Custom, Excise & Service Tax Tribunal
Ms. Klaver J. Edith vs Cc (General) Mumbai on 23 January, 2019
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
APPEAL NO. C/551/2009
(Arising out of Order-in-Original CAO No. 37/2009 dated 06.03.2009
passed by the Commissioner of Customs (General), Mumbai.)
Ms. Klaver J. Edith Appellant
W/o and LR of Bernard Maurice
Gerard Kuhne (deceased)
Vs.
Commissioner of Customs (General), Mumbai Respondent
Appearance:
None for Appellant
Ms. Trupti Chavan, Assistant Commissioner (AR) for Respondent
CORAM:
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
Date of Hearing08.08.2018
Date of Decision: 23.01.2019
ORDER NO. A/85149/2019
Order of confiscation of 537 number of teak wood blocks valued
at Rs. 21,02,287/- in 2008 under section 113(d) & (h) of the Customs
Act (CA) with option for back to town on payment of redemption fine
of 5 lakhs under Section 125 of the CA along with penalty of 2 lakhs
under section 114(1) of the CA on deceased M/s Bernard Maurice
Gerard Kuhne is assailed in this appeal.
2. Factual backdrop of the case is that deceased Bernard Maurice
Gerard Kuhne a national of the Netherlands purchased 575 numbers
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of old & used Burma teak wood of an old building from one M/s
Manav Impex of Chennai after the same was refurbished, transported
from Chennai to Mumbai as advised by CHA M/s Daroowala Bros &
Company, from where it was to be exported. He had export licence to
own and export private forest products for the period. CHA filed
manual shipping bill bearing no. 2000000157 dated 29th July, 2008
on behalf of the appellant for export of 533 numbers of blocks having
total FOB value Rs. 21,02,287/- as personal baggage export to the
Netherlands but in the description of goods, it has wrongly put "All
mixed size Indian Reclaimed Teak Wood" and no commercial value for
customs purpose was put as the said goods were for personal use
only. Those are presented for examination and the shipping bill was
verified by the Customs Department as well as passed accordingly
and the goods were carted at CFS with departure certificate and letter
of authority for executing the shipment were obtained. Further goods
were subjected to examination by the Customs officer who pointed out
that the said huge quantity goods cannot be sent as baggage and teak
wood is restricted for export. It was also pointed by him that wrong
HS code and description were given by the CHA. A detailed
examination of the baggage revealed that it consisted of 537 wood
blocks of total weight 10,652 Kgs. which is less than the net weight
11,230 Kgs. as mentioned in the shipping bill. Shipment was delayed
despite request made by the Consulate General of the Kingdom of the
Netherlands vide their letter dated 17.10.2018 requesting the
Commissioner of Customs to reconsider the case and allow the
appellant to take back the goods detained at CFS.
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3. Vide show-cause notice dated 18.12.2008, the Assistant
Commissioner of Customs, CFS Mulund, Mumbai asked the appellant
and others to submits their reply as to why the goods were not to be
considered as prohibited for export under the provisions of EXIM
Policy, Foreign Trade (Development & Regulation) Act, 1992 and
Customs Act, 1962, confiscated under Section 113(d) & (h) of the
Customs Act, 1962 and why penalty should be imposed on them
under Section 14 of the Customs Act, 1962? The appellant filed a
detailed reply to the aforementioned show-cause notice, the matter
was adjudicated upon by the Commissioner of Customs (General)
confirming the confiscation of goods with option for payment of
redemption fine of Rs. 5,00,000/- given to the deceased appellant for
taking the goods back to town along with penalty of Rs. 2,00,000/- on
the deceased appellant, penalty of Rs. 2,00,000/- on CHA M/s
Daroowalla Bros. & Company and penalty of Rs. 1,50,000/- on its
partner Shri Parvez Jehangir Irani under Section 114(i) of Customs
Act, 1962.
4. Along with deceased appellant, CHA and its partner preferred
three appeals before this Tribunal which were directed to be heard out
of turn, as appellant was terminally ill and suffering from cancer but
vide order dated 16.02.2018 the other two appeals were taken up
separately for hearing and disposed of subsequently absolving the
CHA and its partner from the liability of penalty imposed on them and
the deceased appellant case was split up as no one had appearing on
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his behalf, despite the fact that vide order dated 23.09.2011, on the
petition of deceased appellant filed under Rule 22 of CETAT Procedure
Rule 1982, Ms. Klaver J. Edith wife and legal representative of
deceased appellant had succeeded to the appeal in place of the
appellant upon furnishing of his death certificate issued on
30.10.2009 indicating death of appellant on 21.10.2009 and sole legal
heir certificate issued by the Netherlands Authorities.
5. Substituted appellant and her representative continue to
remain absent on severely dates posted for hearing of the appeal for
which matter was heard on 08.08.2018, from the respondent side
alone, in the absence of appellant for passing of orders as per Rule 20
of CESTAT Procedure Rule, 1982.
