TaxTMI 
TaxTMI 
TaxTMI 
2007 (3) TMI 588
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....wide Trading Est. Pvt. Ltd., Lucknow (WTL, for short), appellants in Appeal No. C/235/2001, which was. to the effect that the seized mulberry silk weighing 2633 kgs. covered under the second and third bills of entry had been transferred to them by M/s. STC and, therefore, they (WTL) should be permitted to clear the same. This claim of M/s. WTL was rejected by the Commissioner, who, in adjudication of show-cause notice dated 20-11-1997 issued after DRI investigation into the imports, confiscated the entire quantity (3917 kgs.) of raw silk valued at Rs. 58.5 lakhs, with option for redemption on payment of a fine of Rs. 30 lakhs. He also imposed a penalty of Rs. 1 lakh on the proprietor of M/s. Pariston Exim, Rajkot. After this order was passed by the Commissioner, he received a report from M/s. STC on 18-4-1998, wherein the suppliers of the goods sought, permission to take back the goods to Hong Kong or to sell it to any other buyer in India. The Commissioner informed M/s. STC that nothing could be done in the matter at that stage and they were at liberty to go in appeal to the Tribunal against the above order dated 06-3-1998. Subsequently, on 16-6-1998, the goods were sold in auctio....
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.... Exim Ltd. (*based on a letter dated 20-6-1997 received from M/s. Pariston Exim) : 15-7-1997* Payment by M/s. Worldwide Trading : 2-6-1997 Requested Commissioner to transfer B/E in their name M/s. Worldwide Trading Ltd. : 16-6-1997 Show Cause Notice issued : Nov. 1997 Case adjudicated on : 6-3-1998 From the above chronology of events, it appeared to learned Commissioner that M/s. STC had sold the same consignment to two different buyers viz. M/s. Pariston Exim, Rajkot and M/s. WTL, Lucknow. It appeared to him that M/s. STC were keeping sale documents in duplicate for the same consignment, one in the name of M/s. Pariston Exim, Rajkot and the other in the name of M/s. WTL, Lucknow. He further inferred that there was collusion between M/s. STC and M/s. Pariston Exim, Rajkot. On this basis, learned Commissioner proceeded to examine the applicability of the ratio of the Apex Court's decision in Sampath Raj Dugar case to the facts of the case on hand. He observed that a foreign supplier of goods imported into India was not entitled to ask for re-export of the goods under claim of ownership over the same, where he was party to any fraud committed by the importer. After no....
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....t's judgment in Bhogilal Mehta v. Union of India [2004 (164) E.L.T. 239 (Cal.)]. Alternatively, it was argued that the appellants were entitled to receive proportionate shares of sale proceeds of the goods auctioned by the department, in terms of Section 150 of the Customs Act. 5. Learned SDR did not think that the adjudicating authority had travelled beyond the scope of the Tribunal's remand order. According to her, it would appear from the operative part of the said order that it was an open remand enabling the Commissioner to consider all claims and contentions of the parties. With reference to Counsel's claim under Section 150 of the Customs Act, learned SDR pointed out that the provision was applicable only to sale proceeds of goods not confiscated. In the present case, the goods were confiscated and thereafter auctioned. Hence the provision would not be applicable. Learned SDR submitted that, in the event of the appellants' claim for share of sale proceeds being allowed, the department's liability would be only to return the balance sale proceeds after adjusting redemption fine, with interest at the rate of 12% on such balance amount. In this connection, reliance was pl....
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.... only remedy is to sue the importer for the price of the goods and for such other damages that he may have suffered and this would not be conducive to international trade. Therefore, the Supreme Court clearly held that owner of the goods is entitled to seek re-export of the goods. The Supreme Court has also clearly observed in that case that the goods should not have been confiscated as on the date of the said importation there was no prohibition inasmuch as the import was covered by valid import licence. It was also held that subsequent cancellation of licence is of no relevance nor does it retrospectively render the import illegal. In this regard reference was also made to earlier judgment rendered in the case of East India Commercial Co. Ltd. v. CC reported in 1983 (13) E.L.T. 1342 (S.C.) = 1963 (S.C.R.) 338. The facts and circumstances in Sampthraj Dugar also is almost identical to the present case wherein also it was not the case of the Revenue that the owner was a party to any conspiracy or other fraudulent plan hatched or sought to be implemented by second respondent, as the first respondent continued to be owner of the goods and that the goods, cannot be confiscated or proc....
