2002 (7) TMI 685 - AT - Customs

Summary

Issues Involved:
1. Confiscation of imported goods (lead scrap, ball bearings, and drums).
2. Imposition of penalties on various parties.
3. Request for re-export of goods by M/s. UNISINDO.
4. Determination of the legitimacy of the importers and the foreign shipper's involvement.
5. Compliance with established legal precedents and procedural guidelines.

Issue-wise Detailed Analysis:

1. Confiscation of Imported Goods:
The consignment declared as lead scrap was found to contain ball bearings upon examination. The Commissioner ordered the absolute confiscation of the goods under Sections 111(d), 111(m), and 119 of the Customs Act, 1962. The Tribunal found that the import was organized using fraudulent documents and concluded that the importers, though declared as M/s. DHRUVA, were fictitious. The Tribunal held that the foreign shipper, M/s. UNISINDO, continued to own the goods and that confiscation under Sections 111(d) and 111(m) could not be upheld. The Tribunal referenced the Bin Sabt Jewellery case to support its decision to allow reshipment instead of confiscation.

2. Imposition of Penalties:
Penalties were imposed under Section 112(a) of the Customs Act, 1962: Rs. 40 lakhs on DHRUVA, Rs. 30 lakhs on Shri Vikram, and Rs. 30 lakhs on Shri Kishore. The proceedings against Shri Patel, Shri Vinay, and M/s. SEA HORSE were dropped. The Tribunal did not find any liability for penalties on M/s. UNISINDO, the foreign shipper.

3. Request for Re-export by M/s. UNISINDO:
M/s. UNISINDO requested re-export of the goods, claiming a mix-up in shipment and continued ownership due to non-payment by the Indian importer. The Commissioner rejected this request, suspecting a fabricated story. However, the Tribunal found that M/s. UNISINDO had no involvement in the fraudulent import and was entitled to reshipment. The Tribunal cited the Savitri Electronics Co. case and the Supreme Court's decision in UOI v. Sampath Rai Dugar, which allowed re-export when the foreign supplier was not involved in fraud.

4. Legitimacy of Importers and Foreign Shipper's Involvement:
The Tribunal concluded that the importers were fictitious and the foreign shipper, M/s. UNISINDO, was not involved in any fraudulent activity. The Tribunal noted that the Bill of Entry was filed using forged documents and that the foreign shipper had a legitimate claim to the goods. The Tribunal rejected the Commissioner's findings that M/s. UNISINDO's request for re-export was part of a dubious scheme.

5. Compliance with Legal Precedents and Procedural Guidelines:
The Tribunal found non-compliance with established legal precedents and procedural guidelines. It noted that the Customs Appraising Manual and the Supreme Court's decision in Sampath Rai Dugar were not followed. The Tribunal emphasized that re-export should be allowed when the foreign shipper is not involved in fraud and the goods are still owned by the shipper. The Tribunal remitted the case to the Adjudicator to redetermine the CIF value of the goods and impose a nominal fine for re-export if necessary.

Conclusion:
The Tribunal set aside the Commissioner's order of absolute confiscation and refusal of re-export. It directed the Adjudicator to redetermine the CIF value of the goods and impose a nominal fine for re-export, ensuring compliance with established legal precedents and procedural guidelines.