Paras Industries Vs. Commissioner of Customs - Court Judgment

Excerpt:
1. this appeal is directed against the order-in-appeal dated 9-9-2004 wherein confiscation of the goods imported and penalty imposed have been upheld.2. the relevant facts that arise for consideration are that the appellants imported 175 nos. of industrial sewing machine from m/s.brother international. the declaration made on the bill of entry in respect of these sewing machines was port of shipment as singapore and country of origin as china. these sewing machines were imported by the appellants under epcg licence no. 0330004053, dated 7-8-2003. when the goods were sought to be cleared the inspection of the goods revealed that the description on the goods found was "brother industries ltd., nagoya, japan" and the country of origin china was not mentioned. on the presumption that the goods amounted to misdeclaration the said importers were directed to prove their bona fide. the appellants requested for waiver of show cause notice and sought adjudication of the matter. the adjudicating authority in his order-in-original dated 21-10-2003 came to the conclusion that since the intimation of country of origin is required on the packages, in the absence of which the appellants have contravened the provisions of section 11[111] of the customs act, and hence, the goods are liable for confiscation under section 11 [111](d) of the customs act, 1962 and also imposed penalty on the appellants under section 112(a) of the customs act. on appeal by the appellants the appellate authority has also upheld the order on the identical grounds. hence, this appeal.3. learned advocate for the appellants submitted that the provisions of section 11 [111] would be applicable only, in respect of goods covered under sub-section (2)(s) of section 117 of the trade and merchandise marks act, 1958. he further submitted that under notification no. 1272 issued under section 117 of trade and merchandise marks act requires affixation of the country of origin on the goods when the goods on importation are for sale in india and not for consumption. he relies upon the div. bench decision in the case of kumar associates v.collector of customs and filaments india ltd. v. cc, new delhi 2000 (123) e.l.t. 954 (tribunal).4. learned dr on the other hand submits that it is the basic requirement of the importer to show that the country of origin is mentioned on the goods. the absence of the same will lead to deceptive practice and violation of provisions of customs act, 1962.5. considered the submissions of both sides and perused the record. it is not in dispute that the goods which were imported under bill of entry no. 507 are industrial sewing machines. these industrial sewing machines were cleared by the appellants and such clearances were allowed by the customs authorities under epcg licence. it is also not in dispute that the epcg licence issued to the appellants on 7-8-2003 was valid and i also find that epcg licence at sl. no. 8 mentions the model number of the industrial sewing machine sought to be cleared under bill of entry. it is also not in dispute that the said goods were imported from brother international. i find the dispute is in very narrow compass that in respect of non-bearing of the country of origin on the imported goods.section 117 of the trade and merchandise act requires that central government by notification specify the goods on which the indication of the country of origin or place in which they are made or produced or name or the address of the manufacturer or the person who manufactured the goods should be affixed. the said provision will apply from the date of notification which is prescribed by the central government. 1 find that notification no. s.o. 1272 was issued on 25-4-62 under section 117 of trade and merchandise act. the said notification indicates the requirement of the fixation of the country of origin on the goods which are imported in india. at the same time i find that the said notification in sub-clause (5) grants exemption. we are concerned with sub-section (d) which reads as under :- goods imported for personal use of individual or member of unincorporated association and not for trade purpose.from the above it can be seen that the application of the notification under section 117 of trade and merchandise act has exempted the goods which are used for the personal use of the individuals and not for trade purposes. since it is not in dispute that the goods imported by the appellants were used by them in their factory for the manufacture of final product the provisions of section 117 would not get attracted.further, i also found that an identical issue was decided by the tribunal in the case of kumar associates (supra) wherein in para 11 the tribunal has held as under :- it is seen that the imported driers were also held as liable to confiscation on the ground that their origin had been misdeclared since according to the certificate of origin filed by the appellants, these goods should have been of japanese origin, whereas on actual examination a part of the goods were found to be of canadian origin. we find that the appellants had declared the origin of these goods on the basis of the certificate of origin received from the concerned chamber of commerce in singapore and there is no finding that driers of japanese origin differ significantly in terms of quality or value from similar goods of canadian origin, we are therefore, inclined to agree with the appellants that the violation if any, in this regard was purely technical.in view of above findings the order-in-appeal dated 9-9-2004 is liable to be set aside. accordingly, i set aside the impugned order and allow the appeal with consequential relief, if any.

