramic tiles as claimed and hence the test as per iso as indicated in your letter may not be necessary for further confirmation in this regard".5. the appellants themselves in their reply to the show cause notice described distinction between unglazed and glazed tiles as under :- "while porcelain unglazed tiles are almost completely vitrified and would absorb no water (impermeable), glazed riles have a porous body permeable to water".even from the manufacturing process of the goods which they allegedly received from the manufacturer and supplied copy of the same to the customs authorities vide letter dated 23-12-2000, this very distinction between the glazed and unglazed tiles could be made out. they even in their subsequent letter dated 30-1-2001 reiterated this very distinction. the relevant portion of their letter reads as under : - "there are clear distinctions between the porcelain unglazed tiles and glazed tiles from the point of view of their nature and compositions. while porcelain unglazed tiles are almost completely vitrified and would absorb no water (impermeable), glazed tiles have a porous body permeable to water".6. thus, from both the reports of the crcl read with distinction between unglazed and glazed, as even pointed out by the appellants themselves in their above referred correspondence with the customs authorities and the manufacturing process furnished by them, it is quite evident that the imported goods were not unglazed but glazed tiles which were classifiable only under tariff heading 6908.90, therefore, the licence for the import of such goods was required before they could be actually imported. the findings recorded by the learned commissioner in this regard, in our view, are perfectly valid and we do not find any sufficient ground to disagree with the same. the appellants admittedly did not possess any licence at the relevant time.7. no doubt, the appellants at a later stage in order to wriggle out of the restricted list of the imports, put forth the claim that the goods were classifiable under 69141000.10 as per classification issued by the dgft. but their plea, in our view, has been rightly not accepted by the customs authorities. this heading, in our view, refers to other ceramic products i.e. products not classifiable under any of the heading of the customs tariff. even the appellants themselves at no stage in the bill of entry claimed classification under this heading and that too knowingly and intentionally as they knew that the goods imported by them were classifiable under the specific heading referred to above of the ceta. they claimed classification under tariff heading 6907.90 as unglazed tiles. it had never been their case that the goods were covered by the expression "other ceramic products" as referred in the dgft clarification under heading 69141000.10.8. this plea of the appellants is in fact an afterthought taken with a view to cover up the lapse on their part of having not taken the licence for the import of the impugned goods.9. the contention of the counsel that rctest of the sample of the goods be got conducted from the centra! glass & ceramic research institute, calcutta and such a test could be ordered by the tribunal at this stage also, cannot be accepted. there exists no reason to doubt the correctness of two reports given by the crcl. according to both the reports, the goods satisfied the characteristics of glazed tiles.moreover, no sample of the goods is available for test as per the report furnished by the d.r. to the bench. the goods had already been got released and utilized by the appellants. the counsel has no doubt produced the copy of the order of the apex court passed in sukeshan equipment pvt. ltd. v. cc, bombay, civil appeal no. 7972/95, [2001 (134) e.l.t. 604 (s.c)] wherein the apex court appointed an expert for the examination of the machines, but in the instant case, the retest of the goods for reasons stated above, cannot be ordered.10. in view of the discussions made above, the impugned order of the commissioner of customs, in our view, is perfectly valid and does not suffer from legal infirmity so as to call for any interference.consequently, the appeal of the appellants being without merits is ordered to be dis missed.

Judgment:
1. P.S. Bajaj, Member (J). - This appeal has been preferred by the appellants against the impugned Order-in-Original, dated 12-6-2001 passed by the Commissioner of Customs.

2. The appellants are importer of Porcelain tiles. They filed bill of entry dated 24-10-2000 through CHA for the clearance of the goods declaring the same as unglazed porcelain tiles (in short the goods) valued at Rs. 18,27,955/-. They claimed classification of the goods under Tariff Heading 6907.90 of the CTA and sought clearance without licence under Para 5.1 of the EXIM Policy, 1997-2002. The bill of entry was assessed as per declaration made by them; and after payment of duty, so assessed, the bill of entry was presented in the import shed for physical examination where the goods were examined in the presence of the appellant's representative. On examination, it appeared that the goods were glazed tiles. Such tiles were classifiable under Heading 6908.90 of the tariff and being restricted for importation as per classification, could not be imported without proper licence. The appellants requested for the provisional release of the goods against P.D. test bond pending finalisation as per test report from the CRCL.

Their request was accepted and the goods were released to them provisionally. The representative samples of the goods were drawn and sealed in their presence and sent to CRCL for test. The test report revealed that the goods had the characteristics of glazed tiles.

Therefore, show cause notice was accordingly issued to the appellants for the confiscation of the goods and for imposition of penalty on them. The appellants, however, contested the correctness of that notice and also submitted manufacturing process of the unglazed tiles. They also requested that the goods may be sent to the Central Glass and Ceramics Research Institute, Calcutta, for test. The Commissioner of Customs, however, after considering the material on record, held the goods to be porcelain glazed tiles and ordered confiscation of the same having been imported without licence and also imposed penalty of Rs. 10,00,000/- on the appellants.

