Kanhaiyalal and Co. Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. shri. s.p. mathew, learned advocate appearing for the appellants submitted that in both these appeals issues relate to confiscation and undervaluation of the white poppy seeds and yellow poppy seeds imported from turkey. he has brought to our notice the final order of court no.i being order no. c-i/3976/wzb/2002, dated 22-11-2002 [2003 (151) e.l.t. 674 (tribunal)] wherein the tribunal has considered the import of yellow poppy seeds involving the said two issues in the appellants own case for an earlier period. the decision has been given in favour of the appellants while allowing their appeal. the learned counsel inter alia submitted that since the issues involved in the present appeal are fully covered by the said decision, the stay may be granted in the matter.2. shri m.k. gupta,.....

Judgment:
1. Shri. S.P. Mathew, learned Advocate appearing for the appellants submitted that in both these appeals issues relate to confiscation and undervaluation of the White Poppy Seeds and Yellow Poppy Seeds imported from Turkey. He has brought to our notice the final order of Court No.I being Order No. C-I/3976/WZB/2002, dated 22-11-2002 [2003 (151) E.L.T. 674 (Tribunal)] wherein the Tribunal has considered the import of Yellow Poppy Seeds involving the said two issues in the appellants own case for an earlier period. The decision has been given in favour of the appellants while allowing their appeal. The learned counsel inter alia submitted that since the issues involved in the present appeal are fully covered by the said decision, the stay may be granted in the matter.

2. Shri M.K. Gupta, learned Jt. C.D.R. has opposed the arguments of the learned counsel and has tried to distinguish the issues involved on the ground of colour of poppy seeds. To a querry from the Bench as to whether the issues involved in the present case are directly covered by the said decision, he could not give any satisfactory answer.

3. Since we are considering only the stay petition and the issues involved are squarely covered by the said decision in favour of the applicants, we waive the requirement of pre-deposit of duty and penalty etc. and stay recovery thereof during pendency of the appeal. The matter is listed for regular hearing on 10th March, 2003.

4. [Order per : C. Satapathy, Member (T)]. - I have carefully gone through the proposed order drafted by my learned brother and I have also carefully considered the submissions, as well as the order passed by the learned Commissioner in the matter.

5. In the stay application, the appellants have asked for waiver of pre-deposit of penalty during pendency of the appeal. The main issues involved in this case are the following : - (1) Whether one of the consignments in question can be confiscated under Section 111(d) of the Customs Act, 1962 for violation of condition 4(c) of the DGFT Notification No. 27 (RE 2000) 1997-2000 since the registration of the contract with the Narcotics Commissioner was done after the date of shipment but prior to physical import and whether the appellants can be penalised for such violation.

(2) Whether the learned Commissioner is justified in rejecting the transaction value method for valuation of the impugned goods under Rule 10A of the Customs Valuation Rules, 1988 and adopting another method of valuation.

(3) Whether the learned Commissioner is justified in confiscating the impugned goods under Section 111(m) of the Customs Act, 1962 and penalising the appellants in a case where the transaction value method has been rejected and another method of valuation has been adopted.

6. The learned Jt. C.D.R. agrees that the cited decision dated 22-11-2002 of Court-I has decided the issue at (1) above in favour of the appellants in a similar case and therefore, he has no objection to stay of the penalty imposed in respect of one consignment which is the subject matter of the first Show Cause Notice out of three Show Cause Notices relating to first of the two adjudication orders. He, however, states that all these consignments including the aforesaid consignment have also been confiscated under Section 111(m) on the charge of mis-declaration of value and consequently, the appellants have been subjected to penal action on this account also. He very strongly urges that though the cited order dated 22-11-2002 of Court-I is on the issue of undervaluation, the product in question being Yellow Poppy Seeds in that case and White Poppy Seeds in the current appeal, the said order of Court-I is not relevant to the present case.

7. I find that the said order dated 22-11-2002 of Court-I deals with the issue of violation of the DGFT notification and has decided the same in the appellants' favour. As far as the other two issues listed in paragraph 5 above are concerned, apart from the fact that the said order deals with valuation of different commodities, it does not deal with these two issues at all. In fact, even though the learned Commissioner in the related adjudication order (submitted by the learned counsel for the Appellants) had taken recourse to Rule 10A of the Customs Valuation Rules, 1988 for rejecting the transaction value method and adopting another method of valuation, the said order of Court-I does not refer to the said Rule 10A at all before coming to a finding that there was no reason for the Commissioner to have rejected the transaction value. As such, I am unable to agree with the observations recorded by my learned brother that the issues involved in the present appeal are squarely covered by the said decision of Court-I.8. However, I am inclined to agree with my learned brother in waiving the pre-deposit of penalty in this case as one of the main issues required to be considered in this case involves the question as to whether confiscation and penal action can be justified in a case where Rule 10A of the Customs Valuation Rules has been applied for rejecting the transaction value method and another method of valuation has been adopted for valuing the imported goods.

9. Accordingly, I concur with the decision of my learned brother to waive pre-deposit of the penalty amount during pendency of the appeal.