Custom, Excise & Service Tax Tribunal
Zenith Rubber And Plastic Works vs Commissioner Of Customs (Export) ... on 11 May, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. C/197/09 (Arising out of Order-in-Appeal No. 422 (ADC/GR.VII-D)/2008 (JNCH) dated 26.12.2008 passed by the Commissioner of Customs (Appeals) Mumbai-II For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Zenith Rubber and Plastic Works
:
Appellants
VS
Commissioner of Customs (Export) Mumbai
Respondents
Appearance
Miss Sushma Nagraj, Advocate with
Anusha Jegadeesh, Advocate for Appellants
Shri B.P. Pareira, JDR Authorized Representative
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of decision : 11/5/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
The appellant has filed this appeal against the confirmation of redemption fine and penalty on them.
2. The facts of the case are that the appellant has imported goods declared as Natural Rubber SVR 10 under DEEC Scheme. The bill of entry was assessed as per declared description and in the examination order it was endorsed to the Docks staff to verify No Objection Certificate from the Rubber Board before release of the goods. The samples were drawn by rubber board and it was found that the goods imported did not conform to the BIS Specification for technical specified natural rubber (TSNR) with respect to dirt, ash and PRI. It was alleged that grade of the goods was found to be mis-declared and also the goods did not conform the BIS specification. The said goods were confiscated and redemption fine was imposed to re-export the goods and penalties were also imposed. Aggrieved from the same, an appeal was filed before the Commissioner (Appeals), who reduced the redemption fine and penalty. Against the order of confirmation of redemption fine and penalty, the appellant has filed this appeal..
3. Miss. Sushma Nagraj, learned Advocate appearing on behalf of the appellant submitted that the appellant has placed a purchase order to their foreign supplier for the goods Natural Rubber SVR-10 under DEEC Scheme for which they have obtained the advance licence. There was a sales contract at the time mentioned as above. The foreign supplier had supplied the certificate of quality analysis and the said goods which conform the goods as per the specification as per the purchase order. The appellant were not having any knowledge about the goods are not up to BIS standard. In fact the appellant has taken all precaution before importation of goods and when they found that goods are not as per BIS Standard they immediately informed before foreign supplier who also admitted the mistake and ask the appellant to re-export the same. In these circumstances, redemption fine and penalty is not imposable. To support their contention, she placed reliance on M/s. Siemens Ltd. reported in AIR 2000 S.C. 3443 wherein the Honble apex court has held that in the case of re-export of the goods, the redemption fine is not imposable.
4. He further relied on HCL Hewlett Packard Ltd. reported in 1997 (92) ELT 367 (Tri.Del.) wherein this Tribunal has held that in the case of re-export of goods, the adjudicating authority is not empowered to impose any redemption fine. She also placed reliance on Akbar Badrudin Jiwani reported in AIR 1990 Supreme Court 1579 wherein the Honble Apex court has observed that a penalty will ordinarily be imposed in cases where the party acts deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation; but not, in cases where there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. She further relied on Northern Plastics Ltd. reported in AIR 1998 Supreme Court 2371 wherein the apex court has held that the declaration was in the nature of claim made on the basis of belief entertained by the appellant and therefore, cannot be said to be a misdeclaration as contemplated by Section 111(m) of the Customs Act. As the appellant had given full and correct particulars as regard the nature and size of the goods, it is difficult to believe that it had referred to the wrong exemption notification with any dishonest intention of evading proper payment of countervailing duty.
5. On the other hand, the Ld. DR submitted that the case laws relied upon by the learned Advocate are not applicable to this case as in this case the goods are the restricted goods as they were misdeclared and they are not allowed to be imported. Hence the decision of confiscation of the goods and imposition of the penalty is correct. To support this contention he placed reliance on Commissioner of Customs, Tuticorin Vs. M.R. Exports 2006 (197) E.L.T. 523 (Tri.-Chennai) wherein this Tribunal has held that the restriction on export of goods amounts to prohibition when conditions stipulated for export of goods not fulfilled. Redemption fine and penalty are imposable, mens rea not a factor. He further submitted that in this case the appellant as misdeclared the goods as Natural Rubber SVR-10. On examination it was found that not upto BIS specification . Hence, impugned order be upheld.
6. Heard both sides.
7. On careful consideration I find that it is a case where the appellant made a purchase order for import of Natural Rubber SVR-10 against the advance licence under DEEC Scheme to import of the raw material without payment of duty and after processing the same it is to be re-exported. Further as per sale contract the description of the goods are same as per purchase order. The examination report submitted by the foreign supplier also confirms the test as per specification of the required goods. It is not the case where the appellant could have imported the goods on finalization of bill of entry but in this case the goods are allowed to be released only after NO Objection Certificate from the rubber board conforming the BIS Standards. In that case, it cannot be said that the appellant tried to misdeclare the goods. The appellant had taken all precaution before importation of the goods to give the description of the goods as per their purchase order. It cannot be said that there was any mala fide intention or appellant was having any knowledge that goods are not as per description and appellant has misdeclared the goods. In that situation, it cannot be said that goods have been misdeclared by the appellant. The reliance placed by the learned DR is not applicable to this case as in that case, it is clear that it is a case of export of goods where the respondent failed to fulfill the stipulated conditions for export. But in this case the appellant has taken all precautions before importation. Hence the case law relied by the DR is not applicable in this case. Further in the case of M/s. Siemens Ltd. (supra) the Honble apex court has held that in case of re-export redemption fine is not leviable. In the case of Akbar Badrudin Jiwani apex court has clearly held the criteria for imposition of penalty, in such event in the case of Pratibha Processors reported in 1996 (88) E.L.T. 12 (S.C.) has held that penalty is ordinarily levied for some contumacious conduct or for a deliberate violation of the provisions of the particular statute. In this case, I find that the conduct of the appellant as such that the appellant has taken due precaution for importation of goods, there is no deliberate violation on the part of the appellant to the provisions of the Customs Act 1962. In that situation, the penalty on the appellant is also not sustainable. Following the ratio of the case laws cited by the learned Advocate, in the facts and circumstances of this case, I hold that the redemption fine and penalty are not sustainable. Accordingly, the impugned order is set aside. Appeal is allowed with consequential relief if any.
(Pronounced in court) (Ashok Jindal) Member (Judicial) Sm 5