Custom, Excise & Service Tax Tribunal
M/S. E.I. Dupont India Pvt. Ltd vs Commissioner Of Customs(Import), ... on 23 December, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/86921/14-MUM (Arising out of Order-in- Appeal No. 527(Gr. II A-F)/2014 (JNCH) /IMP- 492 dtd. 27/2/2014 passed by the Commissioner of Customs (Appeals), Mumbai-II ) For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) ===================================================
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. E.I. Dupont India Pvt. Ltd.
:
Appellant
VS
Commissioner of Customs(Import), Mumbai
:
Respondent
Appearance
Shri. Saurabh Dixit, Advocate for the Appellants
Shri. M.S. Reddy, Dy. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Date of hearing: 23/12/2014
Date of decision : 23/12/2014
ORDER NO.
Per : Ramesh Nair
The appeal is directed against Order-in- Appeal No. 527(Gr. II A-F)/2014 (JNCH) /IMP- 492 dated 27/2/2014 passed by the Commissioner of Customs (Appeals), Mumbai-II, wherein the ld. Commissioner(Appeals) rejected the appeal of the appellant as time bar. The fact of the case is that the appellant had filed a Warehouse bill of entry bearing no. 7157691 dated 19/6/2012 for the import of SUVA(R)134 ITK(ISO Tank) (1,1,1, 2-Tetrafluoroethane) from the supplier M/s. E. I. Dupont De Nemours and Company USA having valued Rs. 39,68,492/- and duty levied Rs. 9,06,924/-. During the assessment it was found that the clearance of the said imported goods required licence from the Chief Controller of Explosive. Since the appellant did not readily have the licence with them, the goods were warehoused under the bond under Section 59 of the Customs Act, 1962. It was contended in the show cause notice that the sub-rules (1) and (2) Rule 4 of the Static and Mobile Pressure Vessels(unfired) Rules, 1981 clearly stipulates that no importer fill any compressed gas in any vessel or transport any vessel filled with any compressed gas unless such vessel has been manufactured in accordance with a type or standard or code as specified under rule 12. No person shall manufacture any vessel approved under sub-rule (1) without prior approval of Chief Controller. Since the said licence could not be produced by the importer, the goods were proposed to be confiscated under Section 111(d) and also for penal action under Section 112(a) of the Customs Act, 1962 with a option to redeem the same on payment of redemption fine of Rs. 10 lakhs in terms of Section 125 of the Customs Act, 1962. A penalty of Rs. 5 lakhs also imposed on the appellant under Section 112(a) of the Customs Act, 1962. Aggrieved of the above order, the appellant approached the Commissioner of Customs (Appeals). The Commissioner of Customs (Appeals) rejected the appeal of the appellant giving following findings:-
6. I find that the appellant had paid the fine and penalty, Therefore, there is no issue of any pre-deposit and I proceed to decide the case finally.
7. I have carefully gone through all the submissions made by the appellant and the case records. The issue involved in this case is whether the adjudication order imposing the fine and penalty is proper or not. I find that appellant by their own admission did not have the stipulated licence at the time of assessment/import which was a clear violation of provisions of Rule 29 of Explosive Rules, 1983, hence covered under Section 111(d) of Customs Act, 1962. Rule 29 of Explosive Rules, 1983 provides that No imported explosives shall be permitted to be landed by the Customs Collector except with the prior permission of the Chief Controller or the Controller duly authorized in this behalf who shall issue such permission if the explosive have satisfied the prescribed tests, analysis or examination and after making such other enquiries as considered necessary. Hence lower adjudicating authority was correct in penalizing the appellant and allowing only payment of Redemption fine as appellant had failed to furnish the requisite licence during the material time of landing of goods.
8. I find that the appellant did not have valid licence at the time of assessment/import/landing of the impugned goods which was a clear violation of provisions of Section 111(d) of Customs Act, 1962 read with Rule 29 of Explosive Rules, 1983. Therefore, the adjudicating authority was right in penalizing the appellant. Hence, I am inclined to find conformity with the order of original adjudicating authority in respect of imposition of R.F. and P.P and find no reason to set aside or revise the quantum of the same. In the instant case, licence was issued by the Chief Controller of Explosive in the name of Bond transfer importer M/s. Shravan Engineering Enterprises Pvt. Ltd. for the subject consignment, who has furnished the requisite licence and goods have been cleared by the concerned assessing group.
