Customs, Excise and Gold Tribunal - Tamil Nadu
M.M. Exports And Anr. vs Cc on 29 September, 1995
Equivalent citations: 1996(63)ECR169(TRI.-CHENNAI)
ORDER
S. Kalyanam, Vice-President
1. The above appeals arise out of a common impugned order of the Collector of Customs, Madras, dated 9.7.1992 confiscating the imported goods, namely, raw silk totally valued at Rs. 61,17,014/- Under Section 111(d) of Customs Act, 1962, (the 'Act' for short} read with Section 3(2) of Import & Export Customs Act, 1962 and permitting redemption of the same on payment of a fine of Rs. 6,72,000/-. The appellants herein filed the following seven BiUs of Entry and sought clearance of 110 bales of raw silk under OGL under the new Import Policy AM 92 to 97 arrived by M/s. M.V. Tiger:
1 17849 dt. 25.5.1992 5. 1602 dt. 30.3.1992
2. 17731 -do 6. 19002 dt. 4.6.1992
3. 17745 -do 7. 19000 dt. 4.6.1992
4. 17750 -do-
The consignments were shipped from Hong Kong and were covered by Bills of Lading No. HKG/MAS/1607 to 1610 dated 30.3.1992 issued by Arabian container lines, S.A. The goods were shipped out of Hong Kong to Singapore and from Singapore the goods were shipped to Madras. Investigation by the Department revealed that the Arabian container lines was only a 'container forwarding agents' and the Bills of Lading issued by them indicated that the goods in question were put on board on 30.3.1992. The Bills of Lading issued by M/s. NYK line did not indicate the date on which the goods were put on board the ship. However, verification of the Bills of Lading issued by M/s. NYK line for other cargo by the same vessel indicated that the goods in question were put on board only on 16.4.1992 at Hong Kong and the vessel sailed on 17.4.1992 and this was also confirmed by the freight list produced by the Customs House Agent. Since the goods wers loaded in the ship only on 16.4.1992, the Department took the view that it is only Policy 92 to 97 that would be applicable under which the consignments in question would require a specific licence for clearance. It is in this view that proceedings were instituted against the appellant which resulted in the impugned order.
2. Shri Vaidyanathan, the ld. Consultant for the appellant submitted that the appellants were actually handed over the goods in Hong Kong on 30.3.1992. The goods were actually supplied by the suppliers in Hong Kong on 30.3.1992 and the appellants were under the impression that the goods would be despatched on that day itself and as on March, 1992 by virtue of a pubic notice 278 dated 29.2.1992 issued by the Ministry of Commerce, Govt. of India, the goods in question can be freely imported. The appellants have their manufacturing units in Calcutta and Bangalore and are the actual users exporting silk garments. Under the new Import Policy AM 92 to 97 which became operative from 1.4.1992, the goods, namely, raw silks which are consumable items could be imported only under licence as restricted items coming under Chapter XV Para 156 Part II-A of the Import Policy AM 92 to 97. The appellants on 6.7.1992 and 7.7.1992 sought clearance of the goods without licence on the basis of the date of shipment which according to the appellants was earlier than 1 4 1992. The appellants waiving the Show Cause Notice participated in a personal hearing on 8.7.1992 and by their letters dated 6.7.1992 and 7.7.1992 which are referred to in the impugned order the appellants offered to execute a bond for provisional clearance and also a licensing bond for clearance of the goods in case a licence is found to be legally necessary by the Department for clearance. This plea was without prejudice to the contention of the appellants that the goods would be freely permissible for import without a licence if the Bill of Lading date is taken as 30.3.1992. The appellants, however, submitted that the goods were made canalised items under appendix 5 part A of Import Policy of AM 90 to 93 and could be imported only by Central Silk Board. It is only in this context that pubic notice 278 dated 29.2.1992 was issued by the Ministry of Commerce permitting the goods as freely importable. The impugned order is bad in law because no opportunity was given to the appellants to produce the necessary licence in spite of their offer made in the letter of 6.7.1992. The appellants were in possession of valid licence covering the goods in question and, therefore, the adjudicating authority, in fairness, if he had taken a view that the goods were not freely importable; public notice 278 dated 29.2.1992 notwithstanding, should have afforded the appellant an opportunity to produce the necessary licence for clearance of the goods. Since no such opportunity was given, the order is liable to be set aside. The ld. Consultant further submitted that EX-IM SCRIPS which are freely transferable were purchased by the appellant and the Calcutta High Court in the case of Mis. Enterprise International Ltd. v. Collector of Customs by judgment dated 9.3.1993 clearly held that the goods in question would be permissible for clearance under EX-IM SCRIFS and struck down the circular dated 17.12.1992 issued by the office of the Director General of Foreign Trade to the effect that the goods would not be permissible for clearance against EX-IM SCRIPS if they were endorsed in general terms for import of items listed in appendix 3 or appendix 5 part A of AM 90 to 93 Policy. The Calcutta High Court also took note of the fact that the customs authorities had allowed the goods in question to be released against EX-IM SCRIPS/REP licence up to 3.1.1993. The' ld. Counsel, therefore, submitted that the personal hearing was held only for the limited purpose of considering the appellants pleas as to whether the goods in question would be permissible for release without a licence and if the Department did not agree with the appellants contention, the Department should have afforded the appellants an opportunity to produce the licence. The appellant had acquired a valid licence at the relevant time and, therefore, the ld. Consultant prayed that the impugned order should be set aside and the matter remitted for reconsideration of the issue by the adjudicating authority by considering the validity and acceptability of the EX-IM SCRIPS which the appellant had procured for clearance of the goods in question.
