Custom, Excise & Service Tax Tribunal
Gokul Exim Pvt Ltd. vs Nhava Sheva on 22 February, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Single Member Bench
Customs Appeal No. 407 of 2010
(Arising out of Order-in-Original No. 179/2009 CC(I) JNCH dated 18.02.2010
passed by the Commissioner of Customs (Imports), JNCH, Nhava Sheva)
M/s. Gokul Exim (P) Ltd. Appellant
C-31, Bhagwan Dass Nagar,
East Punjabi Bagh,
New Delhi 110 026.
Vs.
Commissioner of Customs (I), Nhava Sheva Respondent
Jawaharlal Nehru Custom House, Tal. Uran, Nhava Sheva.
Appearance:
Ms. Reena Ravat, Advocate, for the Appellant Shri Manoj Das, Assistant Commissioner, Authorised Representative for the Respondent CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) FINAL ORDER NO. A/85150/2022 Date of Hearing: 22.02.2022 Date of Decision: 22.02.2022 This appeal is directed against order in original No 179/2009CC(I), JNCH dated 18.02.2010 of the Commissioner of Customs (Import), Nhava Sheva. By the impugned order, the Commissioner has held as follows:
"ORDER
7. In view of the above facts and finding of the case I pass the following order:
i. I confiscate the impugned goods under Section 111(d) of the Customs Act, 1962. However, I give an option to the importer to redeem the goods under Section 125 ibid on payment of Redemption Fine of Rs.13,00,000/- (Rs. Thirteen Lacs Only) ii. I also impose a penalty of Rs5,00,000/- (Rs. Five Lacs Only) under Section 112(a) ibid on the importer."2
2.1 Appellant filed a Bill of Entry No.817532 dated 22.12.2009 for clearance of goods viz. "MS Plates in various thickness and various sizes (stock lot)" under CTH 720852390 as per invoice no.20090075 dated 7.11.2009, B/L No.OOLU 3021703600 dated 7.11.2009, for invoice value of US$ 109862.50 CF, from M/s Siderius, S.A. Switzerland. The declared Assessable Value is Rs. 51,93,066/-.
2.2 The Bill of Entry was assessed on first check basis. After examination on 28.12.2009 docks submitted examination as report as follows:
"Inspected lot. Opened and examined 25% after selection. Checked description and quantity. Marked weight and marked size not found. Verified goods are secondary. Verified goods are of various sizes. Examined under DC/Docks, Supervision. Mill Test Certificate (in short MTC) was not produced. Verified M.S."
2.3. The importer vide its letter dated 21.12.2009 informed that they have finalized the consignment from the supplier vide Contract No. F 026/2009 dated 14.10.2009. The vessel had arrived on 19.11.2009 and the supplier had not provided MTC resulting into heavy detention and demurrage charges and requested to assess the Bill of Entry as per Public Notice No.92/2009 dated 02.12.2009.
2.4 As per docks examination report revenue was of the view that appellant had misdeclared with respect to its description and the impugned goods were not covered by MTC. They were also restricted vide Notification No.63/2008 dated 21.11.2008 as per Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. Thus they were liable for confiscation under Section 111(d) of the Customs Act, 1962 and appellant was liable for penal action under Section 112(a) of the Customs Act, 1962.
2.5 The case was adjudicated by the Commissioner as per the impugned order, referred in para 1 above. Aggrieved appellants have filed this appeal.
3.1 I have heard Ms Reena Ravat, Advocate for the appellants and Shri Manoj Das, Assistant Commissioner, Authorized for the revenue.
3.2 Arguing for the appellants learned counsel submits that 3 Commissioner rejected the Department's contention that the impugned consignment was 'secondary' as stated in the examination report and categorically held that the materials are actually prime" He held Appellant's guilty of failure to produce MTC as required in Public Notice 92/2009 and further held that the same were restricted in terms of DGFT Notification No. 63/2008 dated 21.11.2008 and thus the import was in violation of provisions of Foreign Trade Policy 2004-2009.
Commissioner's finding is ex facie perverse. The said Notification No. 63/2008 dated 21.11.2008 prescribe that import of goods failing under Exim Code 7208 would be 'restricted' instead of 'free' but did not amend any other condition, whereas in terms of Licensing Note 3 of the Foreign Trade Policy ITC (HS) 'Plates' falling under Exim Code 7208/7211, if imported at CIF value above USD 370 per ton were allowed to be imported freely. Public Notice 92/2009 dated 02.12.2009 was issued by the Commissioner of Customs, JNCH prescribing modalities for verification of description of goods and in para 3 of the Notice prescribed that if the importer fails to furnish MTC Certificate, the goods would not be considered as prime, but would be considered as Secondary/Defective/Seconds only and assessed accordingly. However, in the present case, learned Commissioner himself has returned a categorical finding that goods in question were prime in nature and therefore failure on the part of the Appellant lo adduce MIL was inconsequential.
