Custom, Excise & Service Tax Tribunal
M/S. Prashant Freight Forwarders ... vs Commissioner Of Customs(Import), ... on 27 February, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO.II APPEAL NO.C/216, 340, 769 & 770/08-Mum (Arising out of Order-in- Original No.113/07/CC(I) dtd. 30.11.2007 passed by the Commissioner of Customs )Imports), JNCH, Nhava Sheva ) For approval and signature: Honble Mr Ashok Jindal, Member(Judicial) Honble Mr.S.K.Gaule, Member(Technical) ============================================================
1. Whether Press Reporters may be allowed to see : No
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 Their Lordships wish to see the fair copy : seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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M/s. Prashant Freight Forwarders Pvt.Ltd.
CC(Import) Nhavasheva
Warren Trading Pvt.Ltd.
Harish Bulchandani
:
Appellants
VS
Commissioner of Customs(Import), Nhava Sheva
Respondent
Appearance
Shri Sanjay Agarwal, Advocate for Appellants
Shri Amand Shah, Addl.Commr. (A.R.) for Respondent
CORAM:
Mr. Ashok Jindal, Member(Judicial)
Mr. S.K.Gaule, Member(Technical)
Date of hearing: 27/02/2013
Date of decision 27/02/2013
ORDER NO.
Per : Ashok Jindal
M/s. Warren Trading Pvt.Ltd. is in appeal against the impugned order alongwith co-appellants for demand of duty, interest and penalties imposed under Sec. 112(a) of the Customs Act, 1962.
2. The Revenue is also challenged the impugned order for imposing penalties on M/s. Warren Trading Pvt.Ltd and Shri Harish C.Bulchandani under Sec.114A.
3. The brief facts of the case are that M/s. Warren Trading Pvt.Ltd. imported a consignment of synthetic polyester fabrics and filed Bill of Entry as per the description shown in the invoice. The goods were examined on first check, sample was drawn which was sent to the Textile Committee Laboratory and as per the report of the Textile Committee, it was found that the goods are 100% non-texturised. On the basis of the test report, the goods were assessed on 13.2.2003 and duty was paid accordingly. There was some investigation against one M/s. Mayur Impex as 14 consignments imported by M/s. Warren Trading Pvt.Ltd. were part of the consignment imported by M/s. Mayur Impex. Therefore, impugned show-cause notice was issued on the ground that the appellants have mis-declared the goods as synthetic polyester fabrics (100% non texturised). The matter was adjudicated by way of impugned order and differential duty was demanded from the appellants and goods were confiscated but allowed to be redeemed on payment of fine of Rs. 11,25,000/- and penalties were imposed on the Director and the transporters. Later on, a corrigendum was issued modifying the penalty imposed on Shri Harish G.Bhulchandani from Rs. Three lakhs to Rs. One lakh and imposing penalty of Rs Two lakhs on M/s. Warren Trading Pvt.Ltd. under Sec.112(a) of the Customs Act, 1962. Against this order, both Revenue as well as the assesses are before us.
4. Ld.Addl.Commr.(A.R.) appearing on behalf of the Revenue submits that the impugned order is bad in the eyes of law as the same is non speaking and penalties have been imposed by way of corrigendum under Sec.112(a) of the Customs Act instead of imposing under Sec.114A of the Customs Act, 1962. Therefore, the impugned order should be set aside and the matter should be remanded back to the adjudicating authority for fresh consideration.
