Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Customs vs Triveni Industries, J.C. Trivedi, K.A. ... on 29 September, 2003
Equivalent citations: 2004(92)ECC486, 2003(158)ELT854(TRI-MUMBAI)
ORDER Moheb Ali M., Member (T)
1. These appeals along with stay applications are filed by the Revenue against the order-in-appeal passed by the Commissioner (Appeals), Mumbai. The stay applications were dismissed in the Tribunal's order dated 25.10.1996. The main appeals are taken up for disposal. The respondents are represented by Shri Naresh Thacker, Advocate, and the appellants by Shri H. Kotikar, SDR.
2. There is this Foreign Post Office at Mumbai where post parcels from foreign countries meant for various destinations in India are received. The parcels meant for various consignees are sorted out, a list is prepared of such parcels by the postal authorities and handed over to the proper officer of Customs for the purpose of assessing them to duty (Section 83 of the Customs Act, 1962). Rules regarding Postal Parcel & Letter Packets from foreign ports in/out of India govern the procedure to be followed in respect of post parcels. These rules were made under Sea Customs Act but somehow survived the repeal of that Act.
3. On 16.2.1994 the officers of Mumbai Zonal Unit of DRI, while working on intelligence (we are not aware of the nature of intelligence), intercepted 20 post parcels despatched from Hong Kong to M/s. Triveni Industries, Ahmedabad at FPO Mumbai. In the Customs declaration along with names of the consignor and consignee, the words 'As per invoice' were also found. That means value and the number of pieces each carton contained were not shown. On examination of the DRI officers, it was found that the 20 parcels consisted of 128000 pieces valued at Rs. 25,60,000/- of liquid crystal display watch modules with button cells. No invoice was found in the parcels. The goods were seized on the reasonable belief that they were smuggled into the country.
4. During the course of investigation, some statements were recorded (of the addressees), some premises were searched and some, what we call, incriminating documents were recovered. One Jagdish C. Trivedi, one of the partners of the firm to whom the consignments in question were addressed, handed over the invoices covering the parcels. The value shown in the invoices is HK $ 1.5 per piece. Another partner, Atmaram J. Vaghela in his statement, narrated the circumstances under which he came to obtain SSI certificate in the name of M/s. Triveni Industries for manufacture of digital watches, quartz watches etc., how he obtained IE code number and other details and as to how he, in connivance with the foreign supplier, planned to import watch modules, undervaluing them etc. He however could not go through this plan to undervalue the goods as he came to know that the goods were intercepted by DRI. He advised the foreign supplier to correctly declare the value (HK $ 1.5 per piece). The rest of the statements and investigation are not relevant to decide the issue. In due course, a show cause notice was issued and the case was adjudicated by the Deputy Commissioner, Mumbai, where by he confiscated the goods under Section 111(d) and (m) of the Act and imposed penalties.
5. The Commissioner (Appeals), before whom the appeal came up, held that the goods are not liable to confiscation under Section 111(d) as there was no prohibition against import of watch modules. The goods could be imported under OGL by an actual user and the respondents were actual users inasmuch as they had SSI registration; that the goods were not liable to confiscation under Section 111(m) as there was no misdeclaration of value or quantity; that the persons concerned were not liable to penal action as the goods themselves were not liable to confiscation. He also held that the DR1 should have allowed the consignment to proceed to Ahrnedabad before taking any action; that the goods were in transit to Ahmedabad and such goods should not be intercepted, seized and confiscated enroute. He set aside the order of the Deputy Commissioner.
6. The department felt aggrieved by the order of the Commissioner (Appeals) and came in appeal. The grounds are: The Commissioner (Appeals) has not appreciated the fact that, but for the timely investigation of DRI, the goods could have been cleared at much lower prices resulting in huge loss of revenue; that he failed to appreciate that the goods were imported without an import licence; that he did not give proper consideration to the fact that the parcels did not contain a proper declaration; that he did not contradict the finding of the lower authority with reference to the interception by DRI under Section 25 of the Indian Postal Act (whatever that means); that the Commissioner (Appeals) should not have held the importer to be actual user in view of the fact that the consignment was not addressed to the factory premises, but was addressed to a residence; that he ought to have noticed that no manufacturing activity was going on at M/s. Triveni Industries and that he should not have set aside the penalty on Shri Pagrani who abetted the offence.
7. Heard both sides.
8. We observe that the whole procedure followed by the DRI is erroneous. The post parcels were addressed to someone in Ahmedabad. Had the DRI not shown such unseemly haste, the goods would have been handed over to the proper officer of Customs by postal authorities as set out in the Rules referred to elsewhere in this order and as per Section 83 of the Customs Act and that officer would have followed the procedure set out in the Rules. He would have dealt with the parcels in the manner prescribed. The importers held a valid SSI registration and were therefore actual users. The goods could be imported under OGL by them and no import licence was required under the Exim Policy then existing. The goods are therefore not liable to confiscation under Section 111(d) of the Customs Act as held by the Commissioner (Appeals). The goods are not also liable to confiscation under Section 111(m), as the invoices subsequently produced contained all the particulars of the consignments in question, value, quantity etc. It is presumptuous on the part of the original authority as well as the appellant (Revenue in this case) to say that the goods would have been cleared undervaluing the same but for the intervention of the DRI The learned Commissioner (Appeals) rightly held that the goods are not liable to confiscation under Section 111(m). Once it is held that in the fact and circumstances of the case, the goods are not liable to confiscation, the question of imposing a penalty under Section 112 of the Act would riot arise. The Commissioner (Appeals) rightly set aside the penalty imposed on the various persons. The order of the Commissioner (Appeals) is legal and proper for the above reasons. It does not call for any intervention.
9. The appeals of the Revenue are rejected and the order of the learned Commissioner (Appeals) upheld. The appeals are thus disposed of.