2009 (10) TMI 255 - HC - Customs

Confiscation- The respondent is engaged in the business of import and distribution of Mont Blanc products supplied by M/s. Mont Blanc, Switzerland. The respondent has a boutique at Maurya Sheraton Hotel in Delhi and their office is located at Rajkot in Gujarat. The respondent had placed an order for the supply of watch straps made of ostrich, calf and alligator leather. The airline through which the goods came handed over two invoices to the Custom House Agent of the respondent and on the basis of these two invoices, the Custom House Agent filed Bill of Entry No. 467881 dated 4-4-2003. Based on the said two invoices (Invoice No. 10488473 and 10488486), the respondent declared 513 and 600 watch straps respectively. The respondent had also produced a certificate under Convention of International Trade in Endangered Species (hereinafter referred to as CITES ). The goods were examined and it was felt that the leather straps of ostrich and alligator were restricted in terms of licensing note to Chapter 1 of ITC (HS) and that the permission of the wildlife authorities was required for their clearance. It was also alleged that the examination of the consignment revealed an excess of 25 pieces of alligator watch straps valued at Rs.52,980/- and that the said watch straps had not been included in the Bill of Entry. Held that- Moreover, as the item is otherwise freely importable and certificate of CITES is produced, and the duty of a paltry sum of Rs.52,914/- is only involved, in the interest of justice, the respondent can be allowed to clear the goods subject to the payment of aforesaid duty.We, thus, are of the opinion that there is no merit in this appeal and the same is dismissed.

Summary

Issues Involved:
1. Sufficiency of the CITES certificate for import clearance.
2. Non-inclusion of 25 pieces of alligator watch straps in the Bill of Entry.

Detailed Analysis:

1. Sufficiency of the CITES certificate for import clearance:

The first issue revolves around whether the certificate from the Convention of International Trade in Endangered Species (CITES) is sufficient for import clearance or if additional permission from the wildlife authorities is required. The adjudicating authority and the Commissioner (Appeals) held that permission from wildlife authorities was necessary, as the goods were restricted items under the Wild Life Protection Act and ITC (HS) regulations. They cited a letter from the Wild Life Regional Office and clarifications from the Directorate General of Foreign Trade (DGFT), stating that parts and products of restricted live animals are also restricted and require compliance with the Wild Life Protection Act and other laws.

The Tribunal, however, found that the Mississippian species of crocodile and ostrich, which do not exist in India, are not listed in the Wild Life Protection Act. The Tribunal concluded that since these species are not protected under Indian law and the items are freely importable under Entry No. 9113.20.90 of the Import Trade Control Schedule, additional clearance from wildlife authorities was not required. The Tribunal emphasized adherence to CITES provisions, which regulate international trade in endangered species, and noted that the respondent had provided valid CITES certificates from the country of origin, indicating that the items were not restricted.

The High Court upheld the Tribunal's decision, noting that the Mississippian species of crocodile and ostrich are not listed under the Wild Life Protection Act, and thus, clearance from Indian wildlife authorities was not necessary. The court also pointed out that the appellant's demand for a country of origin certificate was not raised at earlier stages and could not be introduced at this appeal stage.

2. Non-inclusion of 25 pieces of alligator watch straps in the Bill of Entry:

The second issue concerns the non-inclusion of 25 pieces of alligator watch straps in the Bill of Entry. The respondent explained that the non-inclusion was due to an error by the airline, which handed over only two out of three invoices to the Custom House Agent. This mistake led to the omission of the 25 watch straps in the Bill of Entry. The respondent argued that the omission was not intentional and provided correspondence with the foreign exporter to support this claim.

The adjudicating authority ordered the confiscation of the goods, including the 25 watch straps, and this order was upheld by the Commissioner (Appeals). However, the Tribunal found that the omission was a genuine mistake and not an attempt to evade customs duty. The Tribunal noted that the respondent had a history of regularly importing high-value items and paying substantial customs duties. Given the circumstances, the Tribunal directed the lower authorities to return the consignment, including the 25 pieces, after assessing the applicable customs duty.

The High Court agreed with the Tribunal's findings, recognizing the respondent's bona fide conduct and the minimal value of the omitted items. The court concluded that the respondent should be allowed to clear the goods upon payment of the applicable duty.

Conclusion:

The High Court dismissed the appeal, affirming the Tribunal's decision that the CITES certificate sufficed for import clearance without additional wildlife authority permission and acknowledging the genuine mistake in the non-inclusion of the 25 alligator watch straps in the Bill of Entry. The court emphasized adherence to CITES provisions and the respondent's bona fide conduct in the import process.