Customs, Excise and Gold Tribunal - Delhi
Harpreet International vs Commissioner Of Customs on 25 July, 2000
Equivalent citations: 2000ECR625(TRI.-DELHI), 2000(120)ELT529(TRI-DEL)
ORDER
K. Sreedharan, J. (President)
1. These cases have come before us in view of Misc. Order No. 261/2000 passed by the South Zonal Bench at Chennai. The circumstances which led to that order are as follows :
Aggrieved by Order-in-Original No. 6/99, dated 28-4-1999 passed by the Commissioner of Customs, Amritsar M/s. Harpreet International and Shri Maninder Singh preferred appeals C/281 and 282/99 before Delhi Bench of this Tribunal. These appeals come up before Northern Bench on 9-3-2000 for hearing. Stay petitions had also been posted. That Bench found that the facts in the case are similar to those in appeals pending before South Zonal Bench in relation to import Of identical goods by M/s. Pearl Associates, Pondicherry. Consequently the Bench took the view that these two appeals are to be heard by South Zonal Bench at Chennai in the interest of justice. Learned Counsel representing the appellant also submitted before the Bench that the two cases may be transferred to South Zonal Bench at Chennai to be heard along with the appeals preferred by M/s. Pearl Associates. In these circumstances, the Bench directed the registry to do the needful for sending these appeals to the South Zonal Bench at Chennai. When appeals reached the South Zonal Bench at Chennai, that Bench found that it had no jurisdiction to entertain the appeals in the absence of an order from the President transferring the case to South Zonal Bench. In this view of the matter, the South Zonal Bench remitted the file to the President for further orders on jurisdiction in the matter. When the matter came back, the President ordered the cases to be posted before a Larger Bench. That is how the matter has now come before us.
2. CEGAT (Procedure) Rules, 1982, inter alia, deals with constitution of benches. It provides for 4 Zonal Benches. Those Zonal Benches are to deal with all matters arising within their jurisdiction and such other matters as may be transferred to them under a general or special order of the President. As far as appeals C/281-282/99 are concerned, order impugned therein was passed by the Commissioner of Customs, Amritsar. Importer, namely, appellants are located at Amritsar, falling within the territorial jurisdiction of Tribunal at Delhi. Appeals were therefore rightly filed before the Delhi Bench. When appeals were so filed before Delhi Bench which has territorial jurisdiction to entertain them the same was found by Northern Bench to be heard along with the matter pending in South Zonal Bench. The Northern Bench should have placed the matter before the President for specific orders transferring the case to South Zonal Bench. In the instant case such a procedure was not resorted to by the Northern Bench. Bench only directed the Registry to do the needful. Had the Bench directed the Registry to place the records before the President for appropriate orders the difficulty would not have arisen. In the absence of such a direction to the Registry, Registry followed the order of the Northern Bench which reads -
"Since we find that there is reference to the case of Pearl Associates in the findings of this case and the evidence in both the cases is the same, therefore, it will be in the interest of justice, if these two appeals are also heard by South Zone Bench at Chennai under intimation to the appellant."
By this order South Zonal Bench did not get jurisdiction to entertain these appeals as per rules referred to earlier. So, South Zonal Bench rightly referred the appeals back to President for appropriate orders. President thereupon posted the matter before Larger Bench.
3. On the issue regarding jurisdiction of benches to hear matters, we think it appropriate to refer to the following observations made by the Supreme Court in Union of India v. Paras Laminates (P) Ltd. -1990 (49) E.L.T. 322 (S.C.)-
"11. It is true that Sub-section (5) refers to difference of opinion arising amongst members of a Bench in a particular case, and not specifically where the members of a Bench doubt the correctness of an earlier decision. However, Section 129C confers power of reference upon the President. That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to what they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree. In such cases, it is necessary for the healthy functioning of the Tribunal -that the President should have the requisite authority to refer the case to a -larger Bench. That is a power which is implied in the express grant authorising the President to constitute Benches of the Tribunal for effective and expeditious discharge of its functions."
In view of the above statement of law made by the Supreme Court and Rules, we are clear in our mind that transfer from one Zonal Bench to another can be made only by general or special order passed by the President. In this view action of South Zonal Bench in referring the appeals back to President for appropriate orders was correct.
4. Stay petitions have also been filed by the appellants praying for waiving the condition of pre-deposit of the amount of penalty imposed on the appellants. Since this appeal had a chequered career and was pending here for more than a year we heard the Learned Counsel representing the appellant and the Learned Departmental Representative on merits after waiving the condition of pre-deposit. We are disposing of the appeals on merit. On hearing the Learned Counsel representing the appellant and the Learned Departmental Representative we come to the conclusion that the facts of this case are not at all interlinked with the appeal preferred by M/s. Pearl Associates, Pondicherry pending before the South Zonal Bench. Without reference to the facts and circumstances which led to the appeal at the instance of M/s. Pearl Associates, these appeals are disposed of.
