Customs, Excise and Gold Tribunal - Delhi
Amber Woollen Mills vs Collector Of Customs on 1 June, 1994
Equivalent citations: 1994(72)ELT855(TRI-DEL)
ORDER
S.K. Bhatnagar, Vice President
1. This is an appeal against the order of Collector Customs, Bombay No. S/10, dated 31-10-1986.
2. At the outset a question arose about the jurisdiction of the Bench in view of the fact that whereas in column No. 8 of the Memorandum of Appeal, the appellant had mentioned that the case does not involve any question having relation to the rate of duty or value of the goods for the purposes of assessment but in the Appeal Memorandum questions relating to valuation appear to have been raised.
3. The Learned Counsel clarified that though they were aggrieved with the valuation and had mentioned that point but they do not intend to press the same and the matter may be heard by this Bench.
4. He added that he would however, like to raise preliminary point regarding jurisdiction of the Collector of Customs, Bombay in view of the facts of this case.
5. It was his submission that they had placed order for importation of shoddy wool of given specifications and it was to be sent to Delhi via Bombay i.e. after transhipment at Bombay it was to be cleared at Delhi.
6. They had accordingly filed permission for transhipment and the same had been allowed by the proper officer.
7. In spite of it the goods were detained and adjudicated at Bombay by the Collector.
8. He stated that they had not filed Bill of Entry at Bombay and the goods were only in transit at Bombay and therefore the right course was to allow them to reach Delhi and then the Delhi Customs could have taken appropriate action under the law.
9. At this stage, when the Learned Counsel drew attention to the copies of the transhipment permits filed by them to show that transhipment had been allowed by the AC some doubt rose as to whether they related to the consignment in question and both the sides were directed by the Bench to check up and clarify the position. Consequently, the appellants filed a date-sheet showing chronological statement of events and photocopies of transhipment permit.
10. The Learned Counsel clarified, in response to queries from the Bench that in this case the order was placed for shoddy wool with minimum 70-75% wool content as per Import Policy for April to March, 1985 and the supplier was asked to furnish a Wool Content Certificate; Further an irrevocable Letter of Credit was opened and the transhipment application was filed on 15-6-1985 in anticipation of arrival of the goods. The ship in fact berthed on 29-7-1985. In the meanwhile, the AC had allowed transhipment on 8-7-1985.
11. But before the goods could be actually transhipped after unloading they were detained and samples were tested and a show cause notice was issued on 18-12-1985 alleging inter alia mis-declaration and liability to confiscation on various grounds.
12. According to the Department the consignment was described as one of shoddy wool waste but in fact contained 80% synthetic waste or synthetic fibre and there was mis-declaration regarding description and value and the importation was not covered by OGL.
13. It was his contention that a declaration under the Customs Act means a declaration on the Bill of Entry upon importation but no such Bill of Entry had been filed or was required to be filed at this stage as the goods were in transit and the declaration was required to be made by filing a Bill of Entry only on arrival of the goods at Delhi and the Collector Bombay had no business to confiscate the goods in transit and had no jurisdiction for this purpose.
14. Furthermore the transhipment permit was filed in the light of the order indent acceptance and therefore, they only expected shoddy wool in the consignment. If therefore, the supplier had mistakenly sent synthetic waste then for such a wrong supply by the foreign firm, they were not responsible and could not be charged with mis-declaration with the intention to evade duty and were not liable to penalty.
15. In support of their contention and to show their bona fides, they have filed copies of the order and the irrevocable Letter of Credit and Bill of Lading all of which show shoddy wool which was accordingly declared in the Transhipment Permit.
16. It was also their contention that a number of parties had imported such goods in the same ship at the same time and therefore possibly in view of their mis-declaration the Collector had formed a similar view here and in any eventuality there was every chance of mix-up.
17. And he would once again emphasise the fact that they had filed the Transhipment Permit on the basis of documents received from suppliers and the transaction was through a bank in the normal course.
18. It was also his submission that if the correct price of shoddy wool and synthetic waste was taken into account, it will be seen that only supplier stood to gain by supplying cheaper goods in place of costlier ones and not the importer and no motive could be attributed to him. This apart, the import of shoddy wool was permissible under OGL. Further they had correctly declared the value in the light of their agreement and contract with the supplier and the documents exchanged with the latter.
