2005 (8) TMI 168 - AT - Customs

Applicability of and liability to Confiscation - Precedent - Misdeclaration - 100% polyester filament yarn/texturised yarn with or without embroidery - DEPB Scheme - HELD THAT - We find that the goods were declared are found to be in rolls of in 20 yards and the goods have been found to be fabrics. The question of declaration of quantum of value, is the only dispute, which has led to the present proceedings. There is an allegation of goods found to be rags/chindis. However, we find from the evidence arrived at by the ld. Commissioner that he has come to certain conclusion on physical examination of the samples himself that the goods under detention were irregularly woven warp and weft which were defective woven material and therefore could not be used as fabrics. This personal assessment of the ld. Commissioner, to impugn the description of the goods, cannot be upheld. The Commissioner may be an expert in Textiles but as an adjudicator he should bring in expert opinion/advice as to the nature of the goods so that the matter can be determined and appreciated in appeal by us. Since there is no material Test Report of an expert, to upset the plea, of the appellants, that the goods were not misdeclared in description, we find no reason to arrive at to uphold the confiscation liability u/s 113(h)(ii) as arrived at by the Commissioner. In the facts and circumstances of this case, when we do not find a liability to confiscation u/s 113(d), and also, after considering the status of the goods brought to a Customs area, on a Shipping Bill, filed u/s 50, but wherein these goods have still not attained the status of 'Export Goods' to be loaded on the vessel u/s 39 of the Customs Act, inasmuch as Section 51 clearance was not observed, would induce us to come to a conclusion, that there was force in the appellants' request, through their CHA on 10-3-2003 of requesting the goods to be 'taken back to town', which should have been considered. Export is an admittedly series of operations, and that Section 51 for the goods having not been traversed the goods do not become Export Goods is the view held by the Supreme Court in Principal Appraiser Exports v. Esajee Tayabally Kapasi 1995 (10) TMI 45 - SUPREME COURT . In this view of the matter, we would permit unhindered back to town order on the subject goods as requested vide letter dated 10-3-2003. Since we have come to the conclusion that there was, only, if at all a preparation to export and not an attempt to export, the bringing of the goods simplicitor to the Customs area under a Shipping Bill filed by carting the goods after permission from the Port authorities, is not a cause for their liability to confiscation u/s 113(d), since no prohibition under the Customs Act, 1962 would be found by us in this carting of goods. The goods which are covered by a Shipping Bill as in this case, can be brought to and carted to the Customs area, they have not acquired the status of Export Goods till they traverse Section 51 stipulation thereafter are ready to be taken on a vessel and therefore are not prohibited in any manner under the Customs Act, 1962. Examining the provisions under DEPB, it is found that in the case of Kobian ECS India Pvt. Ltd. v. CC, Mumbai 2003 (9) TMI 378 - CESTAT, MUMBAI , the Tribunal had held that a declaration for DEPB is not a declaration which should be read as a prohibition under the Customs Act, 1962 read with Foreign Trade (Development and Regulation) Act, 1992 since that Scheme of DEPB has been announced under powers of Section 19 of the Foreign Trade (Development and Regulation) Act, 1992 and not u/s 2 of the said Act. Since the prohibitions under the Customs Act, 1962 and or any other Act could not be found, we find no merits in the plea of the ld. D.R. Thus, the impugned order is set aside and the consignment is ordered to be removed back to town. Appeal allowed in above terms.

Summary

Issues:
1. Misdeclaration of exported goods
2. Confiscation under Section 113(h)(ii) of the Customs Act, 1962
3. Applicability of DEPB Scheme
4. Liability to penalties
5. Status of goods under DEPB Scheme
6. Prohibition under Customs Act, 1962

Analysis:

1. The appellants exported goods declared as fabrics under the DEPB Scheme, but Customs authorities alleged misdeclaration, stating the goods were rags/chindis. A show cause notice was issued for confiscation and penalties under the Customs Act, 1962.

2. The Commissioner concluded that the goods were defective and misdeclared, imposing a redemption fine and penalties. However, the Tribunal found that Section 113(h)(ii) did not apply to DEPB exports, citing precedents and dismissed the confiscation liability under this section.

3. The Tribunal rejected the Commissioner's decision, highlighting that DEPB exports do not fall under Section 113(d) for confiscation. Precedents were cited to support this decision, emphasizing that only dutiable or prohibited goods can be confiscated under Section 113.

4. The Tribunal also dismissed penalties as there was no confiscation liability. Arguments were made based on Supreme Court decisions and the status of goods not meeting export requirements under Section 51 of the Customs Act.

5. Considering the DEPB Scheme, the Tribunal emphasized that goods covered by a Shipping Bill can be carted to the Customs area without acquiring the status of export goods until meeting Section 51 stipulations. The Tribunal found no prohibition under the Customs Act for the goods in question.

6. Ultimately, the impugned order was set aside, and the consignment was ordered to be removed back to town, allowing the appeal in favor of the appellants.

This detailed analysis of the judgment addresses the issues of misdeclaration, confiscation, DEPB Scheme applicability, penalties, status of goods under the scheme, and prohibition under the Customs Act, providing a comprehensive overview of the Tribunal's decision.