P.G. Foils Ltd. Vs. Commr. of Customs - Court Judgment

Excerpt:
1. appellants filed this appeal against the order-in-appeal passed by the commissioner (appeals).2. brief facts of the case are that the appellants filed shipping bills for export of aluminium foils under depb scheme. in the shipping bills, appellants declared the goods as aluminium foil paper backed and claimed depb benefit under group head 61 sr. no. 503. during the time of processing of the shipping bills and examination of the goods, it was found that the goods, in question, were not aluminium foil paper backed but, in fact, are aluminium foils interleaved with paper. the depb benefit on the laminated/lacquered aluminium foils is available under depb group head 61 sr. no. 505. the adjudicating authority confiscated the goods on the ground that the appellants intentionally mis-declared the goods to avail more depb benefit and ordered release of the goods on redemption fine of rs. one lakh and penalty of rs. 10,000/- was imposed. appellants filed appeal and the commissioner (appeals), in the impugned order, held that the goods, in question, are not covered under sr. no. 503 or 505 of depb group head 61.3. the contention of the appellants is that the adjudicating authority held that the goods, in question, are covered under group head 61 sr.no. 505. against this finding, the revenue had not filed any appeal.therefore, the finding of the commissioner (appeals) that the goods are not covered even under sr. no. 505, of depb group head 61, is not sustainable. the contention of the appellants is also that on previous occasions, the appellants made an export of the same goods and claimed the benefit under sr. no. 503 of depb group head 61 which was duly allowed. therefore, under the bona fide belief that the goods are covered under sr. no. 503 of depb group head 61, they filed the present shipping bills. therefore, there was no intention of the appellants to mis-declare the goods to avail more depb benefit.4. the contention of the revenue is that the goods are not aluminium foil paper backed or nor the goods are simply aluminium foils.therefore, the appellants are not entitled for the depb benefit.5. the relevant entries of depb rates under group head 61 of sr. no.503 to 506 are reproduced below : appellants filed shipping bills claiming depb rates at sl. no. 503 as aluminium foil paper backed. the adjudicating authority held that the goods, in question, are not aluminium paper backed, but are aluminium foils interleaved with paper and are covered under sr. no. 505 of depb group head 61 and ordered confiscation of the goods on the ground that the appellants mis-declared the goods for getting more benefit of depb.appellants filed appeal before the commissioner (appeals). the revenue had not filed any appeal. the commissioner (appeals), in the impugned order, rejected the claim of the appellants under sr. no. 503. while rejecting the claim, the commissioner (appeals) also held that they are also not entitled for the claim under sr. no. 505. in absence of appeal not filed by the revenue, the finding of the commissioner (appeals) that the appellants are not entitled for the benefit of depb at sr. no.505, is not sustainable, hence is set aside.6. the goods, in question, are not aluminium foil paper backed. the aluminium foil paper backed and aluminium foils interleaved with paper are two different things. the hsn explanatory notes heading no. 7410 provides that thinnest foils used for lamination/lacquered are very flimsy; they are generally interleaved with sheets of paper and put up in booklet form. other foil, such as that used for making fancy goods, is often backed with paper, paperboard, plastics or similar backing materials.7. appellants produced a sample of the goods, in question, which shows that aluminium foils are interleaved with sheets and are in booklet form. therefore, there is no infirmity in the impugned order that the goods, in question, are not covered at sl. 503 of depb group head 61.in respect of confiscation and penalty, appellants are regularly exporting the goods and claiming the depb benefits at sl. no. 503.appellants produced copies of shipping bills in respect of goods exported in january, 2000, feb., 2000, april, 2000 and july, 2000 where the benefit at sl. no. 503 was claimed and it was duly granted to the appellants. therefore, it cannot be alleged against the appellants that they had mis-declared the goods, in question, to avail the higher benefit of depb. the confiscation of goods and penalty imposed on the appellants is set aside. the appeal is disposed of as indicated above.

Judgment:
1. Appellants filed this appeal against the order-in-appeal passed by the Commissioner (Appeals).

