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TMI Blog1986 (6) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 4672 rolls of Vinyl Wall Coverings imported from United Kingdom and West Germany and 304 pcs of Acrylic Pile Rugs. The same were seized on 19-2-1986 under Section 110 of the Customs Act, 1962. Statements of the partners were also recorded. After the usual investigation, Dy. Director (Inv), Directorate of Revenue Intelligence issued separate Show Cause Notices to the appellants proposing to confiscate the seized goods and also for levying personal penalties upon them for contravening the provisions of Clause (3) of Import (Control) Order, 1955 (as amended) issued under Section 3 of Import Export Control Act, 1947 (as amended) read with Section 11 of the Customs Act, 1962, alleging that the said firms have imported Vinyl Wall Coverings and Acrylic Pile Rugs as PVC sheets and Artificial Fur Cloth by misdeclaring and have abused import licences. In reply the appellants, inter alia, contended that there was no misdeclaration of the goods as alleged; that Vinyl Wall Coverings are also PVC sheets; that PVC stood for Polyvinyl Chloride and therefore there was no misdeclaration in referring to Vinyl Wall Coverings as PVC sheets and that similarly Acrylic Fur Cloth also had the characte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance of the goods for home consumption; that the release of the goods by the proper officer was therefore, an order under Section 47 of the Customs Act; and that if the Department then disagreed with the said order, it was open to it to file an appeal with the Collector of Customs (Appeals) under Section 128 of the Customs Act; that no appeal having been filed before the Collector of Customs (Appeals) within the statutory time limit, the Department had no right to re-open the case. However, it appears from the impugned order that the Collector of Customs, after the usual adjudication proceedings concentrated itself only on the following two questions: (i) assessment made in similar case by Bombay Customs House; and (ii) competency of the Adjudicating Authority to revise the order clearing the goods from Customs. Regarding the first contentions the Adjudicating Authority showed its inability to say anything as according to him the product that was assessed at Bombay Customs by the relevant officer was neither available nor shown to him. The Adjudicating Authority further brushed aside the defence of the appellant on the ground that the same facts were not disclosed immediate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department successfully shows that there was fraud or deliberate suppression. 5. Before we proceed to deal with the respective contentions of the parties, we shall briefly consider the cases cited at the Bar. 6. In the case of Jain Shudh Vanaspati Ltd. v. Union of India, supra, a Division Bench of the Delhi High Court was directly concerned with the interpretation of Section 47 of the Customs Act. In that case, Jain Shudh Vanaspati Ltd., imported palm oil contained in stainless steel drums from foreign suppliers. The proper officer cleared the goods after physical checking and satisfying himself that the imported goods are not prohibited under Section 47 of the Customs Act. It appears that subsequently acting on the belief that under Appendix 3 of the Import Policy A.M. 79, importation of stainless steel drums was banned, the Customs authorities effected searches and seized the drums from various places and after usual investigationm the Assistant Collector issued short levy notices under Section 28 of the Customs Act to the company, calling upon the company to show cause as to why the duty be not recovered from them since the stainless steel drums were subject to levy of cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 124 ibid. 9. One of the Learned Judicial Member who was a party to the decision given in the case of Ajay Exports, supra, reiterated the same view in the case of Parkar Leather Export Co. v. Collector of Customs, 1987 (29) E.L.T. 53 (Tribunal). 10. We also find that a Division Bench of the Bombay High Court very recently in the case of Union of India v. Popular Dyechem, 1987 (28) E.L.T. 63 (Bom.), supra, following the view expressed by a Division Bench of the Delhi High Court in Jain Shudh Vanaspati Ltd., supra, held that once the goods have been cleared by the Customs authorities after physical verification of the goods under Section 47 of the Customs Act, such goods cannot be subsequently confiscated except in contemplation of an order or in pursuance of an order passed in revision under Section 129D of the Customs Act, 1962. In that case, the goods were cleared by the proper officer under Section 47 of the Customs Act as plastic scraps. Subsequently, the goods were attempted to be confiscated by the Department on the ground that the goods were not plastic scraps but serviceable plastic articles when imported. Under these circumstances, their Lordships observed as follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27,68,000/- seized by the officers of Directorate of Revenue Intelligence, New Delhi on 19-2-1986, liable for confiscation under Clause (d) of Section 111 of the Customs Act, 1962 and have also made themselves liable for penalty under Section 112 of the Customs Act, 1962. It also deserves to be mentioned here that the fact that the seized goods when imported were having the labels attached to the rolls of the seized goods describing the goods as Vinyl Wall Coverings and Acrylic Rugs is an admitted position. Moreover, this fact itself finds place in the Show Cause Notice issued to the appellants, and reads as follows : 9. The fact that the said goods were sold off in the market, as they were, is also substantiated by bills/selling vouchers which were also seized. The Bills/Vouchers of the said firm clearly show that Vinyl Wall Coverings was sold off to the different buyers in the market. Moreover, the labels attached to the rolls of the seized goods described the goods as Vinyl Wall Coverings and Acrylic rugs, which go to prove that the goods were not PVC Sheets and Artificial Fur Cloth. (Copies of sale Bill No. 605, dated 31-1-1986 and label attached to one of the sample