2000 (9) TMI 642 - AT - Customs

Issues Involved:
1. Confiscation of raw silk under Section 111(d) of the Customs Act, 1962.
2. Imposition of personal penalty on M/s. Worldwide Freight under Section 112(a) & (b) of the Customs Act, 1962.
3. Jurisdiction of customs authorities to confiscate Nepal-bound cargo under the Indo-Nepal treaty.
4. Bona fide purchaser status of M/s. Atlanta Trading Co. Ltd.
5. Validity of various bills of lading and associated discrepancies.

Detailed Analysis:

1. Confiscation of Raw Silk under Section 111(d) of the Customs Act, 1962:
The Commissioner of Customs (Prev.) confiscated 150 bales of raw silk under Section 111(d) of the Customs Act, 1962. The adjudicating authority concluded that the consignment was meant for M/s. Worldwide Freight, who allegedly attempted to clear it into India. However, the appellants contended that the goods were in transit to Nepal, and the discrepancies in the bills of lading were due to mistakes by the foreign supplier. The Tribunal found that the goods were shipped by the foreign supplier as Nepal cargo and landed at Calcutta 'in transit to Nepal'. The Tribunal concluded that M/s. Atlanta Trading Co. Ltd. was the bona fide purchaser and ordered the release of the goods in their favor.

2. Imposition of Personal Penalty on M/s. Worldwide Freight under Section 112(a) & (b) of the Customs Act, 1962:
A personal penalty of Rs. 5 lakhs was imposed on M/s. Worldwide Freight. The Commissioner alleged that they were the consignee and attempted to deflect the goods to India. The Tribunal found no evidence to support this allegation. The findings of attempted clandestine clearance were not substantiated. Consequently, the Tribunal set aside the imposition of the penalty on M/s. Worldwide Freight.

3. Jurisdiction of Customs Authorities to Confiscate Nepal-bound Cargo under the Indo-Nepal Treaty:
The appellants argued that the Commissioner had no jurisdiction to confiscate Nepal-bound cargo under the Indo-Nepal treaty. They relied on a Calcutta High Court judgment, which held that customs authorities could not confiscate goods meant for Nepal under Section 111 of the Customs Act. The Tribunal agreed, citing the High Court's observation that goods meant for Nepal could not be seized under Section 111(d) and should be allowed transit as per the treaty. The Tribunal ordered the release of the goods to M/s. Atlanta Trading Co. Ltd.

4. Bona Fide Purchaser Status of M/s. Atlanta Trading Co. Ltd.:
M/s. Atlanta Trading Co. Ltd. claimed to be the bona fide purchaser of the raw silk, which was to be transited through India to Nepal. They provided the bill of lading GDL/Cal-3132 and other relevant documents to support their claim. The Tribunal found that no other party, including M/s. Worldwide Freight, claimed the goods. The discrepancies in the bills of lading were explained by the foreign supplier and were amended before the goods arrived at Calcutta. The Tribunal concluded that M/s. Atlanta Trading Co. Ltd. was the bona fide purchaser and ordered the release of the goods in their favor.

5. Validity of Various Bills of Lading and Associated Discrepancies:
The case involved multiple bills of lading issued by different parties. The appellants explained that the discrepancies were due to mistakes by the foreign supplier, which were later corrected. The Tribunal found that the amendments to the bills of lading were made before the goods arrived at Calcutta. The foreign supplier's explanation and the supporting documents were deemed credible. The Tribunal concluded that the goods were shipped for transit to Nepal and should be released to M/s. Atlanta Trading Co. Ltd.

Conclusion:
The Tribunal set aside the impugned order, allowed the appeal of M/s. Atlanta Trading Co. Ltd., and ordered the release of the confiscated goods in their favor. The appeal of M/s. Natts Worldwide Ltd. was rendered moot, and the appeal of M/s. Worldwide Freight was allowed by setting aside the imposition of the penalty. All three appeals were disposed of accordingly.

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