Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of Customs, Bangalore vs M/S. Deejay Dekelab Breeders (P) Ltd., ... on 16 April, 2001
ORDER
Shri S.S. Sekhon, Member(T)
1. Revenue has filed these appeals, a gainst the order of Collector of Customs, Bangalore, who after hearing the parties, granting cross examination as asked for considered the charges in the Show Cause Notice, held that the charges framed in the Show Cause Notice are not established and ordered the dropping of the proceedings initiated against the Respondents herein.
2(a) The Show Cause Notice was issued, pursuant to an enquiry conducted by DRI Officers who had received information to the effect the M/s. DEEJAY DEKLAB BREEDERS PVT. LTD, Bangalore (DJDKB for short) as sister concern of M/s. DEEJAY ENTERPRISERS, Bangalore (DJE for short) have imported certain quantity of Poultry fowls called 'GRAND PARENTS' (GPs for short) in the guise of Pureline Poultry stock (Pureline for short) in a consignment of Purelines imported from M/s. DEEKLAB Research (Inc USA (DKB for short) during August 1990 and have cleared the same under the benefit of Notfn.No.130/77 Cus. Dt.1.7.77 as amended. These GPs have been housed separately, in an undeclared farm named 'Security farm or Trial Farm' and the eggs from this farm are being despatched to their hatchery at HOSUR for rearing Parent chicks alongwith eggs from GPs imparted by DJE in February 1990 and the 'Parent chicks' so hatched are mixed and sold for rearing 'commercials' by their associates and franchisers.
(b) These enquiries revealed that DJE had imported GP chicks and kept at the Grand Parent farm at HOSUR, the chicks from their eggs were sold to franchisers, associates for rearing as 'Commercials.'
(c) It was also alleged, that pursuant to a Programmer for Breeding Purelines to obtain GPs and thereafter parents and commercials was approved by the authorities concerned. Pursuant to the same they imported 12998 one day old from DKB, declared them to be Purelines, produced the necessary certificates and cleared them at 'NIL'rate of duty as per Notn. No.130/77 Cus. and shifted them to their approved Pure Line Breeding from.
(d) However, f rom the documents relied upon and the statements recorded it appeared that chicks from certain lines form the 5 purelines imported, i.e. L10,L30 & L40 were shifted to another farm named as SECURITY FARM/TRIAL FARM, such chicks so shifted amounted to 5741.
(e) The Show Cause Notice thereafter relying on certain code words used in the documents and the statements recorded by the Officers of the relevant technical experts alleges; that these 5141 birds shifted the Security/Trial Farm, were GP's and not Purelines and were thus not eligible for the benefit of duty exemption; the imports of Pureline were also not in the fashion approved, & DJE had abetted with DJDKB to meet the requirement of parent eggs purchased from Security/Trial farm. DJDKB colluded with DJE in order to meet the requirements of 'Parents' by importing GPs alongwith Purelines and suppressing the facts from Customs authorities.
(f) Therefore, it appeared that Customs Duty under Section 28(1) readwith Clause (d) of Section 28 (3) of the Customs Act, could be demanded, the 5141 number of GPs imported by misdeclaring them as 'Purelines', were liable for confiscation under Section 111 (d) of the Customs Act, 1962 as they were imported without a valid import licence only in the guise of Purelines, on a licence for Purelines. These GPs were also alleged to be liable to confiscation under section 111 (m) as they were mis-declared in the Bills of Entry as Purelines; and it was specifically mentioned to be noted, that immediately after the search and seizure of documents on 5.9.91, the chicks housed in the security farm were destroyed in order to eliminate whatever physical incriminating evidence available to establish the case, by projecting false protest of violation of Bio-Security measures, which was not all violated by the Officers. Thus the chicks, though reportedly destroyed were liable to confiscation under the provision of Section 111 (c) and 111 (m) of the Customs Act, 1962.
(g) DJDKB were alleged to have rendered themselves liable for penalty under Section 112(a) for import of 5741 number of GP s which were liable for confiscation.
(h) DJE were alleged to have rendered themselves for penalty under Sec 112 (b) in as much as they concerned themselves with DJDKB in the import of GPs and purchased the eggs from the security farm and thereby concerned themselves by having dealt in with the goods liable for confiscation under Section 111(d) and 111(m) of the Customs Act, 1962.
i) Shri. D.J. Lobo Managing Director of DJE was made liable under 112 (a) for master minding the entire operation.
j) Shri. Julion D'Souza, being a Director of DJDKB for having supervised the day to day functioning of the farms.
k) Shri. Alam Lobo, Director was made liable of rpenalty for mixing and selling "Parent" produced out of the eggs hatched in the security farm/trial farm and he was aware of import of GPs.
1) Shri. Alam Kocpshe, Director was made liable under 112 (a) and he was responsible for the commission and omission of any act directly or indirectly rendering the GPs liable for confiscation.
3.a) The Grounds taken in Appeal are:-
"The Adjudicating Authority in his findings at para 100 of the order highlighted the depositions of Dr. Thiyagasundaram during his cross examination on 8.11.93 wherein he appeared to have inter alia stated that the birds belonging to Line 30 and the Line 40 housed at the Trial Aram were pure lines only, but were functionally utilised as grant parents, that the floor mating was undertaken in pureline breading also; that the presumption that Line 30 males were mated to Line 40 females to produce parents and therefore they could only be grand parents was not correct; that "Spot" was a term used by Dekabl, USA to denote various GPs Locations; that Deejay Enterprises use the same nomemclature in the Trial/Security Farm with reference to the Lines, 10,30 and 40 birds, but the spot nomemclature denotes that one of the spots was a cross and that his earlier statements stating that GPs were imported in the guise of purelines and kept at trial/security farm and were use for production of only parents was not correct and such incorrect statements were given because of long hours of questioning and mental exhaustion.
2. The Adjudicating Authority in para 101 of the order observed that in view of the deposition made by Dr.Thiyagasundaram during the cross-examination, the charges made based on his earlier statements were not sustainable.
3. The above findings of the Adjudicating Authority are not tenable in view of the (SIC) Dr. Thiyagasundaram rendered his statements under Section 108 of the Customs Act, 1962 as early as on 30.9.91, 28.10.91 and 4.3.92. Therefore, any retraction from the above statements after a long lapse of time need be given no cognisance. Further, the deposition of Dr. Thiyagasundaram at the time of Cross-examination stating that incorrect statements were given because of long hours of questioning and mental exhaustion is devoid of any rationals and hence not acceptable. If the depositions of Dr. Thiyagasundaram at the time of cross-examination had beer true, he should have made all the f acts clear to the department within a reasonable time from the date of his statements. Absence of any such detractory letter of statements from Dr. Thiyagasundaram within a reasonable time from the date o f his statements makes it amply clear that what he had stated in his earlier statements is true and correct."