Judgment:
1. This appeal is directed against the Order-in-Appeal dated 9-9-2004 wherein confiscation of the goods imported and penalty imposed have been upheld.2. The relevant facts that arise for consideration are that the appellants imported 175 Nos. of industrial sewing machine from M/s.

Brother International. The declaration made on the bill of entry in respect of these sewing machines was port of shipment as Singapore and country of origin as China. These sewing machines were imported by the appellants under EPCG licence No. 0330004053, dated 7-8-2003. When the goods were sought to be cleared the inspection of the goods revealed that the description on the goods found was "Brother Industries Ltd., Nagoya, Japan" and the country of origin China was not mentioned. On the presumption that the goods amounted to misdeclaration the said importers were directed to prove their bona fide. The appellants requested for waiver of show cause notice and sought adjudication of the matter. The adjudicating authority in his Order-in-Original dated 21-10-2003 came to the conclusion that since the intimation of country of origin is required on the packages, in the absence of which the appellants have contravened the provisions of Section 11[111] of the Customs Act, and hence, the goods are liable for confiscation under Section 11 [111](d) of the Customs Act, 1962 and also imposed penalty on the appellants under Section 112(a) of the Customs Act. On appeal by the appellants the appellate authority has also upheld the order on the identical grounds. Hence, this appeal.

3. Learned Advocate for the appellants submitted that the provisions of Section 11 [111] would be applicable only, in respect of goods covered under Sub-section (2)(s) of Section 117 of the Trade and Merchandise Marks Act, 1958. He further submitted that under Notification No. 1272 issued under Section 117 of Trade and Merchandise Marks Act requires affixation of the country of origin on the goods when the goods on importation are for sale in India and not for consumption. He relies upon the Div. Bench decision in the case of Kumar Associates v.Collector of Customs and Filaments India Ltd. v. CC, New Delhi 2000 (123) E.L.T. 954 (Tribunal).

4. Learned DR on the other hand submits that it is the basic requirement of the importer to show that the country of origin is mentioned on the goods. The absence of the same will lead to deceptive practice and violation of provisions of Customs Act, 1962.

5. Considered the submissions of both sides and perused the record. It is not in dispute that the goods which were imported under bill of entry No. 507 are industrial sewing machines. These industrial sewing machines were cleared by the appellants and such clearances were allowed by the Customs authorities under EPCG licence. It is also not in dispute that the EPCG licence issued to the appellants on 7-8-2003 was valid and I also find that EPCG licence at Sl. No. 8 mentions the model number of the industrial sewing machine sought to be cleared under bill of entry. It is also not in dispute that the said goods were imported from Brother International. I find the dispute is in very narrow compass that in respect of non-bearing of the country of origin on the imported goods.

Section 117 of the Trade and Merchandise Act requires that Central Government by notification specify the goods on which the indication of the country of origin or place in which they are made or produced or name or the address of the manufacturer or the person who manufactured the goods should be affixed. The said provision will apply from the date of notification which is prescribed by the Central Government. 1 find that notification No. S.O. 1272 was issued on 25-4-62 under Section 117 of Trade and Merchandise Act. The said notification indicates the requirement of the fixation of the country of origin on the goods which are imported in India. At the same time I find that the said notification in Sub-clause (5) grants exemption. We are concerned with Sub-section (d) which reads as under :- goods imported for personal use of individual or member of unincorporated association and not for trade purpose.

From the above it can be seen that the application of the notification under Section 117 of Trade and Merchandise Act has exempted the goods which are used for the personal use of the individuals and not for trade purposes. Since it is not in dispute that the goods imported by the appellants were used by them in their factory for the manufacture of final product the provisions of Section 117 would not get attracted.

Further, I also found that an identical issue was decided by the Tribunal in the case of Kumar Associates (supra) wherein in para 11 the Tribunal has held as under :- It is seen that the imported Driers were also held as liable to confiscation on the ground that their origin had been misdeclared since according to the certificate of origin filed by the appellants, these goods should have been of Japanese origin, whereas on actual examination a part of the goods were found to be of Canadian origin. We find that the appellants had declared the origin of these goods on the basis of the certificate of origin received from the concerned Chamber of Commerce in Singapore and there is no finding that Driers of Japanese origin differ significantly in terms of quality or value from similar goods of Canadian origin, we are therefore, inclined to agree with the appellants that the violation if any, in this regard was purely technical.

In view of above findings the Order-in-Appeal dated 9-9-2004 is liable to be set aside. Accordingly, I set aside the impugned Order and allow the appeal with consequential relief, if any.