3. The ld. SDR contended that the date of the Bill of Lading was manipulated by the appellants and it cannot be disputed on the evidence available on record that the goods were actually shipped only on 16.4.1992 at Hong Kong and this information could be found out only on the basis of the investigation. Therefore, the relevant Policy that would be applicable would be Import Policy AM 92 to 97 under which the goods in question, namely, raw silks would come within the mischief of consumable items -restricted item under Chapter XV Para 156 Part II A of the Import Policy requiring a licence for the clearance. The appellant did not produce the necessary import licence before clearance of the goods nor the appellants were in possession of any licence at the time of personal hearing. Therefore, if the appellants had produced EX-IM SCRIPS subsequent to the clearance, the same cannot be accepted in the facts and circumstances of the case.
4. We have carefully considered the submissions made before us. The appeals were elaborately argued by the ld. Consultant and on going through the various issues, the ld. Consultant finally submitted that the appellants were not pressing their case in regard to clearance of the goods under OGL nor would they insist on their plea that the Bill of Lading date should be taken as 30.3.1992. The ld. Consultant further submitted that he would mainly rest the case of the appellants for clearance of the goods on the basis of the EX-IM SCRIPS which the appellants acquired as early as 3.3.1992 licence No. 2010802 dated 6.12.1991 for Rs. 1,54,33,000/- which licence was with them prior to the importation and which licence was valid when the consignments were cleared on 10.8.1992. The ld. Counsel, however, submitted that the legal position that the goods would be permissible for clearance under EX-IM SCRIPS is well settled by the decision of the Calcutta High Court in the case of M/s. Enterprise International Ltd.,'cited supra. We, therefore, do not feel called upon to pronounce on the other contention as to whether the Bill of Lading was dated on 30.3.1992 or not. We, therefore, address ourselves only to the limited question to which the ld. Consultant ultimately confined his plea, namely, whether the adjudicating authority should have afforded an opportunity to the appellant to produce the required licence for clearance of the goods and whether the order is bad for not giving such opportunity to the appellants. The Calcutta High Court in the case of Enterprise International Ltd. v. Collector of Customs while dealing with the permissibility of clearance of identical goods under REP Licence/EXIM SCRIPS vis-a-vis the circular of the Director General of Foreign Trade dated 17.12.1992 and the provisions of the relevant Import Policy observed as under:
In my view, having regard to the circumstances of the case, the petitioners are entitled to the same interim relief as was granted by the Appellate Court in the matter of Prakash Overseas Co. (P) Ltd. In paragraph 10 of the affidavit in opposition filed by the respondents-authorities, it has been stated that the Customs authorities had allowed the goods to be released against EXIM SCRIPS/REP Licences up to 3rd January, 1993. They must have done so because they were not aware of the clarification contained in the impugned circular. In fact, in paragraph 14 of the petition the petitioners had specifically averred that the Customs authorities came to know of the impugned Circular only on 3rd January, 1993. This has not been specifically denied by the respondents. Therefore, even if the Circular had been issued on 17th December, 1992 and was by way of clarification I am inclined to hold at least at this stage that the impugned circular should not be permitted to affect the rights of the parties who may have acted on the basis of the position as prevailing till 3rd of January, 1993. If the Customs authorities did not know of the Circular till 3rd of January, 1993, it would be impossible for the general public to be aware of any internal Circular which might have been issued by the Department. For the reasons aforesaid, I direct that the respondents will release 80 per cent of the goods covered by REP Licences/EX-IM SCRIPS of the petitioners upon payment of duty on the entire consignment and upon furnishing of ITC Bond for the entire consignment after provisional assessment of duty.
