1999 (7) TMI 476 - AT - Customs

Summary

Issues Involved:
1. Confirmation of duty demand and imposition of penalty without specifying the liable party.
2. Confiscation and redemption of goods without clarification on the responsible party.
3. Rejection of the claim for clearance of goods by M/s World Wide Trading Est. Pvt. Ltd.
4. Auctioning of goods during the pendency of the writ petition and within the appeal limitation period.
5. Ownership and right to re-export or sell the goods by the foreign supplier.

Issue-wise Detailed Analysis:

1. Confirmation of Duty Demand and Imposition of Penalty Without Specifying the Liable Party:
The Commissioner of Customs, Chennai, confirmed a duty demand of Rs. 38,01,044/- under the proviso to Section 28(1) of the Customs Act, 1962, and imposed a penalty of the same amount under Section 114A of the Customs Act, 1962. However, the order did not specify against whom these amounts were confirmed or who was required to pay them. This lack of clarity in the order was a significant point of contention.

2. Confiscation and Redemption of Goods Without Clarification on the Responsible Party:
The Commissioner ordered the confiscation of 3917 Kgs. of raw silk valued at Rs. 58.5 lakhs, with an option to redeem the same on payment of a fine of Rs. 30,00,000/-. However, the order did not indicate in whose favor the option of redemption was given. This ambiguity was another critical issue, as it left the parties uncertain about their rights and obligations regarding the confiscated goods.

3. Rejection of the Claim for Clearance of Goods by M/s World Wide Trading Est. Pvt. Ltd.:
M/s World Wide Trading Est. Pvt. Ltd. (WWTE Ltd.) sought permission to clear 2633 Kgs. of mulberry raw silk, claiming ownership based on their negotiations and transactions with the foreign supplier before the seizure of the goods. The Commissioner rejected their claim, noting that the transaction occurred after the seizure and could not be recognized. The Commissioner also pointed out that WWTE Ltd. did not provide sufficient details during the investigation and did not appear when summoned. This rejection was contested by WWTE Ltd., which argued that M/s Pariston Exim had abandoned the goods and that they, as the rightful owners, should be allowed to clear the goods.

4. Auctioning of Goods During the Pendency of the Writ Petition and Within the Appeal Limitation Period:
The goods were auctioned by the Commissioner during the pendency of the writ petition and before the expiry of the appeal limitation period. The appellants contended that this action was premature and prejudicial to their rights, as it occurred before they had an opportunity to appeal the adjudication order. The Commissioner's action of auctioning the goods without considering the pending proceedings was a significant point of contention.

5. Ownership and Right to Re-export or Sell the Goods by the Foreign Supplier:
The foreign supplier, M/s Sunchan Trading Co., claimed ownership of the goods and sought permission to re-export or sell the goods in accordance with the EXIM policy. The appellants argued that M/s Pariston Exim had abandoned the goods, and therefore, the title remained with the foreign supplier. They cited the Supreme Court judgment in U.O.I. v. Sampath Raj Dugar, which held that the exporter retains ownership if the importer abandons the goods. The Commissioner's failure to consider the foreign supplier's claim and the subsequent auction of the goods without addressing their representation was a critical issue.

Judgment and Conclusion:
The Tribunal found that the impugned order suffered from infirmities and required de novo consideration. It noted that the Commissioner had not heard the foreign supplier, M/s Sunchan Trading Co., who had a legitimate claim to the goods. The Tribunal referenced the Supreme Court judgment in U.O.I. v. Sampath Raj Dugar, which established that the exporter retains ownership if the importer abandons the goods and is entitled to re-export or sell the goods. The Tribunal also noted that the auction of the goods during the appeal limitation period was unjustified.

The Tribunal remanded the case for reconsideration, directing the Commissioner to hear the appellants and the foreign supplier, allow them to present evidence, and pass a detailed order in light of the Supreme Court and Tribunal judgments. The appeals were allowed by remand, emphasizing the need for a fair and just resolution of the issues involved.