4. In his statement dated 28.10.91 to the query on the specified ratio of male-female for inter-breeding and the pattern of breeding in the security farm, Dr.Thiyagasundaram stated that Line 10 Spot 1 males were mated with Line 10 Sport 2 females to reproduce male parents and Line 30 Sport 3 males were mated with Line 40 Spot 4 females to produce fertile eggs for female parents which were supplied to Hosur parent hatchery and that such a mating pattern was not followed for pureline breeding and since parents were being produced, it was evident that the flock in the security farm were only grand parents and therefore although he was told by his superious that security farm was for keeping standby purelines, keeping in view the above position, they were grand parents and that he had been misinformed and that the total number of 5141 birds found in the security farm from the 12000 birds imported were grand parents and not purelines.
5. When (sic) about the documents at page 13 of file 7 and the entries therein he stated that (sic) means date of hatching under which February 1990 and August 1990 were mentioned; that GP1 imported DOH February 1990 refers to the consignments (sic) imported in February 1990 and (sic) DOH August 1990 refers to the grand parents which were brought in during August 1990 consignment under the guise of purelines and transferred to the security farm for hatching and the documents outline was given by him and (sic) up by his accountants.
6. Answering the query about the difference in production of grand parents from purelines, Dr. Thiyagasundaram stated that since the purelines were generally in individual cages (both males and females) artificial insemination was to be done to generate grand parents from them; that the grand parents housed in litter or (sic) litter pens were pen mated or flock noted to produce parents in which the males and females in the correct proportion were allotted to each pen; that therefore, the breeding method for purelines in the pedigree farm and the grand parents in the security farm bear this out, since artificial insemination was adopted in respect of the great grand parents/purelines in the purelines farm whereas the parents in the security farm by random flock mating.
7. In his further statement dated 4.3.92, Dr. Thiyagasundaram, Sr. Geneticist under alia stated that 'GP Shed' means a house where the grand parents were housed and the word "Spot" was a term used by Dekalb, USA to denote the grand parents placements and the same terminology was being used in their farms also and it was only to identify the placement of grand parents.
8. When the statements of Mr.D.J. Lobo mentioning that the parent testers were a type of grand parents stock and the letter dated 16.9.91 of Dr. Alomo Lobo mentioning that the grand parents were produced in the security farm and they were mixed wit, the regular parents and sold was shown to Dr.Thiyagasundaram and questioned as to how he could say that they had produced parents only and who was correct, he stated that his statement only was correct as those were parents produced which were directly used in production of commercials and that the information furnished by Mr.Lobo and Mrs.Alomo Lobo was incorrect. Dr.Thiyagasundaram also stated that he fully agreed with the definitions given in the share holders agreement and only grand parents can produce the parents; that the line 30 and line 40 available at the security farm utilised to produce parents which were in turn utilised to produce commercials, in his opinion, were nothing but grand parents.
9. When questioned about the type of mating in the pureline farm and in the security farm and hence the type of birds there, Dr.Thiyagasundaram stated that flock reports were being sent for monitoring the production peridically as master sheets; that however, he confirmed that in the security farm, there were no arrangements for pureline mating which require artificial insemination in individual cages; that therefore, confirmed that the birds housed in the security farm, keeping in view the manner of mating and utilisation of only one sex of a line in mating pattern, they could be grand parent stock only.
10. From the above it can be seen that Dr. Thiyagasundaram, being a geneticist, drew logical onclusions and correctly deposed that the birds in the security farm were only grand parents and not purelines. Therefore, it is clear that during the cross-examination he only tried to retract from his earlier statements, but could not prove logically as to how the logical conclusions in his earlier statements were incorrect. Hence, his depositions at the time of cross-examination cannot outweigh the overwhelming evidence available on record which prove that the birds in the security farm were nothing but grand parents. Further, Dr. Thiyagasundaran gave three statements on 30.9.91, 28.10.91 and 4.3.92 respectively i.e. with long intervals. Therefore, his contention at the time of cross-examination that he gave incorrect statements because of long hours of questioning and mental exhaustion is totally unconvincing and unacceptable.
11. The Adjudicating Authority in his findings at para 203 of the order inter alia observed that Shri. L.P.Pereiara in his statement dated 9.10.91 had clearly shown a diagram wherein purelines had both sexes in each line and grand parents had only one sex in each line and gave a conclusion that all the birds in the security farm were purelines on the ground that Shri. L.P.Perriara had himself placed both the sexes of each line in the security farm. The Adjudicating Authority also observed that Shri. L.P.Perriera was the one who built the security farm and he never questioned or wrote to M/s. Dekalb, USA as to the need for housing both sexes which he could have if they were grand parents.
12. The above conclusion and observation of the Adjudicating authority did not appear to be logical as the important factor to determine the fact whether the birds in the security farm were grand parents or purelines was the mating pattern. This was well explained by Dr. Thiyagasundaram, who is a geneticist, Dr. Thiyagasundaram in his statement dated 28.10.91, explaining the pattern of breeding in the security farm, made it clear that the line 10 spot 1 males were mated with line 10 spot 2 females to reproduce male parents and line 30 spot 3 males were mated with line 40 spot 4 females to produce fertile eggs for female parents which were supplied the Hosur parent hatchery and that such a mating pattern was not followed for pureline breeding and since parents were being produced, it was evident that the flock in the security farm were only grand parents.
13. Dr. Thiyagasundaram, in his further statement dated 4.3.92 inter alia deposed that it became clear to him that the security farm birds were grand parents and not purelines only as per the mating pattern, which showed that females brought in along with males and males brought in along with females were not utilised within the same line.
14. From the above it becomes clear that although both the sexes exist in each line in the security farm, the matting pattern required to be followed in the case of grand parents was only followed. This amply makes it clear that the birds in the security farm were grand parents and not purelines.
15. In view of the above, the other observations of the Adjudicating Authority at pare 103 of the order that Shri.L.P.Perriera and resigned from the company on 18.12.90 and he had made a statement a year after his resignation, which was not sustainable, in view of importer's reply dated 13.10.93 is also not tenable. L.P.Perriera's statement dated 9.10.91 was a valuable document available on record as it was given under Section 108 of the Customs Act, 1962 and the question whether he gave the statement before his resignation or after his resignation from the company is totally immaterial as it does not alter the validity of his statement. Further, the Adjudicating authority did not explain as to how the importer's reply dated 13.10.93 makes the statement of L.P Perriera unsustainable.
16. The Adjudicating Authority in his findings at para 106 of the order, basing on the depositions of Shri. Subramanya Naidu during his cross-examination on 9.11.93, observed that parent testers supplied from security farm showed better performance and hence inferance could be drawn that the importers had deviated from the approved breeding programming to derive better results and thereby curtailing further imports, saving precious foreign exchange to the country.
17. The above observations of he Adjudicating Authority, basing on the depositions of Shri. Subramanya Naidu at the time of the cross-examination, are also not tenable since Subramanya Naidu had not produced any evidence to prove his earlier statement as incorrect but only tried to negate it.
