Customs, Excise and Gold Tribunal - Mumbai
Silkon Silk Mills (Exports) Ltd. vs Commr. Of Cus.-Ii on 31 July, 1996
Equivalent citations: 1997(89)ELT151(TRI-MUMBAI)
ORDER P.K. Desai, Member (J)
1. Both the appeals are directed against the Order-in-Original No. 113/95, dated 21-12-1995 of the Commissioner of Customs-II, Bombay ordering confiscation of the Exports consignment vide Section 113(d) and (i/ of the Customs Act, 1962 with option to pay redemption fine of Rs. 1,00,000/-and imposing penalty of Rs. 1,00,000/-on Silkon Silk Mills (Exports) Ltd., Rs. 50,000/- on Mr. Shreeram Chaudhary, besides penalty of Rs. 10,000/- on Kamalkumar Agarwal and Rs. 5,000/- on Mr. T. Thomas. The last two persons however do not seem to have filed any appeal against the said order.
2. The Silkon Silk Mills (Exports) Ltd. filed Five Shipping Bills for exports of the Polyester Dyed Fabrics-Textile pieces goods. On so information received, the consignments lying in the Docks awaiting shipment, were checked and weighed 100% and as a result thereof, it was ascertained that the weight mentioned in the Shipping Bills was in all, excess by 4960.361 kgs. than the actual weight and as such there was a difference of 53% in the weight declared and actual weighment made. It was also found that in the Shipping Bills No. 410976 and 410330, though the weight shown in duplicate and triplicate shipping Bill was nearly correct, the original Shipping Bills showed excess weight. Investigation were made and statements of persons concerned were recorded and ultimately Show Cause Notices was served on the appellant and others. The appellants pleaded that the lapse was inadvertent and that they had not obtained Advance Licence and hence there was no contravention or attempt to evade any duty. The matter was however adjudicated upon and the impugned order was passed.
3. Mr. A.V. Naik, the Id. Advocate for both the appellants has referred to the Show Cause Notice and has submitted that the Notice has proposed confiscation under Section 113(d) of the Customs Act read with Section 50 of the said Act and Section 3(3) of the Import Control Order, 1988. Referring to the provisions of Section 113(d) of the Act, the Id. Advocate has pleaded that the same is applicable only when the goods are brought for export contrary to prohibition imposed under the Customs Act or any other law for the time being in force and hence there being no prohibition either under the Customs Act or any other law, the said provision does not stand attracted. Accepting the position that there is a non-compliance with the provisions of Section 50 of the Act, he has pleaded that such non-compliance would not fall within the category of Section 113(d) of the Act. The Id. Advocate has then pleaded that though the confiscation is ordered vide Section 113(i) of the Act, the said provision is not invoked in the Show Cause Notice and there also mis-declaration ought to be in relation to dutiable or prohibited goods for lodging a claim under drawback. Whereas here, that is not the case. He has pleaded that as such, there is no justifiable ground to order confiscation under Section 113 of the Act and as such, penal provisions of Section 114 of the Act also cannot be invoked. Challenging the acceptability of the statements recorded, pleading them to be not admissible as obtained under pressure, the Id. Advocate has further pleaded that there is absolutely no mis-declaration in any other aspect and the only variation is in relation to the weight and has referred to the decision of Tribunal in Badri Prasad and Sons Pvt. Ltd. v. Collector - 1995 (80) E.L.T. 624 (Tri.) and has pleaded the same to be directly on the issue, pleading that non-compliance with provisions of Section 50 of the Act may render the appellants liable to penalty but for that, the provisions exist only in Section 117 of the Act and the said Section is not invoked in the Show Cause Notice.
