Customs, Excise and Gold Tribunal - Mumbai
Guru Kripa Marbles vs Commissioner Of Customs, Nhava Sheva on 13 September, 2001
Equivalent citations: 2002(79)ECC677, 2002(150)ELT646(TRI-MUMBAI)
ORDER
Gowri Shankar, Member (Technical)
1. This matter was mentioned a few days ago by counsel for the applicant. On the ground of the delay caused by the department in clearing a consignment which is still pending at the customs, and the urgency caused by delay in delivering of the goods for completion of the project, we have taken up stay application out of turn.
2. The application is for waiver of deposit of duty demanded of Rs. 7.21 lakhs approx., penalty of Rs, 25 lakhs imposed on the applicant and for stay of operation of the order of the Commissioner impugned in this appeal.
3. The applicant imported a consignment declared to be 300 tonnes of rough marble blocks. The bill of entry that is filed to clear the consignment showed the date of shipment to be 3.3.2000. The bill of lading that the importer produced bore this date. Enquiries by the Directorate of Revenue Intelligence led it to conclude that the goods were loaded on board the ship at Thessalonika in Greece on 7th April this year. With effect from 1st April, the policy governing import of marble changed. It now required a licence whereas earlier it was freely importable. The department also found on examination of the consignment that the quantity actually present was 423.78 tonnes.
4. On the department communicating the objections to the importer, he by his letter dated 13.6.2001 waived written show cause notice. By this letter he also requested permission to unstuff the goods from the container in which they had been imported. The importer was heard by the Commissioner on 24th July. The Commissioner by his order dated 31st August ordered confiscation of the goods, with an option to redeem them on payment of fine of Rs. 38 lakhs which he finds to be the margin of profit, and imposed penalty of Rs. 25 lakhs on the applicant.
5. Counsel for the applicant contends as follows. Applicant had bona fide imported the goods, and did not intend to contravene the import restriction. This intention to import the goods long before the policy was changed is clear from the order on the supplier placed on 24.9.2000 and the letter of credit which was also then opened. The Commissioner himself does not find in his order any attempt by the importer or anyone else to deliberately change the date of the bill of lading and thus accepts the goods were handed over to the carrier on 30th March as the bill of entry indicates. The Commissioner reliance upon the decision of this Tribunal in Jawad-Ul-Hasan vs. CCE 2001 (131) ELT 406 in support of his view that the date of shipment is 7th April is misplaced. There was no question in the present case as was the case before the Tribunal, of goods being handed over to any other person for shipment. The policy itself specifies paragraph 15.14 the date shown on the bill of lading to be the date of shipment. That this date is specified in the light of the knowledge of the policy makers that it may be different from the dated on which the vessel carrying the goods actually sails is clear from the provisions in the rest of this paragraph and paragraph 15.15 providing the date os shipment for export goods. The date of shipment in paragraph 15.14 for air cargo is the date of shipping bill provided this is the date on which the goods left the last airport in the country of shipment. The date of shipment from a land locked country is prescribed in this paragraph to be the date of despatch of the goods by a recognised mode of transport of through consignment basis. In the case of export goods, the date of shipment is the date on the bill of lading or the date of the mate's receipt whichever is later. The customs department thus cannot go beyond the prescribed date of the bill of lading, when this has been issued in the normal course of business.
6. Even in the absence of this argument, the Tribunal in its decision relied upon by the Commissioner has expressed the view that in such cases considerable leniency was called for. The Commissioner has not shown any leniency at all. The margin of profit that the Commissioner determines is excessive and the basis in unclear. It is in any event much higher than the margin of profit for similar goods. In two orders passed by him, the Commissioner of Customs Mumbai has determined the margin of profit to be 16% in the case of import by Stone Mann Marble Inds. and 21% in the case of Marmo Classic. The Commissioner has totally ignored the demurrage and container detention charges. If these are taken into account the importer faces a loss.
7. Counsel for the applicant prays for release of the goods pending decision of the appeal on the ground that demurrage which is already to the extent of Rs. 30 lakhs is still mounting. The intended buyer of the goods, which are required for a hotel project, has threatened to cancel the contract and refuse delivery if there is further delay.
8. The departmental representative reiterates the reasoning in the Commissioner's order.
9. The argument of the counsel for the applicant that it is the date of shipment that is specified in the policy has to be accepted has prima facie some merit. It would appear in different circumstances that the policy makers have knowingly fixed different dates for shipment for convenience. In the case before us, there is no allegation that the goods were not actually delivered to the shipper for shipment on 30th March. Even apart from this fact in the total absence of attribution of mala fide to the importer would justify leniency. The feeble argument for the counsel for the applicant that the excess of 123.78 lakhs was supplied by the seller because he was not able to obtain the dressed marble slabs that were ordered and therefore provided for a weight that would be lost in hewing and dressing the slabs is prima facie unacceptable. The order is not seen to have been placed for dressed marble. Nor has it been shown to be the practice in the trade to provide a free of charge extra quantity of this kind. We were told by the departmental representative that the department has thus discontinued recognising some such practice which prevailed earlier. The goods in excess are therefore prima facie liable to confiscation and the importer liable to penalty.
10. It is also to be noted that the demurrage and detention charges which would normally be taken into account in calculating the margin of profit were entirely attributed to the department. The dates that we have indicated above show a delay in adjudication and passing of an order of like consignment for which the departmental representative has no valid explanation. There has also been considerable delay in permitting destuffing of the containers, which the importer sought.
11. Even otherwise, we are not able to appreciate the understanding of mathematics in the Commissioner's order that will be clear from the figures below.
Sale price of the consignment 423.78 tonnes X Rs. 25000 = Rs. 1.059 crores.
CIF price for 423.78 tonnes = Rs. 61.09 lakhs Duty (15.14 lakhs plus 7.20 lakhs) = Rs. 23.24 lakhs Landed cost = Rs. 83.43 lakhs Profit = Rs. 22.42 lakhs
The figure of 38 lakhs arrived at by the Commissioner is thus incomprehensible.
12. In a long line of decisions it has been held that for the purpose of determining margin of profit, the expenses such as demurrage which the importer incurs have to be taken into account as they from part of his cost. The demurrage and detention charges already incurred is around 30 lakhs.
13. In the present case, as we have noted, we are not able to find any mala fides with regard to shipment. If we debut the demurrage already incurred from the profit that we have arrived at Rs. 22.47 lakhs, there seem to be a loss. Alternatively, applying the 20% margin that the Commissioner at Mumbai has applied, at the same levels of sale price and declared value as in case before us, we arrive, without considering the demurrage, at a figure of 4.5 lakhs approx. Even applying 100% margin of profit, to declared quantity in excess, we arrive at about Rs. 6 lakhs. Having regard to all these aspects, we exercise our inherent discretion and direct the department to permit the importer to clear the goods on filing an undertaking before the Commissioner to pay the fine and penalty that may be determined by the Tribunal while disposing of the appeal, depositing Rs. 7 lakhs as security. The duty which has been determined on the goods which is not questioned in the appeal is to be paid.
14. The appeal will be taken up for hearing accordingly.