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TMI Blog1999 (9) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainer in the Import General Manifest (IGM). According to the Container Agents, the shippers, M/s. Rich Shipping Co. Ltd., Sanghai had shown the notified party in respect of the said container as M/s. Everett (I) Pvt. Ltd. The goods were sent by M/s. Naats World Wide Ltd., Hongkong. A show cause notice was issued on 11-8-1998 to (i) M/s. Crescent Shipping Agency (I) Pvt. Ltd. and (ii) M/s. Everett (I) Pvt. Ltd. alleging that the container was required to be mentioned in the IGM and had not been so mentioned. On 18-8-1998, an addendum to the above mentioned show cause notice was issued after interrogation of M/s. Samsara Shipping Pvt. Ltd. M/s. Samsara Shipping Pvt. Ltd., the Vessel Agent had admitted that they have filed the IGM on the basis of the documents received from the Container Agent. On 20-8-1998, a number of documents relevant to the above consignment were produced before the Customs by M/s. Himachal C F Agency, Customs House Agent (CHA), on behalf of M/s. Pashupati Trade Link, Kathmandu, Nepal, the appellants before us. Thereafter a second addendum was issued to the above mentioned show cause notice on 26-8-1998 and M/s. Pashupati Trade Link, the appellants and M/s. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner of Customs (Preventive) West Bengal, Calcutta passed similar order dated 10-12-1998 with regard to the second show cause notice dated 10-9-1998 also and imposed a penalty of Rs.10 lakhs on M/s. Pasupati Trade Link and the goods were absolutely confiscated. A redemption fine of Rs.5,000/- was levied in respect of the container and penalties were also imposed on the Container Agents and the Vessel Agents. 3. The matters were heard on 25-8-1999 when Shri B.N. Chattopadhyay, Consultant appeared for the appellants. He submitted that in both the cases the silk yarn was for Nepal; the appellants had placed orders with the foreign suppliers; they had all the relevant documents for imports and transit to Nepal and that the authorities of HMG Nepal had allowed the import. He stated that the whole confusion arose as there was a delay in the opening of the letter of credit as the appellants after placing the orders with the foreign suppliers could not arrange for the finances. He pleaded that the authorities of HMG, Nepal had given the retrospective permission to the appellants for the import of the consignments already arrived. He also submitted that the containers were ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Agents were known agencies. The goods had been imported in container loads and had been landed in the customs area. Subsequent to the landing of the containers, the appellants, M/s. Pasupati Trade Link of Kathmandu, Nepal had claimed the goods. They had submitted that due to difficulties in organising finances, they could not open the letter of credit with the Bank in Nepal prior to the shipment of the goods and their suppliers acting on their order had shipped the goods without waiting for the letter of credit. The bank in Nepal had regularised the import by giving the appellants retrospective permission in respect of the goods already arrived at Calcutta. We find that cognisance has been taken of the claim of the appellants and show cause notices were issued to them. They had also been penalised by the adjudicating authority under Section 112 of the Act. Under Section 112 of the Act, any person who is concerned with the goods which have been improperly imported and are liable to confiscation could be imposed with penalty. It is seen from these facts that M/s. Pasupati Trade Link have been admitted by the adjudicating authority as persons concerned with the import of the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importers of the goods. Penalty had been imposed on them. We consider that when the appellants had been taken to be the importers, the goods had to be treated as in trasit goods. The appellants had produced a number of documents in support of their contention that they had placed the orders for the goods with the foreign suppliers prior to their landing at Calcutta docks and that the suppliers had shipped the goods before the letter of credit could be opened by them with the Bank in Nepal. They have also submitted that as the suppliers had shipped the goods without waiting for the letter of credit, the confusion had arisen but that there was not doubt that the goods belonged to them and were meant for Nepal. 