4. Mr. K.M. Mondal, the Id. SDR has however supported the order and has pleaded that the export was attempted during the Policy period 1992-97 when Foreign Trade (Development and Regulation) Act, 1992 and Foreign Trade (Regulation) Rules, 1993 were in force. He has pleaded that the appellants have admitted non-compliance with provisions of Section 50 of the Customs Act and has pleaded that the question is whether this could attract the provisions of Section 113(d) of the Act. The Id. SDR has then referred to Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992 (in short Foreign Trade Act) and has pleaded that all the goods to which any order passed under Section 3(2) applies, are deemed to be prohibited goods and referring to Sub-section (2) he submits that under the Act, the Central Government is empowered to order prohibiting restricting or otherwise regulating export of goods. He has then referred to Section 11(1) of the Foreign Trade Act which provides that no export shall be made except in accordance with the provisions of the Act or Rules and orders made thereunder. The Id. SDR has submitted that vide Rule 11 of the Foreign Trade (Regulation) Rules, 1993 (in short the Rules), every export consignment has to be covered by a Shipping Bill which shall contain value, quality and description of the goods and should bear the Certificate that the declaration so made is correct and one in terms of export contract, and vide Sub-rule (2) of Rule 14, no person should employ any corrupt or fraudulent practice for the purpose of exporting any goods. It is his submission, the mis-declaration that makes the goods prohibited for export, as there is a patent contravention and the same would therefore attract the provisions of Section 113(d) of the Act. Pleading that the declaration as to the correct weight is one of the essential criteria, he has pleaded that the decision of the North Region Bench referred to by the appellants, calls for a second look and ought to be reconsidered. He has also pointed out that the weight differentiation is about 53%.
5. The Id. Advocate for the Appellant has however pleaded that here is not an import under Advance Licence where weight has any consideration.
6. Considering the submission and going through the records it appears that the Show Cause Notice is only for confiscation under Section 113(d) of the Act and provisions of Section 113(i) or any other provisions are not invoked. When the Show Cause Notice does not allege any contravention in that regards and the noticee is not called upon to answer that charge, order of confiscation based on the same, cannot be sustained and is therefore set aside.
7. Section 113(d) of the Act is in relation to prohibited goods. The word "prohibited goods" in relation to the provisions of the Customs Act, 1962 has been defined in Section 2(33) which reads :
" Prohibited goods' means any goods the import or export of which is subject to any prohibition under this Act or any other Law for the time being in force but does not include any such goods in respect of which the conditions, subject to which the goods are permitted to be imported or exported, have been complied with".
There is no evidence brought on record or even an allegation is made in the Show Cause Notice that Polyester Dyed Fabrics - Textile Pieces are, for the purpose of exportation, subjected to any prohibition or restriction and that restriction if any, imposed disentitled the exporter from exporting the goods.
8. The Id. SDR has however taken pains to plead that the provisions contained in Foreign Trade Act and Foreign Trade Rules, when read conjointly, would tantamount to laying down prohibition against export and thus attract the provisions of Section 113(d) of the Act. There, however, does exist a distinction between prohibition or restriction, regularisation and compliance with the procedural formalities.
9. The Id. DR has referred to* Section 3(3) of the Foreign Trade Act, but has not shown, nor does any allegation exists, that an order is issued vide Section 3(2) of the Act prohibiting exports of goods unless the same correspond in weight or meets with certain specifications weightwise. Rule 11 of the Foreign Trade Rules also does not say that description weightwise, also should be specified. These are not the goods exported under DEEC Scheme or imported under Advance Licence, where weight may have some significance.
10. Considering from any angle, therefore, non-mentioning the correct weight of the export consignment would make the goods prohibited from being exported.
11. At the best that could be a procedural formality and non-compliance thereof and violation of the provisions of Section 50 of the Customs Act, is admitted.
12. The same however would not attract the provisions of Sec. 113(d) of the Act. The same is the ratio of the North Region Bench of the Tribunal in Re : Badri Prasad & Sons (P) Ltd. (supra) referred to by the Id. Advocate and hence order of confiscation under Section 113(d) also cannot be sustained.
13. Non-compliance with statutory requirement may not attract penal liability under Section 114 of the Act but the same could fall within the penalty provisions of Section 117 of the Act. Plea is raised that Section 117 is not invoked in the Show Cause Notice. However when penalty provisions of Section 114 are invoked which are for major contravention, the penalty could be imposed under other provision meant for minor contravention, separate invocation of such a provision may not be essential as the major always includes a minor one. Considering accordingly, though penalty under Section 114 of the Act cannot be imposed, under the given set of circumstances, with contravention of the provisions of Section 50 of the Customs Act, 1962 having been admitted, the penalty is being imposed under Section 117 of the Act.
14. The maximum penalty provided for under Section 117 of the Act is Rs. 1,000/- and hence the penalty of Rs. 1,000/- is imposed on the appellant firm. When the penalty is imposed on the firm, separate penalty on the Director does not appear necessary.
15. In the result, while Appeal No. C/68/96 is allowed, Appeal No. C/67/96 is partly allowed and while setting aside the order of confiscation under Section 113(d) & (i) of the Act and also the penalty under Section 114 of the Act, penalty of Rs. 1,000/- is imposed under Section 117 of the Act.