Customs, Excise and Gold Tribunal - Mumbai
Chandra I. Kriplani And Inder Kriplani vs Commissioner Of Customs, Acc, Mumbai on 22 October, 2001
JUDGMENT J.H. Joglekar, Member (T)
1. These two appeals involve common facts and are, therefore, dealt with in this single order.
2. A consignment of 5 cartons was imported by air on 13.4.99 by Smt. Chandra I. Kriplani containing mobile battery packs, integrated circuits, adapters etc. valued at Rs. 12,43,400/- cif. On 15.4.99, a consignment was imported containing 395 mobile phones, fax and accessories valued at Rs. 41,35,000/- cif by Shri Inder Kriplani. In both cases, the Airway Bills mentioned the goods as personal and household goods. On 28.4.99, the goods imported under both consignments were seized by the Customs under panchanama. On 18.6.99, in terms of Section 110 of the Customs Act, 1962, the Customs obtained permission from the Magistrate for disposal of the goods pending adjudication. It appears that at a later date, the goods were sold. In both the adjudication orders, the Commissioner has observed this and has shown the sale proceeds of the goods imported by Smt. Kriplani as Rs. 5,81,,076/-. The sale proceeds in the case of goods imported by Shri Kriplani was shown as Rs. 24,21,922/-.
3. Separate show cause notices were issued on 6.10.99 alleging liability to confiscation of the goods under Section 111(d) of the Act. The show cause notices also referred to one Shri Haresh and Shri Prakash Sharma as the ones who had participated in the scheme of importation of consumer goods as personal baggages. The defence before the Commissioner was identical. It was claimed that both the persons planned to file documents for clearance of the gods but were prevented from doing so by premature seizure and disposal of the goods. Grievance was made that the goods were sold at a much lower value and also that the market value shown in the panchanama was highly inflated. The Commissioner in both orders observed that the goods were in commercially quantity. He referred to paragraph 5.6 of the EXIM Policy 1997-2002 AM permitting import of household and personal effects as part of passenger baggage. He observed that since the importers did not have IEC code numbers at the time of import, they could not have cleared the goods as cargo. He observed that at no time documents were filed for clearance of the goods. On this ground, he held that the claim that the importers had time to file documents was without merit. In this belief, he held that the goods were liable to confiscation and in the absence of the goods, 'confiscated' the sale proceeds. He imposed penalties of Rs. 5 lakhs on Shri Kriplani and Rs. 2 lakhs on Smt. Kriplani resulting in filing of the two appeals before us.
4. We have heard Shri Anil Balani advocate for the appellants and Shri A.K. Jain. D.R. for the Revenue.
5. In the case of goods imported as cargo, Section 46 requires a Bill of Entry to be filed for their clearance. This Section does not prescribe any period from the date of the import during which such declaration should be filed. Shri Jain attempted to show that Section 48 requires such documents to be filed within 30 days from the date of unloading of the import cargo. We find that the submission is wrong. Section 48 permits the custodian to sell the goods if no clearance is sought within 30 days. Such sale would be governed by the provisions of Section 150, where after meeting the cost of sale etc. and the duty burden, the reminder would be paid to the importer. There is substantial merit in both the appellants' claim that they had sufficient time available for filing the Bills of Entry. This provision cannot be used to compel the importers to file a Bill of Entry within 30 days and also does not confer any right to the Customs to seize the goods if no such document is filed. If any goods are imported as baggage, they could accompany the passenger or they could be separately imported. In either case, under Section 77, the passenger has to make a declaration. For that also, in the case of unaccompanied baggage, sufficient time must be available to the passenger. This is because, the passenger is not immediately aware of the fact of arrival of his baggage but that he would come to know of such arrival only on being advised by the carrier. Thus the action of seizure of the two consignments within about 2 weeks of their landing and also the action taken under provisions of Section 111 were premature.
