Custom, Excise & Service Tax Tribunal
Minaz Imadadali Chevewala vs Commissioner Of Customs (Adj), Mumbai on 23 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/86908/14-MUM
[Arising out of Order-in- Original No. 42/2014/CAC/CC(ADJ)/SJ dtd. 27/3/2014 passed by the Commissioner of Customs (ADJ), New Custom House, Mumbai-1]
For approval and signature:
Honble Mr Ramesh Nair, Member(Judicial)
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1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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Minaz Imadadali Chevewala
:
Appellant
VS
Commissioner of Customs (ADJ), Mumbai-1
:
Respondent
Appearance
Shri. D.H. Nadkarni, Advocate for the Appellants
Shri. M. K. Mall, Asst. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 23/12/2014
Date of decision: 23/12/2014
ORDER NO.
Per : Ramesh Nair
The appeal is directed against Order-in-Original No. 42/ 2014 /CAC/CC(ADJ)/SJ dated 27/ 3/2014 passed by the Commissioner of Customs (ADJ), New Custom House, Mumbai-1, wherein Ld. Commissioner passed the following order:-
(a) I hold the goods viz. 224.90 MTs of garlic imported by M/s. Imran Trading Establishment per MV Oriental Bright, Rotation No. 2521, Line No. 218 and MV Kedah, Rotation No.2582, Line No. 99 vide B/E No. 1067 and 1084 both dated 3/8/99 valued collectively at Rs. 37,59,325.82 CIF liable for confiscation under Section 111(d) and (m) of the Customs Act, 1962 read with Foreign Trade (Development & Regulation) Act, 1992. The said goods were released provisionally on revenue deposit of Rs. 25,00,000/-and execution of a bond, I appropriate Rs. 20,00,000/- of the said deposit in terms of the conditions of the Bond towards redemption fine in lieu of confiscation.
(b) I imposed penalty of Rs. 4,00,000/- on M/s. Imran Trading Establishment under Section 112(a) of the Customs Act, 1962 and the said amount is appropriated fro the remaining of the deposit as above.
(c) I impose penalty of Rs. 1,00,000/- on Mr. Minaz Imadadali Chevewala, partner of M/s. Imran Trading Establishment under Section 112(a) the Act and also to appropriate the same from the remaining of deposit as above.
1.1 The present appeal is filed by the partner of the firm M/s. Imran Trading Establishment against imposition of penalty of Rs. 1,00,000/- under Section 112(a) of the Customs Act, 1962. The fact of the case is that the appellant, partnership firm imported Garlic declaring as Dried Garlic under Customs Tariff Heading 071290, import of which was freely permitted. However on investigation and test it was found that it is Wet Garlic and covered under the entry 0703.20, which was restricted item as consumer goods as per ITC(HS) classification of Export and Import and were allowed to be imported under licence issued in view of Para4.5 of Import and Export Policy 1997-2002. The show cause notice was issued wherein it was proposed to confiscate the goods 224.90 MTs of garlic covered under bill of entry 1067 and 1084 both dated 3/8/1999 valued at Rs. 37,59,325.82 under Section 111(d) and (m) of the Customs Act, 1962. It was also proposed to adjust the deposit of 20,00,000/- towards redemption fine in lieu of confiscation and enforcement of bond and recovered the amount and imposed penalty upon them under section 112(a)and or 112(b) of the Customs Act, 1962. In the adjudication aforesaid goods were confiscated and amount of Rs. 20,00,000/- being redemption fine was appropriated in lieu of confiscation and penalty of Rs. 4,00,000/- was imposed on partnership firm i.e. M/s. Imran Trading Establishment under Section 112(a) and also penalty of Rs. 1,00,000/- imposed on partner, appellant under Section 112(b) therefore the appellant is before me.
2. Shri. D. H. Nadkarni, ld. Counsel for the appellant submits that as regards the correct classification there were lot of confusion and doubts and there was no clarity. He submits that reference made to DGFT since there was no clarity. The issue was referred to DGFT and DGFT had issued a Circular No. 32(RE-99)/1999-2000 DT 17/9/1999, wherein it was clarified that Dried garlic classified under Exim code No. 071290.04 of ITC(HS) classification, 1997-02 be treated as Dried Garlic provided the moisture content thereof does not exceed 10%, irrespective of the method of drying. It is his submission that only after the said clarification, it could ascertained, what is dried garlic or otherwise. In such situation, it could not be concluded that the appellant has mis-declared with malafide intention. He placed reliance on the Larger Bench judgment in the case of [2004(168)E.L.T.170(Tri-LB)]DAB Exports Versus Commissioner of Customs, Trichy , which was an identical issue, wherein the Larger Bench held that the DGFT Circular dated 17/9/1999 is not retrospective but it is prospective one. Accordingly, import was held to be legal. He further submits that in this very case proceeding against the partnership firm has been dropped by coordinate bench of this Tribunal Vide order No. A/1452/14/SMB/C-IV dated 4/9/2014. It is his submission that penalty on the partner i.e. present appellant is consequential to the charges made against partnership firm towards misdeclaration of the import of garlic therefore main proceedings is dropped, then the penalty on the partner can not be sustained.
3. Shri. M. K. Mall, Asst. Commissioner(A.R.) appearing for the Revenue reiterates the findings of the impugned order.
4. I have carefully considered the submissions made by both the sides and perused the records.
5. The fact of the case is not under dispute that there was doubt and confusion not only by the importer but also with the department. That is why the matter was referred for the clarification of DGFT and DGFT has clarified what is the dried garlic and garlic other than dried garlic. The identical issue came up before the Larger Bench of the Tribunal in the case of DAB Exports(Supra), wherein the Larger Bench referring the Apex Court judgment in case [2007(208)E.L.T.321(S.C.)] Suchitra Components Ltd has held that very circular dated 17/9/1999 is prospective and not retrospective therefore whatever goods imported prior to issuance of this Circular was held to be legal. Therefore in the present case also the import was made prior to issuance of circular i.e. on 3/8/1999. In the present case imposition of penalty on the partner and in the case of partnership firm, wherein confiscation of goods were ordered, the appeal of the partnership firm was allowed vide Order No. A/1452/14/SMB/C-IV dated 4/9/2014. Since a main proceeding against partnership firm has been dropped the penalty on partner can not be sustained. In view of the above discussion, the present appeal is allowed with consequential relief, if any, in accordance with law.
(Dictated in court) Ramesh Nair Member (Judicial)) sk 6