2001 (1) TMI 199 - AT - Customs

Summary

Issues Involved:
1. Validity of the corrigendum issued by the Collector to the order-in-original.
2. Jurisdiction of the adjudicating authority concerning post-importation violations.
3. Under-invoicing of imported goods.
4. Imposition of penalties on the appellants.

Issue-Wise Detailed Analysis:

1. Validity of the Corrigendum Issued by the Collector:
The appellants challenged the corrigendum issued on 2-4-93 by the Collector, which substituted the imposition of a penalty of Rs. 23 lakhs from Gulmohar Industries and Shah and Mehta to Mukesh Shah. The appellants contended that the corrigendum was not permissible under Section 154 of the Customs Act, as it was not merely a correction of clerical or arithmetical errors but a substitution that changed the basis and complexion of the original order. The Tribunal agreed with the appellants, stating that Section 154 permits only the correction of clerical or arithmetical mistakes or errors arising from accidental slips or omissions. The corrigendum was deemed a new development and not a permissible correction, thus it was set aside.

2. Jurisdiction of the Adjudicating Authority:
The appellants argued that the adjudicating authority lacked jurisdiction to exercise powers over post-importation violations, as the goods were imported under OGL with an actual user condition. They contended that any violation of this condition should be dealt with by the Chief Controller of Imports and Exports under the Import and Export Control Act, 1947. The adjudicating authority, however, held that the violation of actual user conditions rendered the imports unauthorized, making the goods liable for confiscation under Section 111(d) of the Customs Act read with Section 3(2) of the Import and Export Control Act, 1947. The Tribunal upheld this view, stating that the Customs authorities had parallel jurisdiction to deal with such cases without prejudice to any other action by the competent authorities under the Import Control Act.

3. Under-Invoicing of Imported Goods:
The appellants contested the finding of under-invoicing, arguing that the adjudicating authority had not considered the documents they produced, which established that the invoice referred to in the telephone communication related to acrylic scrap and not gum rosin. They also contended that contemporaneous import documents were not provided to them. The Tribunal noted that the adjudicating authority had not sufficiently considered the documents produced by the appellants and that the valuation required further examination. Consequently, the matter was remanded to the adjudicating authority to reassess the valuation after considering all relevant documents.

4. Imposition of Penalties:
The penalties imposed on the appellants were based on the unauthorized import and sale of goods, with the adjudicating authority considering the fact that the goods were not available for confiscation. The Tribunal found that the penalty imposed depended on the valuation of the imported goods, which was still under consideration. Therefore, the penalties could not be maintained at that stage and were set aside. The Tribunal directed the adjudicating authority to reassess the penalties after determining the correct valuation of the goods.

Conclusion:
The appeals were allowed, and the impugned order along with the corrigendum was set aside. The matter was remanded back to the adjudicating authority to re-evaluate the case, provide an opportunity for the appellants to produce additional evidence, and determine the actual duty and penalties to be imposed in accordance with the law.