Customs, Excise and Gold Tribunal - Calcutta
Keshan Corporation vs Commissioner Of Customs (Port) on 1 July, 2004
Equivalent citations: 2004(97)ECC577, 2004(173)ELT524(TRI-KOLKATA)
ORDER V.K. Jain, Member (T)
1. The present two appeals filed by one M/s. Keshan Corporation (hereinafter called as the appellant-company) and another by Shri Bharat Kumar Mahensaria, are directed against the Order No. 1Kol/Cus/Port/03/04, dated 10-1-04 passed by Commissioner of Customs (Port), Kolkata. Brief facts of the case are as follows :-
1.1 The appellant-company has imported three consignments of AA Size Telesun Brand Dry Cell Pencil Battery from Thailand at a total declared assessable value of Rs. 47,41,271.20 (Rupees forty-seven lakh forty-one thousand two hundred and seventy-one and paise twenty). Certificates of Origin regarding the origin of the goods were shown as "Thailand". They filed three bills of entry for warehousing of the same. The Customs decided that the subject goods be examined in presence of the S.I.B. Accordingly, the packages were opened, appraised and examined in presence of the SIB Officers. The country of origin/manufacturer of goods was not found stenciled/embossed either on the master carton or on the small inner cartons. The country of origin or the name of the manufacturer was also not found stenciled on the wrapper pasted on the body of the battery. The Customs found that the imported Telesun brand appeared to be identical in look as well as nature of packing to the Chinese origin Durabatt brand of battery. The appellants were asked by the Customs to submit all the original import documents including the original manufacturer's invoice. The appellant-company did not submit the original manufacturer's invoice on the ground that the Bangkok based supplier, M/s. T.P. Enterprises Limited did not want to disclose the same. The show cause notice was issued by the Customs to the appellants on 22-10-2003 as to why the goods should not be confiscated under Sections 111(d) & 111(m) of the Customs Act, 1962 read with Sections 17(3) & 46(4) of the said Act read with Rule 11 of the Foreign Trade (Regulation) Rules, 1993, and as to why the anti-dumping duty should not be levied under Notification No. 84/2001, dated 2-8-2001, and as to why the penalty should not be levied on them under Section 112 of the Customs Act, 1962. The show cause notice was adjudicated by Commissioner of Customs (Port), vide his order dated 10-1-2004 referred to above. The Commissioner vide his Order referred to above held that the imported goods are of Chinese origin and accordingly are liable for antidumping duty at the prevalent rate. He also confiscated the imported goods under Sections 111(d) and 111(m) of the Customs Act, 1962 and gave an option to the appellant-company to redeem the same on payment of Rs. 15.00 lakh (Rupees fifteen lakh). He also imposed a penalty of Rs. 10.00 lakh (Rupees ten lakh) on the appellant-company and that of Rs. 5.00 lakh (Rupees five lakh) on the another appellant, Shri Bharat Kumar Mahensaria, Proprietor of the said firm.
2. We have heard Shri S.K. Bagaria, learned Sr. Advocate assisted by Shri V.N. Dwivedi, learned Advocate appeared for the appellants and Shri N.K. Mishra, learned J.D.R. for the Revenue.
2.1 Shri Bagaria, learned Sr. Advocate submits that the Sales Contract with M/s. T.P. Enterprises, Singapore was for import of Batteries (Telesun Brand) of "Thailand Origin". The foreign supplier has certified - "We certify that the above goods are Thailand Origin". Thai Chamber of Commerce, Bangkok had issued Certificates of Origin certifying Thailand as the Country of Origin of the goods in question. The foreign supplier again certified in their letter dated 15-9-2003 that the goods are of "Thailand Origin". Learned Sr. Advocate submits that the finding of the Commissioner of Customs that the goods are of Chinese origin is incorrect and baseless. The said finding of the Commissioner is contrary to all the documents and records. There is no dispute or evidence in support of the said finding of the Commissioner of Customs. The Commissioner while reaching his conclusion has based his finding on the following reasons :-
(i) The appellants did not supply the manufacturer's invoice. The Commissioner in regard to non-supply of manufacturers' invoice held that the appellant-company has violated Section 17(3) of the Customs Act, 1962. In this context, the appellant-company has submitted that Section 17(3) can apply only if the manufacturer fails to furnish any document which is within its power. Shri Bagaria submits that it was not within the appellants' power to furnish the manufacturers' invoice. They wrote to the foreign supplier to send the manufacturer's invoice. However, the foreign supplier showed their inability to furnish the manufacturers' invoice by stating that the appellants cannot demand the same and the foreign supplier was not under any obligation to supply the same.
