Bombay High Court
Nitco Marble And Granite (P) Ltd. vs Dy. Collector Of Customs on 11 November, 1994
Equivalent citations: 1995(58)ECR96(BOMBAY)
ORDER
1. This is an appeal filed by M/s. NITCO Marble and Granite (P) Ltd., against the order of Dy. Collector of Customs, Jawahar Customs House, Sheva.
2. The facts of the case in brief are that the appellant filed a Shipping Bill No. 523900 dated 8.8.1994 for export of 10.26 M CBM (42.12 M.T. Nt. Wt.) "Marble Blocks Cut & Minimum One Side Polished", valued at Rs. 3,53,739/-FOB. The export was sought under provisional DEEC Scheme, as the appellant had applied for duty free advance licence vide D.G.F.T. receipt No. 289899 dated 26.7.1994.
3. The goods were examined on 19.8.1994 and it was found out that the Marble block sought to be exported were not having "Minimum one side polished" as declared in the Shipping bill, but they were found to be roughly cut from all six sides. In order to ascertain the status of the goods as Marble or otherwise, the sealed samples were sent for test to DYCC, IIT Bombay and Coechem. The Goechem reported that the sample is a Lime Stone which in all probability may be Marble.
4. Subsequently in the light of appellant's letters dated 3.9.1994 and 12.9.1994 the sealed samples were sent to concerned laboratory, in order to confirm whether the blocks were having Minimum one side polished or not. The appellant had also requested for provisional shipment after re-examination. Upon re-examination of the goods on 20.9.1994, it was again found out that the blocks were not having Minimum one side polished, instead they were found to be roughly cut from all six sides.
5. During personal hearing before the Lower Authority, the appellant accepted the fact that "instead of the block being one side polished, they are roughly cut from all sides." In view of the above facts, the Lower Authority held that the appellant misdeclared the description of the goods with a view to avail of DEEC benefit. The potential duty evasion worked out to Rs. 2,16,122/-. Hence the Lower Authority confiscated the goods under Section 113(d) of Customs Act, 62 read with Section 3(3) of Foreign Trade (Dev. and Regulation) Act, 1992 and imposed Redemption find of Rs. 2,16,0007- under Section 125 of Customs Act, 62 and penalty of Rs. 20,000/- under Section 11(1) of Customs Act, 62.
6. Aggrieved by the said orders, the appellant has preferred the present appeal.
7. Request for a short adjournment.
8. Heard the appellant. The appellant submitted that the impugned order is totally untenable as the goods involved are not prohibited goods. There was no attempt to counsel or misdeclare the goods as the exporter has requested the department twice to get the goods examined. Sample was also drawn and sent for testing which confirmed the basic nature of the material.
9. It was further contended that in the findings portion of the lower authority it was mentioned that the exporter tried to misuse the DEEC scheme by attempting to export unprocessed rough cut blocks of marble which was not factually correct. In the original order the duty liability was worked out on the basis of an application to DGFT which is still pending clearance. The appellant argued that no import was made under DEEC scheme nor was any attempt made to export so called misdeclared articles. The imposition of redemption fine and penalty were totally unwarranted as the calculation of duty liability was made on the basis of a presumption that DEEC would have been claimed by the exporter on a later date.
10. I have carefully gone through the submissions of the appellants. I find that the goods are not prohibited goods and the export declarations were examined by the Department twice. Sample was also taken which confirmed the basic material of the export item. On the basis of these facts the export should have been allowed on a free shipping bill without giving the benefit of DEEC or drawback to the exporter. Instead of doing that, the impugned order imposes a fine in lieu of confiscation and also a personal penalty on the exporter. I do not understand how the fine can be realised or refunded if the goods are not exported and import under DEEC is not made. When the exporter makes a declaration, it is the duty of the department to verify its veracity and if the goods are not found in accordance with the declaration, a suitable observation can be made on the relevant shipping bill and the export can be allowed. The impugned order imposes a heavy find and penalty which is totally unwarranted as the goods are not prohibited goods. I therefore, set aside the impugned order and direct that the shipping bill should be converted into a free shipping bill and the export should be allowed. The exporter will not be entitled for any DEEC benefit consequent upon to this order.