TaxTMI 
TaxTMI 
2002 (4) TMI 436
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....Rajesh Kothari, proprietor of M/s. Kothari Filaments. 2. Briefly stated the facts of the case are as under : 2.1. The appellant M/s. Kothari Filaments filed a Bill of Entry for 21.5 MTs. of Lithopone 28-30% (Pigment) at the declared price of US $ 390 per M.T. After assessment duty was paid by the appellant on 7-6-99. Thereafter, the goods were examined 100% and it was found that out of the total 860 bags of 25 kgs. each, 460 bags contained lithopone and the balance 400 bags were of tetracycline HCL BP 93. The said tetracycline was not freely importable, as was the case with lithopone and required specific import licence, the same being negative list item. Moreover the said tetracycline attracted higher quantum of duty due to difference in the value of the same and the lithopone. The said examination was conducted on 8-6-99. 2.2. Thereafter, as per the appellants, upon knowing from their clearing agent that the imported goods were not in accordance with the order placed by them, they immediately contacted their foreign supplier. After checking at his end the foreign supplier informed the appellant that due to mistake in their warehouse, the said consignment w....
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....ong supplier. As such the Commissioner's finding that onus to prove that the firm in Belgium had, in fact, placed an order for tetracycline on the Hongkong supplier lies upon the appellant, is not in accordance with law inasmuch as the appellant does not have any connection with Belgium businessmen. He has business relationship only with Hongkong supplier, who have agreed to replace the goods inasmuch as the same were shipped wrongly by them. This, according to Shri Srivastava, is sufficient to establish their bona fides. 4. Shri Srivastava's main contention is that having allowed the re-export of the goods, the Adjudicating authority was not justified in imposing any redemption fine. By referring to various decisions, he submits that it is well settled that no redemption fine can be imposed on re-export being allowed. In this connection he refers to the following decisions : (a) Siemens Public Communications v. C.C., Airport, Calcutta. - 2001 (137) E.L.T. 623 (Tribunal) = 2001 (43) RLT 57 (CEGAT -Kolkata) (b) Siemens Limited v. C.C. - 1999 (113) E.L.T. 776 (S.C.) (c) HCL Hewlett Packard ....
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....(39) RLT 272, following the earlier decisions of the Tribunal, has set aside the orders passed by the lower authorities ordering confiscation of goods and their release on payment of redemption fine and penalty. Further in the case of Commissioner of Customs, Calcutta v. J.B. (P) Ltd. - 2000 (39) RLT 1074, the order of the lower authorities allowing re-export of the goods without fine and penalty was upheld. 6. As discussed above the issue is squarely covered in favour of the appellants by the various decisions of the Tribunal and the Hon'ble Supreme Court. Inasmuch as the Commissioner vide his impugned order has given an option to the appellants to re-ship the goods back to the supplier, we hold that the redemption fine and the penalty imposed by him was not justified. We accordingly set aside the same and allow re-export of the consignment in question without any redemption fine or penalty or duty. Appeal is thus allowed in above terms." 7. As is clear from above reading of the paragraphs reproduced, the issue is no more res integra. The various decisions as discussed above are to the effect that no redemption fine is imposable when re-export of the goods is al....
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....s imposition of two conditions, namely, (i) imposition of fine in lieu of confiscation and (ii) directing re-export cannot co-exist together. In view of this legal position, the appellant is entitled to refund of redemption fine paid by him if the goods have been re-exported". In this case, however, I find that there is not only ITC violation, but this is also a clear case of misdeclaration and goods are not only liable for confiscation under Section 111(d) of the Customs Act, 1962, but also under Section 111(m) of the Customs Act, 1962. Moreover, the plea of the importers that the goods were mis-sent by the supplier has also been found incorrect on overseas investigation. Therefore, the ratio of the cited case would not apply to this case. In this case, ITC violation has taken place. Misdeclaration and mala fide intention is also conclusively proved. Option to redeem the goods can be allowed for the purpose of re-export as requested by the party, but the party would have to redeem the confiscated goods after only such option is given to him. I am inclined to consider importer's request for re-export of the whole consignment subject to importer's making payment of redemption fine a....