18. Shri. Subramanya Naidu, Partner of M/s. Seven Hill Hatcheries in his statement dated 10.2.93 inter alia, stated that after receiving parent chicks from M/s. Deejay, they hatch the eggs from them and produce commercials and seel them to their farmers; that so far they had received four consignments of Deejay parent layers chicks and they were all same type and were performing uniformly and he did not find any difference among them; that so far 100 buyers had reported satisfactory performance which indicate that what they had received were good parents only; that there was no difference in the commercials supplied by them to all their farmers and they were all uniform.
19. Dr. Thiyagasundaram, Senior Geneticist in his statement dated 4.3.92, answering the query whether BCD parents out of February 1990 imported grant parents were equivalent to CD parents produced from the security farm birds, stated that he was not aware whether the CD supplied as parent was equal to BCD supplied from February 1990 imported grand parents; but both the parents were performing satisfactorily; that they could not differentiate between the two; that the test parents was only his assumption of the chicks produced from hatching the security farm eggs and in practice no such terminology was used while production and despatch of parents from Hosur Hatcher; that the test parents were being marketed as parents only in the same of DJ Dekalb parents and there was no difference in the marketing pattern of those parents; that their field results were not monitored specifically.
20. Shri.Julian D.Souza, Director of M/s. Deejay Dekalb in his statement dated 17.3.93 made it clear that there was no difference in the price between parents and parent testers and they were indicated as parents in the sale documents.
21. It is accordingly, clear that findings of the Adjudicating Authority at para 106 of the order that the importer had deviated from the approved breeding programme to derive better results is not correct. Further, the importer had not produced any evidence to prove that parent testers supplied from security farm showed better performance. The reason for deviation from the approved breeding programme was well explained by Shri.L.P.Perreira, in his statements dated 9.10.91 and 12.11.91. In the statements, he inter alia, stated that the day old chicks against the pureline import permitted by the Governmen arrived in 4 different batches in August 1990; that the line wise break up was not divulged by Dekalb, each bird had a coded wing and this code was divulged only in December 1990 in full; that earlier, some time in October 1990, decoding of what was called 'security birds was sent to them and these were housed separately on slatted floor of a grand parent shed; that security birds was a code being used between Mr.Lobo and Dekalb; that spot 1,2,3 and 4 refer to the position of grand parents to produce parents; that spot 1 refers to the grand parents male, which is crossed with spot 2 females to produce the male parent and that similarly the male of spot 3 is crossed with the female of spot 4 to give the female parent. Explaining the need for import of security birds which were nothing but grand parents, he stated that DJ had imported a set of grand parents in February 1990 for production of parents; and these birds production would phase out by June 1991 and there was therefore the need for supplementing this with a new flock so that continuity of production of parents and market share was maintained. He further stated that the actual number of birds imported appear to have no relation to what was approved; since five lines had been referred to, they could be construed as lines A,B,C,D,& E, but the numbers imported for each line were totally different from what was authorised; that the discrepancy in the number of birds of each line imported was to cater for the import of grand parents to produce parent stock; that the number of birds imported of line B/20 and E/50 were too small for any pure line breeding programme.
22. From the above, it is clear that the imported deviated from the approved breeding programme only to import grand parents in the guise of purelines but not to derive better results as observed by the Adjudicating Authority.
23. The Adjudicating Authority in his findings at para 107 of the order inter alia observed that the birds in the security farm were with known pedigree whereas grand parents would not have pedigree, that the progeny of the purelines in the main farm were exactly like the progeny of the birds in the security farm that every bird had a wind band and each number was traceable back to its pedigree; that therefore it was abundantly proved that the birds housed at Trial/Security farm were purelines only, and he did not hold them liable for confiscation under the provisions of Section: 11(d) and 111(m) of the Customs Act, 1962.
24. As already mentioned, Shri.L.P.Perreira, who was Vice President of M/s.Deejay Dekalb, in his statement dated 9.10.91 made it clear that the day old chicks arrived in four different batches in August 1990, that each bird had a coded wing and this code was divulged only in December 1990 in full and that earlier sometime in October 1990 decoding of(sic) what was called security birds was sent to them and these were housed separately on a slatted floor of a grand parent shed. This amply makes it clear that the wing band of each bird in the security farm was mainly useful to seggregate grand parents from purelines and keep them separately in the grand parents shed. Further, the mating pattern followed in the case of birds in the security farm also makes it clear that the aspect of pedigree was not given importance in the case of birds in the security farm. The mere fact that the progeny of the purelines of the main farm were exactly like the progeny of the birds in the security farm does not make it clear whether the birds in the security farm were purelines or grand parents (sic) as much as the difference in birds cannot be identified by physical appearance.
25. The Adjudicating Authority in his findings at para 108 of the order highlighted the explanation given by the importers with regard to selection of birds shifted to the security farm and gave a conclusion that necessity of trial farm and also having only three lines in the security farm was justified.
26. If the purpose of maintaining birds in the security farm was to fall back in the case of any disease in the main farm, there was absolutely no need to select birds only as per the instructions of DEKALB, USA, and to ensure housing of the correct sex in each spot as indicated by them. Further, there was no need to decode the birds to be kept in the security farm first on 24.9.90 and to decode the other birds later on 3.12.90 i.e. after 3 months. There was also absolutely no need to have a different mating pattern in the security farm from that of the one adopted in the main farm. Therefore, the Adjudicating authority's findings at para 108 of the order do not appear to be proper.
27. Dr.Thiyagasundaram, Sr.Geneticist in his statement dated 4.3.92 made it clear that the extended requirement of parents was met by production of hatching eggs from the pureline project by means of hatching eggs from the security farm only. The evidence on record also makes it clear that the eggs produced at security farm were sent to Hosur parent hatchery and eggs were hatched and they were mixed and sold with regular parents produced out of grand parents imported during February 1990. Shri. L.P.Perreira, who was the Vice President of M/s. Deejay Dekalb in his statement dated 9.10.91 explained the need for import of security birds which were nothing but grand parents as to maintain continuity of production of parents, as the production from grand parents imported in February 1990 would phase out by June 1991. If the entire requirement of parents could be met with the help of grand parents imported in February 1990, there should have been no need to hatch the eggs of the birds at security farm to produce parents and sell them alongwith regular parents produced out of grand parents imported during February 1990. In view of this, the Adjudicating authority's findings at para 109 of the order are not tenable.