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.... to the Commissioner to consider their case. Therefore, the Commissioner having auctioned the goods within the limitation period of appeal is not a justified action in law. However, now that the auction has already taken place, both the parties are seeking for a direction to give them the sale proceeds of the goods. They have also contended that the goods cannot be confiscated in terms of the judgment cited. These contentions are required to be considered by the Commissioner after granting them an opportunity of hearing and permitting them to produce sufficient evidence to satisfy him. The Commissioner shall hear them and pass a detailed order in the light of the law laid down by the Hon'ble Supreme Court and the Tribunal in the noted judgments. The appeals are thus allowed by remand." 6.1 It would appear from the above order of the Tribunal that the direction to the Commissioner was to consider two contentions of the appellants: (a) that the goods were not liable for confiscation and (b) that they (appellants) were entitled to receive the sale proceeds of the goods. These contentions were to be considered in the light of the Supreme Court's decision in Sampath Raj Dugar cas....
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....der. 6.2 The real purport of the remand order was to make the adjudicating authority consider the appellants' claim for sale proceeds of the goods in the light of Sampath Raj Dugar (supra). The remand order had also given a brief account of the facts of the case of Sampath Raj Dugar for the benefit of the lower authority. Learned Commissioner, however, chose to distinguish those facts and to hold, that the ratio of Sampath Raj Dugar was not applicable to the facts of the case of STC and WTL. He held M/s. STC to have colluded with M/s. Pariston Exim and to have acted with fraudulent intention. On this basis, learned Commissioner took the view that M/s. STC were not entitled to claim re-export of the goods. We are unable to accept the distinction drawn between the case of Sampath Raj Dugar and that of STC inasmuch as, in the remand order, this Bench has already found that the facts of the two cases are almost identical. We find that, by holding the goods liable for confiscation and venturing into the act of distinguishing the case of Sampath Raj Dugar, the adjudicating authority was travelling beyond the scope of the remand order. 6.3 The reference to M/s. STC is containe....
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....sioner's office only on 19-5-1998). M/s. STC sent a reminder dated 18-4-1998 to the Commissioner and the same was received by the latter. A further reminder was sent by them on 21-8-1998, wherein they also requested the Commissioner to permit them to warehouse the goods in a Customs bonded warehouse pending consideration of their request for re-export of the goods. Subsequently, having come to know that the goods had already been confiscated and disposed of through auction, M/s. STC, in their letter dated 28-9-1998, asserted before the Commissioner that they were entitled to claim the goods back.. In these letters, they specifically claimed the benefit of the Apex Court's judgment in Sampath Raj Dugar (supra). They further made the following claim also :- "Since it is reported that goods have already disposed off, we should be paid the full amount of USD 30,127.50 along with interest @ 9% p.a. till the date of payment together with our expenses and cost for an amount of USD 500.00. Accordingly, we request you to pass appropriate orders directing payment of USD 30,627.50 plus interest @ 9% p.a. till the date of payment without delay." In his reply dated 5-10-1998 to STC's letters,....
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....7. Being unable to get payment of the Bill Nos. 97 MAS 370 & 97 MAS 371, dated 3-2-1997, the appellant requested their banker Standard Chartered Bank, Hong Kong on 22-4-1997 to call original documents from Dena Bank, Rajkot. Accordingly, Standard Chartered Bank, Hong Kong requested Dena Bank, Rajkot to return the original-documents related to Bill Nos. 97 MAS 370 & 97 MAS 371. Dena Bank, Rajkot returned original documents to appellant's Bank Standard Chartered Bank, Hong Kong on 28-4-1997. Meanwhile, the new contract with second buyer (Worldwide) was negotiated on 25-4-1997. Thereafter, the appellants got the B/L amended from Shipping Company on 7-5.1997 and new invoices were made with the same Invoice No. & date substituting the name of old buyer and bank with that of new buyer (Worldwide) and their bank (Union Bank of India, Aminabad, Lucknow). These were then again sent on 8-5-1997 through Standard Chartered Bank, Hong Kong to second buyer's bank Union Bank of India, Aminabad, Lucknow on D/P terms for payment collection. Once Invoice No. 97 MAS 370 was paid but another invoice No. 97 MAS 371 remained unpaid for long and the original documents were returned by Union Bank of India....
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....lear 1294 kgs, of raw silk covered under the second bill of entry cannot be defeated on the sole ground that they acted as a 'front' for M/s. STC to save the latter's goods. They had requested for permission to present bill of entry in their own name after the importer (Pariston Exim) had abandoned the goods. This request was made on the strength of a bill of lading and an invoice, both of which were in their own name. These documents along with banker's document evidencing payment of price of goods to the supplier should have been accepted as constituting genuine transaction between M/s. STC and M/s. WTL. By presenting such documents to the Customs authorities, M/s. WTL were holding themselves out to be "importer" of 1294 kgs. of raw silk in terms of Section 2 (26) of the Customs Act for the purpose of presenting a bill of entry under Section 46 (1) of the Act for clearing the goods. But they were also liable to produce valid import licence for such clearance of the goods, which was a restricted item. M/s. WTL have also no case that the goods was freely importable. It appears, at no point of time did M/s. WTL claim to clear the goods under a valid licence. The Commissioner, on all....