TaxTMI 
TaxTMI 
TaxTMI 
2008 (7) TMI 210
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....hould be treated as cancelled. (b) The present appellant shall be permitted to file fresh bill of entry / bills of entry in respect of the entire quantity of 500Mts. (c)The appellant shall file fresh bill of entry without claiming exemption under Notification No.21/02 and the same shall be processed as per law and applicable duty and interest shall be collected. (d)The appellants are also directed to produce indemnity Bond to the satisfaction of the Commissioner of Customs for value of the goods indemnifying the department against claim/damage by M/s Magpie Overseas Co. in respect of this consignment. (e)No order is being passed with regard to duty remitted by M/s Magpie Overseas Co. on the basis of assessment made by customs. 2. The appeal was filed on 03.05.2007 on the following questions of law:- (a) Whether or not bill of entry assessed to payment of customs duty on which customs duty is paid and out of charge order issued under Section 47 of the Customs Act, 1962 can be permitted to be amended in view of the provisions of Section 149 read with Section 30(3) of the Customs Act, 1962? (b) Whether or not CESTAT has erred in law in allowing cancellation of bill of entry af....
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....into between respondent and M/s Magpie Overseas Company. Brief Facts of the Case 5. The brief facts set out by the appellant are as under:- 5.1 M/s. Jhunjunwala Vanaspati Ltd. (hereinafter referred to as "the respondent") imported a consignment of Crude palm oil-non-edible grade/industrial grade falling under Chapter Heading No.1511 90 90 of the Customs Tariff Act, 1975. Out of the same, the respondent sold quantity of 500 MT to M/s. Magpie Overseas Company, Delhi (hereinafter referred to as "M/s. Magpiea") on High Sea Sale basis under an agreement dated 06.09.2005. 5.2 On the basis of the said High Sea Sale Agreement, M/s. Magpie filed two bills of entry Nos.119410 and 119384 on 12.09.2005 of 250 MT each for home consumption and claimed benefit of concessional rate of duty under the Notification No.21/2002 dated 01.03.2002 [Sr. No.30(A)] as amended from time to time. 5.3 The said bills of entry were assessed by the concerned officer on 26.09.2005, taking into consideration the documents presented. After the assessment order was passed on bill of entry No.119410 dated 12.09.2005, M/s. Magpie paid duty amounting to Rs.9,53,771/- together with interest thereupon of Rs.1568/- on ....
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....gpie by adjusting the duty paid by M/s. Magpie at normal rate of 65% ad valorem. 5.7 Pursuant to the aforesaid order passed by this Court in Special Civil Application No.5037 of 2006 the respondent as well as M/s. Magpie were issued notice bearing No.F.No.S/23-3/ Jhunjhunwala/2006 Gr.-I dated 02.05.2006 in the following terms: The respondent was called upon to show cause on or before 09.05.2006. (a)In respect of bill of entry No.119410 where the clearance for home consumption under Section 47 of the Customs Act, 1962 has already been passed, why the request for cancellation and permission for filing a fresh bill of entry be not rejected. (b)Why the seized goods covered by the aforesaid bill of entry which were attempted to be cleared under concessional rate of duty based on declarations made by Magpie, be not proceeded against in terms of the relevant provisions of the Customs Act, 1962 for specific violations by way of separate proceedings and; (c)Why the request of notice for cancellation of bill of entry No.119384 on which order for clearance for home consumption under Section 47 of the Customs Act, 1962 has not been passed by considered for amendment, subject to compliance ....
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....department on the basis of High Sea Sale agreement effected by the Noticee in the name of Magpie, claiming concessional rate of duty in terms of notification No.21/2002 Cus., as amended, it may be seen that this bill of entry has already been assessed and released for payment of duty on 26.09.2005. In this case, Magpie has already held themselves out as importer and filed bill of entry on the basis of High Sea Sale Agreement. The definition of the term importer in Section 2(26) of the Customs Act, 1962 very clearly specifies that importer, in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer. As such, Customs Law, in the period between the importation of the goods and the time when they are cleared for home consumption does not hold any ownership test. In short, for holding oneself out to be an importer, a person need not be the owner of the goods. That Magpie held themselves out as importer and filed a bill of entry subscribing to declarations and claiming certain concessions to which apparently they were not entitled as per investigation which....
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....been duly assessed by the department is still very much on record. As such, the element of fraud which is very much involved in the present case was not an issue before Hon. Supreme Court in the case of Sampat Raj Dugar....." 5.11 After recording the aforesaid findings and relying upon the decisions, set out in paragraph No.5.2.5, the Commissioner of Customs passed the Order in Original rejecting the request of the respondent for cancellation of bills of entry Nos.119410 and 119384 dated 12.09.2005 filed by M/s. Magpie, which the Commissioner of Customs found to be a fictitious company. The Commissioner of Customs also declined to accept the request made by the respondent (M/s. Jhunjhunwala Vanaspati Ltd.) for substitution of its name in place of M/s. Magpie as importer. The Commissioner of Customs orders initiation of separate proceedings in accordance with provisions of the Customs Act, 1962 against the assessed goods covered by aforesaid two bills of entry. A copy of the Order in Original is at Annexure-B. 5.12 The respondent herein, being aggrieved and dissatisfied with the said Order in Original, preferred an appeal before the Customs Excise Service Tax Appellate Tribunal, W....
