Custom, Excise & Service Tax Tribunal
Beekay Engineering Corporation vs The Commissioner Of Customs (Acc & ... on 22 July, 2010
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT No.I APPEAL No.C/246 & 247/09 (Arising out of Order-in-Appeal No.326 & 327/Mumbai-III/2008 dated 23/12/2008 passed by Commissioner of Customs (Appeals), Mumbai) For approval and signature: 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 :
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
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Beekay Engineering Corporation
Total Shipping India Pvt Ltd., Appellants
Vs.
The Commissioner of Customs (ACC & Import),
Mumbai Respondents
Appearance:
Shri.S.P.Mathew, Advocate for the Appellants
Shri.B.P. Pereira, JDR for the Respondents
CORAM:
Mr.S.K. Gaule, Member (Technical)
Date of hearing : 22/07/2010
Date of decision : 22/07/2010
O R D E R No:..
1. Heard both sides.
2. The importer and CHA filed these appeals against the order dated 23/12/2008 whereby the Commissioner (Appeals) has upheld the confiscation of goods in question, however reduced the redemption fine to Rs.1.00 lakh. Penalty on importer was set aside and the penalty on CHA was upheld. The issue involved in these appeals is common, therefore, they are taken up for disposal, together.
3. The brief facts of the case are that the importer filed a Bill of Entry on 26/08/2008 through CHA for clearance of hand held x-ray tube based analyzer system for ore analysis and claimed exemption of Customs and Central Excise Notifications No.21/2002 and 10/2006 respectively. During the verification under the RMS system it was found that the benefit of the Notifications was not available to the importer. Therefore, the proceedings were initiated against them and the goods were confiscated and redeemed on payment of redemption fine of Rs.1.2 lakhs and penalty of Rs.10,000/- was imposed upon the importer under Section 112(a) of Customs Act 1962 and Rs.50,000/- on CHA under Section 112 (b).
4. The contention of the importer is that they have claimed the benefit of the Notification which appears against the relevant entry of the tariff heading in CTA, 1975 and this happened only due to mistake, there was nothing on their part to deprive the department from its legal dues. As soon as this was pointed out to them through the system that they are not eligible for the Notification they paid the full duty applicable in the case. Their mistake has been considered as mis-declaration and provisions of Section 111 (o), invoked against them are not applicable to their case. They also contended that the conditions enumerated in the relevant provision (111 (o) relates to non-observation of certain conditions after the clearance of the goods from docks, they claimed the notification inadvertently, the same was corrected by the proper officer while permitting the clearance of goods. Hence, the relevant provisions are not invocable in their case. They placed reliance on this Tribunals decision in the case of CC, Mumbai Vs. Feroz Carpets Industries (2000 (121) ELT 471 (Tri) wherein it was held that when the goods were still at the docks, contravention of Section 111 (o) also cannot be said to have been established. In case of their contention regarding wrong claim of Notification they placed reliance on the decision of the Tribunal in the case of J.K. Industries Ltd., Vs. CC, New Delhi (1996 (88) ELT 41 (Tribunal). So far as the penalty on CHA is concerned the contention of the CHA is that the penalty on the importer itself has been set aside therefore, penalty on them cannot be upheld.
5. The contention of the department is that the claim of benefit of notification was not a mistake on the part of the importer/CHA but it was deliberate attempt to evade payment of duty and their contention is that 111 (o) has been rightly applicable and has been rightly invoked in their case.
6. I have perused the records and considered the submissions made by both sides. The Ld. JDR has emphatically submitted that the claim of benefit of notification is not a mistake but a deliberate attempt to evade duty. Ld. Commissioner in the impugned order-in-appeal held it as a blatant mistake, the same is now being termed as deliberate action, by the department. Obviously, the said contention of the department is without any evidence. Regarding invoking Section 111 (o) Ld. Commissioner (A) in his impugned order-in-appeal found that Section 111 (o) requires non-observance of condition of exemption. The condition for exemption from basic customs duty was that the X-ray analyzer should be for baggage system and be imported by Government organization. This condition could not have been observed in respect of the actually imported goods. Similarly, the condition for exemption from excise duty was that X-ray analyzer should be for medical use. From this it follows that to what the Ld. Commissioner is referring to, are relatable to observation of certain conditions after clearance of the goods from docks. This find support from the view held by the Tribunal in the case of Feroz Carpets Industries (supra) wherein the Tribunal has held that I also find that since the goods have been directed to be confiscated when still at the docks, any alleged contravention of Section 111 (o) cannot also be said to have been established. I therefore, concur with the reasoning given by the Collector (Appeals) on the above point in the impugned order. I also concur with the view taken by him that the order-in-original has to be set aside. So far as the present contention of the department is concerned that it was a deliberate attempt on the part of the importer to evade payment of duty is not supported with any evidence. Further, I find that there is no misdeclaration of description of goods. The claim is always subject to scrutiny, therefore, it cannot be equated with the availment and in turn it cannot be termed as misdeclaration merely on the premise that they have claimed the benefit. The Tribunal in the case of J.K. Industries Ltd., (supra) held that as there was no misdeclaration of the goods. Therefore, I find that the confiscation of the goods in question is not sustainable in law. The Ld. Commissioner (Appeals) has absolved the importer from penalty and department has not challenged the same. Once the penalty upon the importer is set aside there is no justification in imposing penalty on the CHA, since the department has not brought out anything to show that CHA was working for availing the benefits of the exemption notification solely for his own interest and could get away with the benefits in case the same would have been extended and gone un-noticed. Therefore, I set aside the penalty on the CHA. In view of the above, Commissioner (A)s impugned order is set aside, and the appeals are allowed.
(Dictated in Court) (S.K. Gaule) Member (Technical) pj 1 5 2