28. With reference to other findings and observations of the Adjudicating authority, it is pertinent to state that the importers had totally deviated from the approved breeding programme and this fact had been admitted by them. Shri.L.P.Perreira, who was Vice-president of M/s.Deejay Dekalb in his statement dated 12.11.91 inter alia stated that if for any reason the breeding programme was to be deviated from, it was necessary to approach the Government explaining the reasons for the deviation and obtain their approval of new breeding programme; that the breeding programme approved by the Government was as a result of the research and development effort(sic) of M/s. Dekalb of USA and the need for change within a short spell of a few months did not appear to be justified. As rightly opined by Shri.L.P.Perreira the importers should have taken prior approval of the Government for the new breeding programme as there was no need to suppress facts if there had been no malafide intention in deviating from the originally approved breeding programme.
29. The Notification No. 30/77 dated 1.7.77 exempts pureline poultry stock from the whole of the Customs duty but does not cover grand parents. Since the importers imported grand parents in the guise of purelines as is evident from the ample evidence available on record, the benefit of Notification cannot be extended to the imports in question.
30. Coming to the Adjudicating Authority's observation that the best recourse that could have been adopted to prove that grand parents were imported in the guise of pureline was to have got the birds tested in the laboratory genetically, which was not forthcoming, it is pertinent to mention that even before the investigation was started, and immediately after the search and seizure of documents on 5.9.91, the importer in a haste, reportedly destroyed the chicks housed in the security farm as per their letter dated 16.9.91 in order to eliminate whatever physical incriminating evidence available to establish the case, by projecting a false pretext of violation of bio-security measures, which were not at all violated by the officers. Hence, the above observation of the Adjudicating Authority is not justified. Further, the certificate given by the exporting country cannot outroigh (sic) the evidence available on record which simply proves that grand parents were imported in the guise of purelines.
31. It could be seen from the show cause notice issued in this case that several documents had been relied upon as discussed in para 4 of the show cause notice. A detailed observation of the documents vis-a-vis explanation given by the representatives of the company as well as that of the experts have been drawn from para 19 of the show cause notice. The Adjudicating Authority had allowed cross-examination of several persons and none of them had brought in any evidence/points to disprove the case but only tried to negate in an indirect way the statements given (sic) under Section : 08 of the Customs Act 1962. No fresh evidences were produced to disprove the documents relied upon as also their statements. It is also pertinent to mention that the company did not choose to cross-examine Shri.L.P.Perreira, who was the then Vice-President (purelines) of the company and was over all incharge at the time of import of the so called purelines consignments under dispute even though his statement was very vital for the investigation and was relied upon in the show cause notice.
32. The Adjudicating Authority did not give justifiable reasons for rejecting the reliance of various documents relied upon in the show cause notice. Further, most of the documents relied upon in the show cause notice were left uncountered.
33. In view of the foregoing discussions and in vie of the clinching evidence available on record, the Adjudicating Authority should have confirmed the allegations made against the importers in the show cause notice and should have taken appropriate action under the Law on the proposals made therein. In view of the above, the Order-in-Original dated 20.12.92/24.12.93 is not proper and correct in law.
b) Gist of submissions of Respondents made on 6.4.2000.
2. Without prejudice to the submissions advanced by the Respondent hereinbefore, the Respondent submits that the Honourable Tribunal on 21.3.2000, had put a specific question of law, to the Respondent as to whether clause (2) of the proviso below Notification 130/77-Cus dated 1.7.77 was in the nature of a substantive condition and whether any violation of the approved breeding plain would constitute such a violation, as to disentitle the Respondent to the benefit of the notification. In reply to this specific question of law, the Respondent respectfully submits, that the answer has to be in the negative, and the conditions are not substntial but adjective only, as the said proviso as also clause (2) of the notification were totally omitted, by the subsequent amendment effected in Notification 130/77-Cus by Notification 45/92-Cus dt. 1.3.92, a copy of which is produced herewith. The entire proviso including the words "for the purpose of breeding only" were omitted vide serial number 4 of the amending notification.
2.1. The Respondent submits that the amendment effected vide 45/92 Cus. makes the legal position clear, that had the breeding programme condition and approval thereof been a substantive condition in the exemption policy, the same would not have been omitted. The Respondent therefore submits, that the deviation from the breeding programme ought not to be construed to the disadvantage of the Respondent and the benefit of the notification in question should not be denied to them.
3. The Respondent submits that an amending notification such as 45/92-Cus, should not be construed retrospectively and be given its due effect for interpreting Notification 130/77-Cus as it stood before its amendment. This is because, the breeding programme condition not being a substantive condition has been omitted by the amendment, which indicates the intention of the exempting authority. The Respondent places reliance on the decision of the Supreme Court in Johnson & Johnson Ltd vs CCE, 1997 (92) ELT 23 (SC) in support of their contention.
4. The Respondent further submits that in UOI vs Wood Papers Ltd, 1990 (47) ELT 500 (SC), it has been held that when the question is whether a subject falls within the notification/exemption, it should be construed strictly, but once the ambiguity or doubt about the applicability of the exemption is lifted and the subject falls thereunder, full play has to be given to it and the exemption calls for a wider and liberal construction. The Respondent submits that the adjudicating authority has properly concluded that the Respondent having fallen under the ambit of the exemption and having imported purelines, were entitled to the exemption and therefore deviation from the breeding programme was of no consequence.
4.1. The Respondent submits that the fact having been established that what was imported was pureline only, use thereof in a manner partly violative of the breeding programme, ought not to be construed in a manner which deprives the notification of its intent, moreso (sic) when the breeding condition has been done away with in totality by the amending notification 45/92-Cus.
5. The Respondent also submits that even assuming that there is an ambiguity in construing notification 130/77-Cus, the benefit thereof ought not to be denied to the Respondent, since it has been held by the Supreme Court in STP Ltd vs CCE, 1998 (97) ELT 16 (SC), that where there is a doubt in construction of a provision in a taxing statute, that doubt must be resolved in favour of the assessee.
6. The Respondent submits that the benefit of exemption has been rightly granted by the Collector. The grant of exemption under the impugned notification was dependent on the production of a certificate from the Ministry of Agriculture satisfying the four clauses under the proviso to the notification 130/77 Cus.. Once the said certificate had been produced, the benefit of the exemption notification ought not to be denied, moreso when the veracity and genuiness of the certificate itself has not been questioned at any stage in the entire proceedings. The Apex Court decision in Auto Tractors Ltd vs CCE, 1989 (39) ELT 494 (SC) as also the decision in State of Haryana vs Dalmia Dadri Cement Ltd, 1988 (14) ECR 292 (SC) are relied upon by the Respondent in support of this contention. The order of the Collector is therefore entitled to be sustained by this Honourable Tribunal.
7. The Respondent respectfully submits that in any event, the Appellant has not proved that the appeal is maintainable before this Honourable Tribunal having failed to satisfy this honourable Tribunal that the conditionalities and mandate of Sec.129D have been fulfilled by the Appellant, to invoke the jurisdiction of this Honourable Tribunal to entertain the appeal. The Appellant has failed to satisfy the Honourable Tribunal that the directive of the Board issued for filing the appeal (i) concludes that the order impugned is "not legal or proper" and (ii) that the points for determination by the Tribunal have been set out by the Board. Therefore, this serious infirmity in the directive of the Board, vitiates and taints the appeal and no relief is called for at the hands of the Tribunal to the Appellant.