A plea was also urged before us that similar goods, namely, raw silk were permitted clearance under EX-IM SCRIPS/REP Licence at Bombay and Calcutta for similarly placed importers and as a matter of fact, the ld. SDR was also directed during the previous hearings to make verifications in this regard and the appellants were also directed to furnish information with reference to the relevant Bills of Entry. Be that as it may, a copy of the licence and the EX-IM SCRIP was produced before us during the hearing which would ex facie indicate that the same was valid at the relevant time when the goods were cleared. We also note that the appellants also by their communication dated 6.7.1992 addressed to the Collector of Customs, Madras, stated as follows:
Sir, we are an 'Export House', exporting a large quantity and value of silk materials regularly since last 15 years and for which we are having a regular requirement of raw materials to fulfil our export production. In this case, we are in very much trouble to meet the shortage of raw materials as the consignments are hold up by you for a long time and as a result of which 25% of the export orders placed to us from our overseas buyers of European countries, has already been cancelled due to the non-delivery in time. Moreover, we have been warned by our other buyers that the balance further order may be cancelled by them if their requirement could not be filled up within further delivery time.
In view of the above circumstances, your good self is requested to please look into the matter urgently and consider the said B/Es on 'without licence' basis. It may please be noted that the date of shipment (in case of sea) should be the date of original Bill of Lading as per para 18(1) of the I.E. Policy 90-93 and in this case the original Bill of Ladings are showing the date as on March, 1992. However, if you so desire, we are ready to give the P.P. Bond or Licence Bond. Whichever you want in support for releasing of the above consignments, as our export order are held up and we are facing lot of problems and at the same time if we do not ship the goods in absence of the raw materials we have to pay the compensation to our overseas buyers and at the same time our country will lose a good amount of foreign exchange.
Further already we have suffered a huge loss on account of demurrage charges to be paid to the port authority and for cancellation of export order and still if the goods are not released it will be damaged as the raw silk itself is a very sensitive items and had a bad effect due to the weather changes. Rain and excessive heat will make the yarn weak and discolour and it will be most difficult to weave the goods from that material for export order.
For your kind information we have already given you the photocopy of the set of documents, which are of same identical nature and have been cleared from your Calcutta Customs authority, under OGL basis.
The appellants also wrote another communication to the ld. Collector of Customs dated 7.7.1992, the relevant portions of which reads as under:
In view of the above, your good self is requested to please arrange in consider the B/Es on OGL basis and dispose of the matter in question on 'Most Urgent' basis and ailow me to appear before the judicial Collector, for a personal hearing, if necessary. The case may be directed without issue of the 'Show Cause Notice' taking u lenient view.
The above communications make it clear that the appellant offered to give the P.D. Bond or Licence Bend for release of the goods pending assessment and also furnished photocopies of a set of documents where clearances of identical goods were permitted by Calcutta Customs authorities under OGL and appellants in their letter dated 7.7.1992 no doubt pleaded for clearance of the goods under OGL explaining their baia fides. The Calcutta High Court has clearly held that similar goods would be permissible for clearance under the relevant licensing policy under EX-IM SCRIPS and has also referred to practices of such clearances by the customs authorities. This is a matter of verification by the customs authority with reference to their records as to whether such clearances of identical or similar goods have been permitted by the customs authorities in Bombay, Calcutta and Madras, as contended by the appellants. Be that as it may, the appellant by their letter dated 6.7.1992 requested for release of the goods by-undertaking to give PD Bond or Licence Bond. The appellants have also produced a copy of the EX-IM SCRIPS which they had purchased in the market. Since the adjudicating authority confiscated the goods on the ground that the goods were not covered by a licence and since the appellants claimed to have a valid licence a copy of which was also produced before us and in the light of the judgment of the Calcutta High Court and also the alleged practice by the other Collectorate permitting clearance of similar goods under EX-IM SCRIPS/REP Licence under the relevant licensing policy, we are of the view that in the interests of justice the impugned order should be set aside and the matter remitted for reconsideration by the ld. adjudicating authority. In this view, without expressing any opinion on the merits of the issue, we set aside the impugned order and remand the matter to the ld. adjudicating authority to consider the applicability of the ratio of the Calcutta High Court to the facts of this case, the validity of the EX-IM SCRIP copy of which produced and relied upon by the ld. Consultant by taking note of the practice in other collectorates like Bombay, Calcutta, Madras, etc. in similar circumstances and pass necessary orders in accordance with law after affording the appellants a reasonable opportunity of being heard. It would be open to the appellant to put forth all pleas as are open to them in this regard and produce evidences regarding the practice in other Collectorate for clearance of similar goods under EX-IM SCRIPS which will be considered by the adjudicating authority. In this view, for the reasons stated above, the impugned order is set aside and the matter is remanded.
