1995 (3) TMI 249 - AT - Customs

Summary

Issues Involved:
1. Whether the importation was against a confirmed order.
2. Whether an irrevocable letter of credit had been established during the stipulated period.
3. Whether the shipment was made within 60 days from the date of the Public Notice.
4. Valuation of the imported goods.

Detailed Analysis:

1. Whether the Importation was Against a Confirmed Order:
The appellants claimed that the goods were imported under a confirmed order as per the Public Notice No. 159/92-97 dated 7-9-1993. The confirmation of sale filed by the appellants included specific conditions such as shipment by 31st August 1993 and payment through an irrevocable letter of credit payable at 60 days. However, the confirmation of sale did not clearly refer to the same contract number as the invoice, and no correspondence was produced to confirm the sale. The Tribunal observed that the appellants did not provide sufficient evidence to demonstrate that the order was confirmed under the stipulated conditions, especially given the amendments to the letter of credit and the lack of transparency in the transaction.

2. Whether an Irrevocable Letter of Credit had been Established During the Stipulated Period:
The appellants opened an irrevocable letter of credit on 23-7-1993, which was later amended twice to extend the shipment validity. The last amendment extended the shipment date to 31-10-1993, but the actual shipment took place on 7-12-1993. The Tribunal held that the letter of credit could not be considered irrevocable beyond the last amended date of 31-10-1993, as no formal amendment was made for the later shipment date. The Tribunal emphasized that the conditions for importation under OGL required strict adherence to the stipulated period and that the appellants failed to demonstrate compliance with these conditions.

3. Whether the Shipment was Made Within 60 Days from the Date of the Public Notice:
The appellants argued that the shipment date should be considered as 1-11-1993, based on the date affixed on the Bill of Lading. However, the Department's enquiries revealed that the goods were actually shipped on board on 7-12-1993, and the voyage commenced on 8-12-1993. The Tribunal referred to the Handbook of Procedure Vol. I, 1992-97, which defines the date of shipment for sea transport as the date on the Bill of Lading. Nevertheless, the Tribunal concluded that the date of shipment should reflect the actual commencement of the transit of the goods, as supported by the Supreme Court's interpretation in the case of Darshan Oils Pvt. Ltd. v. Union of India. Therefore, the Tribunal held that the shipment date was 7-12-1993, beyond the permissible period, rendering the goods ineligible for import under OGL.

4. Valuation of the Imported Goods:
The appellants did not contest the re-fixation of the value of the imported goods for assessment purposes. The lower authority had refixed the price at Rs. 44 per kg, higher than the declared value. The Tribunal noted that the appellants accepted this valuation without demur, and therefore, the consequences of under-valuation, including confiscation under Section 111(m) of the Customs Act, followed. The Tribunal upheld the confiscation of the goods on the grounds of under-valuation.

Conclusion:
The Tribunal upheld the order of the lower authority, confirming the confiscation of the goods under Section 111(d) and (m) of the Customs Act, 1962, and the Foreign Trade Development and Regulation Act, 1992. The Tribunal also upheld the redemption fine of Rs. 2,25,000 but reduced the penalty from Rs. 2,00,000 to Rs. 1,00,000. The appeals were otherwise dismissed.