GIST OF SUBMISSIONS OF RESPONDENTS MADE ON 1.3.2000
1. The CBEC has not complied with section 129D of the Act, since it has not concluded in its direction issued to the Appellant to file appeal to the Tribunal, that the order subject to the application u/s.129D(!) is "not legal and proper". Hence the application of the Commissioner of Customs is not maintainable in law, as held in CCE Vs Rohit Pulp Mills, 1998 (101) ELT 5 (SC) and CCE Vs GEC Alstom Limited, 1999 (35) RLT 872 (T).
2. The application of the Appellant is untenable, since no points for determination by the Tribunal have been set out by the Board/Appellant, as evident from the prayer (ii) wherein, the Appellant has prayed that the Tribunal should determine whether the order appealed against is legal and proper. The Board's order dt. 19.12.94, at page 75, states that the Appellant should apply to the Tribunal for correct determination of the points arising out of the order. The mandate of section 129D not having been fulfilled, the application u/s.129D is untenable. The Board/Appellant cannot expect the Honourable Tribunal to perform the function of the Board and determine the points arising out of the order appealed against.
3. The so-called grounds 1 and 2 are a repetition of the findings in the order of the Commissioner. No ground is made out for interference by this Honourable Tribunal. The Appellant's contention that cross examination evidence result should be rejected is not proper, as the very purpose of cross examination is to test the truth or veracity of the investigations theory and bring out the real truth from the mouth of the witnesses.
4. The averments at grounds 4 to 9 are a reproduction of the statements of various deponents and are not grounds of appeal. The averments at para 10 of the grounds are untenable since the Commissioner's findings at paras 97, 100, 101, based on Dr. Thiagasundaram's cross examination/evidence, disprove the allegations in the show cause notice.
5. Grounds 11, 24-25 are untenable, since the witness L.P. Pereira's statement was correctly rejected by the Commissioner on the ground that his statement was recorded long after he had left the service of the Respondent.
6. Grounds 12 to 15 are not maintainable since the findings of the Commissioner at paras 101, 103, 106-108 disprove the case of the investigation beyond doubt.
7. Grounds 16 to 18 are opposed to facts found by the Commissioner of Customs in paras 106-107 of the order in original.
8. Grounds 19 and 20 are a reproduction of depositions of witnesses, the veracity of which was tested in the cross examination and rejected by the Commissioner. Hence ground 21 is also untenable.
9. Ground 21 and 22 are not tenable, as Dr.M.R.Choudhary's cross examination and evidence clearly disproved the theory propounded by the investigation and this was accepted by the Commissioner in paras 106, 108, 109, 110 and 112 of the order.
10. Ground 23 is not correct, since the findings of the Commissioner of Customs at paras 106-107-108 on the "pedigree" of birds, shown that they were pureline-stock only.
11. Ground 25 to 27 are not legal or proper as they are opposed to the facts found and evidence accepted in paras 108 and 110 of the order in original.
12. Ground 28 is an "omnibus ground" which shows that the findings on facts and evidence of the Commissioner of Customs have not been properly appreciated, but objected to by the Appellant without cogent reasons, by merely repeating the earlier averments.
13. Ground 29 is opposed to paras 112, 113, 114 and 115 of the order in original wherein the conditions in notification no.130/77-Cus, have been held to have been fulfilled by the Commissioner of Customs.
14. Ground 30 is opposed to the findings at para 116 of the order in original at page 64 of the order in original..
15. Ground 31 and 32 are untenable as they are opposed to findings in paras 97-117 of the order in original.
16. The Appellant has by filing the appeal sought in effect to enforce a demand u/s.28, without proving that the ingredients of section 28(1) have been satisfied.
GIST OF CASE LAWS RELIED UPON BY RESPONDENT(S) S.No. Citation Summary/Gist of case law
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1. CCE Vs. Rohit Pulp Paper Application/authorisation of Department Mills, 1998 (101) ELT 5 (SC) should show formation of opinion that order appealed against i "not legal or proper".
2. CCE Vs GEC Alstom Ltd, 1999 (35) RLT 872 (T). ------- do -------
3. Indian Potash Ltd Vs CC, When post-clearance or post importation 1991 (55) ELT 236 (T). condition is absent, benefit of notifica-
tion should be allowed to importer. No duty liability arises.
4. UOI Vs Rakesh Enterprises, Benefit of exemption to be given to 1991 (56) ELT 39 (Bom). goods mentioned therein, when used in any particular way not mentioned therein, (when such use is irrelevant).
4A. State of Haryana Vs Dalmia Exemption cannot be denied if goods Dadri Cements Ltd, 1988 are for use ie. intended use, although (114) ECR 192 (SC). some part of the goods were used for other purposes. Certificates of competent authorities not proved to be false hence exemption held available. 5. Tata Oil Mills Co.Ltd Vs CCE, Difficulty in ascertainment of fulfill- 1989 (43) ELT 183 (SC). ment of conditions, is not a criterion for denial of exemption. 5A. Zoom Films Ltd Vs UOI, 1994 Exemption not deniable on the basis of (71) ELT 898 (Bom). unsubstantiated doubt regarding assessee's capacity to use the material. 6. Hemraj Gordhandas Vs HH.Dave, Supposed intent of notification not 1978 (2) ELT J.350 (SC). to be inferred, when language of the notification is clear. 7. Bombay Chemicals Vs CC, 1990 1. Once mandatory conditions are ful- (49) ELT 190 (Bom), filled exemption is not deniable. and Surlux Diagnostics Vs CC, 1994 2. When certifcate from sponsoring (71) ELT 569 (T). authority is furnished, it cannot be questioned by tax authorities, and such tax authority not entitled to question the satisfaction/clarfica- tions issued by such authority. 8. CC Vs RV College of Engg., 1996 ----- do ----- (17) RLT 876 (T). 9. Titan Watches Ltd Vs UOI, 1994 ----- do ----- 69) ELT 248 (Mad.). 10. Overseas Cycle Co. Vs CC, 1992 Customs authority cannot be beyond (58) ELT 248 (T). the licence issued by licensing autho- rity. 11. Lokesh Chemicals Works Vs CC, ----- do ----- 1981 (8) ELT 235 (Bom)
4. We have heard both sides and considered the submissions and the material on record and find-
a) We find that the Adjudicator after considering the material has given his findings on two issues, as framed by him-
i) whether 5741 Nos. of birds were 'GPs' imported as declared 'Purelines' in the imports made during August 1997.
ii) Whether an amount of duty could be recovered as proposed in the Show Cause Notice.
