Customs, Excise and Gold Tribunal - Tamil Nadu
J.J. Trading Corporation vs Cc on 24 February, 1999
Equivalent citations: 2000(89)ECR198(TRI.-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. This appeal arises from Order-in-Original No. 146/92 dated 21.10.1992, ordering for absolute confiscation of 10 MTs of Sandalwood chips valued at Rs. 21,20,000/- absolutely under Section 113(d) read with other provisions as detailed in the findings given by the Commissioner of Customs and also under Section 113(i) of Customs Act. There is a penalty of Rs. 2,00,000/- under Section 114(i) of Customs Act on the appellants represented by the partner.
2. The appellants had obtained licence to export the impugned goods and they filed shipping bill No. 03508 dated 15.07.1992 seeking to export the impugned goods packed in 200 gunny bags/packages. Acting on intelligence that the certificate of origin and transport permit in Form No. II submitted by the appellants are not genuine but forged documents, the department investigated the matter. The appellants have claimed to have purchased the goods from M/s. Divya Impex Corporation, Hyderabad, who had issued a letter indicating the sale of goods to the appellants. The certificate of origin (issued under the export trade control) by the Govt. of Andhra Pradesh, Forest Department filed by the exporters in connection with the above export was in the name of M/s. Divya Impex Corporation, Hyderabad and it was stated therein that the source of origin was from the private source (as distinct from Government source) viz. Sri R.S. Ramanujam Kodur, Andhra Pradesh. The certificate was purported to have been issued by the Chief Conservator of Forests, Andhra Pradesh under his signature dated 7.2.1992 under the office seal of the signatory. The transport permits filed in addition in Form No. II in the name of Sri S. Srinivasa Reddy, M/s. Divya Impex Corporation, Hyderabad for a total quantity of 10 MTs of Sandalwood chips purported to have been issued under the signature dated 24.7.1992 of Divisional Forest Officer, Rajampet, Andhra Pradesh bearing the official seal of the signatory.
3. On investigation, it was discovered from the O/o Principal Chief Conservator of Forests, Andhra Pradesh vide his letter dated 05.8.1992 that no such certificate of origin was issued by them and that the signature appearing thereon is not of any of the Chief Conservators of Forest working in their department, therefore, the appellants attempt to export the goods was brought under investigation and show-cause notice was issued alleging mis-declaration and contravention of Rules framed under Tamil Nadu Sandalwood Transit Rules, 1967. The Commissioner has concluded that the certificate of origin is valid only for exports by the named consignor to the particular ultimate consignee, whose name and details should be furnished to the Principal Chief Conservator of Forests, Madras, before seeking for certificate of origin of procurement. He has noted that the transfer of certificate with or without the permission of the Principal Chief Conservator of Forests, will render it null and void. He has noted that the named consignor M/s. Kannan & Company alone can validly operate on the above certificate of origin, which is not issued in the name of M/s. J.J. Trading Corporation, who seek to export the goods under the said shipping bill. He has noted that the appellants had admitted that the forest authorities were not prepared to extend the validity period of the certificate of origin in favour of M/s. Kannan & Company beyond 31.5.1992. He has noted that in these circumstances, action to effect the shipment was not pursued by the exporters M/s. JJ. Trading Corporation under shipping bill No. 1008 dated 6.5.1992. He has noted that the shipping bill has not so far been sought for by them to be cancelled till date. Further he has noted that this shipping bill is not the subject matter of the present adjudication though a reference has been made to it by the party. He has noted that the letter of credit which already stood extended up to 30.5.1992 was further extended and the firm M/s. J.J. Trading Corporation went on getting further extension as late as up to 7.9.1992, before which they filed the present shipping bill bearing No. 3508 dated 15.7.1992 attempting export of 10 MTs of Sandalwood chips as an account party of M/s. Divya Impex Corporation, Hyderabad, declared as exporter. He has noted that in the circumstances of the case, the said certificate of origin is a forged one and hence the export was unauthorised one as also because the licence issued in the name of M/s. J.J. Trading Corporation, who were seeking to operate on account of some other export firm, which is only fictitious firm and figment of imagination brought into existence for an illicit purpose as analysed in the impugned order. He found violation of Rule 3 of the Tamil Nadu Sandalwood Transit Rules, 1967 and as a result there was a violation of Section 113(d) for the purpose of confiscation of goods and hence, ordered for the same and imposed penalty. The Commissioner rejected the prayer of the appellants that they were under bona fide belief that the certificate of origin issued by M/s. Divya Trading Corporation was a genuine and not fabricated.
4. The only question arises in this appeal at the time of argument by the learned Counsel is as to whether the appellants ought to have been granted redemption under Section 125 of the Customs Act to redeem the goods, as they were holding proper licence to export the goods. As also they were holding letter of credit and in terms of the Regulation 5 of the Exports & Imports Policy, as in effect, as on date, they were entitled to export the goods and there was no illegality in so far as the option of the letter of credit and filing of bill of entry. It was only the certificate of origin which was disputed as genuine and the appellants contended that all along they held bona fide belief that M/s. Divya Trading Corporation were authorised exporters and had procured seized goods from the authority. It was contended that the Hon'ble Supreme Court in the case of Hargovind Das K. Joshi and Ors. v. CC and Ors. as remanded the matter to the Additional Commissioner to consider the option to pay fine in lieu of confiscation in terms of Section 125(1) as the same had not been granted. The learned Counsel also brought to the notice, the judgement of Mumbai Bench of the Tribunal rendered in the case of Oil Processors Pvt. Ltd. v. CC as , wherein also the redemption was granted on payment of fine to the goods, although the import was held to be not permissible under OGL. It was also brought another citation in the case of Singareni Collieries Co. Ltd. v. CC & CCE as , wherein also the option was granted to redeem the goods despite having held violation of certain rules. Likewise, in the case of Minus Polycoats v. CC as wherein also the import was held to be not permissible under OGL, however, option to redeem the seized goods was granted by the Tribunal. Reliance was also placed on the judgement of the Karnataka High Court in the case of Mahalakshmi Flour Mills v. UOI as , wherein a direction was given to the department to permit the export of sandalwood chips and powder, despite the fact that the exporter having purchase orders from foreign buyers (though not backed by letters of credit) making counter commitments with Forest Departments for purchase of material before 01.04.1992. Further reliance was made on the judgement of Tribunal in the case of Lavanya Exports v. CC & CCE as , wherein also there was a order of absolute confiscation of sandalwood flakes, however, the Tribunal directed the same to be released on payment of redemption fine.