Sd/-
Dt. 3C.9.1994 (S. Kalyanam)
Vice-President
V.P. Gulati, Member (T):
5. I have perused the order recorded by my ld. Brother and I am not able to agree with him that the impugned order should be set aside and the matter remanded to the adjudicating authority for consideration of the validity of the EX-IM SCRIP. I observe that the issue before the adjudicating authority was whether the goods could be allowed importation under OGL or a licence was required to be produced taking into consideration the date of shipment of the goods. I observe that the appellants before us have not contested the requirement of production of licence so far as the importations are concerned and therefore their plea is only restricted to whether the licence produced can be accepted for the purpose of clearance of the goods. They have pressed the ratio of the ruling of the Hon'ble High Court of Calcutta in support of their plea to say that the description of the licence would cover the raw silk imported by them. My ld. Brother in his order has directed that the lower authority should examine the validity of the licence in the light of the ratio of the ruling of the Hon'ble High Court of Calcutta. In my view, the first question to be considered is whether the licences as have been produced by the appellants can be allowed at all to be taken into consideration. It is observed that licence produced bearing No. 2010802 dated 6.12.1991 was originally issued in the name of Indian Sugar & General Industry Export Import Corporation Ltd., New Delhi for a c.i.f. value of Rs. 1,54,33,000/- with a validity period of 18 months which has been shown as extended by the endorsement by the appellants on the back of the copy of the licence to 2 years, This licence has since expired and a balance of Rs. 49,90,741 has been shown to be still available. Therefore, this licence has become a scrap of paper so far as its utility is concerned. The appellants plea is that they had acquired this licence before the importation of the goods and their importation was therefore covered by the licence at the relevant time and inasmuch as they had indicated before the adjudicating authority that they are prepared to execute a licensing bond and a bond for provisional duty clearance of the goods, they are entitled to produce this licence now. It is seen that originally the licence was issued in the name of Indian Sugar & General Industry Export Import Corporation Ltd., who transferred it to M/s. Maruti Impex, New Delhi under a simple letter dated 7.2.1992, the contents of which are reproduced below:
Sub-Transfer of Import Licence: No. P/S/2010802 dt. 6.12.1991 for Rs. 1,54,33,000/-
With the subject to the above, we are enclosing herewith copy of the above licence and hereby transfer the same in your favour in terms of para 185(1) and 192 of the Import Export Policy in force. You may operate upon the said licence and goods may be imported in accordance with the import policy in force. We hereby agree we have received the full amount of premium for transfer of the said licence. We shall have no right or claim or any responsibility after the transfer of the above licence.
Maruti Impex under their letter No. nil dated 3.3.1992 transferred the licence with the full amount to M/s. Manoharlal Mahabir Prasad and the relevant portion of the letter is reproduced below:
Re : Retransfer of Import Licence No. P/S 2010802 dt. 6.12.1991 for Rs. 1,54,33,000/-
By enclosing both the copies of the above import licence we do hereby transfer the same in your favour in terms of para 199 & 9 of the import policy for AM 93.
We confirm received full consideration for the transfer and the goods thus imported against this licence will be for your sole benefit and we shall have no claim or right on the goods imported. This transfer is confirm.