There is no grounds made out, contesting that these are not the two issues; except challenging the finding on no liability for confiscation under Section 111 (d) and 111 (m) as arrived at by the Adjudicator.
b) A perusal of the material indicates to us that the importers had got an approved to import 5 White Pure lines viz.A, B, C, D, E of 2000 females and 400 males chicks in each line, but imported 12998 Nos, declared as 1278 Nos total on 4 B/Ex (Para 24 of SCN) in five lines as follows:-
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|Line No. | No. imported | Kept in Pureline | Transferred to | | | | Farm | Security Farm |
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|A10 | 2615 | 1799 | 816 |
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|B20 | 290 | 290 | -- |
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|C30 | 1987 | 1312 | 675 |
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|D40 | 7859 | 4209 | 3650 |
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|E50 | 247 | 247 | -- |
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|Total | 12998 | 7857 | 5141 |
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Out of the five lines imported one was not white line but Brown line. The shifting of 5141 birds to the Security/Trial farm made left 7857 birds in the Pureline Farm or 7857 if mortality is taken into account. There is no allegation in the findings or and the Grounds of appeal that the birds kept back in the Pureline farm were not used for 'Pureline Breeding Programme' as envisaged in the notification. They have therefore to be accepted as having satisfied the notification conditions for a major part of the Birds under import. We cannot find any provision in the notification, that all the birds imported should be used in the programme and they cannot be used elsewhere for breeding purposes. We are of the view that as long as the imported Birds are used for breeding purposes, they have satisfied the notification conditions.
c) Revenue also is not seriously contesting this aspect of the notification. What they are contesting is, that the imported birds numbering 5141 were transferred to the 'Security Farm' were not 'Purelines' but are 'GP's' and should have paid duty and penalty for import of GP's which were not being covered by the notification or the licence granted. Therefore, we have to find out whether the birds in the Security farm as transferred were GP's or 'Purelines' base on the grounds made out before us.
d) Before we proceed, it is felt necessary to record the following facts, as they appear from the records/statements of Dr. Choudhoury, Government Expert on Poultry, Dr. Thygarajan, Sr. Genetsist of the Importer Company, and Leaflet No.3/.1981 on'Methods of Commercial Poultry Breeding published by Consultancy and Extension Education Section, Central Avian Research Institute, Izatnagar, U.P'. A perusal of the same reveals-
(i) 'Purelines' are understood as such birds which are specifically devloped to have particular genetic make up to give the desired characters in the offspring when inter-mated, generation after generation, they are delicate birds devoid of Hybrid Vigour and are used for Pureline Maintenance.
(ii) When 'Pureline' is bred with another 'Pureline' of the same kind the resultant birds will be a Pureline Maintenance bird. When a 'Pureline' is crossed with another 'Pureline', the resultant will be a "Hybrid" having the characters of both the purelines and Hybrid vigour. When a Pureline is bred with a 'Hybrid' the result will be a Commercial Hybrid (Refer diagram 'C' in Leaflet No.3 of Izatnagar) when two Hybrids are crossed the resultant can be commercial.
(iii) A Grand Parent stock may be a Pureline or a single cross which are used to produce Male and Female Paresent Stock (Leaflet No.3 of Izatnagar)
(iv) Parent stock is a cockrel from the male line and pullet from the female line which are used to produce commercial hybrid chick called Parent Stock (Leaflet No.3 of Izatnagar)
(v) "Crossing Programme" are the intended use of the Pureline and Hybrids to obtain the desired commercial layer of eggs by planned mating. There can be 4 way crossing where four Pure lines eg. L11, L55, L77 and L99 are chosen as GPs. Therefore, L11 would be crossed with L55 to get L15 as male line and L15 female will be discarded from the programme, this stage would be parent stage, similarly L77 and L99 on crossing will give L79 male and L79 female as 'Parents' here L79 male will be discarded and L79 female will be crossed with L15 male to get L1579 Commercial bird (both males and females will be used as Broilers)
a) There can be a Single Crossing, where Pureline L77 used as male will be crossed with L55, L77, L99 female Purelines to give L15, L17, L19 commercials.
b) There can be a 3 Way Crossing, where female line parent is a single cross between L22 and L33 a Hybrid L23 which when crossed with L66 male will give commercial L236 as layer for formers.
c) Commercial Breeding is a complex secret operation kept closely guarded. The Commercials are Hybrids, difference being only in the amount of in breeding in the Parent lines. Thus what may appear to be sue as GP may be a Pureline especially when 3 lines are being used.
(vi) In the case before us, it appears that a 5 Way Cross was proposed, while 4 way Cross was achieved in the Pureline farm. While in the Security/Trial farm, as it appears from para 27 & 28 of the Show Cause Notice and letter dt. 28.10.91 to the DRI of Dr. Thygarajan as supplement to his statements and at page 16 of statement dt.4.3.92 of Dr.Thyagarajan, it is clear that 3 lines were shifted in December from the Main Pureline farm to the Security/Trial farm viz. at Spot No.1 line A 10 males 61 nos.; at Spot No.2 line A 10 females 755 nos; at Spot No.3 line C 30 mixed 340 males & 335 females; at spot No.4 line D40 mixed 3309 females and 341 males; total 5141 birds were shifted. They were crossed, as per Dr. Thygarajan's statement as a 3 Way Generation of a Commercial i.e. the 3 lines was cleared as in a three way cross as per example of L22, L33 & L66 given in sub para (v) above. This would indicate to us that, purelines A10, C30, D40 served as GP's themselves, the fact that Shri. Periera was no longer with the service, having resigned in December itself, when the birds shifted in December were mature to mate, would induce us to reject his theory of 'Crossing Programme' adapted at the Security/Trial farm given in his statement and accept the version there on as given by Dr. Thygarajan in his suo-motto letter dt.28.10.91, which was never questioned by the Department in subsequent statement dt. 4.3.92 where it has been reiterated. What kind of cross mating transpired at the farm could be nothing other than but what has been revealed by Dr. Thygarajan and not of Grand Parent stock as is being alleged.
(e) We now proceed to examine the grounds in appeal the grounds made out are substantially the reproductions of the finding arrived at by the Adjudicator as made out and recorded herein above in the cross objections of the Respondent's importer dt.1.3.2000. These ground urge us to reconsider:-
i) Dr. Thygarajan's statement dt.30.9.91, 28.10.91 and 4.3.92 given in long intervals to be logical deposition to arrive at a conclusion that he birds in the Security/Trial farm were GP stock and not Purelines and to reject his attempted retraction made in the cross examination which cannot out weigh the over whelming evidence on record. We have considered the ground and find that the letter dt.28.10.91 of Dr.Thygarajan which is on record before us addressed to the Deputy Director DRI voluntarily gave pertinent information to clarify his earlier statements dt. 28.10.91. This letter conveys in his own words:-
"Consequent to my interrogation dt.28.10.91 at your Office. I submit to supplement some technical aspects, which I feel are pertinent to clarify my statements.
