Customs, Excise and Gold Tribunal - Delhi
Sanjeev Woollen Mills And Ors. vs Cc on 30 September, 2002
Equivalent citations: 2002(84)ECC867
ORDER G.R. Sharma, Member (T)
1. The captioned 11 stay petitions have been filed by M/s Sanjeev Woollen Mills and others praying for waiver of pre-deposit of duty and penalty.
2. The facts briefly stated are that three consignments were received between 1989 and 1991. Bills of entry were presented for clearance of the consignment. The goods were declared as synthetic waste (soft quality) with predominance of acrylic fibre. Examination of the goods was conducted. Samples were drawn for test. Test result indicated that the description of the goods was not correctly given. Since the goods on test were found to be different from the declaration about the description of the goods, therefore, it was also alleged that there was under-valuation. The goods were however provisionally released under a bond and bank guarantee. The cases were adjudicated. The Commissioner in the case of bill of entry No. 110713 dated 19.1.90 held the goods were liable to confiscation. He confirmed the demand of duty of Rs. 53,39,836.59 and imposed penalty of Rs. 15 lakhs on M/s Sanjeev Woollen Mills and a penalty of Rs. 1 lakh each on S/Shri S.P. Goyal, H.L. Goyal, Sanjeev Goyal and R.K. Goyal Partners in the firm. In this case the appellants have given a bank guarantee of Rs. 22 lakhs and executed bond of Rs. 1 crore.
3. In the case of bill of entry No. 110537 dated 29.12.89, the adjudicating authority confiscated the goods allowed them to be redeemed on payment of fine of Rs. 1 lakh and confirmed a duty demand of Rs. 9,40,391.25 and imposed a penalty of Rs. 5 lakh on M/s Sanjeev Woollen Mills and penalty of Rs. 50,000 on each of the Partners. The Partners in M/s Sanjeev Woollen Mills were S/Shri S.P. Goyal, H.L. Goyal, Sanjeev Goyal and R.K. Goyal.
4. In bill of entry No. 102266 dated 28.12.90, the adjudicating authority confiscated goods misdeclared as soft waste gave the option to redeem a duty amount of Rs. 5 lakhs and confirmed a demand of Rs. 7540426 and imposed a penalty of Rs. 20 lakhs on M/s Sanjeev Woollen Mills and penalty of Rs. 1,25,000 each on S/Shri S.P. Goyal, H.L. Goyal, Sanjeev Goyal and R.K. Goyal.
5. Arguing the case for waiver of pre-deposit of duty and penalty in all the 11 cases, Shri LP. Ashthana, Ld. Counsel submits that the appellants have imported certain goods. The goods were subjected to test by Central Revenue Control Laboratory (CRCL). He submits it CRCL was not a specialized laboratory for textile. He submits that though request was made to send samples for Re-test to some independent laboratory; that this request of the applicants was ignored. The learned Counsel submits that according to the Commissioner himself 12095 Kgs. is synthetic waste. That since the consignments were found to be partly synthetic waste, they should have been subjected to test by an independent laboratory which was not done. The learned Counsel submits that no expert was examined nor was any technical literature on the subject placed on record. The learned Counsel submits that on retest CRCL found that most of the samples are cut portion of slivers or tows; that the length of the fibre was not uniform; that the part of the goods are crimped whereas others are uncrimped. The learned Counsel submits that no opportunity of cross examination was provided to the appellants. The learned Counsel therefore submits that the finding of the learned Commissioner that particular quantity consisted of acrylic fibre has been misdeclared is incorrect as it has not been arrived after test from any independent textile laboratory having expertise in textile testing.
6. The learned Counsel submits that the goods are not liable to confiscation under Section 111(d) of Customs Act nor they have been misdeclared in the bill of entry.
7. Regarding valuation, the learned Counsel submits that the price of US $ 0.83 per kg. has wrongly been fixed on the basis of enquiry in Korea and London. That the appellants have not made any extra payment on goods and no evidence has been produced in support of contention that any extra payment was made. Therefore the value declared by them as US$ 0.50 reflected the correct transaction value. The learned Counsel submits that the learned Commissioner adopted the same unit price for the entire quantity of goods implying that the goods are identical which he has himself found were not so. The learned Counsel therefore submitted that since the applicants have a good case on merits pre-deposit of duty and penalty in all the 12 cases may be waived.