8. After the appellants had claimed the ownership of the goods and had produced documents relevant to their transit to Nepal, no investigations were made by the Customs with regard to the authenticity of the claim by the appellants. The appellants had explained that the confusion arose as the goods had been sent from Sanghai, at the instance of Naats World Wide Ltd. Hongkong, to whom the order was placed by the appellants, without informing the appellants. The goods had arr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reto and collectively marked F would show that because of the delay in issuance of Letter of Credit by the bank, the Chinese supplier and/or its agent, who was asked to make arrangements for shipment, had shipped the goods to order because it was yet to receive payment for the goods. Accordingly the Bills of Lading dated 8th May, 1998 and 15th May, 1998 were issued by MISC, showing shipper as Rich Shipping Company Limited , Shanghai. However, in both the Bills of Lading the first notify party was Naats Worldwide Limited, Hongkong. After receipt of the Letter of Credit and the amendment thereto as aforesaid, Rich Shipping Company Limited surrendered the Bill of Lading in favour of Naats Worldwide Ltd., Hongkong (from whom we purchased the said goods). The carrier of Naats Worldwide Limited (Gainmega Developments Limited), thereafter, issued the Bills of Lading both dated 28th May 1998. A comparison between the two sets of Bills of Lading would show that the goods and all relevant particulars in respect thereof were the same, except the shipper, consignee and notify party for the reason aforesaid. These documents would also show that the Bills of Lading dated 28th May 1998 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade free. Annexure 2 covers the following products, which are banned for imports:- 1. Products injurious to health (A) Narcotic drugs like opium and morphine (B) Liquor containing more than 60 per cent alcohol 2. Arms and ammunition, and explosives (except under import licence of His Majesty s Government) (A) Materials used in the production of arms and ammunition (B) Guns and cartridges (C) Capes without paper (D) Arms and ammunition/ and other explosives 3. Communication equipment wireless, walkie-talkie and similar other audio communication equipments (except under import licence of His Majesty s Government) 4. Valuable metals and jewelleries (except permitted under bag and baggage regulations) 5. Beef and beef products 6. Any other product notified by His Majesty s Government in the Nepal Gazette. 12. Silk yarn was not covered by the banned or quantitatively restricted items for import in Nepal on the basis of the facts on record we agree with the appellants that the goods in question were meant for Nepal. We, therefore consider that the confiscation of the said goods was not proper, and we set aside the same. The procedure with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea. It was not a case of surreptitious landing or secretion of the goods which could not be detected by the customs. The containers could not be smuggled after they have landed in the customs area. 14. The appellants have relied upon the decisions in the following cases :- (1) Collector of Customs, Calcutta v. Narayani Trading Concern Pvt. Ltd. - 1997 (89) E.L.T. 668 (Calcutta). (2) B. Ghosh and Co. Pvt. Ltd. v. Collector of Customs - 1988 (37) ELT 53 (Calcutta). (3) National Trading Ltd. v. Collector of Customs (Preventive) - 1990 (45) E.L.T. 626 (Tribunal) and (4) Water Trading Corporation v. Commissioner of Customs, Calcutta - 1998 (102) E.L.T. 691 (Tribunal). In the case of Water Trading Corporation (supra), it has been held by the Tribunal that the goods in transit to Nepal were not liable to confiscation under any of the provisions of Section 111 of the Act and penalties were also not imposable under Section 112 of the Act. Para 6 from that order is extracted below :- 6. In view of the aforesaid provisions of the Treaty, we are of the view that the ld. Advocate, Shri S.R. Dutta is on a strong ground when he submits that the authorities have no power to chec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cargo. The goods are in the custody of the customs. We therefore, do not consider that this case has application to the present dispute. 16. In the case of Union of India v. Mustafa Najibai Trading Co. - 1988 (101) E.L.T. 529 (SC) the facts were entirely different. The vessel had come to Bombay port without permission. The Captain and the local agents had not taken any steps to file the IGM and other documents for the purpose of voyage to Bombay. The vessel had on its own attempted to come to the inner anchorage of Bombay Harbour even before Bombay Port Trust charges were paid and without being escorted by port trust Pilot and there was a direction by the harbour Pilot to vessel to go back to the outer anchorage. The goods which were marked in transit to Afganistan, Karanchi and Chaman were found to be video Cassette Recorders, Video Car Cassettes, Textiles, T.V. Sets. etc. It was with such facts and circumstances that the Hon ble Supreme Court confirmed the view taken by the Collector and the Tribunal that the confiscation of the goods and the vessel was proper. We do not consider that the facts of this case have any similarity to the facts before us. 17. As we consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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