Collector of Customs Vs. M. Aslam Aejaz and Co. - Court Judgment

Excerpt:
1. the above appeals have been filed by the department and since the issue involved in the appeals is identical, i take up both the appeals together and dispose of them by a common order.2. the issue for consideration in the above appeals filed by the department is as to whether the goods which was sought to be exported by the respondents as finished leather conformed to the statutory standards of finished leather as per the regulations and instructions or not. the original authority in both the cases gave a finding that the goods were only semi-finished leather and not fully finished leather and levied a small fine of rs. 16,000/- and a penalty of rs. 10,000/- in the appeal relating to respondent m/s. aslam aejaz & co.and only a fine of rs. 28,000/- in the case of the other respondent.3. after going through the records and after considering the submissions of both sides, i am inclined to dismiss both the appeals in terms of second proviso to section 129a(1) and section 129d of the customs act, 1962. i am of the view that having regard to the small amount involved, the appeals need not be admitted and would stand dismissed in terms of second proviso to section 129a(1) of the customs act. apart from it, it would also be seen that the issue as to whether the goods, namely, leather sought to be exported are finished one or semi-finished one itself was controversial by reason of deficiency in norms. in a batch of revisions, the govt. of india, deptt. of revenue, by order no. 872-905/93, dated 31-12-1993 remanded the matter and the learned collector (appeals) while dealing with the issue at the relevant operative part of his order dated 7-9-1993 in customs 953 to 1121/93 has observed as under :- "it is true that there was some confusion regarding the applicability of norms relating to export of leather. while amended notification stated that the goods should conform to 1979 norms it was not received for a considerable time and the goods were allowed to be exported while conforming to 1981 norms. in the meantime, in the drawback schedules, the norms referred to, continued to be 1979 norms. as i have stated earlier, the export department of the customs house has taken the opinion in respect of the shipping bills from the central leather research institute and the institute has categorically stated that in respect of a majority of the cases, the processes relating to 79 and 81 norms are identical and in regard to such cases, denial of drawback according to me may not be in order. i feel that the onus is on the department now to go into the facts of the cases, examine the issue afresh and come to a decision. the drawback department has also rejected the drawback claims without giving any scope to the exporters to appear in person and explain their cases. this is also not proper and legal. in view of the above position, i feel that the ends of justice will demand that the matter be looked into afresh after considering all the aspects of the case including the opinion from clri." 4. i further find that subsequent to the order of remand, duty drawback was given to the exporters concerned. i may also refer to the order passed by the collector of customs, dated 22-4-1994 in the case of m/s.m.m. shamsudden & co. wherein the learned collector has observed as under :- "in view of the fact that the subject goods are not conforming to the is specification 8170/79 to treat them as finished leather and the drawback claim made therein is also reasonably suspected to be not in order and the exporters also had not produced the valid export licence from the licensing authorities to cover the goods, these goods become liable for confiscation under section 113(1) of the customs act, 1962, as amended." 5. keeping in mind that a number of processes were involved in converting the raw leather into finished leather, a minor deficiency in the processing may not ipso facto make the leather as not fully finished leathen keeping in mind that above factual background relating to export of finished leather and the views of the govt. of india as well as the departmental authorities as extracted above and also taking note of the fact that the amount involved in the appeals are very small; the appeals are dismissed without being admitted in terms of second proviso to section 129a(1) of the customs act, 1962.

Judgment:
1. The above appeals have been filed by the department and since the issue involved in the appeals is identical, I take up both the appeals together and dispose of them by a common order.

2. The issue for consideration in the above appeals filed by the department is as to whether the goods which was sought to be exported by the respondents as finished leather conformed to the statutory standards of finished leather as per the regulations and instructions or not. The original authority in both the cases gave a finding that the goods were only semi-finished leather and not fully finished leather and levied a small fine of Rs. 16,000/- and a penalty of Rs. 10,000/- in the appeal relating to respondent M/s. Aslam Aejaz & Co.

and only a fine of Rs. 28,000/- in the case of the other respondent.

3. After going through the records and after considering the submissions of both sides, I am inclined to dismiss both the appeals in terms of second proviso to Section 129A(1) and Section 129D of the Customs Act, 1962. I am of the view that having regard to the small amount involved, the appeals need not be admitted and would stand dismissed in terms of second proviso to Section 129A(1) of the Customs Act. Apart from it, it would also be seen that the issue as to whether the goods, namely, leather sought to be exported are finished one or semi-finished one itself was controversial by reason of deficiency in norms. In a batch of revisions, the Govt. of India, Deptt. of Revenue, by order No. 872-905/93, dated 31-12-1993 remanded the matter and the learned Collector (Appeals) while dealing with the issue at the relevant operative part of his order dated 7-9-1993 in Customs 953 to 1121/93 has observed as under :- "It is true that there was some confusion regarding the applicability of norms relating to export of leather. While amended notification stated that the goods should conform to 1979 norms it was not received for a considerable time and the goods were allowed to be exported while conforming to 1981 norms. In the meantime, in the Drawback Schedules, the norms referred to, continued to be 1979 norms. As I have stated earlier, the Export Department of the Customs House has taken the opinion in respect of the shipping bills from the Central Leather Research Institute and the Institute has categorically stated that in respect of a majority of the cases, the processes relating to 79 and 81 norms are identical and in regard to such cases, denial of drawback according to me may not be in order.

I feel that the onus is on the department now to go into the facts of the cases, examine the issue afresh and come to a decision. The drawback Department has also rejected the drawback claims without giving any scope to the exporters to appear in person and explain their cases. This is also not proper and legal.

In view of the above position, I feel that the ends of justice will demand that the matter be looked into afresh after considering all the aspects of the case including the opinion from CLRI." 4. I further find that subsequent to the order of remand, duty drawback was given to the exporters concerned. I may also refer to the order passed by the Collector of Customs, dated 22-4-1994 in the case of M/s.

M.M. Shamsudden & Co. wherein the learned Collector has observed as under :- "In view of the fact that the subject goods are not conforming to the IS specification 8170/79 to treat them as finished leather and the drawback claim made therein is also reasonably suspected to be not in order and the exporters also had not produced the valid export licence from the licensing authorities to cover the goods, these goods become liable for confiscation under Section 113(1) of the Customs Act, 1962, as amended." 5. Keeping in mind that a number of processes were involved in converting the raw leather into finished leather, a minor deficiency in the processing may not ipso facto make the leather as not fully finished leathen Keeping in mind that above factual background relating to export of finished leather and the views of the Govt. of India as well as the departmental authorities as extracted above and also taking note of the fact that the amount involved in the appeals are very small; the appeals are dismissed without being admitted in terms of second proviso to Section 129A(1) of the Customs Act, 1962.