M/s. Manoharlal Mahabir Prasad transferred the licence with the balance amount of Rs. 60,00,000/- to MM Exports vide letter No. nil dt. 3.3.1992, i.e. on the same date they acquired the license which is reproduced below:
Re : Re-transfer of Import Licence P/S 2010802 dt. 6.12.1991 for Rs. 1,54,33,000/- to the tune of Rs. 6,00,000/- (sic)(sixty lakhs).
With the subject to the above we are enclosing copy of the above licence and hereby transfer part value of the licence for Rs. 60,00,000/-in your favour in terms of para 185(1) and 192 of the Import Export Policy in force.
We confirm received full consideration for the part transfer and the goods thus imported against this licence will be for your sole benefit and we shall have no claim or right on the goods imported.
Thanking you, For Manoharlal Mahabir Prasad Sd/-
Partner It is seen from the endorsement on the back of the licence that the licence was operated for the first time for importation of raw silk under BE No. 911 dated 15.10.1993 and the licence was first debited on 19.10.1993 and thereafter there have been quick importations in October, 1993, November, 1993 the last debit being dated 30.11.1993. The importation of the goods in question took place on 25.5.1992 during the currency of the import policy for the period AM 92-97. It is not understandable when the appellants were called upon to produce the licence at the relevant time, why the appellants failed to come forward with the licence. It is not possible to believe that the appellants who were urging the plea that the goods were sensitive items and were likely to get spoilt and were required to meet the export obligations allowed the goods to remain uncleared for want of production of licence which they claim was in their possession and which had not yet been operated and was also not tied up with any other clearance as the first clearance against that licence was made only in October, 1993. The appellants' plea before the adjudicating authority was that clearance should be allowed to be made against PD Bond or Licence Bond as they had no licence readily available with them for production. I observe that the ld. lower authority in this regard has observed as under:
They came up with a request for release of the goods on a provisional/licence bond without having any licence not readily available for production and hence the request was not entertained.
Even in their pleas before the lower authority they never urged that they were in possession of the licence bearing No. 2010802 for a value of over Rs. 1.5 crores. The only plea they have made in this regard was as under:
However, if you so desire, we are ready to give the PD Bond or Licence Bond whichever you want in support for releasing of the above consignments, as our export order are held up and we are facing lot of problems and at the same time if....
6. There is no explanation forthcoming from the appellants as to why they failed to produce the licence the copy of which they have now produced before us, at the relevant time before clearance of the goods, when it had been clearly indicated that licence would be required for clearance of the goods, when they sought for clearance of the goods on provisional licence bond in case their claim for clearance under OGL was not acceptable. They made no mention of any particular licence being in their possession at the relevant time. It is, therefore, reasonable to conclude that the appellants did not have the licence at the relevant time to produce before the authorities for clearance of the goods. It is not understandable when the appellants had over Rs. 1.5 crores worth of licence with them and out of which Rs. 49,90,741/- is still remaining unutilized with them why they were not willing to come forward with the licence once the objection had been taken by the authorities. The very fact that this licence was operated for the first time on October, 1993 goes to show that the appellants did not have this licence in their hand at the relevant time. Transfer of the licence of the type produced can take place by a simple letter without its being registered with the licensing authorities and the said letter can be produced at any time with any date affixed thereto. As it is, this licence was originally obtained by one Indian Sugar & General Export Import Corporation who transferred the same to M/s. Maruti Impex, New Delhi who has transferred it to M/s. Manoharlal Mahabir Prasad who in turn had transferred the same to MM Exports on the same date and Manoharlal Mahabir Prasad is said to be the Partner in MM Exports as stated by the ld. Consultant. It is not difficult to imagine that to suit the convenience of the appellants, they got it transferred in their name under a letter with a date suiting them. There is no evidence of payment of consideration by the appellants nor any verifiable contemporary documentary evidence produced evidencing the transfer of the licence at the relevant time. It will be a dangerous precedent in case in said licence is allowed to be utilized to cover the importation made long time back when the validity period of the licence as such has already expired. The appellants should have come on record with the licence before the lower authority for him to verify the fact of acquisition of the licence by the appellants at the relevant time. Further, it is seen that for the importation by MM Exports and Manoharlal Mahavir Prasad, the same licence has been used. The West Regional Bench of the Tribunal in the case of Biren Shah v. Collector of Customs where EX-IM SCRIP was sought to be produced under similar circumstances have observed as under:
There is no whisper of any licence held by him during adjudication proceedings. For any item (other than absolutely banned items), some transferable licences will be floating around in the country. If such request for remand on plea of production of licence at the appeal stage is entertained, frauds will be perpetuated by getting such licences with back dated letters of transfer.