8. The learned Counsel alternatively submits that in case entire pre-deposit of duty and penalty is not considered to be waived by the Tribunal at this stage, the applicants have given bank guarantee which are current up to 31st March, 2003 and may be considered as adequate security towards pre-deposit for hearing the appeal.
9. Shri N.K. Bajpai, Ld. Sr. Advocate and R.S. Rana, Advocate submit that it is a clear cut case of mis-declaration and under-valuation in all the 3 cases (Bills of Entry). He submits that in case of bill of entry No. 110713 dated 19.1.90 test on the samples drawn was conducted by IPCL, Baroda. He submits that though the Counsel for the appellant calls It as a competitor of the importer yet it was a specialized textile laboratory. That the test showed: "In view of the above findings, it may be concluded that the characteristics of samples under testing are more like virgin acrylic fibre rather than waste products". The learned Counsel submits that samples in respect of the consignments covered by bill of entry No. 110537 dated 29.12.89 were tested. In which there was categorical finding of the Central Revenue Control Laboratory holding that, "considering texture, fibre length and the fibres are not entangled, the above samples except Registered under CLO-4 (Bale No. 45), CLO-5 (Bale No. 83), CLO-7 (Bale No. 100), CLO-8 (Bale No. 111) and CLO-11 (Bale No. 158) which contain partially fused fibres, do not merit consideration as synthetic waste. In a few cases, small amount of scoured wool has also been found, this is separately kept and does not form part of the slivers/tows. This could be separated without much effort (even handpicked). The learned Counsel submits that in case of bill of entry No. 102266 dated 28.12.90, the test report of the CRCL was "the sample consists of white lustrous pieces of tow and some having fused mass at the bottom and in between. It also consists of pieces of crimped slivers of varying length (some of the slivers exceed 2 metres). The sample entirely composed of man made synthetic staple fibre of non-cellulose origin. Diameter of fibres in above portion of the sample is mostly uniform and the fibres are of spinnable length, Since the fused mass in some places of tow is not significant, the fibres of spinnable length could be easily separated."
10. The learned Counsel for the Revenue submits that in so far as bill of entry No. 102266 dated 28.12.90 is concerned, the learned Commissioner has dropped the charge of under-valuation that the department has filed an appeal with the Tribunal against this part of the order and that the appeal is coming up on 8th October, 2002.
11. In regard to valuation, the learned Sr. Counsel submits that the value of waste material and prime quality material cannot be the same that the authorities had conducted enquiries at Korea and London from where the consignments were imported and calculation of value has been taken on that basis. The learned Counsel, therefore, prayed that the applicants may be directed to deposit the entire amount of duty and penalty and in case the Tribunal considers it fit the department may be permitted to encashment of the bank guarantees executed by the appellants.
12. We have heard the rival submissions. We have perused the evidence on records. We note in the instant case that prima facie the applicants have not been able to make out a case for total waiver of pre-deposit of duty and penalty. In view of the fact that in the case of bill of entry No. 110713 the description of the goods in the bill of lading originally was acrylic staple fibre commercial quality bright which was subsequently changed to synthetic waste (soft waste) with pre-dominance of acrylic fibre.
13. In the case of bill of entry No. 110537 the consignment was shipped from Port Busan, Korea whereas the invoice furnished in this case by the importer shows that this consignment was invoiced from London. When enquiries were conducted in regard of country of origin it was found by the Indian Embassy in Seoul that the goods were sold at a price of US$ 0.833 per kg. In the bill of entry the importer had shown the price as US$ 0.05 per kg. Thus, there was misdeclaration and under-invoicing. This price of US$ 0.833 will be prima facie applicable to determine the value of all the consignments. We note that the applicants have not been able to make a prima facie case for total waiver of pre-deposit of duty and penalty.
14. In respect of all bills of entry, we find that there was wrong declaration about the goods. We also note that there was prima facie under-valuation. Looking to all the facts and circumstances of the case, we direct that the Revenue will encash bank guarantees furnished at the time of provisional release of the goods in lieu of cash pre-deposit. The bank guarantees may be encashed on or before 7.11.2002. On encashment of the bank guarantees further pre-deposit of duty and penalty by all the 11 applicants shall be dispensed with and recovery thereof shall remain stayed during the pendency of the appeal.
15. The matter should be listed for reporting compliance and passing further orders on 12.11.2002.