(ii) The Commissioner has held that there was striking similarity between the imported Telesun brand of the said batteries and Durabatt brand of batteries of Chinese origin. The appellants submitted that the goods imported by the appellant-company were called as "Telesun". There was nothing to show that this brand was manufactured by any manufacturer in China. Shri Bagaria submitted that the brands "Telesun" and "Durabatt" are totally different letters and can never lead to any assumption as if the goods of Tele-sun brand imported by the appellant-company were manufactured by the manufacturers of Durabatt in China. The appellant-company pointed out that the Customs could have made the enquiries about the country of origin from its own sources. However, no such enquiries were made by the Customs as regards the Chinese origin.
(iii) Learned Advocate further submitted that anti-dumping duty under Notification No. 84/2001-Cus., dated 2-8-2001 was leviable only on the goods originating in or exported from China. He relies on the following decisions in this case :-
(a) 2003 (151) E.L.T. 541 in the case of Rahul Associates v. Commissioner of Customs;
(b) 2001 (132) E.L.T. 761 in the case of Ramniklal Salagia v. Commissioner of Customs;
(c) 2003 (161) E.L.T. 1025 in the case of Ganesh Shreshtha v. Commissioner of Customs;
(iv) It was further submitted that levy of the said Anti-dumping Duty is conditional upon the goods being of Chinese origin. The burden to prove the Chinese origin was on the Revenue. The said burden has not been discharged by the Customs. In this context, Shri Bagaria also relies upon the following decisions :-
(a) 1957 (32) ITR 190 in the case of Commissioner of Incomes Tax v. Provident Investment Company Limited (S.C.);
(b) 1967 (66) ITR 692 in the case of Commissioner of Income Tax v. Motors and General Stores (P) Ltd. (S.C.);
(c) 1998 (229) ITR-1 in the case of Wealth-Tax v. Ellis Bridge Gymkhana and Ors.;
(d) 2003 (152) E.L.T. 262 in the case of Cadila Laboratories Pvt. Ltd. v. CCE (S.C.);
(e) 2003 (153) E.L.T. 491 in the case of CCE v. Markfed Vanaspati & Allied Industries (S.C.);
(f) 1998 (98) E.L.T. 3 in the case of Mirah Exports Pvt. Ltd. v. Collector of Customs (S.C.);
(g) 1996 (87) E.L.T. 12 in the case of Union of India v. Garware Nylons Ltd. (S.C.).
(v) As regards the DGFT Notification No. 44 (RE-2000)/1997-2002 dated 24-11-2000, learned Advocate submits that as per Para 4 of the said Notification, some declarations were required to be made on the imported goods and a compliance of this requirement was to be ensured before the import consignment of such commodities is cleared for home consumption- The requirements were mentioning the name and address of the importer, commodity name, quantity, MRP etc. These requirements have to be complied with by the appellant-company prior to actual clearance of the goods. As they have not done so, there is no violation of the provisions in terms of the above said notification. Learned Sr. Advocate further submitted that heavy duty dry batteries covered by IS 9128:1999 were not specified in the Annexure to the said notification. Consequently, Para 6 of the said notification had no application to such batteries. The appellant-company has also taken the plea that the Customs Authorities are regularly allowing the clearance of such batteries without insisting for compliance with the aforesaid requirements or any BIS registration. Learned Advocate submits that the above goods were imported by the appellants fully in accordance with law and in terms of the provisions of Section 111(d) of the Customs Act, 1962 and thus could not attract Section 111(m). The confiscation of the said goods and demand of the said redemption fine of Rs. 15.00 lakh in respect thereof, were totally illegal and invalid. It was further submitted that there was no contravention of any of the provisions of law on the appellants' part, and the levy of penalty of Rs. 10.00 lakh on the appellant-company and that of Rs. 5.00 lakh on the Proprietor of the appellant-company, was also not legal and valid. The Appellants' advocate, in this connection, submits that the Commissioner was not justified in levying penalty both on the appellant-company as also on its sole Proprietor, Shri Bharat Kumar Mahensaria. He has cited the following decisions in this regard -
(a) 2002 (144) E.L.T. 560 in the case of Bhairav Printers v. CCE;
(b) 2001 (128) E.L.T. 113 in the case of Sarala Enterprises v. CC;
(c) 2000 (126) E.L.T. 1098 in the case of Deepak Dhar Gupta v. CCE.