5. M/s. Harpreet International got goods imported under Bill of Entry No. 1286 dated 20-11-1997 and Bill of Entry No. 1287 dated 21-11-1997. Goods covered by these Bills of Entry were received in 15 containers. The goods in the containers were declared as Mulathi and Poppy Seeds. Two containers were completely stored with Mulathi. 13 containers had Mulat (sic) and Poppy Seeds. These containers originated from Karachi in Pakistan (sic) original documents these goods were to be imported by M/s. Pearl Associates, Pondicherry. Pearl Associates did, in fact, import some portion c the consignment. Thereafter it appears that they backed out of the contract. While the goods remained in the Port of Colombo M/s. Harpreet International purchased them as per invoices dated 25-8-1997. In those invoices goods in the containers were correctly declared as Mulathi and Poppy Seeds. The purchase made by Harpreet International of mulathi and poppy seeds was not illegal under the Customs Act, 1962. Pursuant to the purchase Bills of Entry were filed on 20-11-1997 and 21-11-1997, and the goods reached India. On examination by the customs authorities it was found that the goods conformed to the description in the Bills of Entry. In the case of poppy seeds there was an excess by 10.77 MT according to the importer it was caused by moisture. This explanation was not found acceptable to the Department. Department took the view that the importer resorted to the import only to facilitate Pearl Associates to get the goods imported into India. On this premises action was taken and show cause notice were issued. After elaborate investigation the Commissioner came to the following conclusion -
"It is therefore clear that goods in the container covered by Bills of Entry Nos. 1286 dated 20-11-1997 and 1287 dated 21-11-1997 were initially intended to be cleared as mulathi without declaring poppy seeds from Tuticorin port in the name of M/s. Pearl Associates, Pondicherry but later Shri Maninder Singh entered into a conspiracy with his brother-in-law Shri Tejinder Singh to change the documentation and to open a new firm in the name of M/s. Harpreet International and clear the consignment in the name of this firm at CFS, Ludhiana."
6. Harpreet International got the consignment imported after correctly declaring the goods as mulathi and poppy seeds. Commissioner has no where found that goods were undervalued with an attempt to evade payment of duty. On going through the records it is not seen that Harpreet International had done anything illegal under the Customs Act in getting the consignment imported. Import of mulathi has not been found objectionable by the impugned order either. Import of poppy seeds without licence was objectionable. For that liability can be fastened on the importer and its proprietor Shri Tejinder Singh. Maninder Singh's involvement is not of any consequence. He was not importer and so cannot be made liable for any penalty as has been done by the Commissioner invoking the provisions contained in Section 112 of the Customs Act.
7. Redemption fine of Rs. 60 lacs in lieu of confiscation has been imposed on M/s. Harpreet International. Option to pay fine in lieu of confiscation is provided by Section 125 of the Customs Act. Proviso to Clause (1) of Section 125 states that such fine shall not exceed the market price of the goods confiscated less the duty chargeable thereon in the case of imported goods. In view of this specific provision contained in Section 125, learned Counsel representing the appellant submitted that imposition of redemption fine of Rs. 60 lacs can under no circumstance be supported. We find much force in this argument advanced by the Learned Counsel. In the case of poppy seeds, redemption fine that was being imposed by the Tribunal during the period 1996-97 was 85% of the CIF value. In support of this he placed before us following decisions of this Tribunal -
1. CCE, Trichy v. H.M. Enterprises - Final Order Nos. 1600 & 1601/98
2. P.S. Grinders, J.R. Overseas v. C.C., Trichy - Final Order Nos. 767-774/99 - 2000 (117) E.L.T. 705 (Tribunal)
3. Chikku International and Ors. v. CC, Trichy - Final Order Nos. 1312-1315/99
4. Diamond Traders v. CC, Trichy - Final Order No. 701/99 -1999 (111) E.L.T. 438 (Tribunal).
We are inclined to follow the method adopted by the Tribunal in the above-mentioned cases. Accordingly, we fix the redemption fine at 85% of the CIF value.
8. A penalty of Rs. 10 lacs has been imposed on M/s. Harpreet International, Amritsar for their act of omission and commissions which has rendered the goods liable to confiscation. The act of commission resorted to by M/s. Harpreet International, Amritsar can only be in relation to the import of poppy seeds without licence. They are also guilty of importing 10 MT in excess of the quantity declared in the Bills of Entry.- It is conceded before us that poppy seeds are subsequently covered by O.G.L. and no licence was required either. Taking into account the entire circumstances of the case, we reduce the penalty to Rs. 4,50,000 instead of Rs. 10 lacs imposed by the Commissioner. As stated earlier, we do not find any ground to impose penalty on Shri Maninder Singh who was not concerned with the disputed import. So, penalty of Rs. 5 lacs imposed on Shri Maninder Singh is vacated. Redemption fine be fixed at 85% of the CIF value. Total CIF value was Rs. 25,25,210. 85% of this amount comes to Rs. 21 lacs and odd.
9. In view of what has been stated above, we impose a redemption fine of Rs. 21 lacs instead of Rs. 60 lacs as was done by the Commissioner in the impugned order. Penalty imposed on M/s. Harpreet International has been reduced to Rs. 4,50,000 instead of Rs. 10 lacs as was done in the impugned order.
10. Appeals are allowed by modifying the order as stated above with consequential relief, if any.