rol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cence produced for decorative paper was not valid to cover the goods. Accordingly, the Bombay Customs House treated the goods as plastic goods liable to duty under Customs Tariff Heading 39.07 read with CET Item 15A. Consequently, the goods were allowed to be cleared on redemption fine and on payment of duty leviable on plastic goods under Customs Tariff Heading 39.07 read with CET Item 15 A. He further submitted that it was only after the Bombay Customs decided to classify the goods as PVC sheets on the basis of predominance of the PVC contents that the appellants started importing the goods against licence for PVC sheets and also asked the supplier to declare the goods as PVC sheets. Thus, the appellants, relying upon the said classification of the Bombay Customs House, imported the goods accordingly, and therefore, the Revenue cannot now turn round and say that the appellants have misdeclared the goods and had claimed clearance against invalid licence. In support of his contention, he submitted that the copy of the earlier B/E No. 001367, dated 5-4-1983 and the letter from the clearing agents were produced before the Collector of Customs. The appellants have also filed the copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at Bombay appears to be difficult to accept in view of the statements made by Shri Subhash Goyal in particular under Section 108 of the Customs Act, 1962 immediately after the seizure made by the DRI officers. There has been nothing shown or even stated in reply to the show cause notice or during personal hearing that the statement of Shri Subhash Goyal was not made by him or was in any way influenced by the DRI officers. Had that been the fact nothing prevented Shri Suhbash Goyal or his partners in coming clean right at the beginning to say as to why Vinyl Wall Coverings and Acrylic Pile Rugs had been described by them while making the declaration on the bills of entry as PVC Sheeting and Artificial Fur Cloths. From the above it is clear that the Collector of Customs never bothered to verify the contention of the appellants with reference to the earlier adjudication of which details and even the file number were given by the appellants in paragraph 7 of their reply to the Show Cause Notice as stated above, but concluded that omission on the part of Shri Subhash Goyal or the other partners to mention about this earlier import in their statement under Section 108 is fatal to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er posing the said question, the Collector of Customs, Bombay held that PVC sheets is specifically mentioned in column 4 against Sr. No. C-11-4 of Appendix 17 of Import Export Policy. For ready reference, the relevant portion may be extracted as below : Turning to the CCCN, it is seen that the Chapter Note No. 3(d) of Chapter 39 includes within Heading 39.01 to 39.06, plates, sheets, film, foil and strip (other than that classified in Heading 51.8 by the application of Note 4 to Chapter 51), whether or not printed or otherwise surface worked, uncut or cut into rectangles but not further worked (even if, when so cut, they become articles ready for use) . The EN on page 570 includes plates, sheets, strip, film and oil whether or not containing fillers or colouring matters, which may be printed or otherwise surface-worked (polished, embossed, coloured etc.) or merely cured and/or corrugated but not otherwise worked, under Heading 39.01 to 39.06. In fact it further goes on to say that they may also be cut into rectangles even if, as the result of being cut they may become finished articles (e.g. tiles, wall coverings, table cloths). It is thus seen that the description PVC Sheet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouse on previous occasions is not rebutted by the Department by any acceptable evidence available on record when it is settled law that if a charge of misdeclaration is made against an importer, it would be for the Department to establish the said charge by acceptable evidence, as held by this Tribunal in the case of Automotive Enterprises v. Collector of Customs, 1985 (22) E.L.T. 283. Further, the case does not rest here. It was argued by the learned counsel for the appellants that by the said assessment of the earlier identical goods by the Bombay Customs, the appellants had to pay in fact higher duty applicable to PVC sheets. In other words, he submitted that at the earlier occasion duty on decorative paper was to the tune of Rs. 19,809.06, whereas the appellants had to pay Rs. 29,777.72 as duty since the Bombay Customs House treated the imported goods as plastic goods liable to duty under Customs Tariff Heading 39.07 read with CET Item 15 A. In other words, he submitted that in the instant case also the appellants had paid the higher duty leviable on PVC sheets. Thus, applying the ratio of the decision rendered in the case of Gujarat State Export Corporation v. Union of India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Customs on this point, she had no comments to offer. Under these circumstances, at the first blush, we thought it proper to remand the case for recording the findings on this issue by the Collector of Customs, but keeping in view the fact that we are allowing the appeal on other grounds also, the absence of any findings on this issue by the Collector of Customs need not detain us any further. On a careful reading of the items mentioned in column 4 of Sr. No. C-11-4 of Appendix 17 of Import Export Policy applicable during the licensing year 1984-85, we find force in the arguments of the learned counsel for the appellants. In the instant case, looking to the fact that PVC stands for polyvinyl chloride and contain over 50% of PVC - a fact not rebutted by the Department and the designs are all in the PVC portion and the paper was only a backing material - as shown to us during the arguments, Vinyl Wall Coverings, the imported goods, are to be treated as PVC sheets as contended by the learned counsel for the appellants cannot be brushed aside. In other words, it is not possible to brush aside the contention of the appellants when one looks to the material which gives the goods th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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