Thus the impugned order of confiscating the goods and for imposition of redemption fine and penalty is patently perverse and should be set aside.
3.3 Arguing for the revenue, learned authorized representative while reiterating the findings recorded in the impugned order submits:
Appellant has described the impugned goods as "MS Plates in various thickness and various sizes (stock lot)". But during Personal Hearing before the Adjudicating Authority the Customs Broker of the Appellant had submitted that the impugned goods were Prime quality.4
According to the Public Notice No. 92.2009 dated 02.12.2009, issued by the Commissioner of Customs (Import) the importer, in case of import of steel products, has to submit the Mill Test Certificate. The reason stated for non-submission of MTC is not a valid one. When submission of MTC is mandated, the Appellant has to comply with that condition. The real reason for non-
submission could be to camouflage the actual description of the impugned goods. It is submitted that the Appellant had declared the impugned goods as "Stock lot". There is no merit in Appellant's claim that the MS plates are not covered in Notification No.63/2008. Most of the MS plates are manufactured by Hot Rolling process. Therefore impugned goods have rightly been held liable for confiscation under provisions of Section 111(d). In case of Sheikh Mohd. Omer [1970 SCC (2) 728] Hon'ble Apex Court held-
"What cl. (d) of s. 111 says is that any goods which are imported or attempted to be imported contrary to "any prohibition imposed by any law for the time being in force in this country" is liable to be confiscated. "Any prohibition" referred to Ill that section applies to every type of prohibition". That prohibition may be complete or partial Any because s. 3 of the Imports and Exports (Control) Act, 1947 uses three different expressions "prohibiting"
"restricting" or "otherwise controlling", we cannot cut down the amplitude of the word "any prohibition" in s. 111(d) of the Act. "Any prohibition" means every prohibition. In other words all types of prohibitions. Restriction is one type of prohibition. From item (1) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But none the less the prohibition continues."
The declared assessable value of the impugned goods was Rs.51,93,066/-. The rate of redemption fine and penalty depends on the totality of the facts and circumstances in each case. In the instant appeal considering the restricted 5 nature of the offending goods the Redemption Fine of Rs. 13,00,000/- and Penalty of Rs.5,00,000/- do not appear disproportionate.
In case of Atul Automation Pvt Ltd. [2019 (365) E.L.T. 465 (S.C.)] Hon'ble Apex Court, has observed as follows:
"Unfortunately, both the Commissioner and the Tribunal did not advert to the provisions of the Foreign Trade Act. The High Court dealing with the same has aptly noticed that Section 11(8) and (9) read with Rule 17(2) of the Foreign Trade (Regulation) Rules, 1993 provides for confiscation of goods in the event of contravention of the Act, Rules or Orders but which may be released on payment of redemption charges equivalent to the market value of the goods. Section 3(3) of the Foreign Trade Act provides that any order of prohibition made under the Act shall apply mutatis mutandis as deemed to have been made under Section 11 of the Customs Act also. Section 18A of the Foreign Trade Act reads that it is in addition to and not in derogation of other laws. Section 125 of the Customs Act vests discretion in the authority to levy fine in lieu of confiscation. The MFDs were not prohibited but restricted items for import. A harmonious reading of the statutory provisions of the Foreign Trade Act and Section 125 of the Customs Act will therefore not detract from the redemption of such restricted goods imported without authorisation upon payment of the market value. There will exist a fundamental distinction between what is prohibited and what is restricted. We therefore find no error with the conclusion of the Tribunal affirmed by the High Court that the respondent was entitled to redemption of the consignment on payment of the market price at the reassessed value by the customs authorities with fine under Section 112(a) of the Customs Act, 1962."
Appeal is devoid of any merit and should be dismissed.
4.1 Have considered the impugned order along with the submissions made in appeal and during the course of arguments.
64.2 The findings recorded by the Commissioner while adjudicating the case are reproduced below:
"6. I have carefully gone through the records of the case and submissions made by the importer. In view of what has been 'stated at the time of personal hearing, particularly the fact that the value of the imported goods corresponds with the contemporaneous import price of the material during October 2009 end when the Letter of Credit was opened, I find that the materials are actually prime and the deficiency in this case is the failure on the part of the importer to produce the MTC as required under Public Notice No.92/2009. However, as the goods were restricted by the Notification No.63/2008 dated 21.11.2008 (continued till 8.1.2010, the date on which this restriction was withdrawn vide Notification No.23/2009 dated 8.1.2010), the imported goods have violated the provisions of Foreign Trade Policy 2004-09, thereby rendering the impugned goods liable for confiscation under Section 111(d) of the Customs Act, 1962 and importer liable for penalty under Section 112(a) ibid."
