Custom, Excise & Service Tax Tribunal
Pol India Agencies Limited vs Commissioner Of Customs, Raigad on 1 October, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. APPEAL NO. C/381/03-Mum (Arising out of Order-in-Appeal No. 39/2003 (JCH) dt. 7.3.2003 passed by the Commissioner of Customs (Appeals) Mumbai-II For approval and signature: Honble Shri M. V. Ravindran, Member (Judicial) Honble Shri K.K. Agarwal, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
authorities?
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Pol India Agencies Limited
:
Appellant
VS
Commissioner of Customs, Raigad
Respondent
Appearance
Shri Ravinder Jain Consultant, for Appellant
Dr. T. Tiju, Authorized Representative (JDR)
CORAM:
Shri M. V. Ravindran, Member (Judicial)
Shri K.K. Agarwal, Member (Technical)
Date of decision 01/10/2008
ORDER NO.
Per : Shri M. V. Ravindran, Member (Judicial)
This appeal is directed against order-in-appeal No. 39/2003 (JCH) dt. 7.3.2003 vide which the Ld. Commissioner (Appeals) has upheld the Order-in-Original that confirmed duty, confiscated the containers and also imposed penalty on the appellant. The Ld. Commissioner (Appeals) has modified the order as regards the redemption fine and the penalty.
2. The relevant fact that arise for consideration are the appellant herein had imported consignment in 7 containers and filed IGM No.384 dt. 12.12.1995 on behalf of importer M/s. Viral Syntex Ltd. Mumbai. The appellant is a shipping line/steamer agent who are allowed to import containers without payment of duty subject to the condition that the containers so imported shall be exported within six months from the date of import or within such extended period as may be allowed by the authorities on sufficient cause being shown. The appellant herein re-exported 5 containers out of the 7 containers in which they brought the consignments, the balance from two containers were not re-exported as the consignments went in to dispute with Customs authorities. The appellant vide their letter dt.11.12.2000 sought scrapping of the said two containers against payment of Customs duty as the said containers were found fully damaged, beyond repairs and not sea-worthy the appellant waived issuance of show cause notice and personal hearing. The Ld. Additional Commissioner of Customs, (the adjudicating authority) came to the conclusion, that the appellant being steamer agent did not re-export or seek extension of time limit for the export of the containers, are liable for payment of the duty on such containers are also liable for imposition of penalty. Coming to such conclusion, the adjudicating authority confiscated the containers and ordered for redemption of the same on payment of fine of Rs. 25,000/- only on each container and confirmed the demand of the duty at the prevalent rate on the depreciated value of Rs. 65,000/- for each container and also imposed penalties.
3. Aggrieved by such order, appellant preferred an appeal. The first appellate authority after considering the submissions made by the appellant before him came to the conclusion that the duty shall be recoverable from the appellant as ordered by the adjudicating authority and further came to the conclusion that the redemption fine imposed needs to be reduced to Rs.10,000/- on each container and penalty be reduced to Rs.10,000/-. Coming to such conclusion he passed the impugned order.
4. The Ld. Consultant appearing on behalf of the appellant submits that the entire case needs to be considered from the fact that the two containers on which there is a confirmation of demand of the duty, were lying with the Customs authorities from 1995 onwards. It is the submission that the appellant was constantly in touch with the lower authorities to release the containers after de-stuffing the goods which were disputed. It is the submission that the lower authorities released the containers after de-stuffing somewhere in January,2000. He would submit that the appellant vide letter dt. 11.12.2000 sought to scrap the two containers against payment of Customs duty as they are unable to re-export the containers. It is his submission that this letter of December 2000, was met with an adjudication order dt. 17.7.2002 by holding that the value of the containers should be treated as Rs.60,000/- each, Ld. Consultant produces before us the chart, whereby, reading from it submits that the adjudicating authority has taken the value of the containers as Rs. 3 lakhs instead of the value of Rs.2 lakhs for 2 containers. It is his alternative submission that the said value as has been arrived by the adjudicating authority is also erroneous as the containers were more than 20 years old hence even after giving a depreciation, value arrived at is excessive. It is his submission that the containers were of only scrap value. The scrap value during the relevant period was Rs. 3.5 per kg. and each containers was weighing 3000 kg. each hence value should be considered as Rs.21,000/- and the Customs duty, CVD should be applied accordingly. It is his further submission that the confiscation of the containers was in correct as the containers were lying with the Customs authorities, were not released to them for re-export, despite their repeated reminders. In issue of such situation, there should not be any confiscation and redemption fine in lieu of such a confiscation. He would submit that the question of imposition of penalty does not arise as there was no error on the part of the appellant for imposition of penalty under Section 112(a) of the Customs Act, 1962.
