9911796707
TMI Blog1994 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... and US $ 3213.90 equivalent to Rs. 1,24,030/-. The appellants had earlier also imported consignments of secondary used clothings under the aforesaid provisions of the import policy and clearance was allowed by the Customs in terms of the aforesaid Notification i.e. 85/92. In respect of some of the earlier consignments the appellants had also produced distribution certificate as required under the said Notification and the bond executed by the appellants were cancelled by the authorities. Initially in respect of these consignments as seen from the order of the lower authority and the evidence placed on record, the appellants were asked to furnish bank guarantee in addition to the bond executed based on the value fixed by the authorities after drawing representative samples, at Rs. 15/- per kg. Bank guarantee for Rs. 2,14,000/- was submitted. Thereafter, it is seen that the Assistant Collector desired re-examination of the imported consignment for the purpose of fixing valuation and as a result of this, as seen from the Order-in-Original the value was refixed at Rs. 30 per kg. The examination report as endorsed in the Order- in-Original is reproduced below : opened the containers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration from the Executive Magistrate, Delhi as a charitable trust constituted wholly for charitable purposes showing that one of the objects of the trust will be to engage in relief works, supplies viz medicines, medical supplies, food stuff, clothing, blankets etc. for free distribution to the poor and needy without any distinction of caste, creed, race or religion. In the show cause notice, however, it has been stated that the certificate of entitlement produced does not meet the requirement of clause (i) of Notification 85/92 dated 15-3-1992 and as such they do not qualify as a charitable organisation and further that the appellants have imported large quantity of such clothings in quick succession and all such clothings on examination were found to be of saleable capacity and also had price tags and other tags in many cases and thereby do not appear to be bona fide gifts. The learned Collector after going through the examination report by the customs authorities in regard to the bona fide nature of the goods has entered the following findings : The show cause notice appears to conclude the goods are also not bona fide gifts on the grounds that the importer has been importi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther issue would be in regard to the fixing of value for the purpose of confiscation of the goods. The value he pleaded, so far as the appellants are concerned, they had declared before the customs authorities that there was no invoice value in respect of the goods being used clothes and only a notional value could be declared. He further pleaded that the valuation issue is not relevant so far as the permissibility of the goods for importation and clearance of the same are concerned. He further pleaded that he is not going to urge the question of valuation as the appellants will not be interested to clear the goods in case they are not allowed clearance of the goods under the import policy and the Customs Notification as above. He therefore, prayed for taking up the appeal and with the consent of the parties and the appeal itself was taken up for disposal dispensing with the pre-deposit of penalty in the facts and circumstances of this case and taking into consideration the prima facie aspect of the case. 3. The learned Counsel for the appellants pleaded that the appellants are a registered charitable trust as is evidenced by the certificate of the Executive Magistrate, Delhi an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on record that the goods have been received as gifts even if some of them are not found to be used on customs examination so far as para 98(v) of the Handbook for the policy 92-97 is concerned, the importation is covered by this para and there is no requirement that the goods should be used and the appellants fulfil the basic requirements of para 98(v), that the goods received are as gifts for free distribution to the poor and the needy without any distinction of cast, creed or religion. He pleaded that the appellants had imported similar goods in the past and furnished necessary distribution certificate to the Customs authorities and which has been accepted and the authorities have also cancelled the bonds executed by the appellants for the purpose of carrying out their obligations for free distribution of clothings to the poor and needy without any distinction of caste, creed or religion. In this connection he referred us to the certificate filed in the paper book and which has been accepted by the authorities and also referred us to the bond cancelled by the authorities in this regard. He pleaded that in regard to the past clearance no proceedings have been drawn against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that as it is, the lower authority so far as the nature of the goods is concerned has rejected the Department s plea made out in the show cause notice that the importers have been importing large quantity of clothings in quick succession and that the clothings are of saleable capacity and the clothings had price tags and other tags in many cases by stating that it may be true that individually each of these acts may not be determinative of the goods being not bona fide gifts and that it may also be true that as pleaded the importer has no control over the goods sent by the donors as gifts and therefore, may consist of only one set of items and they may also look new though used because of generosity of the donor. He pleaded that the Collector in his findings has ruled in favour of the appellants in regard to the allegation regarding the nature of the goods and that imports had been made in quick succession and he referred us to his findings reproduced above. He pleaded that though the learned Collector has entered a finding in favour of the appellants, without any reason has gone on to hold as under :- however, when all the facts are taken together particularly considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Delhi and the veracity of the appellants claim of being a charitable organisation has not been found to be in any way false and the Divisional Commissioner has also vouchsafed the relief work done by them and no adverse report has been made against them. He pleaded that the appellants have satisfied all the conditions set out in the said Notification. He pleaded that in view of this, the goods should be allowed to be cleared, may be with some conditions against any diversion of the goods into the market. He pleaded that the appellants did not misdeclare any aspect in regard to the goods and its nature. In