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....cline from the other packets containing Lithopone. The import of Tetracycline was sought to be achieved through concealment of its identify from various authorities by mis-declaring the consignment as exclusively of Lithopone. Thus, passing off the Tetracycline packets also as Lithopone packets and the importer being able to make out the Tetracycline packets inter alia from the chits of paper containing, the correct description as Tetracycline dropped in the packets. Taking all these factors as well as other evidence into account, the Commissioner clearly rejected the appellant's explanation regarding error at the despatch point and held that "Misdeclaration and mala fide intention is also conclusively proved" and the Commissioner ordered that option to export the goods can be given only if the goods are redeemed and no objection certificate for the re-export is obtained from the RBI. Further, in para 49, the Commissioner specifically rejected the request for re-export of the 10 MT of Tetracycline on the ground of the consignment being mis-sent. From these findings in the impugned order, it is clear that this was not a case where the Commissioner allowed re-export of the goods. Ins....
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....esent case, the evidence on record have established that to import over 10 MT of medicines in the guise of import of Lithopone. Thus, a huge fraud was under way. It included also an evasion of customs duty of over Rs. 38 lakhs. In these circumstances, the redemption fine of Rs. 30 lakhs and the penalty of Rs. 5 lakhs imposed on the importing firm can be treated only as very lenient punishments. The provisions contained in Section 125 of the Customs Act relating to quantum of redemption fine and the provisions regarding quantum of penalty contained in Section 112 of the Customs Act envisage much stricter punishment. And the facts and circumstances of the case warranted a higher quantum of punishment. I, therefore, do not consider it necessary to grant any relief in respect of the fine of Rs. 30 lakhs and penalty of Rs. 5 lakh on the importing firm. However, a personal penalty of Rs. 1 lakh imposed on the Proprietor of the firm is superfluous, as a penalty of Rs. 5 lakh has already been imposed on the Proprietary firm, which penalty is payable by the Proprietor. 14. In view of what is stated above, I am of the view that this appeal is only required to be rejected. Sd/- ....
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....sions of Customs Act, 1962. It was held that the whole consignment of Tetracycline and Lithopone is liable to confiscation under Section 111(d) and 111(m) read with Section 119 of the Customs Act, 1962. The Commissioner thereafter passed the following order : ORDER "50(i) I order confiscation of the whole consignment weighing 21.5 MTs containing 10 MTs of Tetracycline and 11.5 MTs of Lithopone under Section 111(d) and (m) of the Customs Act, 1962, read with section 119 ibid, read with Section 3 of Foreign Trade Development and Regulation Act. I, however, give the importers an option to redeem the in confiscated goods on payment of a fine of confiscation Rs. 30,00,000 (Rupees thirty lakhs only) in lieu of confiscation. The option must be exercised within three months of the receipt of this order or such extended period as may be allowed by the Commissioner of Customs (Port). After redemption, the importers may re-export the goods within a fortnight from the date of such redemption without any payment of duty leviable thereon or the importers may take out the goods for home consumption on payment of duty on the date of such redemption. (ii) I impose a penalty of Rs....
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....e in paragraph 50(i) is superfluous and irrelevant to the adjudication proceedings. It is only in the nature of clarifying the position that the appellants could dispose of the confiscated goods, after its redemption, either for home consumption on payment of duty or export without payment of duty. 19. It is in the light of the above difference of opinion between the two Members, the following point is referred : "Whether the appeal is required to be allowed as held by Member (Judicial) or the same is required to be rejected as held by Member (Technical)". 20. On going through the records of the case and after hearing the parties, I do not find any reason to take a view that the goods are not liable to be confiscated in view of violation of Clause (d) and (m) of Section 111 of the Customs Act. The procedure adopted in the mode of packing and mixing Lithopone with Tetracycline would make it clear that there was definite intention to conceal Tetracycline. Tetracycline was concealed in the consignment declared as Lithopone and chits of paper indicating the goods as Tetracycline were kept in those bags so that the recipient of the goods could identify Tetracycline fr....
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....oms Act, 1962 he is empowered to allow the importer to redeem the goods on payment of fine. The imposition of fine only validates the import, in other words, on payment of fine the importer becomes absolute owner of the goods, and he is free to export them subject to the provisions of Customs Act, 1962 and Rules made thereunder. The provision enables the owner to avoid confiscation by paying the fine imposed. However, there is no provision under the Act empowering the Collector to re-export the goods on payment of redemption fine. The order passed by the Collector is, therefore, without jurisdiction. The reliance placed by Ms. Mann on para 128 of the Handbook of Import and Export Procedures 1985-88 is irrelevant to the facts of the case. 8. We, therefore, modify the order of the Collector in the following manner : "The goods are confiscated, but the appellants are entitled to redeem the same on payment of Rs. 5000/-. Accordingly, we dispose of the appeal." In the above mentioned two cases challenge was against the imposition of redemption fine while permitting re-export and in both the cases the Tribunal modified the orders retaining that portion of the order directin....