Customs, Excise and Gold Tribunal - Delhi
Anika International P. Ltd. And Ors. vs Cc on 12 March, 1999
Equivalent citations: 1999(83)ECR841(TRI.-DELHI)
ORDER Jyoti Balasundaram, Member (J)
1. The above appeals arise out of a common impugned order passed by the Commissioner of Customs, New Delhi and were hence heard together and disposed of by this common order.
2. The brief facts of the case are that the 3rd appellant herein filed a Bill of Entry dated 8.12.1997 through their CHA for import of goods declared as "printing paper uncoated, in reels, having not less than 70% mechanical wood pulp by weight of the total fibre content," and claimed exemption under Serial No. 78 of the Table annexed to Notification 11/97-Cus. dated 1.3.1997 at nil rate of duty and the goods were declared to be falling under the CTH 4802.60. The CIF value of the goods was declared as Rs. 20,43/255/- under invoice dated 25.10.1997 issued by M/s. Ridhima General Trading Company, Dubai. The goods were examined and found to be "standard newsprint" classifiable under Tariff Heading 48.01. The labels of the suppliers affixed on the reels bore the inscription "standard news-print" and also bore Order No. 7891/IN-0002 and the name of the indenting agent M/s. Anika International P. Ltd. (first appellant herein) along with specifications of the consignment and the name of the supplier M/s. Sachesen Papier, Germany. Statements of Shri Rajneesh Goel, Director of the importer and Shri Anil Vig, Managing Director of the indenting agent were recorded. On the basis of the investigations, it was alleged that the third appellant herein attempted to import newsprint which is only permissible by actual users, in the guise of printing paper and hence the consignment was liable for confiscation under Section 111 of the Customs Act, 1962 and that since the importer did not hold a valid certificate for entitlement of import newsprint and that the goods did not correspond in respect to particulars declared in the Bill of Entry. Therefore, a show cause notice was issued proposing confiscation of the consignment and proposing penal action against the importer and its Director and against the indenting agent and its Managing Director alleging that the indenting agent had connived with the importer to violate import trade restrictions. The adjudicating authority confirmed the charges raised in the show cause notice and ordered absolute confiscation of the consignment and imposed penalties as under on the above appellants:
M/s. Navshakti Industries Rs. 10 lakhs Shri Rajneesh Goel, Director of Rs. 1.5 lakhs M/s. Navshakti Industries M/s. Anika International P. Ltd. Rs. 3.5 lakhs Shri Anil Vig, Managing Director or Rs. 75,000/- M/s. Anika International P. Ltd. Hence these appeals.
3. We have heard Shri J.M. Sharma, learned Consultant, appearing for the first and second appellant herein, Shri Gopal Prasad, learned Counsel on behalf of the third and fourth appellant and Shri M.M. Dubey, learned DR.
4. The goods have been surrendered by the importers and hence, we are not required to record any finding on their confiscation. Hence, we confine our order to the issue of liability to penalty of the appellants.
5. From the facsimile of the labels affixed on each of the reels, it is seen that the paper has been clearly mentioned as standard newsprint and the name of M/s. Anika International is printed on the labels which clearly signifies that the goods had been sent at the instance of Anika International P. Ltd. Neither the importer nor M/s. Anika International have filed a copy of the Order No. 7891/IN-0002 indicated on all the labels. The telefax message sent by the supplier M/s. Sachsen Papier, Germany is dated 18.2.1997 which is a date after the misdeclaration had been detected by the Customs authorities. In the above fax, the supplier has communicated that "on investigation in the Mill Warehouse, it has been found that this material has been actually manufactured for some other customers but has wrongly been shipped to Nav Shakti. This has happened due to some error in our computer. We are extremely sorry for this and would request you to kindly explore the possibilities of diverting this material to some other clilent". It is significant to note that the supplier no where indicated for whom the consignment shipped by them was booked. M/s. Anika International has also not come forward with the name of the consignee of the consignment in dispute. A copy of the packing list issued by the consignor shows the name of the buyer Ridhima General Trading, Dubai and that of the consignee as Nav Shakti Industries. The specifications regarding No., weight and length in metres found on the goods tally with the specifications in the packing list. If it was a despatch of a consignment meant for some other buyer, the name of M/s. Anika International would not have appeared on the labels and also the specifications would not have tallied. The invoice in this case has been issued by Ridhima General Trading, Dubai who is only the financier of the deal and not the manufacturer and there is no correspondence between the German manufacturer and M/s. Ridhima General Trading regarding wrong despatch of the goods. It is also to be noted that Shri Rakesh