1. As per the mating programme envisaged by Deejay Deekalb Joint venture the ultimate commercial egger will be a five way cross. But after my discussion with the U.S. Genetist during January 1991, I was advised to generate 3 way commercials to explore the market with Deekalb layers for which we had to generate crosses spot 1 and spot 2 of (both are from line 10A) to make parents; spot 3 x spot 4 of (line 30/C x line 40 of D) to make female parents. The ultimate commercials variety from this type of cross will be ACD or 103040 which is different from Deekalab XL line. So the crosses from security Trial Farm are to be called as "Test Parents" rather then "Real Parents".
The same idea was maintained by Dr. Thygarajan in his statement dt. 4.3.92, recorded after this letter was sent on 30.10.91. At page 16 of this statement, the Doctor has recorded....." The line 10 males and female were mated to produce hatching eggs that would produce 'Male' Parents.
Line 30 Males were mated with line 40 females to produce 30 x 40 cross which were supplied as hatching eggs to produce female parents.
The line 10 Males and females chicks, line 30 Males chicks and line 40 female chicks were used as "Grand Parents" to generate parent hatching eggs from Security Farm".
This would, when read with the fact that the Doctor was not questioned on his letter dt.28.10.91 and further on page 22 of this statement dt.4.3.92 to a question has answered-
"Q: As per the definition in the shareholders agreement, which you have see and signed in your previous statement, elite stock means Pureline chicken used for production of grant parents stock only, Parent stock means chicks produced form Grand Parents, If that is the case, how can you produce parents directly from Elite Stock.
I full agree with the definition given in the shareholders agreement and only grand parents can produce the parents. The line 30 & line 40 available at security farm utilised to produce commercials in my opinion are nothing but Grand Parents. However I am not exactly aware of the constituents of Line 30 & 40 birds..." at page 25 of this statement dt.4.3.92 in answer to a question he has stated-
....."However, I confirm that in the Security farm, there are no arrangement for Pureline matings, which to recapitulate require Artificial insemination in individual cases. I therefore, confirm that the birds found in the Security far, keeping in view the manner of mating and utilisation of only one sex of a line in mating pattern, they can be grand parents only".
And there after at page 26 confirms the presumption of the interrogated that based on mating pattern, the Security farm was only having grand parents. Thereafter at page 28 middle, his statement is closed and he was allowed to go. This to our mind indicates, that the Officers till they got direct/indirect evidence of the birds in the Security farm to be Grand Parents from him, went on questioning him and when that was admitted, he was done with and allowed to go. This aspect, even if summons issued show that the deponent was called within Office hours, indicates that the admission of the birds in the Security farm to be conclusively GP's should not be relied, when on other aspects he has not been questioned. In his statement dt.30.9.91, Dr. Thygarajan has categorically stated in Answer to Q.11. That in Trial farm "Line 10" males of line 10 females were mated to produce the male Grand Parents. The females of line 40 were mated with males of line 30 to make the test group".
To Q 18 he gave the following answer to type of mating of Security flock-"Line 10 males and line 10 females were mated to produce Line 10 females eggs line 30 males were mated to line 40 females to produce line 30 x 40 cross fertile eggs. Line 40 males and line 30 females were not utilised for any cross".
And to Q19 he specifically says"The chicks were used as Grand Parents". These admissions only indicates that a 3 Way Crossing had been restored at the security farm, by using Purelines chicks as GP's. That by itself will not make the birds as "Grand Parents". In the statement dt.28.10.91, he has clearly stated that Great Grand Parents, Grand parents/Commercial in a breeding programme will be in relation to the specific objectives. The Grand parents on a specific combination of one sex of a line, and the other sex of another line, resulting in a first stage cross, and again to Q 13 has explained infect a 3 Way Crossing taking place in the Security/Test farm, between line C & D crossed to get CD female Parent which is crossed with A Male at Spot, to get proposed commercial ACD, which is not a mating pattern in Pureline breeding. Therefore the flock is only GP's. In conclusion, he therefore states that all 5141 birds in the Security/Trial farm were GP's and not Purelines. Considering the above we find that all Dr.Thygarajan has stated is that in the Security/Trial far, a 3 Way Cross resulting in ACD commercial, was practised and parent eggs for this, were obtained and the Purelines were used as GP's. But then that won't indicate, that the Pureline in A, C & D imported and transferred to the Security/Trial farm, and bred in a different manner, would necessarily not be Purelines but import of GP's as is being urged before us. We rely on the totality of his depositions made in letter dt.28.10.91 and cross examination and came to same conclusion as the adjudicator and the grounds made out in the appeal are not acceptable.
(ii) Considering the statements of Shri Peirera which were recorded, and have been relied upon in para 8.1.0 to 8.2.4 of the Show Cause Notice and statements are dt.9.10.91 and 15.10.91 and after going through the same we find, Shri. Peirara had 3 months training in 'Pureline' and worked with another farm and joined this group in Feb'90 as Vice President incharge of Purelines "White layer Project" and admittedly had no personal knowledge of the negotiations held with the foreign supplier; however he finalised the agreement and the imports of 5 different types, of white layers as per the breeding programme submitted to the Government. He explained the code 'Security Birds' to refer to GPs and 'spot' refers to GP male to be crossed with GP spot 2 females, spot 3 with spot 4 and the shifting was done from Main farm as chicks had reached Adulthood. However, besides his impressions and interpretations, he does not give any reason how the shifted birds, were GP's. We find para 27 & 28 of the Show Cause Notice and other evidence reveals that the shifting was at Spot 1 of 61 males of Line A 10; Spot No.2 pf 755 females of Line A10; Spot No.3(mixed lot of 340 males and 335 females of Line C30); spot Not 4 (mixed lot of 3309 females and 341 females of line D 40). Thus, to our mind, it is clear that at the trial farm line A, was kept sex segregated while lines C & D could 'flock mate' being kept together. This in is itself, disproves that spot 1 was to mate with spot 2 as deposed by Shri.Pereira as they were kept segregated and spot 3 was to mate with spot 4 were to mate , since they were already 'flock mating' at the two spots 3 & 4 which were segregated and could not have mated between C & D. The statements of Perira are not explicit enough to reach the conclusion that what was transferred to the Trial shed and at 'spots' were GP's. While in statement dt.4.10.91, he cites Personal reasons for leaving the company, when confronted on 12.11.91 with documents indicating "knowledge of things happening" to a question he explained, he was not clear what Birds were sent, as discussion were anterior to his joining and decoding came later, it was only on 3.12.90, he learnt of GPs import, therefore he decided to leave the employment. This explanation which comes in the subsequent statement, which is a typed statement, while the earlier is hand written, and also in this statement Shri. Perira defines a "Grand Parent means chickens produced by properly mated Elite stock" dis-regarding the accepted position in Poultry Breeding that Elite (Pureline) stock can also serve as a Grand Parent, especially when 3 Elite (Purelines) are to be crossed in a 3 way cross, induces us to agree with the adjudicator's findings of not relying on Shri.Periera statements. We find no grounds as made out in the appeal to make us rely on Shri.Periera statements.