In the end, he requests that the appeals may be allowed with consequential reliefs to the appellants.
3. Shri N.K. Mishra, learned J.D.R. for the Revenue has reiterated the findings of the Commissioner of Customs (Port). He submits that the Commissioner has comes to a correct conclusion based on the circumstantial evidence regarding the country of origin. The importers have not been able to give any clear evidence regarding the country of origin. As such, he prays that the Commissioner's Order be upheld by the Tribunal.
4. We have heard both sides. The short question that arises for our determination in this case is whether the Anti-dumping duty is leviable on the said goods and consequently, whether the subject goods are liable to be confiscated under Sections 111(d) and 111(m) of the Customs Act, 1962 and the appellants are liable to any penal action under Section 112 of Customs Act, 1962, or not?
5. We have also perused the records. The appellants have also placed a sample of batteries for our inspection. We find that the levy of Anti-dumping duty needs to be proved by way of ascertaining the country of origin. This burden lies on the Customs. In his impugned Order, the Commissioner has held that the general circumstantial evidence regarding the goods being of Chinese origin is complete. We find that the Customs have not been able to produce any evidence showing that the goods imported by the appellants are of Chinese origin. In Ganesh Shreshtha v. Commissioner of Customs reported in 2003 (161) E.L.T. 1025, it was held - "There is nothing on the record to suggest if any inquiry was made from Nepal Government to ascertain that the goods were of Chinese origin and not Nepal. The correctness of the certificate issued by the Nepal Government regarding the origin of the goods had not been doubted or questioned. All the relevant documents regarding the legal import of the goods contained the description of the goods as Ginger of Nepal. No evidence has been brought on the record to suggest that the seized Ginger was not available in Nepal. For want of any corroborative evidence, no inference could be drawn that the goods imported were of Chinese origin". The Revenue had not properly rebutted the origin of the goods claimed by the importer.
6. As held by the Hon'ble Supreme Court in the various decisions, the burden to prove that the goods arc of Chinese origin lies on the Customs. Various case laws have been cited by the appellants in this context. Attention is invited to the Commissioner of Income Tax v. Provident Investment Company Limited case reported in 1957 (32) Income Tax Reports 190, where the Hon'ble Supreme Court has held - "If the Revenue satisfied the Court that the case falls strictly within the provisions of the law, the subject can be taxed. If, on the other hand the case is not covered within the four corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy".
7. The Revenue has failed to prove whether the goods were originated or exported from China, we hold that there is no scope of levy of anti-dumping duty on the said goods.
8. As per the said notification some declarations were required to be made on the imported goods and a compliance of this requirement was to be ensured before the import consignment of such commodities is cleared for home consumption. The requirements were mentioning the name and address of the importer, commodity name, and quantity, MRP etc. These requirements have to be complied with by the appellant-company prior to actual clearance of the goods. As they have not done so, there is no violation of the provisions in terms of the above said notification.
9. We find that the importers' goods have not violated the DGFT notification as referred to above. In view of the above, the confiscation under Sections 111(d) & 111(m) of the Customs Act, 1962, is not warranted. As such, the redemption fine in this case is not leviable, as the goods are not liable for confiscation. We agree that there is no scope to levy any separate penalty upon the sole proprietor concern and its sole Proprietor. Since there was no contravention of any of the provisions on the appellants' part, the levy of penalty on the appellants is set aside.
10. In view of the above, we set aside the impugned order and allow the appeals with consequential reliefs.