Custom, Excise & Service Tax Tribunal
Pradeep Kumar Vijay Pal Jain vs New Delhi(Icd Tkd) on 23 December, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH-COURT NO.-4
Customs Appeal No. 52167 of 2019
[Arising out of Order-in-Original No. VIII/ICD/10/TKD/SIIB-IMP/INV/Nahar Singh/ 99/2019
dated 21.08.2019 passed by Principal Commissioner of Customs-Import, ICD, TKD, New
Delhi]
M/s Pradeep Kumar Vijay Pal Jain Appellant
2094, Katra Tobacco, Khari Baoli,
Delhi
Versus
The Principal Commissioner of Customs Respondent
Import, ICD TKD, New Delhi New Delhi 110020 Appearance Ms. Anjali Manish, Advocate for the appellant Shri Sunil Kumar, Authorized Representative for the respondent CORAM: HON'BLE MR. BIJAY KUMAR, MEMBER (TECHNICAL) HON'BLE MS. RACHNA GUPTA, MEMBER (JUDICIAL) Date of Hearing: 03.10.2019 Date of decision: 23.12.2019 FINAL ORDER NO. 51671/2019 BIJAY KUMAR:
1. This appeal seeks to assail the order dated 21.08.2019, passed by the Principal Commissioner of Customs, Import, ICD TKD, New Delhi by which the following conditions has been set out for the provisional release of the seized goods under Section 110A of Customs Act, 1962;
(i) The importer shall execute a Bond, in proper format, for an amount of Rs. 1,00,14,852 i.e. equal to value of the goods; 2
(ii) The importer shall furnish a band guarantee/security deposit for an amount of Rs. 51,44,318/- towards differential duty and the BG so submitted shall contain an auto renewal clause;
(iii) The importer shall furnish Bank Guarantee/security deposit (with auto renewal clause) for an amount of Rs. 15,00,000/- to cover any possible fine/personal penalty that may be imposed on the importer at the time of adjudication in respect of seized goods;
(iv) An undertaking by the importer to the effect that he shall not challenge the identity of the provisionally released goods;
(v) The importer shall ensure compliance to relevant standards laid down by Food Safety and Standard Authority of India before clearance of the goods or any other policy condition for import of goods covered under CTH 0801.
2. The fact of the case is that M/s Pradeep Kumar Vijay Pal Jain (hereinafter referred to as "importer") imported consignment of "defatted coconut powder" from a supplier from Vietnam and filed Bill of Entry No. 3959788 dated 06.07.2019 for clearance thereof. The importer has classified the imported goods under Customs Tariff Heading 2306 5090 and paid basic customs duty at the rate of 15%, Social Welfare Surcharge at the rate of 10% and IGST at the rate of 5%. Acting on the intelligence the customs officer anticipated the said consignment and came to the conclusion that the product is not defatted coconut power "desiccated coconut" and are thus classifiable under Customs Tariff Item 0801 1100 and leviable to basic customs duty (for short "BCD") at the rate of 70%, SWS at the rate of 10% and IGST at the rate of 5%. The goods were examined by the Custom Officer on 15.07.2019 and samples were drawn and sent for test to 3 Central Revenue Control Laboratory(CRCL) vide letter dated 01.08.2019.
3. Subsequently, search was conducted at the godowns owned by M/s RB Mutha Impex Limited, Maniyari wherein the consignments of provisional declared vide coconut power along with other items, namely, Cloves, Split Casia and shredded coconut were found. Therefore, the following items were also seized along with items which has been imported vide Bill of Entry No. 3959788 dated 06.07.2019. S BE No/ Descripti Qty. Assessab Duty (In Duty Diff.
N Date on of Seized le value Rs.) Payable Duty (in
o. Goods (MTS) of Seized to be Rs.)
declared goods paid @
85.85%
1 3253279/ Defatted 42.65 2710391 808684.7 2326871 1518186
16.05.2019 coconut
power
2 3449586/ Defatted 34 2467482 550865.3 2118333 1567468
30.05.2019 coconut
powder
3 3765278/ Defatted 33.13 2378640 545058.6 2042062 1497004
22.06.2019 coconut
powder
4 3959788/ Defatted 26.5 2458339 548824.1 2110484 1561660
06.07.2019 coconut
powder
Total 10014852 2453433 85,97,750 61,44,318
4. The statement of Proprietor of the firm, Shri Rinku Jain were obtained by the Customs Department who admitted the classification of the consignment of defatted coconut power to be mis-declared with intent to evade the payment of customs duty. And he also paid a sum of Rs. 10 lakhs on 17.07.2019 and Rs. 13 Lakhs on 26.07.2019 in respect of the present import and also for the past import.
