9911796707
TMI Blog1997 (3) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... s were consigned to M/s. Geeta Times, Delhi and M/s. B.K. Associates, New Delhi. Since even after the statutory period of 30 days nobody had come forward for filing any Bill of Entry or for getting extension, the container was opened and examined on 28-6-1995 which showed that the container was stuffed with 1121 boxes of led battery cells of 1.5 volts of China origin and one box of 555 brand battery cell. The total number of pieces contained in the said boxes was 30,46,208. Since the battery cells are consumer goods falling under the list of restricted items under Exim Policy 1992-1997 and since specific licence was required for import of the said item, the goods were placed under seizure on 28-6-1995 under reasonable belief that they were liable for confiscation under the Customs Act, 1962. Statements were recorded of the Manager of the Shipping Lines and that of the Shipping Agents. The representatives stated that they had sent arrival notice to M/s. Geeta Times and M/s. B.K. Associates on 7-3-1995 and M/s. Geeta Times had by Fax enquired about the position of the container. The statement of Shri Laxman Dutt Khanna, Proprietor of M/s. Geeta Times was recorded on 18-7-1995. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner held that they were not liable to any penalty. Penalties were, however, imposed on M/s. Geeta Times and its Proprietor M/s. Laxman Dutt Khanna. 6. Shri J.S. Agarwal, ld. Counsel submitted that the appellants, M/s. Geeta Times had no doubt placed an order for supply of 600 cartons of battery cells with M/s. Equity Industrial Company, Hong Kong in January, 1995, in anticipation of arranging the required import licence, which is generally the trade practice. He pointed out that such advance import licences are issued by the Import/Export Licensing Authorities under DEEC Scheme and in terms of para 127 of Hand Book of Import Trade Control Policy, 1992-1997, they were also transferable. Unfortunately, in spite of their best efforts the appellants were not able to obtain the licence and, therefore, in February, 1995 they had to cancel the said order and inform the suppliers accordingly. In the meantime, the goods had already been shipped by the suppliers on 29-1-1995 in P O Container No. TXU 3144994/158/563 from Hong Kong to Kandla. Though, the order was cancelled subsequently, the goods were already midway in transit. The suppliers themselves had confirmed this position by thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of India v. Sampat Rai Duggar [1992 (58) E.L.T. 163 (S.C.)] and Savitri Electronics v. CC [1992 (62) E.L.T. 395] in support. He also pointed out that there was no basis for fixing the value of the goods at Rs. 80,77,248/- mentioned in para 4 of the SCN as the value of the goods as per the invoice and the documents were only about Rs. 10,08,000/- even going by the wholesale market rate for the said batteries in India which was about Rs. 1.50 per piece which worked out about Rs. 20 lakhs. He also submitted that there was no warrant for imposing separate penalties on the Proprietor as well as the Firm. He relied on the Tribunal decision in Shehla Enterprises v. Collector of Customs, Calcutta - 1995 (80) E.L.T. 360 (Tribunal) = 1996 (62) ECR 55 and N.K. Agarwal v. Collector of Customs - 1994 (74) E.L.T. 83 wherein the penalties imposed simultaneously on the Proprietor and Proprietary concern was quashed 8. Appearing for the Respondent Commissioner ld. SDR submitted that the battery cells were seized on their import since they could not be legally imported without specific licence. Referring to the statement given by the Manager of the Shipping Agents recorded under Section 108 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the container and entertaining of their Bill of Entry. The Commissioner had further observed that the story of disclaimer of the goods appeared only after 14-12-1995 after the SCN had been issued. 10. We find that on a perusal of the copies of the messages dated 27-2-1995 and 20-6-1995 (which are available at Annexures B and C of the Memo of Appeal papers), the fact cannot be denied that the suppliers had clearly indicated that they had directed the Shipping Company to divert the container to Moscow and the P O Containers had not complied with the said instructions and had off-loaded the container in Kandla. We also find that in the statement given by the representative of H.K. Shipping Services that P O containers had enquired about the possibilities of transhipment of the subject container to Moscow. In view of these facts we are unable to agree with the Commissioner that the letter dated 26-10-1995 addressed to Member, CBEC would falsify the appellants claim that they had relinquished their claim on the ownership of the goods. The question whether the present appellants did or did not make a formal disclaimer of abandonment of the goods before the goods arrived o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer alone was the owner of the goods and no one else. On behalf of the foreign exporter (who was the first respondent in the Appeal), it was contended that confiscation had been ordered only under Section 111(d) of the Customs Act and since on the date of import there was a valid licence, no charge of contravention of any law could be sustained. Analysing the scope and purport of clause 5(3)(ii) of the Import (Control) Order which provided that the goods for the import of which a licence is granted shall be the property of the licensee at the time of import and thereafter upto the time of clearance through Customs , the Apex Court held that the idea was to hold the licensee responsible for anything and everything that happened to the goods from the time of import till they are cleared through Customs. Whether or not he is the owner of such goods in law, the Import (Control) Order creates a fiction that he shall be the owner of the goods from the time of their import till they are cleared through Customs . The object underlying the provision was to ensure the proper implementation of the Import (Control) Order and the Import and Exports (Control) Act, 1947. The Hon ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of the goods, instead of holding the goods as liable to confiscation on the ground that they were not covered by a valid licence at the time of importation, the new consignee in whose favour the documents had been transferred by the foreign supplier, should be given an opportunity to clear the goods under valid licence. Having regard to the fact that the order of confiscation no longer survived and the fact that the first consignee had not taken any steps to clear the goods, a linient view was taken on the first consignee and the penalty imposed on them set aside. 12. On the basis of the law laid down by the Hon ble Supreme Court in Sampat Raj Duggar s case and followed by the Tribunal in Savitri Electronics case, we are of the view that any order of confiscation of the imported goods under Section 111(d) of the Customs Act will be subject to the claim for their ownership by the unpaid foreign supplier. However, we observe that in both the aforesaid cases the question relating to the order of confiscation was agitated in Appeal by the foreign supplier himself or by the second consignee in whose favour the foreign supplier intended to transfer the imported goods. It was in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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