Custom, Excise & Service Tax Tribunal
Pacific International vs Commissioner, Customs-New Delhi(Icd ... on 28 April, 2022
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Customs Appeal No. 52958 of 2019-SM
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI.
PRINCIPAL BENCH - COURT NO. II
Customs Appeal No. 52958 of 2019-SM
(Arising out of order-in-original No. 11/2019/M.K. Singh/ Pr. Commr./ ICD-
Import/TKD dated 31.07.2019 passed by the Principal Commissioner of Customs
(Import), ICD, Tughlakabad, New Delhi).
M/s Pacific International Appellant
701/3, Shivaji Road
Behind Azad Market, Delhi-110006.
VERSUS
Commissioner of Customs Respondent
ICD, Tughlakabad New Delhi.
APPEARANCE:
Sh. Harish Kohli, Advocate for the appellant Sh. Mahesh Bhardwaj, Authorised Representative for the respondent CORAM:
Hon'ble Mr. Anil Choudhary, Member (Judicial) FINAL ORDER No. 50377/2022 DATE OF HEARING: 10.11.2021 DATE OF DECISION: 28.04.2022 ANIL CHOUDHARY:
The appellant had filed Bill of Entry No. 588883 dated 24.04.2007 under Section 46 of the Customs Act, 1962 for the container No. MSKU 8971306 by declaring the goods as "Worn Clothing & Other worn Articles" covered in CTH 6309 having negligible commercial value, declared in the invoice at Rs.2,50,000/-. 2
Customs Appeal No. 52958 of 2019-SM
2. Examination of the goods in container No. MSKU 8971306 was conducted by the Officers of SIIB Branch, ICD, Tughlakabad, New Delhi under panchnama dated 27.11.2007. It was reported by the SIIB that the abovesaid container contained 39 bales containing 64,350 pcs. of mixed ready-made garments of different varieties/ qualities/ size valued at Rs. 32,17,500/- (CIF) taken @ Rs. 50 per piece on assumption basis.
3. Subsequently the goods of the appellant were seized under Section 110 of the Customs Act, 1962 under panchnama dated 27.11.2007 and thereafter summons dated 02.05.2008 was received by appellant for appearance on 08.05.2008 before the customs authorities. In response, a letter dated 08.05.2008 was submitted, wherein it was categorically stated that the appellant is not able to clear the goods imported in container No. MSKU 8971306, as the detention charges of the container were too high than total invoice value.
4. Show cause notice No. VIII/ICD/10/TKD/SIIB/Inv./140/07 dated 19.05.2008 was issued to the appellant and consequently ex- parte order-in-original No. 36/2009 dated 09.04.2009 was issued.
5. This is the second round of litigation. Earlier the matter have come up before this Tribunal in Custom Appeal No. 467- 468/2009, Vide final Order No. 53194 - 53195/2016 dated 24.08.2016, remanded the matter observing as follows:-
"8. We find that no explanation is available as to why M/s Chirag textiles have not filed the bill of entry within the stipulated 3 Customs Appeal No. 52958 of 2019-SM time as provided under section 48 of the Customs act, 1962. We also find that the Commissioner has held that the bill of entry in the name of M/s Pacific was filed using manipulated documents including manipulated bill of lading. He has also recorded in the impugned order that both M/s Chirag as well as M/s Pacific have not cooperated in the investigation as well as adjudication proceedings. It is also on record that the goods imported by M/s Chirag have not been claimed by filing any bill of entry. As far as M/s Pacific is concerned they have relinquished the goods and have stated that they are not in a position to clear the goods. The Commissioner has also recorded the finding that the goods found in both the containers were not used and mutilated garments as indicated in the documents, but were are found to be assorted ready-made garments.
9. The Commissioner's finding recorded in paragraph 13.1 is that both the appellants were requested vide letters dated 17/07/2008 and 10th of September 2008 to collect the relied upon documents from SIIB, ICD, TKD, New Delhi. However since they failed to collect the documents, he has recorded that these were sent to M/s Chirag vide letter dated 24th of October 2008 and to M/s Pacific vide letter dated 1st of January 2009. However in the grounds of appeal both the appellants have claimed non-receipt of relied upon documents. They have also failed to submit any written reply to the show cause notice. They also did not appear for personal hearing before the Commissioner when it was fixed. Under the circumstances we are constrained to take the view that the appellants did not cause appearance before the adjudicating authority and the impugned order stands passed without hearing them even though personal hearing dates were fixed by the Commissioner on two occasions. We also find that the appeal filed by the third-party who has been penalised in the impugned order, viz. M/s Maersk India private limited, the shipping agent, has been disposed of by Tribunal vide Final Order number C/A/51105/2016 CU (DB)dated 8th of April 2016 with a direction to the original adjudicating authority to pass fresh decision after giving an effective opportunity to the appellants to put forth their case. We find that it would be fair to both the appellants that their case is also heard afresh by the Commissioner inasmuch as all the 3 appeals had arisen out of the same impugned order on similar grounds of appeal.
10. In line with the above discussions we allow the appeal by way of remand by setting aside the impugned order and remanding the matter to the Commissioner for fresh decision after giving effective opportunities to both the appellants to put forth their case in person. Relied upon documents, if any not received by the appellants, may also be supplied to them before that. We also make it clear that the appellants would not seek unnecessary adjournments and should co-operate in the adjudication process. The appellants would also place the correct address on record and should be ready to cause appearance before the authorities as and when date for the same is fixed. The appeal is disposed of in the about terms".