2. Brief facts of the case are that the appellants filed shipping bills for export of aluminium foils under DEPB Scheme. In the shipping bills, appellants declared the goods as aluminium foil paper backed and claimed DEPB benefit under group head 61 Sr. No. 503. During the time of processing of the shipping bills and examination of the goods, it was found that the goods, in question, were not aluminium foil paper backed but, in fact, are aluminium foils interleaved with paper. The DEPB benefit on the laminated/lacquered aluminium foils is available under DEPB group head 61 Sr. No. 505. The adjudicating authority confiscated the goods on the ground that the appellants intentionally mis-declared the goods to avail more DEPB benefit and ordered release of the goods on redemption fine of Rs. one lakh and penalty of Rs. 10,000/- was imposed. Appellants filed appeal and the Commissioner (Appeals), in the impugned order, held that the goods, in question, are not covered under Sr. No. 503 or 505 of DEPB group head 61.

3. The contention of the appellants is that the adjudicating authority held that the goods, in question, are covered under group head 61 Sr.

No. 505. Against this finding, the revenue had not filed any appeal.

Therefore, the finding of the Commissioner (Appeals) that the goods are not covered even under Sr. No. 505, of DEPB group head 61, is not sustainable. The contention of the appellants is also that on previous occasions, the appellants made an export of the same goods and claimed the benefit under Sr. No. 503 of DEPB group head 61 which was duly allowed. Therefore, under the bona fide belief that the goods are covered under Sr. No. 503 of DEPB group head 61, they filed the present shipping bills. Therefore, there was no intention of the appellants to mis-declare the goods to avail more DEPB benefit.

4. The contention of the revenue is that the goods are not aluminium foil paper backed or nor the goods are simply aluminium foils.

Therefore, the appellants are not entitled for the DEPB benefit.

5. The relevant entries of DEPB rates under group head 61 of Sr. No.503 to 506 are reproduced below : Appellants filed shipping bills claiming DEPB rates at Sl. No. 503 as aluminium foil paper backed. The adjudicating authority held that the goods, in question, are not aluminium paper backed, but are aluminium foils interleaved with paper and are covered under Sr. No. 505 of DEPB group head 61 and ordered confiscation of the goods on the ground that the appellants mis-declared the goods for getting more benefit of DEPB.Appellants filed appeal before the Commissioner (Appeals). The revenue had not filed any appeal. The Commissioner (Appeals), in the impugned order, rejected the claim of the appellants under Sr. No. 503. While rejecting the claim, the Commissioner (Appeals) also held that they are also not entitled for the claim under Sr. No. 505. In absence of appeal not filed by the revenue, the finding of the Commissioner (Appeals) that the appellants are not entitled for the benefit of DEPB at Sr. No.505, is not sustainable, hence is set aside.

6. The goods, in question, are not aluminium foil paper backed. The aluminium foil paper backed and aluminium foils interleaved with paper are two different things. The HSN Explanatory Notes heading No. 7410 provides that thinnest foils used for lamination/lacquered are very flimsy; they are generally interleaved with sheets of paper and put up in booklet form. Other foil, such as that used for making fancy goods, is often backed with paper, paperboard, plastics or similar backing materials.

7. Appellants produced a sample of the goods, in question, which shows that aluminium foils are interleaved with sheets and are in booklet form. Therefore, there is no infirmity in the impugned order that the goods, in question, are not covered at Sl. 503 of DEPB group head 61.

In respect of confiscation and penalty, appellants are regularly exporting the goods and claiming the DEPB benefits at Sl. No. 503.

Appellants produced copies of shipping bills in respect of goods exported in January, 2000, Feb., 2000, April, 2000 and July, 2000 where the benefit at Sl. No. 503 was claimed and it was duly granted to the appellants. Therefore, it cannot be alleged against the appellants that they had mis-declared the goods, in question, to avail the higher benefit of DEPB. The confiscation of goods and penalty imposed on the appellants is set aside. The appeal is disposed of as indicated above.