7. In view of the above, respectfully following the ratio of the above decision of the West Regional Bench and in view of my observations above, I hold that the licence sought to be now produced cannot be considered for the purpose of importation of the goods in question.
8. So far as the redemption fine levied is concerned, the same is in the range of 10% in all the cases as could be seen from the following details.
______________________________________________________________________________________ SI. No. B/E No. & date Value of the Goods Redemption fine (RS.) levied (Rs.) ______________________________________________________________________________________
1. 17849 MM Exports 21,18,454/- 2,16,000/-
2. 17731 MM Exports 15,07,974/- 1,52,000
3. 17745 MM Exports 15,09,969/- 1,53,000
4. 17750 MM Exports 14,94,107 1,51,000
5. 19000 @@ 15,09,141/- 1,52,000
6. 19002 @@ 16,31,068/- 1,65,000/-
@@ Appellant Manoharlal Mahavir Prasad ______________________________________________________________________________________
9. No plea has been taken by the appellants that the redemption fine levied is in any way excessive warranting reduction.
10. In view of the above, I do not find any reason to interfere with the order passed by the ld. adjudicating authority. I, therefore, dismiss the appeals.
Sd/-
(V.P. Gulati) Member (T) Dt. 8.11.1994 POINTS OF DIFFERENCE Whether in the facts and circumstances of the case the impugned order should be set aside and the matter remanded to the adjudicating authority for the reasons set out by Shri Section Kalyanam, Vice President.
OR Whether in the facts and circumstances of the case the licence now produced by the appellants should not be considered and the appeals should be dismissed, for the reasons set out by Shri V.P. Gulati, Member (T).
Sd/- Sd/- (S. Kalyanam) (V.P. Gulati) Vice-President dt. 10.11.1994 Member (T) Jyoti Balasundaram, Member (J):
11. The following point of difference has been referred to me for resolution:
POINTS OF DIFFERENCE Whether in the facts and circumstances of the case the impugned order should be set aside and the matter remanded to the adjudicating authority for the reasons set out by Shri Section Kalyanam, Vice President.
OR Whether in the facts and circumstances of the case the licence now produced by the appellants should not be considered and the appeals should be dismissed, for the reasons set out by Shri V.P. Gulati, Member (Technical).
12. The ld. Member (J) VP proposed setting aside of the impugned order of confiscation of raw silk with option to redeem on payment of a fine holding that since the adjudicating authority confiscated the goods as they were not covered by a valid licence and the appellants claimed to have a valid licence, copy of which was also produced before the bench, and in the light of the judgment of the Calcutta High Court in the case of Enterprise International reported in 1993 (68) ECR 304 (Cal.) permitting clearance of identical goods under REP licence/EXIM SCRIPS. He proposed remanding of the matter to the adjudicating authority for consideration of the applicability of the ratio of the Calcutta High Court judgment to the facts of the case. However, the ld. Member (T) held that the appellants did not have a valid licence at the relevant time and in the absence of any explanation forthcoming from the appellants as to why they failed to produce the licence before clearance of the goods, the licence produced before the bench was a fabricated document. He therefore held mat the licence sought to be produced before the bench should not be considered for the purpose of importation of the goods in question, confirmed the impugned order and proposed rejection of the appeals.
13. Shri K.R. Natarajan, the ld. Consultant submits that the appellants were of the view that the raw silk imported by them from Hong Kong was freely importable under OGL as Public Notice No. 278 dated 29.2.1992 issued by the Ministry of Commerce, Government of India, permitted clearance of such goods under OGL. However, under the new Import Policy April March, 1992-97 which became operative from 1.4.1992, the raw silks which are consumable items could be imported only under licence coming under Chapter XV Para 156 Part II-A of the Import Policy. Since the appellants required the goods urgently, they waived the Show Cause Notice and offered to execute a bond for provisional clearance and also a licensing bond in case the licence was ultimately found to be necessary for clearance. He submits that since the licence was not readily available for production before the authorities, the appellants sought clearance under bond and this cannot be interpreted to mean that they were not in possession of a valid licence at the time of clearance of the goods. He attacks the impugned order on the ground that no opportunity was given to the appellants to produce the necessary licence and the order was passed on 9.7.1992 i.e. 3 days after the appellants sought clearance without licence. He submits that EX-IM SCRIPS which are freely transferable were purchased by the appellants and the goods in question would be permissible for clearance under these EX-IM SCRIPS as held by the Hon'ble Calcutta High Court in the case of Enterprises International cited supra. In this background, he submits that it is not correct to hold that there is no explanation as to why the appellants failed to produce the licence, the copy of which they produced before the bench, at the relevant time of clearance. The ld. Consultant contends that there is no basis for the ld. Member (T) to hold that the licence obtained by them was transferred in their name under a letter with a date to suit their convenience. In the absence of any charge of fraud being established against the appellants the ld. Consultant submits that the order of the West Regional Bench of the Tribunal in the case of Biren Shah v. Collector of Customs is not applicable to the facts of this case, and reliance based upon the same by the ld. Member (T) is misplaced. He therefore urges acceptance of the order proposed by the ld. Member (J) VP.