19. It was also his contention that there was no concealment involved.
20. It was also his submission that Section 112 has been mentioned in the Show Cause Notice but neither Sub-clause (a) nor Sub-clause (b) had been mentioned and therefore, the Notice is defective and not a proper Show Cause Notice.
21. The Learned DR stated that this was a case of mis-declaration of description and value resulting in violation of both Customs Act and Import Trade Control Act and order.
22. The Collector of Customs, Bombay could consider the matter as the goods had been imported from abroad at Bombay although their ultimate destination in India was Delhi.
23. The Transhipment application was filed in advance of the arrival of the goods and therefore it was open to the Collector to deny transhipment on arrival of the goods when he had reason to believe that there was violation of law and once on examination the goods were found to be other than declared, it was open to the Bombay Collectorate to adjudicate the matter with regard to the goods which were within his jurisdiction.
24. The mis-declaration has been established on the basis of test report and the appellant is not even contesting the fact that synthetic waste was found in the consignment. Their argument that it was a case of wrong supply does not merit consideration as the inter alia the Bank concerned has reported that documents have not even been retired.
25. Further the declaration on transhipment permit was also required to be a correct declaration.
26. It was also his submission that there was no evidence to show that it was a case of wrong supply whereas there was substantial evidence to show that synthetic waste was sought to be imported and cleared in the guise of shoddy wool without licence and in violation of the Customs Act and Import Trade Control Order. He also drew attention to the discussion and findings in the Collector's order.
27. Learned DR also cited and relied upon the order of the WRB No. 1448-50/91/WRB, dated 31-7-1991.
28. Learned Counsel reiterated that it was a case of wrong supply and not, in any eventuality, a case of mis-declaration. They neither intended to evade duty nor violate Customs Act/ITC and he would like to emphasise that even the Certificate of Composition had been insisted upon and it shows shoddy wool of U.K. origin.
29. He also submitted that WRB's order is distinguishable as the appellants have not abandoned the goods in this case.
30. Further, although they are not pressing the contention regarding value for the purpose of assessment, it was their contention that the value of Rs. 12 per kg. taken by the department was very high and the actual value would be Rs. 8 per kg. and it is this value which was required to be kept in view for considering whether there was any mis-declaration or not and the penalty aspect correspondingly.
31. We have considered the above submissions. We observe that in this case apparently the application for transhipment was filed before the Assistant Collector of Customs, Bombay in anticipation of arrival of the goods. The A.C.'s order, under the above circumstances could only be considered as a tentative one subject to verification and completion of other formalities on arrival of the goods. Hence, if upon arrival of the goods, the Customs had reason to believe that there was violation of the Customs and Allied Acts it was open to the Bombay Customs to initiate proper action.
32. We also observe that actually importation takes place in such cases at the port of arrival, since it is at this point that the goods enter into India. In other words, the Collector of Customs of that port acquires jurisdiction over the goods.
33. The transhipment from the port of arrival to an inland station or port falls under a different category and merely provides the machinery and procedure for facility of clearance out of Customs control at the destination.
34. Further, in the above circumstances, the declaration made in the application for transhipment permit also becomes a declaration for the purpose of the Customs Act and is required to be made correctly in all respects including description, quantity, value etc. and upon filing such an application, the importer assumes all those responsibilities which are cast upon such importers (or their agents) under the Customs Act.
35. We also observe that the appellants have not produced any correspondence exchanged with the supplier which would go to show that they had protested against a wrong supply and claimed damages and/or the supply was accepted as a wrong supply by the seller and he had agreed to compensate the appellant. We also note the DR's submission that the bank documents have not been retired. We also note that the misdeclaration is in respect of description, quantity as well as value and of a substantial character. In the circumstances, violation of both Customs Act and ITC stands established and the goods were liable to confiscation under Section 111 and the appellants were liable to penalty under Section 112. Since the Show Cause Notice clearly makes out the case and the charges have been brought home minor technical error of not mentioning Sub-clause (a) or (b) under Section 112 does not help the appellant. It was also of little consequence whether the bales of synthetic wool waste could be considered as having been concealed or not because consignment as a whole has to be taken into consideration in the circumstances of the case.
36. We also note that WRB's case" cited by the Learned DR is similar and abandonment of goods is a different matter. We agree with the ratio of the above order but find no reason to take a lenient view in the circumstances of this case.
37. In view of the above position we see no reason to interfere in the order of the Collector which is upheld.
38. The appeal is accordingly rejected.