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TMI Blog1997 (3) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... Ports with their container shipping service and accepted cargo in marine containers from USA, Europe and Middle-East. SLS opened a liaison office and posted their representative in India with the permission of Reserve Bank of India and also started containerised service at the two Ports in January, 1979. They required top chassis (trailers) of 35 x 40 size to operate on wheels for their shore based operations. Their application for Customs Clearance Permit for import of 256 pieces of Chassis having been rejected, RSTC, at their request, applied for and obtained in May, 1980 CCP for import of 256 pieces of second hand chassis valued at US $ 481000 with condition of re-export within two years from the date of import. In 1980, 115 pieces of Chassis were imported and cleared at Cochin Port and the adjudication thereof led to an appeal being filed in the Tribunal which has been disposed of as per Order No. 1524-A, dated 2-5-1996. 193 pieces of second hand chassis were imported and off-loaded at Bombay without declaration in the relevant Import General Manifests and without Bills of Entry being submitted to Customs authorities and without clearance on payment of duty and were used in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese Chassis were not commercial cargo but the vessels shipment has to be rejected as they were imported for use in the docks. (c) The contention that RSTC or their principals, SLS did so in ignorance of the correct procedure and under the impression that no duty was payable or that no licence or permit was necessary or that no clearance was necessary has to be rejected. (d) Since 115 pieces were imported at Cochin, only 141 pieces and not 193 pieces could be imported at Bombay. The excess import was unauthorised. (e) The contention that no duty liability was incurred for 100 pieces (184-4) as no Bill of Entry was filed has to be rejected. (f) Proviso to Section 28 of the Act is attracted to the case. (g) The correct value of Chassis would be US $ 2535 CIF per piece. (h) The alternate claim for drawback under Section 74 of the Act has to be rejected. (i) RSTC and their principals SLS are liable to pay the duty on these Chassis. (paragraph 19 of the order). (j) Duty should be levied on 184 pieces. (k) There is evidence of the deliberate involvement of SLS and RSTC in unauthorised imports of Chassis, non-inclusion of the same in respective IGM, the unauthori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RSTC had nothing to do with any Chassis other than the 84 pieces for which they filed Bill of Entry on the request of SLS and under the terms of the agreement and hence RSTC cannot be saddled with liability for duty on 100 pieces. In any event, it is submitted, since there is no difficulty for recovery of duty or differential duty from SLS, the direction for recovery from RSTC was unjustified in terms of the proviso to Section 28 of the Act. RSTC was not guilty of any action contemplated by the proviso. RSTC acted, if at all, only as agents of SLS under the terms of the agreement and cannot have any liability higher than that of SLS. Learned Counsel also pointed out that the two have fallen out and there are litigations between them. Learned Counsel pleaded that there was no justification to levy penalty on RSTC, which, in any event, is excessive. 7. Shri K.K. Jha, SDR rebutted the aforesaid contentions and submitted that value adopted in the impugned order is correct, that the Collector held both the parties liable for duty and did not exonerate SLS and that both the parties were guilty of wilful suppression of facts and misrepresentation and hence the larger period of limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Bills of Entry as agents of SLC. There is no indication in the documents that they were only acting as the agents of SLC. Accordingly, the protection applicable to an agent under Section 147(3) of Customs Act is not available to them. They had, as early as 1979, applied to the Chief Controller of Imports and Exports for Customs Clearance Permit for 256 Chassis. They had received the chassis and used them for handling the containers in the docks area. Such work was carried out by them as per the agreement with SLS and they were getting paid for it. The fact that they were doing so for SLS did not, however, absolve them of their responsibility before the Customs authorities. They did come forward in regard to the 84 Chassis but they should have done so for all the Chassis cleared and used by them for the purpose of handling the containers in Bombay Docks. We do not accept the plea taken by them that they were not aware of the requirement that the Chassis had to be cleared on payment of duty and that they were guided by SLS who in turn, had a bona fide belief that the Chassis which were for use and ultimate re-export were not liable to duty. This plea is not acceptable as SLS h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been cleared assessing the duty on a price of $ 1000 + $ 700 refurbishing charges + $ 100 for freight per chassis. This was interfered by the Collector in his order by taking the price per chassis to be $ 2535. This has been arrived at on the basis of the price $ 2790.37 for a new chassis as per invoice dated 4-4-1986 and allowing 46% depreciation. The depreciation allowed has been referred to as the maximum. On the depreciated value, the refurbishing charge of $ 700 has been