K.S. Venkataramani, Member (T)

1. This appeal is against the order dated 28-8-1987 passed by the Collector of Customs (Appeals) Calcutta by which he had upheld the order dated 7-10-1986 passed by the Deputy Collector of Customs, Special Investigation Branch of the Calcutta Customs House ordering absolute confiscation of the consignment of Nutmeg Oil under Section 111(d) and 111(m) of the Customs Act, 1962 for unauthorised import and for under-valuation of the goods. The appellant is stated to be a proprietary firm whose proprietor has since expired and this appeal is being pursued by his wife. The appellants imported a consignment for which a Bill of Entry was filed on 24-4-1985 declaring the CIF value of Rs. 26,066/-. The Customs House found that the declared value of Rs. 1.75 per kg. in the packing of 25 kg. was not the correct value because on enquiry with the local agent of the supplier from U.K., M/s. H.E. Daniel Limited, it was found that the value of the goods is actually Rs. 2.95 per kg. This, the Customs House found would have resulted in a loss of revenue to the extent of Rs. 34,198.46. Initially, a Show Cause Notice was issued to the appellants charging them with under-valuation which was dated 27-1-1986. Subsequently, the Customs House received a circular of the Joint Chief Controller of Imports and Exports, Calcutta debarring the appellants from receiving import licence because the licensing authority had found that the factory owned by the appellants was not even set-up at the address given. A second Show Cause Notice was, therefore, issued asking them to show cause why the goods should not be confiscated under Section 111(d) as the import was unauthorised. This was because the appellants' claim for clearance of the goods as actual importer under OGL, Appendix 6 to the I.T.C. Policy - April-March 1984-85 was found to be untenable. The Deputy Collector considered the reply to the first Show Cause Notice issued and adjudicated the case on that basis as the appellants did not respond at all to the second Show Cause Notice. He held that the higher value was applicable to the consignment and also held that the import was unauthorised and confiscated the goods absolutely. The Deputy Collector's order was upheld in appeal.

2. The learned consultant, Shri N.C. Sogani, appearing for the appellants contended that Nutmeg Oil imported was a perfumery compound and the appellants were entitled to its import because they held a Small Scale Industries Registration Certificate issued by the Government of West Bengal, Directorate of Industries. Being the actual user (industrial), the appellants had validly effected the import. Shri Sogani urged that the appellants herein had fulfilled the condition under Para 21(a) regarding the conditions governed with the import under OGL. He further pointed out that it was not as if in the Policy that the goods can be imported only by actual users because in the List 8 of the Appendix, Nutmeg Oil is not one of the items restricted for import only by actual users. According to the learned consultant, the item would be covered by Part-III of the list which allows imports by actual users and others for stock and sale. As regards the order of the Joint Chief Controller of Imports & Exports debarring the appellants from obtaining import licence, this order was issued in 1986, subsequent to the present import for which the contract, letter of credit and the date of arrival of the goods and filing of the Bill of Entry was all done before the date of issue of the debarring order by the licensing authority. Therefore, the confiscation of the goods is illegal, according to the appellants. On valuation, Shri Sogani submitted that the letter dated 1-4-1985 of M/s. Daniel Ltd. of U.K. to the Calcutta firm of M/s. United Trades Agency (Calcutta) would clearly show that M/s. United Trades Agency was not the sole indent agents of M/s. Daniel Limited. This letter would also show that there was no regular pri