6. Both the importers consistently maintained that they were entitled and were intending to file the clearance documents. The ld.Commissioner has not accepted this claim. The importers stated that in terms of the Policy all the goods imported were freely importable. The relevant Policy in paragraph 5.1 makes this very clear. Paragraph 4.1 of the said Policy at the material time referred to ITC (HS) classification of import and export items as a sole guide as to the regulation governing the importability of any goods. Shri balani has showed us the extracts of the said classification in so far as they relate to the goods imported by the importers in this case. On perusal, we find that all the goods imported were freely importable.
7. The Commissioner held that in the absence of their having obtained an import and export code number, the importers were ineligible for acquiring the clearance of the goods. Shri Jain referring to the provisions of paragraph 4.9 of the Policy submitted that such code number should have been obtained before the goods were physically imported. He further submitted that in the absence of the Code number, the goods were liable to confiscation. Shri balani countered this by saying that such number was freely given and there should not have been any difficulty for getting this number provided the Customs had not acted in undue haste.
8. It is not necessary for us to discuss this argument because it would enter the realm of conjectures. We are unable to assess what might have been if the importers had been given sufficient time.
9. The Commissioner has observed that in the Airway bill, the goods were described as personal and household goods making the items imported as baggage. He held that in view of the very large number of each item, the goods could not be claimed as bonafide baggage. He further observed that it had come in the statements of the importers that they had planned to sell the goods in the market for profit. On these grounds, he denied the claim of importability as baggage. He also referred to the provisions of paragraph 5.6 which permit importation of baggage items provided they are bonafide household goods and personal effects.
10. The ld.counsel referred to an relied upon the Tribunal's judgment in the case of Irfan Abdul Haque v. CC, Mumbai [2001 (131) E.L.T. 441]. In paragraph 4 of the judgment, in dealing with an identical situation, the Tribunal compared the provisions of paragraph 5.2. and of 5.6 of the said Policy. The Tribunal observed that when an importer could import millions of pieces of particular goods under paragraph 5.2, the restrictions put on the import by passengers under paragraph 5.6 did not make any sense. Shri Jain submitted that the distinction having been made in the Policy, it cannot be ignored.
11. We would not enter into his controversy of an apparent lack between the two provisions of the Policy. We have earlier observed that if sufficient time was given, the appellants could have filed the documents for substantiating their claim for importability. What would have happened when the claim of importation either as cargo or baggage, was made is a matter of speculation in which we would not enter at this stage.
12. We, therefore, find that the situation in the present case is akin to what was before the Supreme Court in the case of Northern Plastics Ltd. v. CC & CE [1999(113)E.L.T.3 (S.C.). In that case, the goods were sold subsequent to confiscation. The order was upheld by the Tribunal. The Supreme Court later set aside the order of the Commissioner and of the Tribunal and held that the goods were not liable to confiscation. In the meanwhile, the goods had been disposed of. The Supreme Court held that in that situation, what was required to be refunded to the importer was the money value of the goods, the confiscation of which was wrongly done.
13. In the two orders impugned before us, the goods have been confiscated under Section 111(d) of the Act. For such confiscation, it has to be established that the goods were imported in contravention of the Customs Act and or any other Act relevant at the material time. The manner in which the entire case was proceded did not permit the importer to establish lawful importation nor did it give any scope for the department to establish unlawful importation. In the peculiar situation, we have to hold that the orders of confiscation do not sustain and penalties were not imposable.
14. The orders themselves mentioned that the sale proceeds were significantly lower than the cif value of the goods. Although the market value was contested by the importers, the proceedings do not show that the cif value was low. Shri balani urges that the importers are entitled do not the sale value of the goods but to the cif value. He refers to the judgment of the Tribunal in the case reported in 1991 (55) E.L.T. 80 [U.Enowell Khonglam v. CCE]. In that case the seizure value of the goods was Rs. 15,000/- The T.V. was sold at Rs. 10,000/- by the Department. The Tribunal directed the seizure value to be refunded even if the realization was less.
15. Allowing the two appeals, we direct that the two appellants should be compensated to the extent of the cif value of the goods imported as shown in the panchanama.
(Dictated in Court)