9. Further, I have gone through the records available in file and find that the there is a delay of 14 days infilling of this appeal. The appellant has admitted the date of communication of the Impugned order was 26/2/2013; however he has filed the appeal on 8/5/2013 before Commissioner (Appeals) after 73 days which is more than 60 days period prescribed under law. I have gone through the appeal application to find out any reasons of delay but I find that the appellant has not requested for condonation of delay. The impugned delay of 14 days in filing the present appeal is over and above the stipulated appeal period of 60 days. I have gone through the Proviso to section 128(1), which state that:
Provided that the Commissioner(Appeals) may, if he is satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of sixty days, allow it to be presented within a further period of thirty days.
10. I find that the delay of 14 days infilling the instant appeal is beyond the filing period of 60 days and moreover the appellant has not requested for condonation of delay and not stated any reason for the same. Therefore, without going into the merits of the case, I reject the impugned appeal as time barred.
Hence the appellant is before me.
2. Shri. Saurabh Dixit, ld Counsel for the appellant submits that the goods after import were warehoused in the bonded warehouse. During the bonding of the goods the appellant has sold goods to different company i.e. M/s. Shravan Engineering Enterprises Pvt. Ltd.. It is his submission that the necessary explosive licence was obtained by the buyers of the goods and it was produced at the time of the clearance of the goods. He submits that since at the time of the clearance of the goods explosive licence was produced and accordingly goods were cleared, there is no violation and contravention on the part of the appellant, therefore the aforesaid goods could not have been confiscated and consequential penalty and fine should not have been imposed. He placed reliance on the following judgments.
(a) [2010(260)E.L.T. 113(Tri-Ahmd.)] Laxmi Marine Versus Commissioner of Customs, Kandla
(b) [2003(157) E.L.T. 598(Tri Mumbai)] B.G.H. Exim Ltd. Versus Commissioner of Customs, Kandla
(c) [2014-TIOL-1916-CESTAT-MUM] M/s. Royalex Versus CC(Import)Nhava Sheva As regard the rejection of the appeal by the ld. Commissioner(Appeals) as time barred, he submits that there was delay of four days in filing the appeal before the Commissioner(Appeals) beyond 60 days. The delay was well within the condonable period of 30 days. He submits that the application of the condonation of delay was filed before the Commissioner of Customs(Appeals) along with the appeal. The Commissioner (Appeals) has not considered the condonation of delay application. He also submits that though in the operative part of the order, the ld. Commissioner (Appeals) has stated the rejection of the appeal as time bar but in para 7 and 8 of the order clearly recorded finding on merit. It is his submission that the Commissioner (Appeals) in one hand given detail findings on the merit and thereafter rejected the appeal on the ground of time bar, which is absurd and unsustainable.
3. On the other hand, Shri. M.S. Reddy, Ld. Dy. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the order of Commissioner (Appeals). He submits that though the explosive licence was produced at the time of the clearance of the goods from the warehouse but same was not produced at the time of the import of the goods. He submits that the requirement of the explosive licence is not at the time of clearance of the goods but at the time of import itself. Since, appellant did not produce the explosive licence at the time of import they have contravened the provision of Rule 4 of the Static and Mobile Pressure Vessels(unfired) Rules, 1981 and rendered the goods as prohibited. It is his submission that as regard the contravention is concerned there is no dispute. As regards the reliance placed by the Ld. counsel for the appellant in the case of Laxmi Marine Versus Commissioner of Customs, Kandla (supra). The Ld. Dy. Commissioner(A.R.) resubmits that the fact of this case is different; in the said case the imported goods Freon Gas was imported without being ordered by the importer, whereas in the present case the importer has knowingly imported the vessel. He prays for upholding the order of the lower appellate authority.
