Custom, Excise & Service Tax Tribunal
Raisoni Exports (India) Private ... vs Nhava Sheva on 2 February, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO: C/760/2000 [Arising out of Order-in-Original No: S/10-21/99 Gr.I (JCH) (Sr.No. 93/2000) dated 20/07/2000 passed by the Commissioner of Customs, Nhava Sheva.] For approval and signature: Hon'ble Shri P.G. Chacko, Member (Judicial) and Hon'ble Shri Sahab Singh, Member (Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : Yes 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes Raisoni Exports (India) Private Limited ...Appellant Vs Commissioner of Customs Nhava Sheva ...Respondent
Appearance:
Shri Bharat Raichandani, Advocate for the appellant.
Shri V.K. Singh, Authorised Representative (SDR) for the respondent.
CORAM:
Hon'ble Shri P.G. Chacko, Member (Judicial) and Hon'ble Shri Sahab Singh, Member (Technical) Date of hearing: 02/02/2011 Date of decision: 02/02/2011 ORDER NO:
Per: P.G. Chacko:
This appeal filed by M/s. Raisoni Exports (India) Pvt. Ltd. is against the Commissioner's order whereby a consignment of garlic imported by the appellant was held liable for confiscation under Section 111(d) of the Customs Act and a penalty of Rs. 24,25,000/- was imposed on them under Section 112(a) of the Act. The appellant had not produced any specific import licence when they filed the Bill of Entry dated 28/10/1998 for clearing the consignment of garlic declared as 'dried garlic'. In other words, they sought clearance under OGL. The goods were of Pakistani origin. The customs authorities suspected the correctness of the above declaration and insisted on specific import licence for clearance of the goods on the premise that the garlic was not dried garlic (freely importable) but fresh garlic with high moisture content (which required specific licence for importation). However, the consignment was provisionally released against a bond coupled with bank guarantee for Rs. 26,37,665/-. Subsequently, the case was taken up by the Commissioner for adjudication inasmuch as the importer did not insist on issuance of show-cause notice. The learned Commissioner, after referring to Policy Circular No. 32/RA/99-2000 dated 17/09/1999 issued by the DGFT, which clarified that garlic containing water content more than 10% would not be treated as dried garlic, took the view that the goods in question had "sufficient water content" and hence could not be imported without licence. He referred to certain Explanatory Notes contained in Chapter 7 of the HSN (edible vegetables, certain roots and tubers) and claimed support therefrom to hold that the goods in question was not dried garlic. The learned Commissioner, therefore, held it liable for confiscation under Section 111(d) of the Act for want of import licence and also imposed penalty on the appellant.
2. It appears from the records that the final order passed by this Bench in this appeal was set aside the Hon'ble Supreme Court and the case remanded for fresh decision vide Commissioner of Customs vs. Ashish Bajpai 2007 (217) ELT 163 (SC). The apex court, without expressing any opinion on the point of law to be followed by the Tribunal, directed that the case be disposed of in accordance with law. Accordingly, we have taken up the appeal.
3. The learned counsel submits that the water content of the garlic imported by the appellant was never tested and that the finding of the Commissioner regarding water content of the goods is vague. It is submitted that a laboratory test of a sample of the consignment to ascertain its water content was necessary for determining whether it was dried or fresh garlic. Without such test, it was not open to the Revenue to reject the declared description of the goods. As per the declared description, the item was dried garlic which was freely importable and hence not liable to confiscation under Section 111(d) of the Act. On the other hand, the learned SDR submits that the adjudicating authority itself inspected a sample of the garlic and found to its satisfaction that it contained "sufficient water" for holding the goods to be fresh garlic. The learned SDR has also referred to the relevant HSN Explanatory Notes, which stated thus:
"This heading (07.12 - DRIED VEGETABLES, WHOLE, CUT, SLICED, BROKEN OR IN POWDER, BUT NOT FURTHER PREPARED) covers vegetables of heading 07.01 to 07.09 which have been dried (including dehydrated, evaporated or freeze-dried) i.e., with their natural water content removed by various processes. The principal kinds of vegetables treated in this way are potatoes, onions, mushrooms, .............)"
The learned SDR has also claimed support from an expert opinion contained in letter dated 21/08/1999 by the Joint Director, National Horticultural Research and Development Foundation, addressed to the Dy. Commissioner of Customs (GR.1), Custom House, Chennai, which discusses processes for drying of fresh garlic. The said letter certified a certain garlic sample to be freshly harvested, cured garlic. The learned SDR has also referred to order No. A/318/10/CSTB/C-II dated 25/08/2010 passed by this Bench in appeal No. C/964/2002 (Navalji Kothari Trading India Ltd. vs. Commissioner of Customs, Madras) wherein a consignment of garlic was found to be fresh garlic and its confiscation in the absence of import licence was upheld.
4. Learned counsel, in his rejoinder, submits that the decision taken by this Bench in the case of Navalji Kothari Trading India Ltd. (supra) was based on test report which confirmed moisture content of garlic in the range 52 - 68% by weight.
5. After considering the submission, we have found a good case for the appellant even without referring to DGFT's Policy Circular dated 17/09/1999. The garlic was imported from Pakistan and was declared to be dried garlic for the purpose of clearance under OGL. Fresh garlic was not freely importable unlike dried garlic. The department, however, did not choose to get any sample tested for its moisture content. The Commissioner's order holding the goods liable for confiscation under Section 111(d) of the Act is on a theoretical basis rather than on the basis of actual moisture content. This Tribunal has consistently held that garlic containing moisture more than 10% by weight has to be treated as fresh garlic and garlic with moisture content up to 10% by weight should be regarded as dried garlic for ITC (HS) purposes. In the case cited by the learned SDR also, test results were available to this Tribunal, which indicated the moisture content of the garlic in the range 52 - 68% by weight. The commodity was held to be fresh garlic on this basis. In the instant case, admittedly, no sample was got tested for its moisture content. The Commissioner's order does not disclose any reliable alternative examination of the goods. No copy of the Bill of Entry with any examination report is available on record. In these circumstances, we do not think that the adjudicating authority was right in rejecting the declared description of the goods. Where the determination of the moisture content was imperative in the context of ascertaining whether the garlic imported by the appellant was fresh or dried, it was open to the customs authorities to get a sample tested for its moisture content. Having not done so, they are not justified in rejecting the declared description of the goods. The letter dated 21/08/1999 from the National Horticultural Research and Development Foundation does not improve the Revenue's case any further inasmuch as this letter is a certificate on a given sample of garlic, which is anyway not the garlic in question. The garlic imported by the appellant cannot be confiscated on the basis of test results or expert opinion on samples of garlic imported by others.
6. In the result, we set aside the impugned order and allow this appeal with consequential reliefs to the appellant.
(Dictated in Court) (Sahab Singh) Member (Technical) (P.G. Chacko) Member (Judicial) */as 5 7