Custom, Excise & Service Tax Tribunal
Commissioner Of Customs (Import) Nhava ... vs Krishna Trading Co on 17 June, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. C/87376/13 & C/87771/13 (Arising out of Order-in-Appeal No. 190 (Gr. III)/2013/JNCH/IMP-146 dated 05.03.2013 passed by Commissioner of Customs (Appeals), Mumbai Zone II.) For approval and signature: Honble Mr.S.S. Kang, Vice President Honble Mr. P.K. Jain, Member (Technical) ==========================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
========================================================== Commissioner of Customs (Import) Nhava Sheva Appellant (Represented by: Mr. D. Nagvenkar, Additional Commissioner (AR)) Vs Krishna Trading Co Respondent (Represented by: Mr. A.K. Prabhakar, Advocate) Krishna Trading Co Appellant (Represented by:(Mr. A.K. Prabhakar, Advocate Vs Commissioner of Customs (Import) Nhava Sheva Respondent (Represented by: Mr. D. Nagvenkar, Additional Commissioner (AR)) CORAM:
Honble Mr.S.S. Kang, Vice President Honble Mr. P.K. Jain, Member (Technical) Date of Hearing : 25.04.2014 Date of Decision: 17.06..2014 ORDER NO..
Per: S.S. Kang
1. Appellant M/s Krishna Trading Co as well as Revenue filed appeals against the common impugned order passed by the Commissioner (Appeals). Hence they are being taken up together.
2. Brief facts of the case are that M/s Krishna Trading Company has filed two Bills of Entry for clearance of the goods described as PVC coated fabric. Samples were taken from the consignments and the same were sent to Textile Committee for re-testing. As per the report of Textile Committee the samples were neither coated, nor laminated nor impregnated but having finish on one side. During investigation it was also found that the goods were misdeclared in respect of quantity also. During investigation it was also found that previously appellant got cleared 8 Bills of Entry and the goods in respect of earlier imports were found in the godown. The goods were seized and a Show Cause Notice was issued for demanding of differential duty as well as of confiscation of the goods. The adjudicating authority confirmed the demand of differential duty of Rs. 38,91,397/- and also ordered confiscation of the goods and allowed the same on payment of redemption fine. Penalties were also imposed.
3. The appellant filed appeal before the Commissioner (Appeals) and the Commissioner (Appeals) after relying upon the decision of the Honble Bombay High Court in the case of Union of India vs Popular Dyechem 1987 (28) ELT 63 (Bom) held that the goods which were already cleared are not liable for confiscation on the ground that the goods once cleared under Section 47 of the Customs Act, 1962 cannot be confiscated except in pursuance of an order passed in revision under Section 129D of the Customs Act, 1962. The Commissioner (Appeals) otherwise upheld the adjudication order.
4. The appellant filed appeal against the confirmation of the demand and against the order of confiscation and imposition of penalty and Revenue filed appeal against the portion of order whereby the Commissioner (Appeals) set aside the confiscation in respect of goods which were found in the godown.
5. The contention of the appellant is that the test report of Textile Committee is not definite as the Textile Committee also found that the goods may be used as Upholstery. However, the end use of the fabric is upto Customers/Users choice and fashion trend. Any material can be used for several purposes. Appellant relies upon the test report supplied by the supplier to submit that the goods in question are coated fabrics only and accordingly the Bills of Entry were filed. There is no evidence on record to show that there is any additional flow back of money towards any additional consideration of sale other than the transaction value. Hence the demand is not sustainable.
6. Revenue supported the findings of the adjudication order and submitted that as the appellant declared the goods as PVC coated fabrics and as per the report of Textile Committee the goods were neither PVC coated, nor laminated nor impregnated but having finish on one side, hence it is a clear case of misdeclaration. Misdeclaration is also in thickness as well as quantity. Hence the impugned order is rightly passed.
7. In respect of the appeal filed by the Revenue relied upon the decision of the Honble Supreme Court in the case of Jain Shuddh Vanaspati Ltd vs Union of India & Ors reported in 1982 (10) ELT 43 (SC).
8. In the present case, the appellants declared the goods imported as PVC coated fabrics. Samples were taken and sent for examination and in the report of the Textile Committee there is a specific opinion that the goods in question is neither laminated, nor impregnated. In view of this test report, we find no infirmity in the impugned order, whereby the lower authority held that the goods were misdeclared and we find no infirmity whereby the demand of differential duty and the goods were held to be liable for confiscation.
9. The appeal filed by the appellant is dismissed.
10. In the appeal filed by the Revenue, we find the Commissioner (Appeals) has taken a view that once goods have been cleared under Section 47 of the Customs Act, 1962 the same cannot be confiscated except in pursuance of an order passed in Revision under Section 129D of the Customs Act, 1962. We find that the Honble Supreme Court in the case of Jain Shuddh Vanaspatis case (supra) held in para 6 as under:
6.The case of the appellants in the show cause notices is that the stainless steel containers in which the said oil was imported were banned, that the stainless steel containers were deliberately camouflaged by painting them to resemble mild steel containers, and that this was done with a view to enabling their clearance. A clearance order under Section 47 obtained by fraudulent means such as this (if it, in fact, be so) cannot debar the issuance of a show-cause notice for confiscation of goods under Section 124. Fraud, if established, unravels all. An order under Section 47 obtained by the employment of fraudulent methods does not have to be set aside by the exercise of revisional powers under Section 130 before the ill-effects of the fraud can be set right by initiation of the process of confiscation of the fraudulently cleared goods under Section 124.
11. In view of the above the Honble Supreme Court we find merit in the contention of the Revenue that the impugned order whereby the Commissioner (Appeals) set aside confiscation is not sustainable. The appeal filed by the Revenue is allowed and the order in this regard passed by the adjudicating authority is restored.
(Pronounced in Court on 17.06.2014.) (P.K. Jain) Member (Technical) (S.S. Kang) Vice President rk 6