any case the authorities have refixed the value at Rs. 90 per kg after making some enquiries in Delhi which could not be accepted. He pleaded that before the lower authority also the appellants made pleas in this regard that the value has not been fixed properly. He pleaded that since the issue involved is only regarding the acceptance of the certificate and also the bona fide nature of the appellants foundation, for the purpose of clearance of the goods, the valuation could not be an issue and for determination of the same he is not pleading in view of the nature of the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he paper book which is signed by the Assistant Director (Exemptions), Income Tax, dated 10-9-1993 showing that the appellants have been registered as a trust under Section 12A(a) of the Income Tax Act. This Section deals with voluntary contribution received by trusts created wholly for charitable or relief purposes. The recognition granted by the Income Tax authorities clearly goes to show that the appellants are a charitable trust and as seen from the evidence produced one of the objects of the foundations is free distribution of blankets, clothings, medicines etc to the poor and the needy without any distinction of caste, creed or religion or race. No foreign exchange remittance is also alleged. From the above it is clear and we hold that the appellants are eligible to import the goods which have been sent as gifts and which fact has been accepted by the learned lower authority in terms of the import policy 1992-97 under para 98(v) of the handbook. 6. The next question that arises for consideration is whether the appellants are eligible for the benefit of Notification CN 85/92. For proper appreciation of the said notification, the same is reproduced below : In exercise of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has been permitted to maintain an account abroad by the Reserve Bank of India for the purpose of receiving funds donated overseas". In the show cause notice it has been alleged that the appellants have not satisfied the condition No. (i) of the Notification and also that the quantum of goods imported in quick succession had been large. We observe that Notification envisages the production of a certificate by the importer from the State Government certifying that it is a bona fide organisation engaged in relief work for distribution of relief supplies to the poor and the needy without any distinction of caste, creed or race or otherwise provides for production of evidence in the absence of that which would satisfy the Assistant Collector of Customs, that the organisation which is importing goods is a charitable organisation and is engaged in the relief work in the distribution of relief supplies as set out above and if this evidence is found adequate and acceptable this would be enough for the purpose of satisfying condition No. (i) (emphasis supplied). In the present case, as we have held above, that the appellants have established by the evidence produced that they are a chari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities have cancelled bond earlier executed in respect of the earlier consignments on production of certificate from Halqa President. Kawandara, Srinagar (J K) and this distribution certificate has not been found fault with nor any adverse inference drawn by the lower authority in regard to the earlier distribution of the goods by the appellants. In view of above, we hold that the appellants satisfy the condition No., (i) of the Notification. 7. The next condition in the notification at S. No. (ii) is in regard to the satisfaction of the Assistant Collector in regard to the activities and bona fides of the organisation importing the goods, the area of the organisation s operation, its financial resources, status of the donor, the nature, value and quantity of the goods imported, the food and sartorial habits of the people amongst whom the goods are to be distributed. We observe that the lower authority has merely given a finding in this context that the appellants had imported in quick succession consignments of used clothings. We observe that apart from taking into consideration the quantum of goods the learned lower authority has not entered any finding in regard to the activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the Notification and the ITC policy in question have not been satisfied. We observe that the goods have been examined a number of times and the value fixed at Rs. 15 per kg. initially and then it was raised to Rs. 30 per kg and again it came to be fixed at Rs. 90/-. The mere fact that the prices have been fixed based on weight itself goes to show that goods are in the nature of secondary used clothings and not of primary quality. Inasmuch as the issue before us relates to whether the goods can be allowed clearance in terms of Notification 85/92 and also para 98(v) of the Handbook of Procedures 1992-97 we are not going into the question of valuation of the goods. However, we observe that there is an element of arbitrariness in the matter of fixation of value. We find that after detailed examination and drawal of samples the price was initially fixed at Rs. 15/- per kg and then revised to Rs. 30/- per kg and later on again revised to Rs. 90/- per kg. We find from the impugned order that the price of the clothings at Rs. 90/- per kg was fixed as a result of some enquiries made in the Delhi market. The learned lower authority in this regard has observed as under in para 5.3 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or such extended period as the Assistant Collector may allow certifying that the goods have been distributed to the poor and the needy free of cost without any distinction of caste, creed or race. We observe that as large quantities of goods have been imported there is no bar under the law against the authorities exercising a modicum of control that the authorities may choose to exercise to ensure that the purpose of the Notification 85/92 and the ITC policy in terms of para 98(5) of Handbook of Procedures 1992-97 are carried out. The learned SDR pleaded that he is not agreeable to any post importation condition being made regarding verification etc. We observe that we are not able to appreciate the stand of the Department. It is desirable that a watchful eye is kept for fulfilment of the post importation conditions as set out in the Notification or in the policy and a spot verification is arranged to be done by the authorities through the State Government agencies or otherwise in regard to the distribution of the clothes undertaken to ensure that it is done in conformity with the provisions of the Notification. However, this need not be done in each and every case but whenever ..... X X X X Extracts X X X X X X X X Extracts X X X X
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