5. The test report from the CRCL vide 20.08.2019 indicated that the fat contained in the goods covered under the Bill of Entry NO. 3959788/06.07.2019 is 69.69% by mass. The test report of the 4 previous imported consignment has not been brought on record by the Department.
6. Learned Advocate on behalf of the Appellant submits that the contention is for the provisional release of the seized goods is stringent and harsh. The Department although has obtained the report of CRCL, however, same has not been made available to the Appellant. This is the case of mis-classification of the goods as alleged by the Department, however, same has not attained finality as the adjudication is yet to be adjudicated. Further, it is submitted that the test report which is applicable for the consignment in question to the provisional imported consignment which is from the different suppliers.
7. Learned Advocate further submits that the goods which has been seized under Section 110A of the Customs Act is required to be released in terms of Customs (Provisional Duty Assessment Regulation, 1963) in absence of any separate provisions for provisional release of the seized goods under Section 110A of the Customs Act as has been held in case of Navshakti Industires Private Limited vs. Commissioner of Customs (ICD TKD New Delhi)[2011 (267) ELT 483 (Del.)] held that by furnishing bank guarantee of 20% of differential customs duty to the suffice the conditions for provisional release.
8. Learned Advocate also placed reliance on the following decisions;
(a) Bhaiya Fibres vs. Additional Director General Revenue [2012 (281) ELT 396 (Del.)]
(b) Zest Aviation Private Limited vs. Union of India [2016 (289) ELT 243 (Del.)] 5
(c) Sprirotech Heat Exchange Private Limited vs. Union of India [2016 (341) ELT 110(Del.)]
(d) Agya Import Limited vs. Commissioner of Customs, NCH, New Delhi [CUSAA-184/2018.]
9. It is his submission that in all these cases Hon'ble Delhi High Court has held that in case of valuation disputes the bank guarantee worth 15% to 30% would suffice the revenue interest depending on the facts and circumstances of the case. It is, therefore, his submission that the Appellant has already deposited Rs. 40 Lakhs with the Department which should be sufficient considering the amount of alleged duty evasion. As the goods are lying seized since 15-17/08.2009 the immediate release of the consignment should be ordered by modifying terms and conditions set for the provisional release of the seized goods.
10. Learned Authorised Representative supports the impugned order in view of CBEC Circulars No. 81/11-NT dated 25.11.2011 and Circular No. 35/17-CUS dated 06.08.2017. He, therefore, submits that the order for the provisional release of the goods is in terms of CBEC Circular and the Commissioner has acted as per the said circular.
11. We have considered the rival submissions and also perused the appeal records.
12. The issue involved in this case is regarding the provisional release of the seized goods for the imported consignment for their appropriate classification. It is the contention of the Appellant that the said goods is appropriately classified under Customs Tariff Item 2306 50 90 against the Department claim under Customs Tariff Heading 0801 1100. The Department has drawn the samples and obtained the test report for the live consignment vide Bill of Entry No. 39 59 788 6 dated 06.07.2019. Further, the same has not been made available to the Appellant. Regarding the test report of other consignment the same has not been mentioned in the provisional release of the order. We have also considered the various case laws cited by the Appellant regarding the provisional release of the seized goods, including M/s Agya Import Limited (supra). We, therefore, are in agreement with the submission made by the Appellant that the conditions set forth for the provisional release is very harsh and not in conformity with the findings of the various case laws. The Appellant has already deposited a sum of Rs. 40 Lakhs with the Department, which in our opinion should be sufficient for the provisional release of the seized goods, keeping in view the other conditions unmodified, we direct that release of the seized goods should be granted forthwith.
(Order pronounced in open court on 23.12.2019) (Rachna Gupta) (Bijay Kumar) Member (Judicial) Member (Technical) Tejo