Custom, Excise & Service Tax Tribunal
Micro Labs Ltd vs Cc Chennai on 8 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No.C/522/2005
[Arising out of Order-in-Appeal No.C.Cus.No.682/2005 dt. 14.10.05 passed by the Commissioner of Customs (Appeals), Chennai]
For approval and signature:
Honble Mr. P.G.CHACKO, Member (Judicial)
1. Whether Press Reporters may be allowed to see 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 the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Micro Labs Ltd.
Appellant/s
Versus
CC Chennai
Respondent/s
Appearance:
Smt.Sridevi, Advocate Shri B.L.Meena, SDR For the Appellant/s For the Respondent/s CORAM:
Mr. P.G.Chacko, Member (Judicial) Date of hearing : 8.2.2008 Date of decision : 8.2.2008 Final Order No.____________ The appellants had imported a consignment of clinical thermometers supplied by M/s.Pristine Asia Co.Ltd., Hong Kong, and had presented a Bill of Entry dated 5.5.2005 for its clearance under Notification No.44 (RE-2000)/1997-02 dt. 24.11.2000 issued by the Director-General of Foreign Trade (DGFT) and circulated by the Customs authorities under Public Notice No.4/01 dt. 5.1.01 for guidance of importers, clearing agents and trading public. An importer of clinical thermometers was required to produce the evidence of registration of the supplier with the Bureau of Indian Standards (BIS). When the assessing authority asked for this evidence, the appellants were not able to produce it. On the other hand, they stated that the thermometers were for free distribution to doctors and not for sale. They requested for provisional release against a Bank Guarantee pending production of BIS Registration Certificate from the supplier. However, they failed to make use of the opportunity given by the Customs authorities for obtaining the certificate from their supplier and produce it. On the other hand, they got a sample of the thermometers tested by the Central Scientific Instruments Organization (CSIO) and obtained a certificate from the CSIO to the effect that the sample was a precision clinical thermometer which complied with maximum permissible error requirement as per Bureau of Indian Standards conforming to IS 3055 (Part-2):2004. The original authority, however, felt that it was a mandatory requirement for the importer to produce the BIS Registration Certificate for free import of clinical thermometers. In the absence of the certificate, it held the goods to be liable for confiscation under Section 111 (d) of the Customs Act read with Section 3 (3) of the Foreign Trade (Development & Regulation) Act, 1992. Accordingly, the authority ordered absolute confiscation of the goods under Section 111 (d) of the Customs Act read with Section 3 (3) of the FT (D&R) Act and also imposed a penalty of Rs.30,000/- on the importer under Section 112 (a) of the Act. This decision of the original authority was upheld by the Commissioner (Appeals). Hence the present appeal of the assessee.
2. Ld.counsel for the appellants submits that they were not aware of the requirement of producing BIS Registration Certificate in respect of the thermometers. As the thermometers were intended for free supply to doctors and not for sale, any mala fide intention was not attributable to the appellants. The goods were also certified by CSIO to be clinical thermometers conforming to BIS. In the circumstances, non-production of BIS certificate is only a condonable lapse. Ld.counsel submits that, in any case, there is no justification for absolute confiscation of the goods. The authorities ought to have allowed the importer to redeem the goods in lieu of confiscation by paying fine under Section 125 of the Customs Act. Alternatively, it is submitted, the appellants should be permitted to re-export the goods. I have heard ld.SDR also who reiterates the findings of the lower authorities.
3. Section 111 (d) of the Customs Act reads as follows :-
111. Confiscation of improperly imported goods, etc. The following goods bought from a place outside India shall be liable to confiscation :-
(a)
(b)
(c)
(d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force ; The appellants have pleaded ignorance of the requirement of production of the suppliers BIS Registration Certificate. This plea is not acceptable inasmuch as such a requirement under the DGFTs Notification No.44 (RE-2000)/1997-02 dated 24.11.2000 was published by the Customs authorities for the guidance of importers, clearing agents and trading public vide Public Notice No.4/2001 dt. 5.1.2001 issued by the Commissionerate of Customs, Chennai. The subject import was made through Chennai seaport long after the above public notice was circulated. In the circumstances, it should be held that the appellants presented the goods for clearance without BIS certificate even though they were aware of the requirement. Import of such goods without the above certificate is in breach of the relevant provisions of the FT (D&R) Act, 1992, coming within the ambit of the expression any other law for the time being in force used in clause (d) of Section 111 of the Customs Act. In other words, the clinical thermometers imported in violation of the FT (D&R) Act were prohibited goods for purposes of Section 111 (d) and consequently the confiscation cannot be resisted. The penalty imposed on the party under Section 112 (a) is only consequential to their having imported the goods with the knowledge that they are liable to confiscation under Section 111 (d) of the Customs Act. Nevertheless, I have found force in the submission of ld.counsel that the authorities could have permitted redemption of the goods against payment of fine under Section 125 of the Act. In fact, no reason whatsoever was stated by the lower authorities in their respective orders as to why the importer could not be allowed to redeem the goods. I am of the considered view that the present plea for redemption of the goods against payment of a reasonable fine should be considered. However, the belated plea for permission to re-export the goods cannot be accepted.
4. In the result, the orders of the lower authorities are set aside and the case is remanded to the original authority for de novo adjudication by allowing the importer to redeem the goods under Section 125 of the Customs Act against payment of a reasonable fine to be determined by that authority after hearing the party. The quantum of penalty shall also be re-determined after hearing the party. In the result, the appeal stands allowed by way of remand.
(Dictated and pronounced in open court) (P.G.CHACKO) MEMBER (J) gs 4 2