added as also Freight of $ 300.00 and insurance of 11/F% adding to a sum of $ 2535.00. The Collector has referred to the letter dated 6-1-1982 to Mr. V.A. Vanna stating the value of 199 chassis as $ 30,00,00. This works out to a price of $ 1507.50 per chassis which the Collector has observed to be close to the depreciated value. The addition of refurbishing cost and the freight has increased the value. As regards the depreciation allowed by the Collector, we find that 46% has been allowed stating it to be the maximum. We find that the age of the xxx chassis and the 1966 invoice call for a higher deduction for depreciation. On that basis the declared unit price of $ 1000 should be held to be in order. There i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 41 = 400,040 , would clearly cover the cost of one of the two pieces of stacking equipment needed." Mr. I.D. Blackman of SLS of SLS appeared before the Customs Officers and his statement was recorded on 26-9-1983 and 27-9-1983. His attention was invited to this letter dated 7-8-1979 of Mr. Roberts wherein he had referred to the import of chassis at Bombay and the non-payment of duty thereon and the saving of $ 400,040 if the chassis are re-exported before duty was paid. Commenting on this letter, Mr. Blackman stated that it was his supposition that Mr. Roberts was under the mistaken impression that if the chassis were not physically present in India at the time CCP was issued then duty would only be due on those still remaining in India and not prior to issue of CCP. He then stated that it was most unfortunate that this mistaken impression of Mr. Roberts had created the problem. He stated that it is SLS s Corporate Policy never to avoid or evade their regulatory responsibilities in any country in which it operates. The deficiency having been made known to the management, they found themselves in a position of acute embarrassment and they would earnestly desire to correct and regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hassis for which Bills of Entry had been filed and assessment was done by the Customs Officer. Hence for the short levy alleged and confirmed in respect of these 84 chassis, the relevant date for reckoning time limit will be the date of payment of duty. Misdeclaration of value has been established. Hence the longer time limit has been correctly applied. 15. As regards the chassis not declared at all and not covered by any Bill of Entry, we take note of the submissions on behalf of SLS in the hearing as well as the statement of Mr. Blackman before the Customs Officer accepting the fact of non payment of duty. Where no Bill of Entry was filed and no assessment made and the goods had been removed without payment of duty, the starting point of limitation in terms of relevant date is not referred to in Section 28 of the Act. It does not mean that in such cases there is no provision for recovering the duty not paid. The Supreme Court had held in Government of India v. Citadel Fine Pharmaceuticals Ltd. [1989 (42) E.L.T. 515] that in the absence of any period of limitation it is settled that every authority is to exercise the power within a reasonable period. What would be reasonable per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hassis but deliberately refrained from doing so for the 100 chassis. We find that a separate show cause notice was issued to the two appellants calling upon them to, inter alia, show cause why penal action should not be taken against them under Section 112 of the Customs Act, 1962. This was a detailed and lengthy show cause notice wherein the full details of the acts of omission and commission in regard to the import of the chassis and the short payment and non-payment of duty thereon had been stated. RSTC had filed the Bills of Entry for 84 chassis in 1980 and filed amendment applications in respect of four Import General Manifests to make it appear that these 84 chassis were imported only at that time. Corresponding entries were not there in the Port Trust copies of the manifests. They did not disclose the fact of importation of other chassis over and above the 84 numbers for which alone they filed Bills of Entry. They were aware of the import of these chassis also as they had cleared them and used them in the Bombay docks. Such action on their part had led to evasion of Customs duty. Their plea that they were only acting as agents of SLS and any liability in this regard is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the greater; (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under Section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding five times the difference between the declared value and the value thereof or one thousand rupees, whichever is greater; (iv) in the case of goods falling both under clauses (i) and (ii), to a penalty not exceeding five times the value of the goods or five times the difference between the declared value and the value thereof or one thousand rupees, whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding five times the duty sought to be evaded on such goods or five times the difference between the declared value and the value thereof or one thousand rupees, whichever is the highest." As discussed earlier both the show cause notice and the order have brought in detail the role of both the appellants. By their action Customs duty had been evaded in respect of the chassis. The chassis were thus liable fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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