Customs, Excise and Gold Tribunal - Delhi
Vikas Spinners vs Commissioner Of Customs on 14 November, 2000
Equivalent citations: 2001(73)ECC206, 2001(128)ELT143(TRI-DEL)
ORDER P.S. Bajaj, Member (J)
1. This appeal has been filed by the appellants against the order-in-original dated 29-2-2000 passed by the Commissioner of Customs, Lucknow vide which he had ordered confiscation of their 482 bales of readymade garments (old, used and showing signs of wear) as well as 3 bales of used clothing and showing sings of wear, valued at Rs. 10,42,750/- under Sections 111(d) and 111(m) of the Customs Act with option to redeem the same on payment of fine of Rs. 5,00,000/- and also imposed penalty of Rs. 50,000/- under Section 112(a) of the Customs Act on them.
2. The facts giving rise to this appeal may briefly be stated as under:
3. The appellants filed a Bill of Entry dated 7-5-1999 with the Assistant Commissioner of Customs, Varanasi for clearance of imported cargo consisting of 485 bales of old lot stock garments (assorted) falling under Chapter Sub-headings 6203.41, 6203.42, 6203.43, 6203.33, 6205.20, 6205.30, 6206.30 and 6206.40 of the Customs Tariff imported from Japan in two containers. They also submitted invoice and packing list No. NKS10492, dated 14-2-1999 issued by M/s. NIHON COGTO SHOJI, HIGASHI, OSAKA, Japan. The value of the goods sought to be cleared, declared was 0.40 US $ per Kg. by them but the same was not accepted by the department. Consequently, the value of the goods was loaded to 0.50 US $ per Kg. in consultation with Shri Gautam Sinha, Special Attorney of the appellants who agreed to the same and signed an affirmation on the back of the Bill of Entry. Subsequently, on the basis of loaded value, the assessable value of the goods was found to be Rs. 10,42,750/-. The appellants produced a special import licence of appropriate value and the goods were accordingly assessed to duty amounting to Rs. 4,22,008/- on 19-5-1999. This duty amount was deposited by Shri Gautam Sinha, Attorney of the appellants on 20-5-1999.
4. After payment of duty, as per second check system, the consignment was examined on 20-5-1999 and 21-5-1999, in the presence of Shri Gautam Sinha, Representative/Attorney of the appellants and other officers of the Customs. On examination of the contents of the container, 482 out of 485 bales, were found to contain readymade garments used and worn showing signs of appreciable wear, while the rest of the 3 bales were found to contain used clothing not showing sign of appreciable wear. However, none of the bales bore readable marks and numbers. The examination report to this effect was agreed to and signed by the Attorney of the appellants on 20-5-1999 and 21-5-1999. The readymade garments used and worn showing signs of appreciable wear, were classified under Chapter sub-heading 6309.00 of the Customs Tariff and in terms of EXIM Policy 1997-2002 such goods were consumer goods and could be imported only against specific import licence which the appellants did not possess at that time. There was misdeclaration of the goods by them also. Therefore, the goods became liable for confiscation under Sections lll(m) and lll(d) of the Customs Act. Accordingly, the show cause notice dated 5-11-1999 was issued to the appellants vide which they were called upon to show cause as to why the goods be not confiscated under Sections lll(d) and lll(m) and penalty be not imposed under Section 112 of the Customs Act on them. They contested the correctness of that show cause notice wherein they denied the inspection of the goods after opening the bales in their presence. They also denied of having made any misdeclaration in respect of the disputed goods. They further alleged that the loading of the value of the goods was illegally done as the goods were imported under a contract and seller and buyer were not related persons. However, the Commissioner of Customs did not agree with the contention of the appellants and ordered confiscation of the 482 bales but gave option to the appellants to get the same redeemed on payment of Rs. 5,00,000/-. He also imposed penalty of Rs. 50,000/- on them.
5. None has come present on behalf of the appellants. They have prayed for decision on merits. We have heard the SDR and gone through the record.
6. In the written submissions, the appellants have challenged not only the confiscation of the goods and imposition of penalty on them, but also valuation of the goods. According to them, the loading of value of the goods was not made in accordance with law and the value was wrongly enhanced from US $ 0.40 per Kg. to US $ 0.50. They have referred to the ratio of the law laid down by the Apex Court in Sounds N. Images v. CC, 2000 (117) E.L.T. 538 wherein it has been ruled that the burden to establish that the value of the imported goods declared was not correct, always rest on the Revenue and cannot be shifted on the importer. They have also relied on two cases on the Tribunal in Khushiram Beharilal v. CC, New Delhi and Globe International Agencies v. CC, Madras - 1997 (94) E.L.T. 129 (Tribunal) to contend that they were not debarred from contesting the valuation.