5. On behalf of M/s. Warren Trading Co.Pvt.Ltd and Harish Bhulchandani, Shri Sanjay Agarwal, ld.Counsel appeared before us and submitted that the matter is not required to be remanded for fresh consideration as the order is a speaking one and the Commissioner has given his findings on merits of the case. He mainly stressed that the show cause notice issued is beyond the normal period of limitation. Therefore, the impugned proceedings initiated against the assesses are not warranted as there is no allegation of fraud, collusion, mis-representation or suppression of facts against M/s. Warren Trading Pvt.Ltd. As the goods were examined on first check basis, thereafter sample was drawn and sent to the Textile Committee approved by the Government of India, Ministry of Textile and on the basis of report of the Textile Committee, goods were assessed on 13.2.2013 as per the Boards Circular No. 23/2004-Cus dated 15.3.2004. Therefore, the allegation of mis-declaration or suppression of facts is not sustainable against the assesses. In these circumstances, the order is to be set aside. He further submitted that when the goods were examined and assessed on the basis of test report, extended period of limitation is not invokable. It is also an admitted fact that the goods were never examined further. Therefore, proceedings against M/s. Warren Trading Pvt. Ltd. and others are not sustainable.
6. Heard both sides in detail. We find that in this case Bill of Entry was filed on 6.2.2003 and as per the description in the invoice and on first check, sample was drawn and sent to Textile Committee approved by the Government of India, Ministry of Textile. The test report was obtained and on the basis of test report, as the goods were 100% non texturised the Bill of Entry was assessed and duty was paid accordingly. The test report was obtained as per the Circular No.23/04 Cus dated 15.3.2004, which is reproduced below:- Circular No.23/2004-Cus dtd 15.3.2004 Subject: Testing of imported textile/textile articles for its composition and hazardous dyes- Regarding.
I am directed to state that the trade has brought to the notice of the Board that some of the filed formations are sending samples of imported textile/textile articles for testing of hazardous dyes to Textiles Committee Laboratory under the Ministry of Commerce and for composition to Central Revenue Control Laboratory (CRCL) resulting in duplication of work and delay in clearance of cargo.
2. In this connection attention is invited to Notification No.29/(RE-2004)/2002-2007, dated 28.1.2004 issued by DGFT, Ministry of Commerce and Industry. As per para 2 of the said notification, the import consignment of textile/textile articles not accompanied with the pre-shipment certificate from notified agencies will be cleared after testing of the same from the notified agencies based on the following:-
(a) At least 25% of sample are drawn for testing instead of 100%.
(b) While drawing the sample, it will be ensured by Customs that majority sample are drawn from consignments originating from countries where there is no legal prohinition on the use of harmful hazardous Dyes.
(c) The test report will be valid for a period of six months in cases where the textile/textile articles of the same specification/quality are imported and the importer, supplier and the country of origin are the same.
3. The matter has been examined by the Board and it has been decided that in all of the cases, where samples are required to be sent for testing hazardous dyes to Textiles Committee Laboratory under the Ministry of Commerce, the testing for composition, i.e. texturised/ non-texturised, should also be done at Textiles Committee Laboratory to avoid duplication of work. However, where no test for azo-dyes are required as per the DGFT notification, the test for composition, i.e. texturised/non-texturised, shall be carried out at the CRCL in-house testing laboratory.
4. Kindly bring the above instructions to the knowledge of all concerned through appropriate Public Notice. Thereafter, no test was conducted on the impugned goods. The goods were assessed on the basis of test report of the Textile Committee. In these circumstances, the allegation of mis-declaration or suppression of facts, fraud are not sustainable against the assesses. When the allegation of mis-declaration or suppression of facts, fraud are not sustainable against the assesses, the extended period of limitation is not invokable. In this case, admittedly, the goods were assessed on 13.2.2003 and show-cause notice has been issued on 4.9.2003 which is beyond the normal period of limitation. Therefore, the impugned show cause notice is barred by limitation. As the proceedings against the assesses are barred by limitation, therefore, there is no question of demand of duty and penalties against the assesses. In these circumstances, we set aside the impugned order and allow the appeals of the assesses viz. M/s. Prashant Freight Forwarders P.Ltd., Warren Trading Pvt.Ltd. and Shri Harish Bulchandani. The appeal filed by the Revenue is dismissed.
7. Appeals are disposed of in the above terms.
(Dictated and pronounced in court) S.K.Gaule Member(Technical) Ashok Jindal Member(Judicial) pv 6