1994 (5) TMI 111 - AT - Customs

Issues Involved:
1. Delay in filing the second appeal.
2. Confiscation of goods under Sections 111(d), 111(m), and 111(o) of the Customs Act, 1962.
3. Eligibility for the benefit of Notification 85/92 CN.
4. Compliance with para 98(v) of the Handbook of Procedures, Vol. I, 1992-97.
5. Valuation of imported goods.

Detailed Analysis:

1. Delay in Filing the Second Appeal:
The appellants initially filed only one appeal against the impugned order. Upon realizing that separate appeals were required for each Bill of Entry (BE), they filed another appeal, resulting in a delay. The delay in filing the second appeal was condoned.

2. Confiscation of Goods:
The Collector of Customs, Madras, confiscated the goods described as secondary used clothing for charitable purposes, which were sought to be cleared under para 98(v) of the Handbook of ITC Policy 1992-97 and Notification 85/92 CN. The goods were held to be confiscable under Sections 111(d), 111(m), and 111(o) of the Customs Act, 1962, due to allegations of under-valuation and doubts about the bona fides of the importers. However, proceedings under Section 111(o) were dropped as post-import conditions were not the issue before the lower authority.

3. Eligibility for the Benefit of Notification 85/92 CN:
The appellants claimed eligibility for the benefit of Notification 85/92 CN, which exempts certain goods from customs duty when imported by a charitable organization for free distribution to the poor and needy. The key conditions for this exemption include:
- The organization must furnish a certificate from the State Government certifying it is engaged in relief work.
- The Assistant Collector of Customs must be satisfied with the organization's bona fides and the nature of the goods.
- The organization must provide an undertaking to furnish a distribution certificate within six months from the date of importation.

The appellants produced various certificates, including one from the Executive Magistrate, Delhi, and another from the Director of Income Tax (Exemptions), New Delhi, establishing their status as a charitable trust. The lower authority's rejection of these certificates was found to be without basis, especially since similar certificates had been accepted for past consignments.

4. Compliance with Para 98(v) of the Handbook of Procedures:
Para 98(v) allows the import of foodstuffs, medicines, clothing, and blankets by charitable organizations for free distribution to the poor and needy without any distinction of caste, creed, or color, provided no foreign exchange remittance is involved. The appellants fulfilled these conditions, as evidenced by the certificates and the lack of any allegation of foreign exchange remittance. The lower authority's primary concern was the large quantity of goods imported in quick succession, but this alone was not sufficient to deny the benefit under para 98(v).

5. Valuation of Imported Goods:
The valuation of the goods was initially fixed at Rs. 15 per kg, then revised to Rs. 30 per kg, and finally to Rs. 90 per kg based on market enquiries in Delhi. The appellants contested the valuation, arguing that the goods were used clothing and should be valued accordingly. The Tribunal observed an element of arbitrariness in the valuation process and directed the authorities to re-fix the value based on 100 kg of representative samples drawn in the presence of the appellants' representative.

Conclusion:
The appeals were allowed, subject to the goods being distributed in terms of the Notification with proper safeguards. The appellants were directed to execute a Bank guarantee for Rs. 3,00,000/- and comply with specific procedural conditions to ensure the goods are distributed as per the provisions of Notification 85/92 CN and para 98(v) of the Handbook of Procedures. The impugned order was set aside, and the authorities were instructed to issue a detention certificate upon request.

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