6. Admittedly, appellant Mr. Bernard Maurice Gerard Kuhne death
with effect from 21.10.2009 has been acknowledged by this Tribunal
but penalty continue to be in force as no express order was passed to
that effect. Penalty being punitive in nature admittedly gets abated
on the death of the person and in view of such legal position, penalty
of Rs. 2,00,000/- imposed on deceased Bernard Maurice Gerard
Kuhne is abated on his death that occoured on 21.10.2009. Penalty
on other appellant have been set aside vide earlier order of this
Tribunal and therefore the issue of confiscation of goods by the
respondent department is required to be scrutinised in this appeal to
determine its legally.
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7. Both show-cause notice and Order-in-Original indicate that
Section 3 & 11 of the "Foreign Trade (Development & Regulation) Act,
1992" and Schedule 2 of the EXIM policy prescribed for prohibition of
export of wood. The Commissioner of Customs also indicated in his
finding that noticee (appellant here) had mis-declared the nature and
weight of the goods in shipping bills in violation of Section 50 of
Customs Act, for which he ordered for confiscation with redemption
option to take back teakwood blocks back to town on payment of
redemption fine of Rs. 5,00,000/-. On perusal of case records, it is
found that transit clearance was given by the Forest Department of
Maharashtra State (Annexure-2) for 575 numbers of wood having
90,500 kgs. weight to M/s Manav Impex from where the appellant
had purchased the articles. Gmail communication (Annexure-3) to
one Mr. Bharat of Customs made by deceased appellant on 26th May,
2008 indicates that Mr. Bharat had sought information from Customs
Department and replied to the deceased appellant that wood items are
allowed to be exported subject to NOC from the local Forest
Department but the same should not be more than 100 years old.
Shipping bill vide Annexure-4 indicates the description of wood of
Indian reclaimed teakwood but the same description of Indian
teakwood is found absent in the transit permit issued by the Forest
Department, though the Forest Department has indicated the wood as
old wood of the old building. The deceased appellant claims the same
to be imported Burmese teak wood while the show-cause notice
indicates that the baggage consist of blocks of wooden blocks of 537
numbers having total weight 10,652 Kgs. against declared number of
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533 and weight of 11,230 kgs. Statement of the Partner of CHA Mr.
Parvez Jehangir Irani was relied upon by the respondent Department
to arrived at the conclusion that RITC number was mis-quoted as
44072910 instead of 44011000 but going by the relevant provisions of
Section 3 & 11 of the Foreign Trade (Development & Regulation) Act,
1992 as well as Chapter 44 under Schedule-II of EXIM Policy, it can
very well be said that CHA had intended the same to be Burmese
imported teak wood made exclusively out of imported old and used
wood and quoted it under RITC No. 44072910 for which export policy
permits free export for imported logs/timber of all species other than
CITES. The said statement is not submitted by either of the parties
for scrutiny but as found from the record is that CHA had mistakenly
declared it as Indian wood instead of imported Burmese teak wood.
Further, even if the contention of the Commissioner of Customs is
accepted that CHA partner admitted that the tariff items HS code
should be 44011000, since item description covered under prohibited
wood does not cover blocks that to made exclusively out of imported
logs/timber, I have got no hesitation to conclude that the goods
under confiscation, which the Assistant Commissioner of Customs,
ICD Mulund (Export) informed to have been kept in container number
TR2311935, are not prohibited goods that can be subjected to
confiscation.
8. The Commissioner of Customs also had given his finding that
the deceased appellant had mis-declared the goods in terms of its
number and weight. However, going by the weight as found in the
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Forest Department NOC vide Excibit-2, the shipping bill entry and the
physical inspection by the Customs Department, there is a variation
from about 100 kgs. in approximate 1000 kgs. of wood blocks. It is
common knowledge that due to climatic condition including rain and
sun, weight of wood item varies and approximately 10% variation on
both sides is not that fatal when weight is not a consideration for
determination of duty liability, since the same duty liability for the
goods is NIL. Further there is a variation of 4 pieces of counting of
blocks which deceased appellant is stated to have declared at 533
blocks and physical counting by the Department brought the figure to
537 and such variation could be unintentional arithmetical error
since in so doing by the deceased appellant, there is no revenue loss
for the respondent-department or financial gain for the deceased
appellant. The learned Commissioner has also held that such mis-
declaration in the shipping bill is violative of Section 50 of Customs
Act and ultimately confirmed the confiscation order under Section
113(h). Further, in terms of weight, the declaration can be considered
as made in excess while in terms of number of peaces the declaration
can be considered as less by 4 numbers, which going by Section (h) of
113 of the Customs Act is to be covered in the present case under
Section 77 dealing with baggage. But when the goods being exported
are not liable for duty, there is no point in discussing on clearance of
baggage from originating place. Hence the order.
ORDER
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9. The appeal is allowed and order passed by the Commissioner of Customs (General), Mumbai vide Order-in-Original CAO No. 37/2009 dated 06.03.2009 is here by set aside. The confiscation order is held as not in conformity to law and substituted appellant is here by permitted to export the goods to her home country the Netherlands. Since the goods are confiscated and kept in the warehouse on the strength of order passed by the Commissioner which is set aside, no warehouse fees etc. is to be collected from the substituted appellant.
(Pronounced in Court on 23.01.2019) (Dr. Suvendu Kumar Pati) Member (Judicial) Prasad