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....s paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. (2) Where the importer fails to pay the import duty under sub-section (1) [within [five days], excluding holidays] from the date on which the bill of entry is returned to him for payment of duty, he shall pay interest [at such rate, not below [ten per cent] and not exceeding thirty-six per cent, per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette] on such duty till the date of payment of said duty: Provided that where the bill of entry is returned for payment of duty before the commencement of the Customs (Amendment) Act, 1991 and the importer has not paid such duty before such commencement, the date of return of such bill of entry to him shall be deemed to be the date of such commencement for the purpose of this section:] [Provided further that if the Board is satisfied that it is necessary in the public interest so to do, it may, by order for reasons to be recorded, waive the whole or part of any interest payable under ....
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.... which the same were not only assessed but in case of one of the bills of entry, even the duty was paid. 6.10 The learned Assistant Solicitor General of India relied upon a decision of the Hon'ble the Apex Court in the case Bharat Commerce & Inds. Ltd., New Delhi, reported in 1997 (93) E.L.T. 653(S.C.) = (1997) 11 S.C.C. 62. Paragraph Nos.1 to 3 and 8 to 12 of the said judgment read as under:- "1. On 16-8-1985, the appellant, through its clearing agents, lodged a bill of entry for home consumption. On 20-8-1985, the appellate wrote the following letter to the Assistant Collector of Customs: Sub: 40 Bales Cashmilon Brand Acrylic Fibre IGM No.1958/249 s.s. Eastern Splendour, M/s Bharat Commerce & Ind. Ltd., Bombay. Dear Sirs, The above-mentioned B/entry was noted for Home Consumption on 16-8-1985, but the Importer has instructed us now to prepare and clear the Material under Bond. Since they are having shortage of funds and are unable to pay the import duty for the time being. Kindly allow us to cancel the Home Consumption B/Entry and allow fresh B/Entry under Bond." 2. The grievance of the appellant is that no action was taken on this application. On 26-8-1985 the appellate ....
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....strength of this judgment that the wordings of Section 46 and particularly the expression "shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form" make it appear at the first glance that the filing of the bill of entry in the prescribed form was mandatory and that, therefore, non-compliance thereof may make the importer liable to the penalty. This view, however, overlooked that presentation of a bill of entry in the prescribed form was only procedural, non-compliance of which could not be visited with penalty. 12. We do not have a case of penalty before us. We are also of the view that filing of a bill of entry in the prescribed form is not a procedural formality. Otherwise any importer may write a letter to the proper officer stating that certain quantities of goods have been imported and the goods will have to be cleared on the strength of the letter only. If a statutory form is prescribed for presentation of a bill of entry, then the bill of entry has to be in the prescribed form. Section 46(5) contemplates substitution of one bill of entry by another. The second bill of entry must also be prepared....
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.... concealing its profits, that the sales standing in their names were sham and fictitious, and that the profits ostensibly earned by them on those transactions were, in fact, earned by the appellant, and should be added to the amounts shown as profits in its accounts. The point for decision is whether there arises out of the order of the Tribunal any question which can be the subject of reference under section 66(1) of the Act. Under that section, it is only a question of law that can be referred for decision of the court, and it is impossible to argue that the conclusion of the Tribunal is anything but one of fact." 39. For the reasons aforementioned, we are of the opinion that the High Court may not be entirely correct in holding that no substantial question of law arise for its consideration. Ordinarily, although, we have referred the matters back to the High Court, having regard to the fact that we have ourselves examined the findings of the Tribunal and the findings of the Commissioner, we are of the opinion that instead of remitting the matter back, interest of justice would be met if upon setting aside the judgment of the High Court and Tribunal the matters are remitted to ....
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.... Magpie at the time of hearing, which was fixed by the authorities after the matter was ordered to be decided by taking a final decision on applications / letters submitted by the respondents dated 06.10.2005 and 30.12.2005 within 4 weeks from the date of receipt of order of this Court'. 7.4 Learned advocate for the respondent emphatically submitted that as the duty was not paid by M/s. Magpie, the respondent continues to be the owner and therefore, the authorities ought to have allowed the respondent to file fresh bill of entry, though M/s. Magpie had filed two bills of entry, which were cleared by the authorities on 12.09.2005 pursuant to a High Sea Sale Agreement dated 06.09.2005. 7.5 Learned advocate for the respondent placed reliance on certain communications, which were part of the record of the Tribunal being letters dated 06.10.2005 and 30.12.2005, which were not placed before this Court. The learned advocate for the respondent filed a pursis to produce the said two documents before this Court, on which the respondent was permitted to produce the said documents, along with the written submissions which were filed before the Commissioner of Customs at the time of hearing o....
