1987 (4) TMI 244 - AT - Customs

Summary

Issues:
1. Whether the Additional Collector of Customs was justified in ordering confiscation and imposing a fine on the appellants for the import of goods.
2. Whether the goods imported were covered under Open General Licence (OGL) and if the appellants had the necessary license to cover the goods.
3. Whether the appellants acted bona fide in the import process and whether there was any wilful misdeclaration on their part.
4. Whether the appellants were entitled to re-export the goods and if the fine imposed was justified under the Customs Act.

Detailed Analysis:
1. The appeal challenged the Order passed by the Additional Collector of Customs, Bombay, which directed confiscation and imposed a fine on the appellants for the import of goods. The appellants, M/s. Peejay Maya Exports, ordered brass scrap of NARI specification N.F.80, but upon inspection, it was found that the goods in 55 drums did not match the description in the Bill of Entry. The appellants claimed there was a wrong supply by the foreign suppliers, supported by documents like indent, invoice, and packing specification. The Additional Collector's order did not consider the plea of wrong shipment by the suppliers, and there was no finding of misdeclaration by the appellants. The goods were not imported against the indented goods, leading to the conclusion that the appellants were not at fault in the import process.

2. The issue of whether the goods imported were covered under Open General Licence (OGL) was raised. The Collector argued that the goods were not covered by OGL at the time and that the appellants did not produce the necessary license to cover the goods. However, the documents provided by the appellants matched the description in the Bill of Entry, indicating no misdeclaration on their part. The goods were intended for re-export due to the wrong shipment by the suppliers, and the Additional Collector's decision to order confiscation and impose a fine was not justified under the circumstances.

3. The appellants contended that they acted bona fide in the import process and that the fault lay with the suppliers. The suppliers admitted the mistake and agreed to re-shipment at their cost. The documents presented by the appellants demonstrated their innocence in the misdeclaration of goods. The Additional Collector's failure to consider the supplier's error and the appellants' genuine intent led to an unjust imposition of a fine, despite allowing re-shipment. The appellants suffered demurrage and financial losses due to the suppliers' error, further supporting their claim of acting in good faith.

4. The issue of re-exporting the goods and the imposition of a fine under the Customs Act was analyzed. The Customs Act did not specifically provide for re-shipment of goods, except under Section 80, which was not applicable in this case. The Collector's decision to permit re-export but impose a fine was deemed unjustified, as the appellants were not at fault in the import process. The practice of re-export in the Custom House may stem from importers not being blamed for supplier errors. The appellants were entitled to relief, and the fine imposed in lieu of re-shipment was set aside, granting the appellants the necessary relief in the appeal.