4.3 From the findings as recorded in the impugned order, revenue has not proceeded against the appellant on the charge of misdeclaration of goods but have held them liable for confiscation for the reason,-
a. Non production of MTC as prescribed by the Public Notice No. 92.2009 dated 02.12.2009;
b. The goods were restricted by the Notification No 63/2008 dated 21.11.2008.
4.4 Public Notice 92/2009 referred itself provides for the manner in which the goods were to be dealt in case of non production of MTC. The said public notice is reproduced below:
F No S22-Gen-274/2009 Date: 02.12.2009
AM(1)
PUBLIC NOTICE NO. 92/2009
Subject : Assessment / Examination of Prime Steel including Stainless Steel Sheets/ Coils/ Plates/ Tin Plates etc. Instructions Reg.
It is prescribed in Bureau of Indian Standards, ASTM and Other International Standards that the purchaser of Steel products shall obtain a proper Mill Test Certificate (MTC) from the 7 manufacturer wherever required and the goods shall be marked with the details such as manufacturers name, specification, heat numbers, dimensions, finish, chemical composition etc. Accordingly, it has been the practice to assess the consignments of H.R./C.R. Steel including Stainless Steel Sheets/ Coils/ Plates/ Tin Plates etc. declared to be Prime / Stock Lot/ Ex-Stock/ Prime Excess on the basis of a proper Mill Test Certificate containing the details viz. Heat Number, finish, quality, dimensions, chemical composition etc. However, it has been noticed that some of the Importers/CHAs are not producing MTC and such documents to verify the correctness of the declaration regarding Prime / Stock Lot/ Ex-Stock nature of consignments being imported.
2. In this regard, all the Importers/CHAs are directed to furnish inter alia, the following documents wherever consignments of H.R./ C.R. Steel including Stainless Steel Sheets/ Coils/ Plates declared to be Prime/ Stock Lot/ Ex-Stock / Prime Excess are imported:
1) Copy of Invoice
2) Copy of Packing List indicating details of Sizes, quantity, weight, thickness etc.
3) Manufacturers Mill Test Certificate certifying, Heat No., finish, Chemical Composition, Grade etc.,
4) Country of Origin Certificate (Original), and
5) Bill of Lading.
3. The officers in Docks while examining such consignments are required to compare the details given in the MTC with those marked on goods / Packages. If the importer fails to submit such a MTC, the claim made by importers that goods are Prime / Stock lot / Ex-stock / Prime Excess may not be accepted and all such consignments shall be considered as Secondary / Defective / Seconds only and assessed accordingly.
In case of doubt regarding the nature/grade of the goods, the goods may be referred for test or to SIIB for further investigation, if necessary.
A.K.Das COMMISSIONER OF CUSTOMS (IMPORT), JNCH, NHAVA SHEVA.
84.5 The Public Notice itself envisages the situation wherein the MTC would not have been produced and directs that assessment should be made accordingly. It do not state that the proceedings leading to confiscation be initiated. Further Commissioner who has issued this public notice, directing that all the goods for which MTC is not produced "be considered as Secondary / Defective / Seconds only and assessed accordingly.", has in the impugned order held the goods to be of prime quality. Having done so Commissioner could not have held any contravention in non production of MTC, which even as per Public Notice is not a mandatory requirement, but only prescribed as an aid for assessment of goods.
4.6 Commissioner has held goods to be liable for confiscation as they are restricted as per Foreign Trade Policy, 2004-2009 read with Notification No.63/2008 dated 21.11.2008. However while doing so he has ignored the licensing note 3, which is part and parcel of policy. This in respect of the impugned goods reads as follows:
"3. Prime steel items specified below are for import free, except those in respect of which the c.i.f value of imports is below the value specified against each of these items.
S No ITC(HS) Code Description Minimum c.i.f value (US $
per Tonne
...... .........
6 72.08/72.11 Plates 370
...... ...... ....... ...."
4.7 Admittedly the impugned goods are classifiable as per ITC
(HS) Code under the heading 7208 52 90 and the declared CIF value is US $ 425 per Tonne and hence as per this licensing note are freely importable. In the case of Sheikh Omer referred to by the learned authorized representative Hon'ble Apex Court has clearly and unambiguously stated ""Any prohibition" means every prohibition. In other words all types of prohibitions.
Restriction is one type of prohibition. From item (1) of Schedule I, Part IV to Import Control Order, 1955, it is clear that import of living animals of all sorts is prohibited. But certain exceptions are provided for. But none the less the prohibition continues." Licensing Note 3 provides for exceptions and the situations in which these goods when imported are freely importable and not 9 restricted. Commissioner has himself held that the impugned goods are "prime" and have cif value of US $ 425 per Tonne. With that finding on record the order holding goods as restricted as per Notification No 63/2008 cannot be sustained. 4.8 Before parting with the appeal, I would like to observe that the impugned order is completely a non speaking order, passed without consideration of any submission and the law on subject.
5.1 Impugned order is set aside and appeal allowed.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) tvu