Kumar, Manager of Ridhima General Trading, Dubai is the brother of Rajneesh Goel, Director of M/s. Nav Shakti Industries P. Ltd., who is the 4th appellant. It is significant to note that although the invoice and Bill of Lading are dated 25.10.1997 and the Bill of Entry was filed on 8.12.1997 and the goods were examined on 15.12.1997, the so called mistake had not been detected by the consignor and was not brought to the notice of the consignee for about two months, and the consignee never came forward on its own to point out the mistake in the despatch of the goods. Therefore, we agree with the finding of the adjudicating authority that the fax message from the manufacturer in Germany was procured by the consignee and the indenting agent. There is no direct dealing between M/s. Nav Shakti Industries P. Ltd. and the German suppliers for whom M/s. Anika International are the intending agent. Therefore, when the goods arrived and the Bill of Entry dated 8.12.1997 had already been filed by the importers misdeclaring the goods as "printed paper uncoated", they decided to obtain a certificate from the manufacturer to the effect that the consignment consisted of printing paper and not newsprint. Hence they approached the indenting agent vide their letter dated 9.12.1997 to arrange the following certificate from their principals to enable the importers to clear their consignments - "we certify that the paper shipped vide Invoice No. ... dated. B/L No. ...dated...is printing paper and not newsprint. We further certify that this is other than marble paper/flint paper/chromo paper/stereo paper/poster paper and art paper." They also stated in the letter that such certificate was required by the Customs authorities to process their Bill of Entry pending for production of certificate. The certificate was sought in respect of 5 consignments including the one in dispute. The indenting agent was fully aware that the imported goods were newsprint and not printing paper, as is evident from the labels affixed on the reels of the paper on which the name of the indenting agent was also printed. Hence we agree with the conclusion of the adjudicating authority that the newsprint was sent at the behest of the indenting agent of the foreign manufacturer/supplier and the request of M/s. Nav Shakti Industries P. Ltd. for issue of certificate was duly forwarded by the second appellant herein to the foreign supplier, as admitted in the reply to the show cause notice. This leads to the inescapable conclusion that the indenting agent has actively connived with the importer to contravene the import trade restrictions imposed on newsprint. The contention of the appellants that the production of the certificate was a requirement of the Customs is not substantiated in the absence of anything in the examination report on the reverse of the Bill of Entry to indicate that the Customs authorities had raised any query regarding the certificate from the manufacturer/supplier. The plea that the other consignments mentioned in the letter dated 9.12.1997 for which also the importers requested issue of certificates by the foreign manufacturer/supplier were duly cleared by the Customs, does not advance the contention that the certificate was a requirement of the Customs authorities.
6. Misdeclaration of the goods as newsprint and attempt to get them cleared through ustoms in violation of Import Trade Notification restricting import of newsprint only by actual user is established against the importer and Shri Rajneesh Goel, Director of the importing company, who has clearly admitted that he was fully aware of the fact that newsprint import was restricted to actual users only and that he had earlier imported newsprint from various European suppliers including Sachesen Papier, Germany and sold the newsprint to small newspapers in the local market, and he has also sent the letter dated 9.12.1997 addressed to Shri Anil Vig of M/s. Anika International for getting the certificates in a particular manner so as to mislead the Customs authorities. Therefore, penal action against the importer and its Director is justified.
7. The second appellant has admitted in his statement dated 21.12.1997 that M/s. Navshakti Industries P. Ltd. had introduced M/s. Ridhima General Trading, Dubai to them and they had raised indents for 3 or 4 consignments of newsprint during the previous four months and the goods were being cleared by M/s. Navshakti Industries P. Ltd. (even though import of newsprint was restricted to actual users holding a certificate for entitlement to import newsprint issued by the Registrar of Newspapers for India, Government of India, Ministry of Information and Broadcasting, New Delhi as per Notification 22(RE-96)92-97 dated 29.1.1992 of the Ministry of Commerce). Therefore, we agree with the adjudicating authority that the indenting agent and Shri Anil Vig are liable to penalty for abetment of import of newsprint.
8. In the result, we uphold the impugned order and reject the appeals, but reduce the penalty on the appellants as under:
1. M/s. Anika International P. Ltd. - Rs. 1.75 lakhs
2. Shri Anil Vig. - Rs. 25,000/-
3. M/s. Navshakti Industries P. Ltd. - Rs. 5 lakhs
4. Shri Rajneesh Goel, Director - Rs. 50,000/-.