Calcutta High Court
Commissioners Of Customs (Prev.) vs M/S. New Heera Sales Corporation & Anr on 4 May, 2011
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
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IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction
(Original Side)
Present:
The Hon'ble Mr. Justice Bhaskar Bhattacharya
And
The Hon'ble Mr. Justice Sambuddha Chakrabarti
CUSTA No.4 of 2010
Commissioners of Customs (Prev.), West Bengal, Kol.
Versus
M/s. New Heera Sales Corporation & Anr.
For the Appellant: Mr. N.C. Roy Chowdhury,
Mr. P.D. Mukherjee.
For the Respondent: Mr. J.P. Khaitan,
Mr. Yasin Ali.
Heard on 26.04.2011.
Judgment on: 4th May, 2011.
Bhaskar Bhattacharya, J.:
This appeal under Section 130 of the Customs Act, 1962 is at the instance of the Commissioner of Customs (Preventive) West Bengal, and is directed against an order dated 14th October, 2009, passed by the Customs, Excise and Service Tax, Appellate Tribunal, East Regional Bench, Kolkata, in 2 Appeal No.157 of 2009 by which the said Tribunal set aside the order of Commissioner of Customs of Confiscation and penalty.
Being dissatisfied, the Commissioner of Customs has come up with the present appeal.
A Division Bench of this Court at the time of admission of this appeal formulated the following substantial question of law:
"Whether the learned Tribunal erred in law in not considering the Test Report though admittedly submitted before it while passing the impugned judgment and order?"
The facts giving rise to filing of this appeal may be summed up thus:
a) M/s. Heera Sales Corporation, the respondent before us, filed an appeal before the Tribunal below against the order of the Commissioner of Customs (Preventive) West Bengal, by which the said Commissioner of Customs imposed the penalty of Rs.2,00,000/-
and also confiscated 20 consignments of fabric belonging to the said respondent by disallowing the claim of ownership.
b) On 5th March, 2008 certain consignments of fabrics were seized from the godown of one Inland Road Transport at Kolkata on the ground that those were illegally imported to India 3
c) The respondents claimed the fabric covered under 20 consignments notes which they allegedly purchased from Mapasa Tapes Pvt. Ltd. and Global Overseas under 34 invoices. During investigation, the Revenue collected the bills of entry from the original importer regarding the import of those goods who sold the consignments to the present respondent.
d) According to the respondent, the goods were PVC quoted fabrics and the same were not notified goods under Section 123 of Customs Act and thus, the burden of proof that the same was smuggled to India was on the Revenue.
e) The Commissioner of Customs (Preventive) came to the conclusion that the Transporter was bound to verify contents of consignment and also genuineness of the names and addresses of the consignor and the Transporter could not evade its responsibility for abetting such crime and thus, came to conclusion that the Transporter did not maintain proper records with the object of bringing the investigation to a dead end and consequently, the order of confiscation of the goods were passed. So far the respondent is concerned, they appeared before the Commissioner of Customs (Preventive) and produced documents in support of their claim that 240 rolls of Mapasa Brand fabric were owned by them as would appear from 34 purchase bills/invoices showing ownership in 4 respect of 20 consignments. They further claimed that they procured the goods from M/s. Global Overseas and Mapasa Tapes Pvt. Ltd. against genuine consignment notes for transportation to Kolkata. They also expressed their doubts of variances of thickness between test report and bills of entry.
f) Being dissatisfied with the order of confiscation and imposition of penalty, the respondent preferred an appeal before the Tribunal below and by the order impugned herein the said Tribunal had set aside the order passed by the Commissioner of Customs (Preventive) with a finding that PVC quoted fabrics were not notified goods under Section 123 of the Customs Act and, therefore, the burden of proof to show that those fabrics were smuggled to India was on the Revenue. It was further held that the goods recovered from the Transport Company were not prohibited goods and the burden of proof that those were smuggled to India was not discharged by Revenue and thus, those were not liable for confiscation on the ground that the same was smuggled to India. According to Tribunal below, the respondent proved ownership of the goods on the basis of invoices under which those were purchased and the corresponding consignment notes over the goods were booked in the name of the respondent. The Tribunal further held that invoices were verified by the Revenue and those were found to be genuine and the consignment notes were available on 7th March, 2008 as would be 5 evident from the inventory of seized goods by the Revenue Officers. It was further held that the evidence collected from the Transport Company also had shown that the goods were booked in the name of the respondent. In view of such circumstance, the order of confiscation was set aside and direction was given for release of the goods.
Being dissatisfied, the Commissioner of Customs (Preventive) has come up with the present appeal.