3. The issue in the appeal relates to the classification of the goods in question under ITC Policy only. There is no dispute regarding rate of duty payable thereon. But depending on the classification, the goods, will either fall under restricted list or free list of import.

According to the appellants, the imported goods were only unglazed porcelain tiles classifiable under Heading 6907.90 and as such, could be imported without licence.

4. To substantiate this plea, much reliance has been placed on the manufacturing process supplied to the appellants by the manufacturer and the distinction between unglazed and glazed tiles, as pointed out by them in their reply to the show cause notice as well as in the letter dated 30-1-2001. The learned Counsel has also sought for retest of the goods from the Central Glass and Research Institute, Calcutta.

But we have gone through the record and in our view, the plea of the appellants cannot be accepted. Admittedly, the representative samples of the goods were drawn and sealed in the presence of the appellants.

The samples were sent to CRCL for test. It was opined that samples had the characteristics of glazed tiles, again on the request of the appellants, as is evident from the order itself, the second report from CRCL on that samples was sought. The second report was given by the Director of the CRCL which was conveyed to the appellants vide letter dated 27-2-2001.

"The imperviousness test and the chemical resistance test on the samples, have been concluded in this laboratory as prescribed in the ASTM Methods and found to satisfy the conditions as laid down in respect of glazed tiles. The test for water absorption as laid down in the I.S. has also been conducted and found to absorb appreciable quantity of water. In view of above facts it is clear that the samples under reference are other than unglazed ceramic tiles as claimed and hence the test as per ISO as indicated in your letter may not be necessary for further confirmation in this regard".

5. The appellants themselves in their reply to the show cause notice described distinction between unglazed and glazed tiles as under :- "While porcelain unglazed tiles are almost completely vitrified and would absorb no water (impermeable), glazed riles have a porous body permeable to water".

Even from the manufacturing process of the goods which they allegedly received from the manufacturer and supplied copy of the same to the customs authorities vide letter dated 23-12-2000, this very distinction between the glazed and unglazed tiles could be made out. They even in their subsequent letter dated 30-1-2001 reiterated this very distinction. The relevant portion of their letter reads as under : - "There are clear distinctions between the porcelain unglazed tiles and glazed tiles from the point of view of their nature and compositions. While porcelain unglazed tiles are almost completely vitrified and would absorb no water (impermeable), glazed tiles have a porous body permeable to water".

6. Thus, from both the reports of the CRCL read with distinction between unglazed and glazed, as even pointed out by the appellants themselves in their above referred correspondence with the customs authorities and the manufacturing process furnished by them, it is quite evident that the imported goods were not unglazed but glazed tiles which Were classifiable only under Tariff Heading 6908.90, Therefore, the licence for the import of such goods was required before they could be actually imported. The findings recorded by the learned Commissioner in this regard, in our view, are perfectly valid and we do not find any sufficient ground to disagree with the same. The appellants admittedly did not possess any licence at the relevant time.

7. No doubt, the appellants at a later stage in order to wriggle out of the restricted list of the imports, put forth the claim that the goods were classifiable under 69141000.10 as per classification issued by the DGFT. But their plea, in our view, has been rightly not accepted by the customs authorities. This heading, in our view, refers to other ceramic products i.e. products not classifiable under any of the heading of the Customs Tariff. Even the appellants themselves at no stage in the bill of entry claimed classification under this heading and that too knowingly and intentionally as they knew that the goods imported by them were classifiable under the specific heading referred to above of the CETA. They claimed classification under Tariff Heading 6907.90 as unglazed tiles. It had never been their case that the goods were covered by the expression "Other ceramic products" as referred in the DGFT clarification under Heading 69141000.10.

8. This plea of the appellants is in fact an afterthought taken with a view to cover up the lapse on their part of having not taken the licence for the import of the impugned goods.

9. The contention of the Counsel that rctest of the sample of the goods be got conducted from the Centra! Glass & Ceramic Research Institute, Calcutta and such a test could be ordered by the Tribunal at this stage also, cannot be accepted. There exists no reason to doubt the correctness of two reports given by the CRCL. According to both the reports, the goods satisfied the characteristics of glazed tiles.

Moreover, no sample of the goods is available for test as per the report furnished by the D.R. to the Bench. The goods had already Been got released and utilized by the appellants. The Counsel has no doubt produced the copy of the order of the Apex Court passed in Sukeshan Equipment Pvt. Ltd. v. CC, Bombay, Civil Appeal No. 7972/95, [2001 (134) E.L.T. 604 (S.C)] wherein the Apex Court appointed an expert for the examination of the machines, but in the instant case, the retest of the goods for reasons stated above, cannot be ordered.

10. In view of the discussions made above, the impugned order of the Commissioner of Customs, in our view, is perfectly valid and does not suffer from legal infirmity so as to call for any interference.

Consequently, the appeal of the appellants being without merits is ordered to be dis missed.