Customs, Excise and Gold Tribunal - Delhi
Venus Gems & Jewellery vs Commissioner Of Customs, (Acu), New ... on 8 March, 2002
Equivalent citations: 2002(142)ELT388(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1. These are two appeals, one filed by M/s. Venus Gems & Jewellery and the other preferred by the Revenue, arising out of a common Order No. HKS(865)Cargo/2001, dated 12-10-2001 passed by the Commissioner (Appeals), New Delhi.
2. Briefly stated the facts are that M/s. Venus Gems & Jewellery (Venus in short) placed an order for import of gold jewellery in March, 2001. The foreign supplier sent the jewellery under Invoice No. 0062, dated 21-4-2001. They filed Bill of Entry No. 151677, dated 31-5-2001 and claimed benefit under Notification No. 117/94-Cus. and produced Special Import Licence. The Customs Department informed them that Special Lmport Licence was not valid for import of gold with effect from 1-4-2001 and the gold jewellery could be imported against a specific import licence only. The importer requested the Department permission for re-exporting the jewellery. The Additional Commissioner, under Adjudication Order No. 24/2001, dated 25-8-2001 denied the permission to re-export the jewellery on the ground that ignorance of law is no excuse and as such reasons advance for re-export were not bonafide. He confiscated the jewellery with an option to redeem the same on payment of fine of Rs. 1.50 lakh and imposed a penalty of Rs. 25,000/- on M/s. Venus. On appeal, the Commissioner (Appeals), under the impugned order, upheld the Adjudication order with the modifications to allow reexport of the goods after redeeming the same and after payment of penalty. The Revenue has filed appeal against re-export of the gold jewellery allowed by the Commissioner (Appeals) whereas M/s. Venus have come in appeal against the imposition of redemption fine and penalty.
3. Shri M.P. Singh, learned D.R. for the Revenue, submitted that the Commissioner (Appeals) has allowed the re-export of the jewellery without giving any reasons in the impugned order; that on the other hand, the Additional Commissioner denied the permission to re-export by giving reasons in the Adjudication order, that moreover, the foreign exchange has been remitted by the importer; that re-export is allowed only in cases of wrong deliveries and not in case the goods are found to be in violation of any provisions of law. He relied upon the decision in the case of Commissioner of Customs (Import) v. Jagdish Cancer & Research Centre, [2001 (132) E.L.T. 257 (S.C.) = 2001 (46) RLT 121 (S.C.)] wherein it was held that where the goods are confiscated and allowed to be redeemed on payment of redemption fine under Section 125(1) of the Customs Act, duty becomes payable under Sub-section (2) of Section 125 of the Act. The learned D.R. finally mentioned that the importers have the option to redeem the goods on payment of redemption fine and to clear the goods on payment of duty and then they can re-export the goods and claim Drawback up to 98% of the duty under Section 74 of the Customs Act.
4. On the other hand Shri J.P. Kaushik, learned Advocate, for M/s. Venus, submitted that it is well settled that when the goods are confiscated because of ITC prohibition in terms of Section 111 of the Customs Act and an option to pay fine in lieu of such confiscation is given, the effect of such option is to lift the prohibition; that once the goods had been allowed to be re-exported, imposition of fine and penalty is not justified; that the Appellate Tribunal in a number of cases had taken a consistent view that penalty and redemption fine are not imposable on re-export of confiscated goods being allowed. He relied upon the decision in the case of Alukkas Exporters v. Commissioner of Customs, 2002 (48) RLT 311 (CEGAT). The learned Counsel, further, submitted that even it is a practice with the Customs Department since time immemorial to allow re-export of the goods. In support, he referred to the Standing Order No. 2/2001, dated 7-3-2001 of Commissioner of Customs, Air Cargo Unit, New Delhi, which lays down the procedure to be followed in respect of re-export of import cargo. He also mentioned that in spite of the requirement of specific import licence for import of gold in any form, Notification No. 117/94-Cus. which was issued on 27-4-94, it was mentioned that benefit of concessional rate of Customs duty is applicable subject to the condition that the gold in question is covered by a Special Import Licence. Finally, the learned Counsel referred to the following decisions under which fine and penalty were set aside on re-export of the goods :-
(i) Siemens Public Communication Network Ltd. v. C.C., Calcutta [2001 (137) E.L.T. 623 (T) = 2001 (43) RLT 57]
(ii) G.V. International v. C.C., Jaipur [2000 (118) E.L.T. 517 (T) = 2000 (39) RLT 272]
(iii) Siemens Ltd. v. CC [1999 (113) E.L.T. 776 (S.C.)]