Mr. Roychowdhury, the learned senior counsel appearing on behalf of the appellant, by relying upon the notification under Sections 123 of the Customs Act submitted before us that as per the said notification, fabrics made wholly or mainly of synthetic yarn is a notified item and thus, the Tribunal below wrongly placed the onus upon the Revenue. Mr. Roychowdhury submitted that the description of goods mentioned in those invoices did not tally with the testing report of the Customs Authority in respect of seized goods and thus, the Tribunal below should have held that those invoices did not relate to the seized goods. Mr. Roychowdhury, therefore, prayed for setting aside the order passed by the Tribunal.
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Mr. Khaitan, the learned counsel appearing on behalf of the owner, has on the other hand, opposed the aforesaid contention of Mr. Roychowdhury and has taken us through the invoices as well as the testing reports.
It appears that the thickness of the articles substantially tallied with the description of the seized article as would appear from the fact that in the bills of entry, the noted thickness of the concerned fabric mentioned therein further indicated that there could be variation of (+/-) 10%. If we take into consideration the aforesaid variation of 10%, it would appear that the goods seized substantially tallied with the seized articles. It appears from the Bill of entry annexed to the supplementary paper book at page 139 that the thickness of the imported fabric MAPSA was shown to be 0. 53 mm, with the variation of 10%. The test report annexed at page 48 of the paper book relating to the said goods indicates that the average thickness found was 0.57 mm. Thus, with the variation of 10% of 0.53 mm, it tallies with the invoice. Similarly, in respect of Panda Brand fabrics, indicated at page 44 of the paper book, it appears that the test report indicated that the average thickness of the seized goods was 0.29 mm whereas the invoice shows that the described thickness is 0.26 mm and in this item, there is no variation of thickness indicated. In our opinion, the test report having described the thickness in average and not the exact one, the variation of 0.03 mm is not vital when the genuineness of the bill of entry has not been disputed by the Revenue. It has further been established that the respondent is the owner of the goods as would appear from the documents of transportation 7 itself from the purchasers. Thus, on the basis of the variation of 0.03 mm of thickness appearing from the test report which did not disclose the exact thickness but an average one, there was no justification of confiscation of the goods when the bill of entry and the documents of purchase substantially tallies with each other and the facts that those were brought to Kolkata at the instance of the Respondent through the Transporter from whose custody the goods were seized has been proved.
The Customs authority in its report having failed to give the exact thickness of the goods for the reasons best known to it, on the basis of such a vague report containing only average thickness, it cannot take advantage of the alleged variation of 0.03 mm from the declared one appearing in the bill of entry produced by the Respondent. Nobody prevented the Customs authority from giving the exact thickness of the goods seized and it has failed to explain the reason for not giving the exact thickness. Even the mode of arriving at the average thickness has not been indicated in the test report. Thus, it cannot take benefit of its own wrong in not giving the exact thickness or the mode of arriving at the alleged average thickness. The word "average", according to the Oxford Advanced Learner's Dictionary of Current English, Fourth Edition, Ed. by A. S. Hornby, means the result of adding several amounts together and dividing the total by the number of amounts. In the report submitted by the Customs Authority, the mode of arriving at the average has not been disclosed and thus, it is apparent that the Customs Authority was not sure about by the real thickness 8 of the seized goods. In order to uphold an order of confiscation on the ground of such a small variation of thickness appearing from the documents produced by the party in support of its claim of lawful entry of the goods in this country, the Customs Authority should either rely upon the exact thickness or the mode of arriving at the figure of average thickness in its report. Otherwise, it can be legitimately contended that the Customs Authority has not dared to give the exact thickness of the goods confiscated lest it is proved to be "not smuggled" and in order to create a confusion, has deliberately given an average thickness which is at variance with the declared one although there is no basis of such average thickness.
We, therefore, find that the Respondent has discharged the burden of proving that the goods seized are not smuggled goods and that they purchased those from their seller who lawfully acquired ownership of those goods.
We, thus, find that in this case the test reports of the seized goods substantially tally with the descriptions of those indicated in the invoices produced before the Customs authority and thus, even though we do not agree with the view of the Tribunal regarding the question of burden of proof, we are of the view that such burden has been discharged by the Respondent as the Customs authority did not find that the invoices were not genuine.
We, accordingly, dismiss the appeal by affirming the ultimate order of the Tribunal by answering the formulated point in the negative against the Revenue. 9
In the facts and circumstances, there will be, however, no order as to costs.
(Bhaskar Bhattacharya, J.) I agree.
(Sambuddha Chakrabarti, J.)