Customs, Excise and Gold Tribunal - Mumbai
Texnomac Traders vs Commissioner Of Customs on 31 March, 1998
Equivalent citations: 1999(114)ELT256(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. Three consignments of mace were imported on the ship MV Ial Governor at Kandla. The person shown as importer in the manifest did not come forward to clear the goods, and investigation by the Customs Department disclosed that they did not exist at the addresses shown. Therefore, the suppliers who had sent the three consignments sold the goods to the appellant before us. This appellant filed the bills of entry for clearance of the goods, after the import manifest was amended to show him as the importer. In the meantime, however, the Collector had passed orders on the notices issued to the persons first shown as the importers, and confiscated the goods. On appeal by this appellant, that order of confiscation was set aside by orders passed on 4th July, 1995 by this Tribunal. By that order the Tribunal also asked the Commissioner to adjudicate the matter afresh within two months in view of the perishable nature of the goods.
2. The Commissioner passed this order after hearing the appellant on 11th May, 1997. He ordered confiscation of the goods for having been imported without any import licence. There was no serious attempt by the importer before us to question the liability of goods to confiscation. It however pleaded leniency on the grounds that it was a genuine purchaser of the goods, after they were imported from the foreign supplier, and on the further ground that, because of the long period of storage of the goods and consequent deterioration in their quality, and cost involved in storing the goods and otherwise, it had not made any profit, and that the redemption fine therefore should be fixed taking into account these factors on working the margin of profit on the market price which was stated to be Rs. 70/- to Rs. 75/- per kg.
3. The Commissioner did not accept this contention. He said that the appellant chose to buy the goods from the foreign supplier when it was fully aware that the goods could not be imported without a licence. Being consumer goods they were liable to confiscation, in the absence of any import licence. He did not agree that the market price of the goods in November, 1996 was around Rs. 70/- per kg. He said that, according to Spices Market Weekly published by the Spices Board, the price of mace was ranging from Rs. 180/- per kg in December, 1996, Rs. 267/- per kg in March, 1997 and Rs. 269/- in April, 1997. The "Economic Times", Mumbai quoted the prices ranging Rs. 230 to Rs. 236 per kg. He concluded that averaging these prices, the market value would be Rs. 225/- per Kg. The Commissioner however accepted the contention of the appellant that because of their storage for over three years, the goods were deteriorated in quality and said that he was taking these factors into consideration. He therefore, while ordering confiscation of the goods, determined the redemption fine at Rs. 10.00 lakhs. He also imposed a penalty of Rs. 1.00 lakh on the appellant. Hence this appeal.
4. Advocate for the appellant reiterates the contention that it was a purchaser in good faith of the goods. He says that the Commissioner erred in calculating the margin of profit with reference to market price prevailing in December, 1996. He ought to have considered the market price in March, 1994 when the goods were imported. According to him this price should be taken at Rs. 112/- being the average of Rs. 95/- and Rs. 120/- per kg which was the prevailing price in May, 1994 as certified by the Gujarati newspaper "Vyapar". He relies upon the decision of the Tribunal in C.C. v. Kalpana Import and Export Agencies -1990 (63) E.L.T. 337. He further contends that the appellant had incurred demurrage of Rs. 5.00 lakhs, container detention charges of Rs. 2.00 lakhs and interest of Rs. 2.21 lakhs on the capital of Rs. 4.43 lakhs blocked up in the goods for 2 1/2 years, and that these amounts to be considered while fixing the margin of profit. He cites the decision of this Tribunal in S.V. Shivalinga Nadar & Sons v. Collector of Customs -1996 (85) E.L.T. 133 and other decisions in support.
5. The Departmental Representative raises the following contentions. The appellant chose to buy the goods without possessing an import licence knowing that such a licence was required and therefore must face the consequences of that act. The amendment of the manifest which was first permitted in 1994 was challenged before the Collector (Appeals) by his order passed in September 1995 and in the subsequent de novo proceedings ordered by him, the permission for amending the manifest was not granted. It was only subsequently in 1996 that this order was set aside and amendment permitted. Therefore, the bill of entry was filed only in 1996 and that is the period that has to be considered for determining the margin of profit. The certificate from "Vyapar" is not sufficient evidence of prevailing prices.
6. The liability to confiscation of the goods is not questioned by the appellant. It is also not possible to agree that the relevant date for determining the margin of profit must be after the order of the Collector (Appeals) of 1996 who in 1996, bringing to an end the proceedings relating to the amendment to the manifest which was first permitted and subsequently set aside. The proceedings relating to the amendment of the manifest continues and the order of the Collector (Appeals) in 1966 related to the original amendment. Even assuming the departmental representative's contention to be acceptable, the fact remains that import was made much earlier, and it is the market price prevailing at the time of import that has to be considered [C.C. v. Kalpana Import and Export Agencies -1990 (63) E.L.T. 337]. Vyapar is a reputed commercial newspaper in Mumbai and a certificate by its editor specifically refers to the prices as published. The price published is acceptable evidence of price prevailing in April 1994. We have, later, in this order in any event asked for an affidavit in support. The margin of profit has to be calculated on the basis of these prices.
7. Each of the elements on the basis of which the cost to the importer is acceptable except partially for one. Demurrage is necessarily an expense that has to be added. The deterioration in the goods on account of storage is also a factor to be considered. The Tribunal, in its decision in S. V. Shivalinga Nadar & Sons v. Collector of Customs had noted that interest paid/payable as an element of expense at the hands of the importer and must be considered at arriving at the margin of profit.
8. However the representative of the appellant has not produced any documentary evidence in support of these charges being incurred and the production in the value on account of storage. Therefore we are unable to accept the figure proposed by the appellant for want of substantiation. We are therefore left with no alternative but to send the matter back to the Commissioner for redetermination of the margin of profit after taking into account the expenses which are shown by the appellant to have been incurred as indicated above and the reduction in the value of the goods on account of storage. Appellant shall also produce an affidavit for its edition of "Vyapar" affirming the correctness of the contents of his letter which was produced. The order the Commissioner shall consider the evidence that the appellant may produce.
9. We shall first deal with liability to penalty. It has not been shown that the goods were covered by a licence when they were first imported the importer not having been traced. Therefore when the appellant purchased these goods from the supplier it knew that the goods were liable to confiscation, unless a licence could be produced which was not done. There is therefore a liability to penalty under clause (b) of Section 112. However taking into account the fact that the present appellant did not wilfully import the goods without a licence we reduce the penalty from Rs. 1 lakh to Rs. 50,000/-.
10. In our earlier order passed in 4-7-1995 we had asked the Collector to pass orders within three months. The Customs actually passed the orders in May 1997. We hope that there will be no inordinate delay this time and that the Commissioner will pass the order positively within two months from the date of receipt of this order.