(iv) HCL Hewlett Packard Ltd. v. C.C. Delhi [1997 (92) E.L.T. 367]
5. We have considered the submissions of both the sides. The facts which have not been disputed are that the order for import of gold jewellery was placed by the importers in March, 2001 when the import was allowed on the basis of Special Import Licence which was in possession of the importer. Notification No. 117/94 was issued by the Central Government providing concessional rate of Customs duty, inter alia, in respect of Gold in any form subject to the condition that the goods are covered by a Special Import Licence. No doubt the Import-Export Policy prescribes the requirement of Specific Import Licence for the import of gold jewellery, mens rea cannot be attributed to the importer in placing order for gold jewellery in March, 2001. The facts of the matter is similar to the facts in the case of Alukkas Factory, supra. In the said case also the Appellants had imported gold jewellery against the Special Import Licence and the Department confiscated the same and allowed the jewellery to be re-exported on payment of fine and penalty. The Appellate Tribunal, after considering a number of decisions, held that "the redemption fine is not imposable if the party has been granted the option to re-export the goods........On such re-export being done, appellants cannot be insisted for paying the redemption fine as the same is not impossible." The learned Advocate has also relied upon the decision of the Apex Court in the case of Siemens Ltd. v. Collector of Customs, 1999 (113) E.L.T. 776 (S.C.) wherein the Court directed the Revenue to refund to the Appellant therein the amount paid as and by way of redemption fine in respect of the goods which were re-exported. The Tribunal also in the case of G.V. International v. C.C., Jaipur, [2000 (118) E.L.T. 517 (T) = 2000 (39) RLT 272 (CEGAT)], referred to the following decision of the Tribunal in the case of Skantrons Pvt. Ltd. v. C.C., New Delhi, 1994 (70) E.L.T. 635 (T) and held that penalty under Section 112 of the Customs Act and redemption fine under Section 125 of the Act are not impossible on re-export of confiscated goods :
"Imposition of redemption-fine on confiscation of goods under Section lll(d) while giving an option for re-export of the goods is not correct in law. When the goods are confiscated because of ITC prohibition in terms of Section lll(d) of the Act and an option to pay fine in lieu of such confiscation is given, the effect of such option is to lift the prohibition. In other words the importer/appellant is entitled to import the goods and consume them within the country on payment of such redemption fine. Therefore, the simultaneous imposition of two conditions namely (i) imposition of fine in lieu of confiscation and (ii) directing re-export, cannot co-exist together."
6. Similar views were held by the Tribunal in the case of HCL Hewlett Packard, 1997 (92) E.L.T. 367 (T) and Siemens Public Communication Networks Ltd. v. C.C. (Airport) [2001 (137) E.L.T. 623 (T) = 2001 (43) RLT 57]. Following the ratio of all these decisions we hold that in view of the facts and circumstances of the present matter when the impugned goods have been allowed to be re-exported, the question of imposing any redemption fine and penalty does not arise. We, therefore, set-aside the same and allow re-export of goods without any redemption fine or penalty subject to other directions mentioned in the impugned order. Accordingly, we allow the appeal filed by M/s. Venus Gems & Jewellery and reject the appeal filed by the Revenue.