1996 (3) TMI 465 - AT - Customs

Summary

Issues Involved:
Ownership of the goods, liability of the goods to confiscation, issuance of notice under Section 124 of the Customs Act, and permission for re-shipment of the goods.

Detailed Analysis:

1. Ownership of the Goods:
The Tribunal examined whether the ownership of the goods vested with the foreign supplier or had been transferred to the Indian importer. The Tribunal referred to the case of Savitri Electronics Co., where it was held that if the documents in favor of the consignee were drawn on a collection basis and the payment was not guaranteed, the ownership of the goods remained with the exporter if the consignee failed to retire the documents from the bank. In the present case, the Tribunal found that the Indian importers, M/s. Stylo Foot Wear, were a fictitious firm, and the SSI certificate was bogus. The goods were incorrectly described to evade duty and licensing requirements, making the import prohibited. Therefore, the Tribunal concluded that the ratio of the decision in Savitri Electronics Co. and the Supreme Court's decision in Union of India v. Sampat Raj Dugar was not applicable due to the fraudulent nature of the case.

2. Liability of the Goods to Confiscation:
The Tribunal found that the goods were described in the invoices and bill of lading as insoles for footwear, but on examination, they were found to be coated fabrics. Insoles could be imported under OGL, but coated fabrics required a specific licence. The misdeclaration of the goods constituted fraud to evade duty and licensing requirements. The Tribunal observed that the goods were liable to confiscation under Sections 111(d) and 111(f) of the Customs Act due to the misdeclaration and the absence of a valid import licence. Since no importer came forward, the goods were rightly confiscated absolutely.

3. Issuance of Notice under Section 124 of the Customs Act:
The Tribunal noted that the name of the importers was given in the manifest, and when no bill of entry was presented, enquiries revealed that M/s. Stylo Foot Wear did not exist at the given address. Further enquiries with the Bank of Baroda showed that the SSI certificate was fictitious and bogus. The incorrect description of the goods indicated fraud. The show-cause notice was issued to the importers shown in the bill of lading and invoices, complying with Section 124 of the Customs Act. The Tribunal found no legal infirmity in the order of the lower authorities.

4. Permission for Re-shipment of the Goods:
The Tribunal considered whether the goods should be permitted for re-shipment to the foreign supplier. Given the fraudulent nature of the import and the circumvention of restrictions, the Tribunal did not find it a fit case for allowing re-shipment. The Tribunal upheld the impugned order and rejected the appeals.

Conclusion:
The Tribunal upheld the order of the lower authorities, confirming the absolute confiscation of the goods due to fraud, misdeclaration, and the absence of a valid import licence. The appeals were rejected, and the request for re-shipment was denied.