6. Pursuant to remand, the appellant - M/s Pacific International and its Prop. Sh. Anil Gulati submitted written 4 Customs Appeal No. 52958 of 2019-SM representation dated 15.03.2017 disputing classification and valuation of the goods relating to Bill of Entry No. 588883 dated 24.04.2007 and also requested for supply of RUDs, so as to enable them to file proper reply and also requested for refund of pre-deposit amount. Further request was made for examination of the goods in their presence. Thereafter, as per the impugned order, RUDs was provided to the appellant/ their Authorised Representative vide letter dated 25.04.2017 and personal hearing was fixed on 26.05.2017. This appellant also appeared on 26.05.2017 and filed an interim reply reiterating the prayers made earlier on 15.03.2017. Thereafter, due to change in the Adjudicating Authority the date of personal hearing was fixed on 26.01.2019 on which date also this appellant appeared and reiterated their earlier submissions.
7. This appellant have inter alia contended that in the re- examination of the goods it has been found that the goods are worn clothing and other worn articles, which are classified under CTH 6039 as per declaration in the Bill of Entry, and hence the allegation of mis- declaration does not stand. It was further urged that during re- examination 14,000 kgs. goods were found as against total quantity of 21,000 kgs. approximately. The remaining 7,000 kgs. goods are yet to be located by CONCOR (custodian). It was also urged that prior to completing the adjudication, it is necessary to locate and re- examination of balance 7,000 kgs. goods. It is further urged that the appellant have declared proper transaction value. Further, appellant is not liable to pay demurrage and detention charges in the facts and 5 Customs Appeal No. 52958 of 2019-SM circumstances. Further, pointed out that the condition of the goods has deteriorated over the long passage of time (about 10 years) as has been recorded in the examination order and accordingly calls for no adverse finding or imposition of penalty, etc.
8. The Commissioner in the impugned order has observed that as per Bill of Lading the quantity is 17,760 kgs. and hence the alleged shortage of 7,000 kgs. is erroneous. The quantity found at the time of re-examination 14,780 kgs. is not abnormal and within the tolerance limit attributable to deterioration in cloth wt. over a period of about ten years.
9. The Commissioner further recorded that the shipping line M/s Maersk India Pvt. Limited had made alteration in the bill of lading wherein the description of goods was changed, without such change brought to the notice of the customs, nor the shipping line filed amendment in the relevant IGM. Further, they did not give any satisfactory answer for such change. Accordingly, it appeared to the Commissioner that the parties are in collusion and they knew that the goods are liable for confiscation due to act of omission and commission and also liable to penalty. Accordingly, the ld. Commissioner was pleased to confiscate 64350 pcs. of mixed ready- made garments of different varieties / qualities/ sizes valued at Rs. 32,17,500/- imported under Bill of Entry No. 588883 dt. 24.04.2007. Further, pleased to impose penalty of Rs. 10,00,000/- under Section 112 of the Customs Act and confiscation of goods under Sections 111(d) and 111(m) of the Act.
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Customs Appeal No. 52958 of 2019-SM
10. Assailing the impugned order, learned Counsel sh. Harish Kohli for the appellant inter alia urges that Revenue although admits that the goods under import are used or worn, but have erred in revaluing and reclassifying the goods as new garments, and revalued the same at Rs.32,17,500/- against the declared value of Rs.2,50,000/-. What is worn and useless/ rejects of one person, may be useful and of value for somebody else. Thus, rejection of classification and revaluing the goods is arbitrary and fit to be set aside. Further, admittedly pursuant to remand by this Tribunal, when the goods have been re-examined, they have been found to be worn/ rags. It is also urged that the impugned order is more or less repetition of the earlier order-in-original, which has been set aside by this Tribunal. Thus, the impugned order has been passed in a mechanical way without application of mind. The appellant also relies on the ruling of this Tribunal in the case of S.S. Impex vs. Commissioner of Customs (Port), Kolkata wherein vide Final order dated 27.03.2012, it has been held - once the goods are held to be old and used, their value cannot be enhanced by treating the goods as other than old and used goods. It is urged that there is no finding with regard to any mal-practice on the part of the appellant or the shipper/ supplier. It is further urged by the appellant that they have admittedly relinquished the goods as permissible under law, as early as on 08.05.2008, and hence the whole proceeding against them - confiscation and imposition of penalty is bad in the eyes of law. Further, the transaction value has not been rejected by recording reasons for the same, as required under Section 14 of the Customs 7 Customs Appeal No. 52958 of 2019-SM Act read with the Valuation Rules. It is further urged that the impugned order may be set aside against this appellant with consequential benefits. It is also urged, in the facts and circumstances that no penalty is imposable.
11. Learned Authorised Representative appearing for the Revenue relied on the impugned order.
12. Having considered the rival contentions, I find that admittedly in the re-examination of the goods done, the same have been found to be used and worn clothing. Accordingly, I hold that the Court below have erred in rejecting the classification and valuation as declared in the Bill of Entry. Further, I find that as the appellant has relinquished their title and claim on the imported goods in writing by letter dated 08.05.2008, the whole proceedings against them is vitiated and uncalled for.
13. Accordingly, in view of my findings, I set aside the impugned order so far this appellant is concerned. The appellant is entitled to consequential benefits in accordance with law.
(Pronounced on 28.04.2022).
(Anil Choudhary) Member (Judicial) Pant