iii) We find that much has been made out of the destruction of the birds by the Respondent Examining this conduct, we find that, the Respondent had searched the Security/Trial farm on 5.9.91. The mahazar indicates, objection to entry into the Bird sheds and reluctance on the part of the Officers, on the ground of "Bio Security" (Ref.Mahazar at Thalli farm dt.5.9.91). At the "Trial Plot farm" no such objection was taken and the Officers only searched the Office room. However, the Respondents on 16.9.91 intimated to the DRI Officers, their intention to destroy the flock on 20.9.91. The DRI nor the Revenue, has explained as to why they did not move in & seize the stock of Birds on 5.9.91 as during the search, since they had in formation that the Birds were imported in contravention of law by mis-declaration and were evidently only searching for goods liable for confiscation or on and after 16.9.91, when they were intimated about the proposed destruction. The seized birds on Genetic Testing would have concluded the case. The failure on the part of the Officers, of not seizing the goods now being alleged to be liable for confiscation, is a fatal flaw to arrive at any liability of confiscation. When the Officers had an "information" and a search authorisation, did the Officers who had reason to believe that documents relevant to enquiry were found, had no reason to believe that the goods (Birds) in this case were not liable to seizure? When we find, this to be the state of affairs, in the minds of the "proper officer" on 5.9.91 and thereafter upto 20.9.91, we cannot hold the goods liable for confiscation on any of the grounds; as Poultry Birds are not specified under Section 123 of the Customs Act, 1962, and the onus rests on the Department to prove the smuggled nature of the birds. Which cannot be only proved by the conduct of destruction, since 'Bio-Security' cannot be assumed to be a second hind sight thought to destroy evidence: as Mahazar drawn on 5.9.91 at a farm, brings this objection on that date itself. We therefore find, nothing sinister in the destruction, or that act to be a reason to upset the findings of the adjudicator.
(f) The infrence, which Revenue is submitting, should be drawn from the statements and the fact of shifting only certain number of Birds from three lines, and not all the five lines, to the Secret un-disclosed farm and kept at places termed as 'spots', a word used to designated placement of GPs and the construction of sheds at these places to be 'sloping' etc i.e. for GPs cannot be a reason to arrive at that GPs were imported in the guise of "Pureline". This evidence only supports the presumption of use of the Purelines Birds as GP's and not necessarily the birds to be GP's and not Purelines.
(g) We therefore find no valid ground, to come to a conclusion that the certificates issued by the supplier and USA authorities could be discarded and on mere suspicion that the 'change in programme' should have been got re-approved as per the opinion of Shri.Pereira, we should deny the benefit of exemption of notification 130/77 on the imports made of part of the 1 day old chicks, consignments, by considering the part of the import to be of GP's, and hold them liable for confiscation under Section 111(d) and 111 (m) of the Customs Act, 1962. Nor is any reason found to visit the importer with a penalty under the Customs Act, 1962. The denial of the Notification on non compliance of the approved breeding programme and imports not of approved 'Purelines' was not the case of the Revenue as submitted during the hearing.
(h) Considering role of Respondents other than the imports we find,
i) DJE have been charged with colluding with DJDKB in the import of GPs and having purchased the produce of eggs from the Security farm and hatched the same into parent chicks and sold them and there by concerned themselves with having dealt with goods which were liable to confiscation. When we find no goods were seized even in the reasonable belief as being liable to confiscation and no goods in the imports made by DJDKB liable for confiscation or recovery of duty thereon, we cannot find DJE to be liable under Section 112 (b) of having concerned themselves.
ii) Shri D.J.Lobo is the Managing Director of importing firm and is not liable for any penalty since we do not find any liability on the firm.
iii) Shri. Julian D'Souza, Mrs. A.Lomo Lobo, Shri.Alam Kopeche being Directors of importing firm are similarly not liable for any penalty.
(i) Before we part with the case, we would like to observe that the knowledge and dealing was the same in the case of Shri. Periera, as in the case of Shri. Julian D"Souza, Mrs. Alomo Lobo and more than the role ascribed to Shri. Alam Kopeche of 'as much as being a Director of the Company, he was responsible for the commission and omission of any act directly on indirectly by which he has rendered the goods liable for confiscation'.....Surprisingly Shri.Pereira, the Vice President was not made a noticee, even though, the acts admitted were of directly dealing with the imported goods knowingly. We get a whiff of quid proquo of his having given a statement, as per the desires of the investigators, who were trying to prove the truth of the "INFORMATION" with them. The "Information" is only unevaluted data, the need for commercial eggs could not be met from the earlier imported GP's which was met by these disguised GP's as per the documentation seized, are only inferences and interpretations since there is no hard and fast rule that Pureline can't be kept at designated "spots" in sheds meant for GP's or that Pureline cannot be used to serve the purpose of GP's. We have found that 3 Purelines can effectively serve the purpose of a 3 way cross; which has been disclosed by Dr.Thygarajan to have taken place in the Security/Trial farm by his suo motto explanation supplementary offered, to his earlier statements by his letter dt.28.10.91 and incorporated in his statement dt.4.3.92. The fact of keeping the Trial/Security farm and it existence secret from others, cannot lead only to a conclusion that what was bred there, were 'Grand Parents'. The explanation to keep the same 'hush-hush' has been well explained by the Respondent in their letters and explanations. The evidence, therefore relied upon to prove that the birds at the Security/Trial farm, at the most are interpretation of a probability from a circumstantial evidence. The same cannot be relied in absence of direct evidence of the seizure of the birds, which was not effected nor any steps obtained to secure the same.
(j) The Adjudicator has dealt with the allegations of the imports not being the Ratio of sexes, as applied for, and the programme are being altered and relying on the Governments expert witness Dr.M.R.Chowdhary, has not found any irregularity in the deviation of the programme or and the number of each sex imported; we find no fault with this findings. We agree with the appellants information herein, that the breeding programme was not followed, only for the 5741 birds out of 12,998 birds imported, however that should not be acted, upon without proper collation, analysis and proper evaluation of the said when it would be as 'Development Intelligence'. We find the submissions made before us are only substantiating the information, and pleadings to accept the information without proper evaluation of the other facts on record. We find the Adjudicator has evaluated the entire facts, in his order and has disseminated an intelligence i.e. there is no truth in the information that incorrect goods were imported by mis-declarations.
(k) We reject the reliance of the statement of Shri. Subramanya Naidu, an associate/buyer of the commercials, who had no reason to know, what were the birds imported, and how the crossing was done at the firms, his evidence helps nobody's case.
6. In view of our findings, we find no reasons to upset the Order in Original. The appeals are dismissed.
(Pronounced on 16/4/2001)