7. In our view in the present appeal, the question of loading of the value of the goods cannot at all be legally agitated by the appellants. Admittedly, the price of the imported goods declared by them was US $ 0.40 per Kg. but the same was not accepted and loaded to US $ 0.50 per Kg. This loading in the value was done in consultation with Shri Gautam Sinha, the Representative and Special Attorney of the appellants who even signed an affirmation accepting the loaded value of the goods on the back of the Bill of Entry dated 7-5-1999. After loading of the value, the appellants produced the special import licence and paid the duty on the goods accordingly of Rs. 4,22,008/- on 19-5-1990. Having once accepted the loaded value of the goods and paid duty accordingly thereon without any protest or objection they are legally estopped from taking somersault and to deny the correctness of the same. There is nothing on record to suggest that the loaded value was accepted by them only for the purpose of clearance of the goods and that they reserved their right to challenge the same subsequently. They settled their duty liability once for all and paid the duty amount on the loaded value of the goods. The ratio of the law laid down by the Apex Court in Sounds N. Images, (supra) is not at all attracted to the case of the appellants. The benefit of this ratio could be taken by them only if they had contested the loaded value at the time when it was done, but not now after having voluntarily accepted the correctness of loaded value of the goods as determined in the presence of their Representative/Special Attorney and paid the duty thereon accordingly.
8. Similarly the ratio of the law laid down in Kushiram Beharilal and Globe International Agencies (supra) referred by the appellants in their written submission is of no avail to them for the simple reason that there is nothing on the record to show that they accepted the loaded value only for the purpose of clearance of the goods and reserved their right to challenge the same at a subsequent stage. The payment of duty was not made by them under protest on the loaded value of the goods. Their own Attorney/Representative agreed to the loaded value of the goods and signed the affirmation on the back of the Bill of Entry even and that is why no show cause notice in this regard was issued to them. The show cause notice in the instant case was issued to them only for the confiscation of the goods and imposition of penalty on them due to misde-claration of nature of goods and import of the same without specific licence.
9. The challenge of the appellants against the confiscation of the imported goods is also without any basis. They undoubtedly could not import the readymade garments used, worn and showing signs of appreciable wear, classifiable under Chapter sub-heading 6309 of the Customs Tariff being consumer goods as per the Exim Policy 1997-2002, without specific import licence, but they admittedly did not possess such a licence. They also gave misdescrip-tion of the goods. Therefore, their goods were liable to be confiscated under Sections lll(d) and lll(m) of the Customs Act. That being so, the impugned order of the Commissioner regarding confiscation of the goods, cannot be said to be in any manner illegal and unjustified.
10. The redemption fine of Rs. 5,00,000/- determined by the Commissioner of Customs on payment of which the appellants were given the option to get the goods released, cannot be in any manner said to be exorbitant, or unwarranted, keeping in view the facts and circumstances of the case referred to above. Similarly, penalty of Rs. 50,000/- had been also rightly imposed on the appellants as they tried to woodwink the Customs authorities and attempted to evade the payment of appropriate Customs duty on the goods. They misdeclared the goods intentionally and knowingly with a view to evade the payment of duty and as such keeping in view their conduct, no leniency could be shown to them in the matter of imposition of fine and confiscation of the goods.
11. The plea of the appellants is that since the goods remained under detention for long time and incurred demurrage, redemption fine and penalty should not have been imposed on them by the Commissioner of Customs, cannot be accepted having regard to their mala fide conduct. The mis-description and undervaluation of the goods was purposely and deliberately done by them with the sole object of deceiving the Customs authorities and to avoid the payment of appropriate Customs duty. The ratio of the law laid down in Jai Hind Wire Rod Mills Ltd. v. CC, Tricky - 2000 (121) E.L.T. 159 referred by them in their written submissions, wherein the matter was sent back for determining the redemption fine and penalty by taking into account the demurrage and landed cost of the consignment, is not at all of any help to them, in the case in hand. The goods were rightly detained as they tried to play fraud on the Customs authorities by misdeclaring and undervaluing the goods, but were timely caught in the net before getting the goods released. The goods could not be released until appropriate duty was paid by them thereon. Therefore, they could not be permitted to take benefit on their own wrong by claiming the allowance of demurrage and landed cost towards the imposition of redemption fine and penalty.
12. In view of the discussion made above, the impugned order of the Commissioner of Customs is perfectly valid and no interference is called for. Consequently, there is no merit in the appeal of the appellants and the same is ordered to be dismissed.