14. Shri Arulsamy, the Id, DR draws my attention to the order recorded by the ld. Member (T) in which details of the transfer of the licence dated 6.12.1991 originally issued in the name of Indian Sugar & General Export Import Corporation, New Delhi have been set out, from which it is clear that the licence has changed hands several times. He contends that the claim of the appellants that they were in possession of a valid licence at the time of clearance of the goods is not plausible as they failed to produce the same for clearance, even though it had not yet been operated and also was not tied up with any other clearance, as the first clearance against that licence was made only in October, 1993. He submits that the very fact that the licence was operated for the first time in October, 1993 conclusively confirm that the appellants did not have this licence with them at the relevant time of import of the raw silk in question. Hence, the ld. Member (T) has rightly turned down the request of the appellants to consider the licence produced before the bench for the purpose of importation of the disputed goods. Hence he urges acceptance of the order proposed by ld. Member (T).
15. I have carefully considered the submissions made by both sides Prior to the Import Policy AM 92-97, the goods in question could be freely imported. They were canalised items under appendix 5 part A of Import Policy of AM 1990-93 and it is in this context that Public Notice No. 278 dated 29.2.1992 was issued permitting free import of these goods. It is only under the new Import Policy which became operative from 1.4.1992 that the goods could be imported under a licence as restricted items. The appellants sought clearance of the goods without licence on the basis of the date of shipment on 6.7.1992 and 7.7.1992. They waived Show Cause Notice and participated in the personal hearing on 8.7.1992 and the impugned order of confiscation was passed on 9.7.1992. There is nothing on record to show that the appellants were afforded any opportunity to produce the necessary licence which the Department felt was required to cover the goods. The ld. Member (J) VP has set out the details of the communications addressed by the appellants to the Collector of Customs from which it is clear that the appellants offered to furnish a P.D. bond or licence bond for release of the goods pending assessment and also furnished photocopy of a set of documents where clearances of identical goods were permitted by the Calcutta Customs under OGL. Further, the Hon'ble Calcutta High Court has held that similar goods would be permissible for clearance under the relevant licensing policy with EX-IM SCRIPS. The ld. Member (J) VP has extended the opportunity to the appellants for production of EX-IM SCRIPS for examination of its validity, which opportunity was not given to the appellants by the adjudicating authority, in order to enable them to place all the necessary documents before the adjudicating authority to satisfy himself as to whether the appellants were in possession of a valid licence to cover the goods in question. In the case of Biren Shah cited supra, the appellants admitted in their letter dated 14.1.1991 that there has been a contravention of the Import Policy and the provisions of the Customs Act and did not mention that the goods were covered by any licence held by him and it is in this context that the bench held that frauds would be perpetuated for getting such licence with back dated letters of transfer if the request for remand was accepted while in the present case, the appellants did not have reasonable opportunity to produce the licence before the adjudicating authority. I therefore, agree with the view expressed by the ld. Member (J) VP that the matter should be remanded to the adjudicating authority for passing a fresh order in accordance with law after affording the appellants a reasonable opportunity of being heard and adducing evidence regarding the practice in other collectorates for clearance of similar goods under EX-IM SCRIPS.
16. The case file is returned to regular bench to pass an appropriate order.
Sd/-
(Ms. Jyoti Balasundaram) Member (J) FINAL ORDER In view of the majority decision, the matter is remanded to the adjudicating authority for passing a fresh order in accordance with law.