| SooperKanoon Citation | sooperkanoon.com/6525 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | Jun-28-1991 |
| Reported in | (1991)LC528Tri(Delhi) |
| Appellant | Luxor Pen Company |
| Respondent | Collector of Customs |
2. The appellants imported a consignment of 33 cartons containing Nylon Yarn (Industrial Yarn) 2/1000 Danier under Bill of Entry No. 8706 dated 18-12-1987. They claimed clearance of the goods under Open General Licence (OGL) vide Appendix 6, List 8, Part I, Item No.173. The goods had been shipped on 20-10-1987 but contract for import has been registered with the Textile Commissioner vide Registration No.47/Others/M/87-88 dated 12-11-1987. Clearance of the said goods against OGL was not accepted by the Department on the ground that the contract was not registered with the Textile Commissioner at the time of shipment of the goods. It was held that the import is unauthorised under the provisions of para 26 of Import & Export Policy read with para 11 of Appendix 6 to Import & Export Policy. The Collector who adjudicated the proceedings passed order confiscating the goods in question under Section (d) of the Customs Act, 1962. However, he gave an option to redeem the goods on payment of redemption fine of Rs. 17,500/- but without any penalty. Hence this appeal.
3. Shri K. Kumar, learned Advocate, appearing for the appellants submitted that the appellants were under a bona fide belief that registration of contract with the Textile Commissioner for import of such yarn would not be necessary as industrial nylon yarn required for manufacture of fibre tips is not at all suitable for use in textile industry. This plea was confirmed by DGTD in their letter dated 10-3-1987. In this connection, he drew my attention to the letter written by DGTD with reference to letter dated 22-8-1986 clarifying that registration is not necessary. Further he said that when the appellants came to know that registration was necessary, they got their contract registered on 12-11-87 after the goods had been shipped but before the importation of the goods as the goods landed into India on 18-2-1987. Shri Kumar said that the Collector erred in interpreting Para 11 of Appendix 6 to the Import Policy and he drew my attention to the relevant portion which reads as under : "(11) In the case of all man-made fibres, tow and yarn allowed to be imported under Open General Licence, all eligible Importers, Actual Users (Industrial) and others, shall be required to register their contracts with the Textile Commissioner, Bombay. Imports shall be made only after the connected contracts have been stamped by the Textile Commissioner, Bombay as evidence of such registration. For this purpose, two copies of the contract should be lodged with the Textile Commissioner and he will return one copy to the importer duly stamped on each page for production to the customs at the time of clearance of goods. At the time of registration of a subsequent contract, the eligible importer should also furnish a statement indicating the progress made in import and utilization/disposal of the imported material in respect of all the contracts earlier registered for information record of the Registering authority." The learned Advocate said the stipulation in the above paragraph is that "imports shall be made only after the connected contracts have been stamped by the Textile Commissioner, Bombay as evidence of such registration" and further the same contract will be submitted to the customs at the time of clearance of the goods. Both the stipulations are fulfilled in the present case inasmuch as the contract for import was registered with the Textile Commissioner on 12-11-1987 much before the import of goods from the U.S.A. The certified contract was also produced before the customs authorities at the time of clearance of goods. Hence the term "import" cannot be equated with the date of shipment. Para 11 of Appendix 6 of the Import Policy which has been made the basis for holding the importation does not talk of the date of shipment. On the other hand, "import" is defined under Section 2(g) of the Imports and Exports (Control) Act, 1947 as bringing into India by sea, land or air. Now it is settled law that earliest point of time of import can be at the moment a ship carrying goods crosses territorial waters of India as it was held in many cases including in the case of Apar Private Ltd. v. Union of India -1985 (22) ELT 644 Bombay and since the contract was registered with the Textile Commissioner before import and it was duly submitted before the customs authorities at the time of clearance of the goods, the Department was not justified in confiscating the goods under Section 111(d) of the Customs Act.
4. Alternatively, he argued that there was no mala fide intention on the part of the appellants in delaying the registration as they were under bona fide impression that registration was not necessary and further the same was confirmed by the DGTD. He said under these circumstances imposition of redemption fine is not called for and it is not incumbent to the Department to pass order of confiscation or imposition of penalty. In the present case the Collector himself has given a clear finding that he did not find any mala fide intention on the part of the importer. He placed reliance on the decision in the case of Peejay Maya Exports v. Collector of Customs, Bombay -1988 (33) ELT 383 (Tribunal) Preetliya Jewellers v. Collector of Customs -1990 (50) ELT 170 and Miles India Ltd. v. Collector of Customs, Bombay - 1991 (52) ELT 577 (Tribunal) wherein a view was taken that in the absence of any finding that the appellants were concerned in the illegal import, imposition of fine and penalty was not justified. He submitted that taking into consideration the ratio of these decisions and when the bona fides have been accepted by the Department, imposition of redemption fine is not substainable in the eye of law.
5. Shri Sharma, the learned JDR, while justifying the order passed by the Col-lector submitted that here is a case where the import is in contravention of the provisions of the Imports and Exports Control Act and accordingly in terms of Section 11 of the Customs Act the imposition of redemption fine was justified for unauthorised importation. The term 'import' has to be understood as envisaged under para 26 of the relevant Import and Export Policy (1985-88) and not as per the definition of 'import' as defined in the Customs Act. He drew my attention to the relevant para 26 of the Import Policy and said that import is valid if it fulfils the condition that the shipment/despatch of the goods from the supplying country takes place within the validity period of the Licence/Open General Licence/Customs Clearance Permit. In other words, he said that it was not an import unless it was registered before the date of shipment as explained under para 26 of the Policy Book. Since it is evident that it was not registered before the date of shipment and the DGTD is not an authority to clarify registration procedure and further more the policy mentions that registration has to be made even on import of the yarn. Import under OGL is not valid and the Department was fully justified in imposing redemption fine.
6. In reply Shri Kumar said that the condition specified in para 26 of the Policy refers to stipulation of time, if any, mentioned in the licence or in the permit and accordingly this condition cannot be taken into consideration to treat the import is invalid as such because the conditions were duly fulfilled as per provisions of para 11 of Appendix 6 to the Policy.
7. I have considered the arguments advanced on both sides and perused the record. In the present case, the Collector has given a clear finding that there was no mala fide intention on the part of the importer in importation and accordingly waived penalty under Section 112. In view of this clear finding it is very clear that there was no intention on the part of the appellants to clandestinely import the goods into India in violation of the law. Though the law provides for confiscation of goods if they are unauthorisedly imported, however, it has to be considered in the light of the facts and circumstances of each individual case and merely because the import is considered as unauthorised, confiscation and imposition of fine is not an unavoidable exigency. I find that the Collector himself was satisfied about the bona fides of the appellants and the delay in getting registration was due to the bona fide impression as can be seen from the records. Thus there was no intention on the part of the appellants to violate the provisions of Customs Act and the Import & Export (Control) Act.
Therefore, considering the guidelines laid down in the decisions cited by the appellants' Counsel, and in the facts and circumstances of the case, I hold that it is not necessary to order confiscation and the imposition of redemption fine. Since I am allowing the appeal on the issue of bona fide conduct of the appellants, I do not feel it necessary to go into the other issues raised by both sides.
8. In the result, I set aside the impugned order and accordingly the appeal is allowed with consequential relief to the appellants.