2001 (8) TMI 218 - AT - Customs

Summary

Issues Involved:

1. Unauthorized import by a fictitious firm.
2. Confiscation of sale proceeds.
3. Entitlement to re-export goods.
4. Validity of the Import General Manifest (IGM).
5. Compliance with the Foreign Trade (Development & Regulation) Act, 1992 and Customs Act, 1962.

Detailed Analysis:

1. Unauthorized Import by a Fictitious Firm:
The case involved the import of 60 MTs of Citric Acid by a fictitious firm, M/s. Ganapathi Trading Co. Pvt. Ltd., which had no Import Export Code Number, violating the Foreign Trade (Development & Regulation) Act, 1992, and the Customs Act, 1962. The investigation revealed that the firm did not exist at the provided address, and no Importer Exporter Code Number was allotted to them by the DGFT, confirming the firm's non-existence and fictitious nature.

2. Confiscation of Sale Proceeds:
The Commissioner of Customs ordered the confiscation of the sale proceeds amounting to Rs. 34,34,000/- because the goods were imported by a non-existing company, making the import unauthorized. The goods were auctioned, and the sale proceeds were realized. The Commissioner found no basis to return the sale proceeds to M/s. Peer Chemicals & Metallurgy Pvt. Ltd., Singapore, as they were not proven to be the legitimate importers or owners of the goods.

3. Entitlement to Re-export Goods:
M/s. Peer Chemicals & Metallurgy Pvt. Ltd., Singapore, claimed the right to re-export the goods, citing various judgments. However, the Commissioner found that they did not appear as the shipper/exporter in the Bill of Lading. The Supreme Court judgment in UOI v. Sampat Raj Dugar [1992 (58) E.L.T. 163 (S.C.)] was referenced, stating that the exporter continues to be the owner of the goods only if they are bona fide and not party to any fraud. Since M/s. Peer Chemicals & Metallurgy Pvt. Ltd. could not establish their bona fides or ownership, their claim was rejected.

4. Validity of the Import General Manifest (IGM):
The IGM mentioned M/s. Ganapathi Trading Co. Pvt. Ltd. as the consignee but did not provide a specific address. The investigation showed that the address given was actually that of the forwarding agent, M/s. Contfreight Shipping Agency India Pvt. Ltd. The Bill of Lading also lacked the address of M/s. Ganapathi Trading Co. Pvt. Ltd., raising suspicions about the correctness of the IGM. The Commissioner found that the IGM was not correct in all respects, and there was no case for allowing its amendment.

5. Compliance with the Foreign Trade (Development & Regulation) Act, 1992 and Customs Act, 1962:
The import was found to be in contravention of Section 7 of the Foreign Trade (Development & Regulation) Act, 1992, and Section 111(d) of the Customs Act, 1962. The goods were imported without a valid Importer Exporter Code Number, which is mandatory under the Import Export Policy, 1992. The Commissioner concluded that the import was unauthorized and thus, the goods were liable for confiscation.

Conclusion:
The Tribunal upheld the Commissioner's order of confiscating the sale proceeds amounting to Rs. 34,34,000/- and rejected the appeal of M/s. Peer Chemicals & Metallurgy Pvt. Ltd., Singapore. The Tribunal found that the import was unauthorized, the firm was fictitious, and the appellants were not the bona fide importers or owners of the goods. The sale proceeds were rightfully vested in the Government of India, and the appellants were not entitled to any relief.