5. The Ld. JDR would submit that the impugned order of the Ld. Commissioner (Appeals) has already given enough relief to the appellant in respect of the redemption fine imposed and the penalty imposed. It is the submission that the value of the containers as is arrived by the adjudicating authority is a the correct value and appellant should discharge the duty liability on the said value. He reiterates the findings of the Ld. Commissioner (Appeals).
6. We have considered the submissions made at length by both sides and perused the records. The undisputed facts are the appellants are steamer agents and they are allowed to import containers and subsequent re-export thereof by the provisions of Notification No. 104/94 dt. 16.3.1994. The said notification requires the appellant to re-export the containers within 6 months and submitted proof thereof to the authorities and in case the appellant is not able to re-export the containers within the time frame given in the notification, the said notification also provides for extension of time limit on sufficient cause being shown. It is also undisputed that the appellant herein did not seek any extension of time for re-export of containers in dispute. It is also on record that the said containers were seized in the year 1995 and despite correspondence entered by the appellant with the authorities to release the containers after de-stuffing the goods, the containers were released to the appellant only January 2000. We find that the appellant has vide his letter dt. 11.12.2000 sought permission to scrap the said two containers on payment of Customs Duty as they were found to be fully damaged beyond repairs and not sea-worthy. To this letter, the Revenue authorities did not respond favourably nor did they reject the contention of the appellant. The adjudicating authority in order dt. 17.7.2002 arrived at the value of the containers as Rs. 60,000/- each taking into consideration the value of the containers as Rs.2 lakhs each and after granting the depreciation of 70% till January 2000. We find both the lower authorities have erred in coming to such a conclusion, as the appellant has been raising the issue with the authorities from 1995 onwards. The appellants letter dt. 11.12.2000 clearly brought to the notice of lower authorities, that the containers are beyond repairs and not sea-worthy and hence have to be scrapped. The lower authority should have considered this letter in a proper perspective and should have arrived at the value on which duty is recoverable from the appellant. While holding that the appellant is liable to discharge duty liability on the said containers, as they have not re-exported the same, the valuation of the containers has to be considered from the perspective that the lower authorities have kept quiet on the submission as to the condition of the containers, being of only scrap value. We accept the contentions putforth by the Ld. Consultant that value of the containers should be scrap value for recovery of the appropriate duty. The Ld Consultant submits that the containers are weighing 3000kg., each and during the relevant period the value of scrap was Rs. 3.5 per kg. that would work out for both the containers at value of Rs.21,000/-. Since the issue is of 1995, we accept the contention of the Ld. Consultant and hold that the value of the containers should be Rs.21,000/- and appropriate duty liability is to be discharged.
7. As regards the liability for confiscation of the said containers, we find that the adjudicating authority has confiscated the containers under the provisions of Section 111(o) of the Customs Act, 1962. The provisions of Section 111(o) are clearly applicable in this case, as the section contemplates confiscation of goods which are exempted subject to fulfillment of condition, if unfulfilled, goods are liable for confiscation. We find that in this case the condition of Notification was to re-export the containers within a period of six months or within the extended time of extension as may be granted by proper officer. It is on record that the appellant did not seek any extension of time for re-export of the said containers. Be that as if may, the fact that the appellant was in constant correspondence with the authorities to release the containers after de-stuffing the goods would show that the appellant was trying level best to seek the release of the containers for re-export. The lower authorities have not responded to these correspondence in the facts and circumstances of the case, we hold that the said containers are liable for confiscation under the provisions of Section 111(o) of the Customs Act, 1962. The redemption fine which has been imposed by the adjudicating authority has been reduced by the Ld. Commissioner (Appeals). In the facts and circumstances of the case, we hold that the ends of justice will be met if the redemption imposed on the appellant is reduced to Rs.1000/- on each of the container. As regards the penalty, since the penalty is imposable on the appellant under the provisions of Section 112, for the reason that the containers are held to be liable for confiscation, we hold that the penalty is imposable on the appellant. In the facts and circumstances of the case, we are of the considered view that the ends of justice will be met if the penalty imposed on the appellant is reduced to Rs. 500/- (Rupees five hundred only).
8. The appeal is disposed off as indicated herein above.
(Pronounced in court) (K.K.Agarwal) Member (Technical) (M. V. Ravindran) Member (Judicial) Sm 7