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TMI Blog1986 (9) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... The shipments were for M/s. Raznoexport, Moscow, U.S.S.R. Both the shipping bills were processed by the Custom House in the usual course on the basis of the shipping documents including the declaration under the D.E.E.C. scheme. The Customs House received intelligence to the effect that the appellants had obtained the D.E.E.C. Book No. 005327 (BOM) Import dated 11-12-1984 for import of components of fishing rods against export obligations of three types of fishing rods under D.E.E.C. Book No. 5328 (BOM)/Export, but that the appellants did not manufacture or carry out any manufacturing process on the imported components of fishing rods but exported the components by mis-declaring them as fishing rods . As a follow up, the above said shipping bills were taken up for investigation, certain premises, including those of the appellants, were searched, certain documents were recovered and statements of three persons were recorded. The appellants presented to the customs 5 more similar consignments for export. The goods were examined and found to be components of fishing rods without fittings of hooks, slings, reels, spools etc. which are accessories for making a unit as a complete f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods imported under D.E.E.C. which are liable to confiscation under Section 111(o) of Customs Act, 62 read with Sec. 3(2) of Imports Exports (Control) Act, 1947 are not available for confiscation, a penalty equal to the fine in lieu of confiscation should not be imposed. (c) M/s. M.J. Exports Pvt. Ltd. should not be called upon to pay the import duty of Rs.70,09,102.90/- payable on the components of Fishing Rods imported as per the details shown in para 7(iv) above to the Custom House Treasury in terms of Section 143(A)(2)(b) of Customs Act, 62 along with interest @ 18% P.A. from the date of clearance of the goods to the date of payment of such dues. (d) Action should not be taken against M/s. M.J. Export Pvt. Ltd. and M/s. Mathuradas Naraindas Sons CHA 11/170, S/Shri Ashok C. Shah and K.C. Chakravarty of the exporters under Sections 112 and 114 of Customs Act, 62 as persons concerned in the commission of the said offence." 4. In due course, after conducting adjudication proceedings, the Principal Collector of Customs, Bombay passed the impugned order dated 29-3-1986 to the following effect: (i) the goods not being available for confiscation an amount of Rs.3,40,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished on the basis of the facts of the case as well as the statements of Shri R. Chakrawarty and Shri Ashok C. Shah, the contravention under Sec. 117 read with Section 50(2) of Customs Act, 1962 is established. Party from beginning was aware that no manufacturing activity would be undertaken and the goods will be exported in the same condition in which they were imported. They were fully aware that the conditions of the D.E.E.C. scheme and the notification 117/78 would not be fulfilled. For this knowing contravention, they are liable to penal action under Section 112 of Customs Act, 1962. Similarly they have exported components parts of fishing rods declaring them as complete fishing rods fully knowing that no manufacturing process was undertaken by them as contemplated in the D.E.E.C. Scheme making such goods liable to confiscation under Section 113(i) of the Customs Act, 1962. They are, therefore, liable for penal action under Section 114 of Customs Act, 1962." 6. The crucial question that needs to be answered in this dispute is what is a fishing rod ? We say this question is crucial because the department s stand is that what was exported by the appellants was not fishing r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... glass, quill, etc.) including luminous floats; line winding frames; automatic striking devices; mounted fishing rings (other than mounted rings of precious stone); sinkers, and fishing rod bells on mounts. 10. The above passages extracted from authoritative reference books point to the conclusion that fishing rod is but one of the many things which go to make up fishing tackle. Articles such as reels, hooks, mounted lines and casts are the other things that comprise the tackle. They are, therefore, at best adjuncts or accessories to fishing rods. They may perhaps be even termed as component parts of fishing tackle, but cannot be termed as component parts of fishing rods which are but long, slender, tapering rods of diverse materials, in a single piece of jointed to which the fishing line is attached. 11. Therefore, the view taken by the Collector that the exported goods did not constitute complete fishing rods in the sense that they did not comprise also of hooks, reels, spools, etc. is not tenable. 12. The learned Counsel for the appellants very vehemently contended before us that the Collector had no jurisdiction to adjudicate upon the matter. The jurisdiction was entirel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... components respectively per piece of the 3 different types of fishing rods. It was also mentioned in the application that during 1981-82 and 1982-83, the appellants had exported to the U.S.S.R., fishing rods valued at over Rs.66 lakhs and Rs.62 lakhs. 14. It was on the basis of the above-mentioned application that import licence No. B-3056000/C/XX/93/B/84, dated 11-12-1984 came to be issued to the appellants for import of 2,17,300 pieces of components of fishing rods. The condition slip attached to the licence required the appellants to export 22,140/16,960/50,000 pieces of fishing rods of the 3 models noted earlier. The imported goods were required by the condition slip to be utilised in accordance with the provisions of Customs notification No.F.No.602/14/8/DBK, dated 9-7-1978. A legal undertaking for fulfillment of the export obligation was required to be executed with the licencing authority. In the event of failure to fulfill the export obligation within the prescribed time limit, the licencee would be required to pay to the Customs authorities the duty on the proportionate quantity of the material corresponding to the products not exported. The bond executed with the lice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been granted on the basis inter alia of the declaration of the appellants that the imported components parts would be assembled, after import. Therefore, we are of the opinion that if the appellants had assembled fishing rods out of the imported components, that would be sufficient compliance of the requirement of manufacture of the specified resultant products from the imported materials. 18. The Collector holds that the imported components were being sought to be exported as such, some in the original packing, and some in indigenous packing. The appellants contention is that the imported components were sorted out, the pieces required to make up each fishing rod were aligned, and then re-packed for ease of export. 19. In this connection, it is noted that the appellants had produced before the Collector, two letters from the Trade Representative of the U.S.S.R. in India, Bombay. The first one, dated 5-6-1985 addressed to the appellants stated that the fishing rods exported by vessel P.EMTSOV had been received and that we are satisfied with the quality of the goods . The second, dated 28-10-1985 addressed to the Collector confirmed that during the period April/July, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at they had sorted the imported components and repacked them to make up fishing rods. Further, it is seen from the examination reports recorded on some of the shipping bills, (copies submitted by the appellants) that the description and quantity were checked as per invoice specification. While the quantities were admitted, certain discrepancies were noted in the description as regards certain differences in the casting weight , marked length on pieces. There is no mention in these reports to the effect that the goods were not fishing rods. Thus it appears that the basis for the allegation that the goods exported were not fishing rods but only component parts as imported seems to rest on the premise that items such as spools, reels, hooks etc. were not also exported. We have already given our finding that fishing rod is but one of the items that go to make up fishing tackle and that the items mentioned above are not parts of fishing rods but at best accessories or adjuncts. 21. Once the position is reached that what was exported were fishing rods, the whole basis for the allegations against the appellants falls to ground. Consequently, the findings on this basis and the adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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