Customs, Excise and Gold Tribunal - Tamil Nadu
Krishna Textiles Industries And ... vs Commissioner Of Customs on 4 November, 2003
Equivalent citations: 2004(92)ECC125
ORDER S.L. Peeran, Member (J)
1. All these appeals raise a common question of fact and law and hence they are taken up together for disposal as per law.
2. The appellants had imported synthetic rags through Tuticorin Port. It was alleged that the Public Notice in this regard did not specify Tuticorin Port and hence the import was not proper, the second issue with regard to mutilation of the goods and held that the rags were not properly mutilised and the end use certificate is also not endorsed and hence on these grounds the department ordered for confiscation of the imported synthetic rags and for complete mutilisation (sic, mutilation) of the goods. They were however permitted to be redeemed on payment of fine and penalties.
3. We have heard Ld. Counsel Shri S. Sethuraman who submits that a batch of 55 appeals by the parties and 4 appeals by the revenue on the same fact and circumstance were heard and disposed of by a common Order No. 500/1994 dated 2.5.1994. He produces a copy of the Tribunal's order, wherein the impugned orders were set aside on the ground of import made through Tuticorin Port is invalid including mutilation. The Tribunal however referred to the original authority for the purpose of verification of end use certificate. The fine and penalties were also set aside. The revenue appeals were dismissed. Counsel submits that in view of the Tribunal's order, following the ratio of the Hon'ble Madras High Court judgment, the imports were rightly made at the Tuticorin and Cochin Port and mutilation were properly done and that the fine and penalties are required to be set aside and has no objection for referring to the original authority for the purpose of verification of the end use certificate.
4. We have (sic, have heard) DR Shri C. Mani, who reiterated the departmental view.
5. On a careful consideration we noticed that the issue is no longer res integra and the matter has been decided as stated by the counsel. The findings recorded by the Tribunal in para 3 to 6 is reproduced herein below:
"3. The issue arising for determination is the issue decided in favour of the appellants/petitioners in a batch of cases by the Division Bench of the Madras High Court in their order dated 15.12.94 in Writ Appeal Nos. 461 to 468 and 548 to 550 of 1993. Therefore, this decision of the Division Bench of the Madras High Court will have to govern the other appeals also. In this context we would like to take note of the fact that as against the ruling of the Division Bench cited supra, the Department has not filed appeal to the Supreme Court to the knowledge of the learned SDR and, therefore, it has to be taken that the ruling of the Division Bench has become final and is binding on all the parties so far as the issue arising for determination is concerned.
4. In all the cases, the importers have imported synthetic/woollen rags hereinafter referred to as mutilated rags under OGL in terms of 1TC Order No. 1/90-93 dated 30.3.90 in terms of the ITC Policy for the period AM 90-93. Proceedings were instituted against the importers by the Department on the ground that (i) the goods were imported through Tuticorin Port which port was not specifically mentioned in the ITC Order 1/90-93 dated 30.3.90 and the import had been restricted only to two ports i.e. Bombay and Delhi and as such the imports were in contravention of law, and (ii) the goods imported were not completely mutilated satisfying the norms of Public Notice No. 1/88 dated 6.6.88 issued by the Collector of Customs, Trichy. Pending adjudication, some importers moved the Madras High Court seeking interim release of the goods pending adjudication and in respect of some other cases where orders of adjudication has been passed against the importers holding the importation in contravention of law, some importers filed writ petitions in the Madras High Court which eventually culminated in the order of the Division Bench cited supra including the issue in favour of the importers.
5. His Lordship Justice S. Ramalingam of the Madras High Court by his order dated 25.4.90 in Writ Petition No. 2167/90 held that restriction for import of mutilated rags only through Bombay and Delhi ports in terms of the ITC Public Notice cited supra was violative of Articles 14 and 19(6) of the Constitution of India and, therefore, unsustainable. This finding was not appealed against by the department and admittedly was allowed to become final. Therefore, validity of importation of the mutilated rags through Tuticorin/Cochin Port stands concluded and does not survive for consideration and indeed has the imprimatur of the Division Bench of Madras High Court cited supra.
6. The second issue is that the goods imported is not completely mutilated in terms of Public Notice 1/88 dated 6.6.88. The Division Bench of the Madras High Court, while confirming the order of Justice Venkataswami of the Madras High Court S. Venkataswami dated 8.1.93 in favour of the importers held that synthetic rags imported are mutilated and they fall under OGL vide Sl. No. 418 list 8 Part I of Appendix 6 of the ITC Policy for the year 1993 and in this view and also referring to the ratio of the ruling of the Supreme Court in the case of Kakkar & Co. v. CC., 1988 (35) ELT 718 decided the issue in favour of the importers. Therefore, following the ratio of the ruling of the Division Bench of the Madras High Court, cited supra, we hold that in all the appeals, the goods imported are permissible for import under OGL as mutilated rags. However, inasmuch as the learned Single Judge Venkataswami, in his order referred to above in para 8 observed that "the importers will produce the end use certificate as a condition precedent for getting back the money and for cancelling the Bank Guarantee and personal bonds" and this has been affirmed by the aforesaid order of the Division Bench, cited supra, while holding that the imports of the goods in question through Tuticorin and Cochin (in Appeal No. C/366/91-Corronation Spinning India) are permissible under law in the light of the ruling of the Division Bench of the Madras High Court cited supra, we direct the importers to produce necessary end use certificates to the authority. Since the issue is pending for a long time, a prayer was made that a direction may be given to the original authority to dispose of the matter expeditiously. We direct that the original authority shall dispose of the matter in the light of the ruling of the Division Bench and our observations above by verifying the end use certificate within one month from the date of production of the end use certificates. We make it clear that the matter is referred to the original authority only for the limited purpose of verification of the end use certificate for the purpose of giving relief as prayed by them."
6. In terms of the above order, we hold that the imports made at the Tuticorin Port are valid and the mutilation has been correctly done. Following the ratio, appeals are allowed by setting aside the imposition of fine and penalty. The matter is referred back to the original authority for limited purpose for verification of the end use certificate for the purpose of giving relief as prayed by them. The appeals are disposed of accordingly.