5. The learned SDR opposes the prayer on the ground that in the case of Lavanya Exports, there was proper procurement order so also in the case of Mahalakshmi Flour Mills, while in the present case, the certificate of origin was a forged one and there was a violation of Tamil Nadu Sandalwood Transit Rules and as such redemption cannot be exercised.
6. On a careful consideration of the submissions on both sides, we notice that the only prayer made by the appellants is about the non-speaking nature of the impugned order in so far as the grant of redemption of seized goods under Section 125 of the Customs Act is concerned. We also notice from the impugned order that there is no findings given by the Commissioner with regard to grant of redemption of the goods under Section 125 of the Customs Act. The Hon'ble Supreme Court in the case of Hargovind Das K. Joshi and Ors. (supra) has clearly noted that Section 125 requires consideration of the plea of redemption and the Collector had the discretion to pass such an order and he should have addressed himself to the question whether or not the discretion should be so exercised. In regard to the facts and circumstances of the case, we are of the considered opinion that this judgement of the Hon'ble Supreme Court applies to the present case, in as much as the Collector of Customs had not adverted to Section 125 and considered the plea of redemption at all. The findings given by the Hon'ble Supreme Court in paras 3 to 5 are re-produced hereinbelow:
3. We are of the view that insofar as the order directing confiscation of the goods is concerned, it is unassailable in facts or in law. So also the order levying penalty is justified by facts and warranted by law. There is, however, substance in the last contention urged on behalf of counsel for the appellants. The Collector of Customs has passed an order for absolute confiscation of the imported goods without giving the appellants an option to redeem the same on payment of such fine as may be considered appropriate by him. Reliance has been placed by learned Counsel for the appellants on Section 125(1) of the Customs Act in support of the plea that the Collector had the discretion to pass such an order and he should have addressed himself to the question whether or not the discretion should be so exercised having regard to the facts and circumstances of the case. The Additional Collector of Customs who passed the order of confiscation undoubtedly had the discretion to give an option to the appellants to pay a fine in lieu of confiscation. Presumably the Additional Collector of Customs assumed that he was bound to confiscate the goods because he had not adverted to this aspect in his order. He had undoubtedly the authority under law to give an option to the importers to pay such fine as was considered appropriate by him (not exceeding the full market value of the goods in question) in lieu of confiscation of the goods. We are of the opinion that since the Additional Collector of Customs who passed the order for absolute confiscation had the discretion to give the option for redemption, it was but just, fair and proper that he addressed himself to this question. The order passed by the Additional Collector of Customs as confirmed by the Customs, Excise and Gold (Control) Appellate Tribunal therefore requires to be modified only to this limited extent.
4. We therefore direct that the matter be remitted to the Collector of Customs for this limited purpose to this limited extent as to whether or not to give an option to the importers (appellants) to redeem the confiscated goods on payment of such fine as may be considered appropriate by him in lieu of confiscation. It will be open to the concerned officer to take a decision one way or the other in accordance with law as is considered appropriate in the circumstances of the case after hearing the appellants. We have no doubt that the concerned officer will take into consideration all the relevant circumstances including the submission urged to behalf of counsel for the appellants that the goods in question, zip fasteners, can at present be imported freely for whatever it is worth.
5. The appeals are, therefore, dismissed subject to modification to the aforesaid limited extent. There will be no order as to costs.
7. On a careful consideration, we further notice that in the case of Mahalakshmi Flour Mills (supra), export was granted in respect of sandalwood chips and powder, although there was no letter of credit which was a violative of the export licence. In the case of Minus Polycoats (supra) there was a clear violation of export provisions and redemption of goods was granted. In the case of Singareni Collieries Co. Ltd. also despite the violation of rules, redemption was granted. In the case of Oil Processors Pvt. Ltd. (supra) the import was also to be not permissible yet the Tribunal held that the goods ought to have been released on payment of redemption fine. So also in the case of Lavanya Exports (supra) there was violation of certain provisions of law, yet the Tribunal held that in the facts and circumstances of the case, redemption ought to have been granted.
8. Taking into consideration all facts and circumstances of the case and in particular the judgement of Hon'ble Supreme Court rendered in the case of Hargovind Das K. Joshi and Ors. (supra), we remand the matter to the Commissioner of Customs for considering the plea of the appellants for redeeming the goods under Section 125 of the Customs Act, which has not been considered. The Commissioner shall give an opportunity of hearing to the appellants to satisfy the plea of redemption in the matter. The appellants also prayed for reduction in the penalty, as the appellants have the letter of credit for export of goods and the only fault found was in respect of certificate of origin which was found to be forged not accountable to any act of the appellants. The Commissioner shall also consider this plea of reduction of penalty in the facts and circumstances of the case pleaded by the appellants.
9. Thus, the appeal is allowed by way of remand for de novo consideration in the light of the citations relied on by the party.
(Pronounced in the open court on 24.2.1999).