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....he respondent heavily relied upon decision of the Hon'ble the Apex Court in the case of Union of India Vs. Sampat Raj Dugar, reported in 1992 (58) E.L.T. 163 (S.C.). Learned advocate for the respondent relied upon paragraph Nos.6, 7, 8, 10 and 19 of the judgment and submitted that the decision of the Hon'ble the Apex Court applies to the facts of the present case in all fours. The said paragraph read as under:- "6. The first respondent did not prefer an appeal against the said order. He directly challenged the same in the Bombay High Court by way of a Writ Petition. He reiterated his contention viz., since the second respondent has failed to pay and receive the documents regarding the said four consignments, he himself continues to be the owner thereof; if so, the said goods cannot be confiscated or proceeded against in any manner for any act or default of the second respondent. He claimed to be entitled to re-export the same to Hong Kong. The case of the Collector of Customs and the Union of India was that the second respondent must be deemed to be the owner of the said four consignments by virtue of the definition of 'importer' in S. 2(26) of the Customs Act read with Clause 5(3....
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....t of price of imported goods. In such a case, it will be open to the exporter, in case of non-payment of price or abandonment by the importer, to collect the price by invoking such arrangement. In such a case, it is obvious, the exporter will not be allowed to claim title to and/ or to re-export the goods. (Indeed, it is unlikely that in such a case, the importer abandons the goods ordinarily speaking.) It is therefore necessary that in all such cases, the authority should issue a notice to the importer and/ or his agent before allowing the exporter to deal with or seek to re-export the goods. So far as this case is concerned, both the importer and exporter (RR 2 and 1 respectively) were present before the Collector (Customs) as well as before the High Court. R 2 did not plead any such arrangement." 7.9 Learned advocate for the respondent also relied upon the following decisions:- I. Agrim Sampada Ltd. v. UOI, reported in 2004 (168) E.L.T. 15. II. Savitri Electronic C. v. CC, reported in 1992 (62) E.L.T. 395. III. Dr. Prasad v. CC, reported in 1994 (73) E.L.T. 93. IV. Worldwide East Pvt. Ltd. v. CC, reported in 2001 (136) E.L.T. (88). V. Telerama (India) Ltd. v. CC, reported ....
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....formed us that the production in their unit has been suspended, due to which they are unable to accept the delivery of the goods and release the payment for the same. He wants to cancel the high-seas agreement......" (emphasis supplied) 9. The case of the authorities is that on the basis of the intelligence received and on the basis of preliminary investigation report received from the Headquarter, Preventive Wing of Delhi-II to the effect that the goods lying at Kandla Port would not be used by the importer in absence of capacity to store/process and manufacture soap, the officers of SIIB, Customs House, Kandla placed the goods totally weighing 494.085 MT as per port out turn report under seizure by drawing panchnama on 08.02.2006, under a reasonable belief that the goods are liable for confiscation under the provisions of the Customs Act, 1962. 9.1 The respondent, having failed to trace M/s. Magpie, as they admitted during the course of personal hearing, have tried to adopt a course which is favourable to them by asking the authorities to allow the respondent to file fresh bill of entry. 9.3 The fact that M/s. Magpie vanished after paying existing duty to the tune of Rs.9,53,....
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....by the Noticee (present respondent) who has initially imported and then transferred it on high sea sale basis to a fictitious firm, with or without motive, and once that firm was investigated and vanished from the scene, seeks to substitute themselves as the importer. The bill of entry filed by M/s Magpie which has been duly assessed by the department is still very much on record. As such, the element of fraud which is very much involved in the present case was not an issue before Hon. Supreme Court in the case of Sampat Raj Dugar......." (emphasis supplied) 10.2 This Court, having perused the aforesaid judgment of the Hon'ble the Apex Court, is of the considered opinion that the facts of that case are different and therefore, the decision has no application to the facts of the present case. 11. Coming to the order passed by the CESTAT the appellate authority, it is clear that the order is nothing more than a cryptic order. The Tribunal, except narrating the facts/ the case of the parties in a form of presi, has not considered and has not recorded any reasons for which it accepted the case of the appellant and the reasons for which it did not find favour with the case of the auth....
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.... in the customs house to allow the party to amend or not. In the opinion of this Court, the authorities the Commissioner of Customs has not committed any error in rejecting the request of the respondent in light of the facts of the case, which are set out in detail hereinabove. 14. Learned advocate for the respondent paid emphasis on the provisions of Section 149 which reads as under:- "Provided that no amendment of a bill of entry or shipping bill or bill of export shall be so authrosied to be amended after the imported goods have been cleared for home consumption or deposited in a ware house, or the export goods have been exported, except on the basis of documentary evidence which was in existence at the time the goods were cleared, deposited or exported, as the case may be." (emphasis supplied) 14.1 Learned advocate for the respondent did not give due importance to the word, 'shall'. The proviso puts a restriction on the discretion conferred on the proper officer in the main body of Section 149. It cannot be read that proviso mandates the exercise of discretion in favour of a party so as to allow the party to amend the documents if the eventualities set out in the proviso hav....