4. I have carefully considered the submissions made by both the sides.
5. The fact is that the pressure vessel imported by the appellant. For import of the subject goods, explosive licence was required and importer did not possess and produced the explosive licence before the assessing authority at the time of import. However the said licence was produced at the time of clearance of the goods from the bonded warehouse. In view of the judgment in case of Laxmi Marine Versus Commissioner of Customs, Kandla (supra), since the required licence was produced even at later stage, confiscation of goods set aside. The relevant paras of the judgment are reproduced below:
As regards confiscation of 740 bottles of Freon gas totally valued at Rs. 22,13,600/- the same stands confiscated by the Commissioner with an option to redeem the same on payment of redemption fine of Rs. 5 lakhs. It stands recorded in the impugned order of Commissioner that the Freon gas requires licence under Gas Cylinder Rules, 1981 at the time of import into India. The appellants have contended before the Commissioner that certain clearances were being permitted by the department without this licence. In any case on an objection raised by the department through the seizure dated 9/4/04, they have obtained a provisional licence dated 20/5/04 from Deputy Chief Controller of Explosives, Navy Mumbai. It is seen that the Commissioner has not considered the above production of licence by the appellant, thought belatedly. He has observed that since licence was required at the time of import into India, the goods are liable to confiscation.
10. We find favour in the above contention of the learned advocate. Admittedly Freon gas was not one of the ordered products to the supplier and has been received by them from the supplier inadvertently. As such the question of producing the licence at the time of import itself does not arise at all. Admittedly such licence stands produced by them subsequently and about in a months period. Such subsequent production of licence from Deputy Chief Controller of Explosives, Navy Mumbai should be held sufficient to cover the absence of the same at the time of import. It stands settled law that subsequent fulfillment of condition, which was required to be fulfilled at the time of import itself, should be accepted for providing substantial justice to the assessee. As such we are of view that the confiscation of Freon gas cylinders with an option to redeem the same on payment of redemption fine of Rs. 5 laksh are not justified. Accordingly we set aside the confiscation of the same.
Applying the ratio of above judgment, in the present case also though the explosive licence not available at the time of import, since before clearance of the goods it was produced, prima facie the goods is not liable for confiscation.
5.1 In the case of M/s. Royalex Versus CC(Import)Nhava Sheva (supra) the coordinate bench of this Tribunal held as under :
6. Having considered the rival submission, I hold that the provisions of the Insecticides Act provide for registration being taken by an person desiring to import or manufacture any insecticide, may apply to the Registration Committee for the importation of such insecticide. It is further provided that where any person referred to in the preceding proviso fails to make such application at any time thereafter on payment of a penalty as specified. Further Section 17 of the Insecticides Act has provided no person shall, himself or by any person on his behalf, import or manufacture any insecticide except in accordance with the condition on which it was registered under the Insecticides Act, the Legislation has used the word manufacture i.e. manufacture or home consumption under Section 17 of the Insecticides Act, read with para 2.36 of the Foreign Trade Policy 2009-2014. It is very clear that restricted goods may be imported under Customs Bond for the purpose of re-export, the provision of the Insecticides Act is not attracted. I follow the view taken by the Honble High Court of kerala in the case of Malliakkal Industry Enterprises(supra), which is also affirmed by clarification dated 23/6/2003, issued by DGFT, Ministry of Commerce & Industry.
7. Thus, the appeal is allowed and the impugned order is set aside. The appellant is entitled to consequential relief of redemption fine and penalty alongwith interest.
In the above judgment also, though the insecticide registration was required but since the goods were warehoused and allowed to be re-exported the confiscation was dropped.
6.2 In view of the above legal position, I am of the prima facie view that in the present case, since explosive licence was produced at the time of clearance of the goods the confiscation of the goods was unwarranted. However, since the ld. Commissioner (Appeals) rejected the appeal of the appellant on the ground of time bar, in spite of recording his clear findings on merit. It is fit case for remand. I therefore remand the matter to the Commissioner (Appeals) to decide a fresh on merit after consideration of above referred judgments and my above observation. The appeal is allowed by the way of remand in the above terms.
(Dictated in court) Ramesh Nair Member (Judicial) sk 11