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2009 Supreme(Mad) 4803
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE F.M. IBRAHIM KALIFULLA & THE HONOURABLE MR. JUSTICE T.S. SIVAGNANAM
Commissioner of Customs (Exports) Custom House
Versus
M/s Ishwar Impex rep.by its Proprietor Sunil Khemka & Another
C.M.A.No.1028 of 2007, M.P.No.1 of 2007 and M.P.No.1 of 2009
Decided On : 11-11-2009
For the Appellant: P. Mahadevan, Senior Standing Counsel.
For the Respondents:R1, Joseph Prabakar, Advocate.
The entitlement of the original importer to the goods imported and the rights of the first respondent to claim the release of the goods were the central legal points established in the judgment.
Headnote:
Customs - Import Licence - Customs Act 1962 - Sections 111(m), 111(o), 112(a), 28 AB - The judgment discusses the entitlement of the original importer to the goods imported, the rights of the first respondent to claim the release of the goods, and the reduction of redemption fine. The court held that the Tribunal should not have passed the impugned order in the absence of the original importer and that the matter is remitted back to the Tribunal for deciding the appeal afresh after impleading the original importer. The court also highlighted the lack of coordination among the officers of the appellant while dealing with such matters.
Fact of the Case:
M/s Sandip Exports Limited, holder of an advance licence, imported 'Mulberry Raw Silk' from China. The goods were seized by the officers of SIIB and were liable for confiscation under the Customs Act. The Commissioner issued a show cause notice for recovery of duty, but M/s Sandip Exports Limited did not respond. The first respondent made a representation contending that the supplier had recalled the original documents and requested the Commissioner for amending the import documents. The Commissioner passed an order denying the benefit of duty exemption and ordering the confiscation of goods.
Finding of the Court:
The Tribunal's order was set aside as it was passed in the absence of the original importer. The matter was remitted back to the Tribunal for deciding the appeal afresh after impleading the original importer. The lack of coordination among the officers of the appellant was highlighted.
Issues: Entitlement of the original importer to the goods imported, rights of the first respondent to claim the release of the goods, reduction of redemption fine, lack of coordination among the officers of the appellant.
Ratio Decidendi: The Tribunal should not have passed the impugned order in the absence of the original importer. Lack of coordination among the officers of the appellant while dealing with such matters.
Final Decision: The appeal was allowed with the direction to the Tribunal to decide the appeal afresh after impleading the original importer. No costs were awarded.
F.M. Ibrahim Kalifulla, J.
The Commissioner of Customs (Exports) is the appellant. The challenge is to the Final order No.908/2006 of the CESTAT dated 29. 2006 passed in Appeal No.C/145/2006.
2. (a) The brief facts which are required to be stated are that one M/s Sandip Exports Limited who is holder of advance licence imported 3061.82 Kgs of "Mulberry Raw Silk" from China under Bill of Entry No.39260 dated 08.09.2003 and Invoice dated 08.08.2003 where the value of goods was mentioned as 37507 US$. The advance licence is dated 23. 2002. It prescribed for the benefit of duty exemption under Customs Notification No.48/99 dated 29.099. The Bill of Entry declared the value of the goods as 39803.66 US$. The assessable value of the goods in Indian Rupees was Rs.18,49,278/-. The importer, however, did not come forward to clear the goods for a long time. The consignment was seized by the officers of SIIB on 010. 2004 and was liable for confiscation under the Customs Act. Be that as it may, the investigation by DRI revealed that M/s Sandip Exports Limited was a continuous defaulter and was misusing the import licence dated 22.03.2002 on very many aspects. Therefore, a show cause notice was issued to M/s Sandip Exports Limited by the Commissioner for recovery of duty of Rs.20,34,882/- which was covered by the above referred to Bill of Entry. M/s Sandip Exports Limited did not respond to the show cause notice nor did they appear for the personal hearings before the Commissioner.
(b) In the abovestated background, the first respondent herein made a representation on 28.03.2005 contending that the supplier (Chinese party) had recalled the original documents from the bank and issued revised documents in the name of the first respondent in their letter dated 112. 2003 and on that basis requested the Commissioner for amending the import documents. A similar claim had already been made in the first respondents letter dated 31.07.2004. Since there was no response from the Commissioner, the first respondent approached this Court by way of Writ Petitions, in W.P.No.29860/2004 and W.P.No.1827/2006. A common order came to be passed in the said Writ Petitions on 31.03.2006 wherein while directing the Commissioner to adjudicate on the show cause notice dated 11.02.2005 issued to M/s Sandip Exports Limited and in the said proceedings to permit the first respondent herein to participate and prove its claim. The Commissioner passed the order in Original No.5094/2006 dated 04.05.2006 wherein the Commissioner passed the following order:
"1. I order the denial of benefit of duty exemption claimed under Customs Notification No.48/99 dated 29.04.1999 for the consignment covered under the Bill of Entry No.39260 dated 08.09.2003.
2. I demand the differential duty of Rs.20,34,882/-for the goods covered under the Bill of Entry No.39260 dated 08.09.2003 be paid by them along with interest applicable as per Sec.28 AB of Customs Act, 1962.
3. I order the confiscation of goods totally valued at Rs.18,49,278/- under Section 111 (m)and 111(o) of the Customs Act 1962. However I give the option to M/s Sandip Exports Ltd, Kolkata to redeem the goods on payment of fine of Rs.30,00,000/- (Rupees Thirty lakhs only).
4. I impose a penalty of Rs.8,00,000/-(Rupees Eight Lakhs only)under on M/s Sandip Exports Ltd, Kolkata under Section 112(a) of the Customs Act, 1962.
5. I repudiate the claim of request for change of title made by M/s Ishwar Impex, Bangalore in respect of the subject goods."
Aggrieved against para 5 of the said order, the first respondent herein preferred an appeal before the second respondent herein. It is relevant to note that the original importer, namely, M/s Sandip Exports Limited was not impleaded as a party to the said appeal.
(c) By the order impugned in this appeal dated 21.09.2006, the Tribunal after holding that undisputedly the first respondent had retired the relevant shipping documents (revised by the Chinese party in their favour)
