Custom, Excise & Service Tax Tribunal
Commissioner Of Customs vs Rumana Leather Company on 18 November, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C//40976/2015 & C/CO/40816/2015
[Arising out of Order-in-Appeal C.Cus.II No.150/2015 dt. 30.1.2015 passed by the Commissioner of Central Excise (Appeals-II), Chennai]
Commissioner of Customs
Chennai-IV
Appellant
Versus
Rumana Leather Company Respondent
Appearance:
Shri K. Veerabhadra Reddy, JC (AR) For the Appellant Shri S. Venkatachalam, Advocate For the Respondent CORAM:
Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of hearing/decision : 18.11.2016 FINAL ORDER No.42282/2016 The facts of the case are that respondent filed shipping bill No.5057127 dt. 18.9.2014 for export of goods declared as finished leather. Four representative samples were drawn and sent to CLRI for test to verify whether the goods were finished leather or otherwise. CLRI confirmed that the leather is finished in respect of three samples. However, in respect of the fourth sample, CLRI certified that it does not satisfy the norms and conditions laid down in Public Notice No.21/2009-14 as to the type of finished leather as declared. Accordingly, while allowing remaining consignments for export, the disputed consignment was adjudicated upon, goods were confiscated for non-fulfilment of conditions, misdeclaration etc. Original authority allowed redemption, under Section 125 of the Customs Act, of goods valued at Rs.43,03,488/- on payment of fine of Rs.43,00,000/- under Section 125 of the Customs Act and allowed shut out of the cargo. Penalty of Rs.2,50,000/- was also imposed on the respondent under Section 114 (ii) ibid. On appeal, Commissioner (Appeals) vide order dt. 30.1.2015 allowed the appeal of the importer and set aside the confiscation of the goods and consequent redemption fine and penalty. Hence this appeal by the department.
2. On behalf of Revenue, Shri K. Veerabhadra Reddy, JC, Ld. A.R. reiterated the grounds of appeal and in particular submitted that CLRI report has clearly indicated that the goods is not finished leather for the purpose of public notice; that exporter had in fact requested for shut out of that part of the export consignment which was not meeting the required standards. Hence confiscation and imposition of redemption fine and penalty is very much in order. He further submitted that Commissioner (Appeals) in pages 5 & 6 of the OIA has referred to a subsequent opinion of CLRI dt. 14.11.2014 and has come to the conclusion that the observation therein is contradictory to the first clarification. Ld. A.R pointed out that in fact the second clarification, which is in the nature of opinion, is actually supplemental to the first one. For these reasons, he prays that appeal may be allowed.
3. On the other hand, Ld. Counsel Shri S. Venkatachalam appearing for respondent, raised a preliminary objection stating that the value involved is below the limit for Revenues appeal to CESTAT and hence it should be dismissed as infructuous.
4. At this point, Ld. A.R submits that this is not the case and in fact duty that could be involved in the disputed goods would be Rs.25,82,093/-.
5. Ld. Counsel further submits that failure to meet the requisite standards as reported by CLRI was in any case not intentional and they were not aware that skin surface area should less than or equal to 14 sq.ft. are not considered as hides. For this reason, he made an alternate plea that there should not be imposition of redemption fine and penalty.
6. Heard both sides and gone through the facts.
7. It is clear from the records that respondent during the personal hearing have not disputed the findings of the certificate No.7234/2014 dt. 25.9.2014 of CLRI. In the written submissions, dt. 20.10.2014 they have also requested shut out of the leather which does not satisfy the norms. These facts are very clear from the discussions in the OIO. It is also to be noted that in respect of the other three consignments where CLRI report is in their favour, they have not asked for retest and they have sought export of the same. In the circumstances, I find that the impugned order setting aside confiscation of goods and imposition of redemption fine and penalty only on the basis of apparent contradiction found by lower appellate authority between the two reports of CLRI is misconceived and an error-finding. At the same time, I note that one of the export consignments not meeting the requisite standards cannot be attributed to intentional or obvious reasons on the part of the exporter. It could have very well been due to mistake or some negligence on their part. This being the case, there is case for reduction in redemption fine and penalty.
8. In the event, confiscation of the goods ordered by the original authority is restored. However, redemption fine imposed under Section 125 of the Customs Act, 1962 is reduced to Rs.1,50,000/- (Rupees One lakh Fifty thousand only) and penalty of Rs.2,50,000/- imposed on the appellant under Section 114 (ii) is also reduced to Rs.1,00,000/- (Rupees One lakh only).
Appeal is allowed in the above terms. In view of disposal of appeal, CO filed by respondent stands disposed.
(Dictated and pronounced in open court) (MADHU MOHAN DAMODHAR) MEMBER (TECHNICAL) gs 5