9911796707
TMI Blog1999 (7) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... as rejected the claim of M/s World Wide Trading Est. Pvt. Ltd. for clearing 2633 Kgs. of mulberry raw silk. He has also held that the impugned goods viz. 3917 Kgs. of raw silk valued at Rs. 58.5 lakhs is confiscated. He has however granted option to redeem the same on payment of a fine of Rs. 30,00,000/- without indicating as to whom the option of redemption has been given. He has also imposed a penalty of Rs. 1,00,000/- on CN Shah, Proprietor of M/s Pariston Exim Rajkot. 2. M/s World Wide Trading Est. Pvt. Ltd. had sought permission from the authorities to seek release of the imported goods on the basis of the negotiations and transactions they had with the suppliers during the last week of April 1997 due to the reasons that the demands for the goods had been made by them through their Bankers on 2-6-1997. They had contended that M/s. Pariston Exim Rajkot had filed three Bill of Entries (BEs) through clearing Agent M/s Southern Shipping Services, Chennai for clearing the goods. On account of the investigation initiated by the Directorate of Revenue Intelligence (DRI) on the basis of the intelligence that M/s. Pariston Exim, Rajkot is a fictitious firm floated by one CN Shah that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants had been sold by the Commissioner pending the representation and Writ application and the said fact was not even communicated to the appellants though proceedings were continuing in the writ petition. They also made a very strong exception on this point in their appeal. A further representation was given by them on 28-9-1998 to the Commissioner of Customs in disposing of the goods during the pendency of the writ petition. On or about 5-10-1998, the Commissioner passed an order on the representation of this appellants stating therein that the goods had been confiscated by the impugned order and the appellants could prefer an appeal before the CEGAT. The appellants contend that they had addressed a letter to the Commissioner of Customs to inform them as to when the goods were put on sale and when the goods were delivered pursuant to such sale. It is stated that they received a reply dated 22-10-1998 stating therein that the sale proceeds amounted to Rs. 14,20,848.00 and the goods were put on sale on 16-6-1998 and the goods were sold to NCCF, Chennai from 16-6-1998 to 20-7-1998. It is contended that the adjudication order dated 6-3-1998 was dispatched to the parties on 31-3-1998 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was bound to see that they were issued with show cause notice and decide the issue in the light of the law laid down by the Hon ble Supreme Court in the case of U.O.I. v. Sampath Raj Dugar reported in 58 E.L.T. 163. It was pointed out that in this judgment the Hon ble Supreme Court has laid down that for the purpose of clearance, a legal fiction is created for the proper and effective implementation of the Imports and Export Control Act to consider the person filing the BE or the importer as the owner. However such ownership cannot be attributed to the imported goods to the importer even in a case where he abandons them i.e. in a situation where he does not pay for and receive the documents of title. It has been held that it may be that for such act of abandonment, action may be taken against him for suspension/cancellation of licence. May be, some other proceedings can also be taken against him. But certainly he cannot be treated as owner of the goods even in such case. It has been further held that holding otherwise, would place the exporter in a very difficult position; he loses the goods without receiving the payment and his only remedy is to sue the importer for the price of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M.D. of M/s WWTE Ltd did not choose to explain the details of the transaction when investigation was going on. He also did not consider it fit to appear before the officers when he was summoned. Therefore, the Commissioner has noted that it is not understood as to how he is making a claim now for clearance of the goods and that too which is in dispute. He has further noted that the DGFT has also cancelled the advance licence issued to M/s Pariston Exim Rajkot. Therefore, the goods assume the nature of tainted goods having been imported without valid licence. He rejected the request of WWTE Ltd for clearance of 2633 Kgs of mulberry raw silk. Thereafter he has proceeded to confirm the duty demand of Rs 38,01,044/- under Section 28(1) of the Customs Act, 1962 without indicating as against whom this amount is confirmed and who is required to pay this amount. The Commissioner has also imposed penalty of the like sum under Section 114A without indicating against whom the penalty is imposed. He has also held that appropriate interest on the duty shall also be paid under Customs Notification No. 80/95, dated 31-3-1995 without indicating who is required to pay this amount. He has also noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration of their claim is totally violative of the Customs Act, 1962. He pointed out that the goods could not be directed to be released to M/s Pariston Exim when they have abandoned the goods and only those who have come forward to claim the onwership of the goods i.e. WWTE Ltd and Sunchan Trading Co. should have been permitted to file the BE/Shipping Bill and their claim adjudicated. He pointed out that non-consideration of their claim has resulted in violation of the provisions of the Act. He also pointed out that the law has been clearly laid down by the Hon ble Supreme Court in the case of U.O.I. v. Sampath Raj Dugar wherein it has been clearly laid down that any claim of the exporter for export of the goods should be considered and granted and it cannot be held that the person filing the BE and abandoning the goods should be treated as the onwer of the goods. In that case, the Hon ble Supreme Court granted permission for re-export of the goods by the supplier. He further submits that in the case of Savitri Electronics Co. v. CC as reported in 1992 (62) E.L.T. 395, it has been held that foreign supplier cannot be party to the fraud, ownership of the goods continues to vest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s out that in terms of Section 46 of the Customs Act, 1962 the owner of the goods is entitled to file fresh BE as the exporter M/s Sunchan Trading Co. continued to be the owner of the goods since M/s Pariston Exim had abandoned the goods. Therefore, they should have been heard and permitted to re-export the goods and non granting of opportunity of hearing or making them party has resulted in failure of justice. 9. On consideration of submissions made by both the sides, we are convinced that the impugned order suffers from infirmities and is liable for being set aside for remand for de novo consideration. In terms of the Uniflex Cables case (supra) it was held that the authorities have got right to initiate proceedings for violation of the Customs Act, and related laws, more particularly import/export regulations and also for violation of the duty exemption Notification No.80/95. In this case however, M/s Pariston had filed Bill of Entry along with valid licence. By merely filing Bill of entry they did not become owners of the goods and they merely got ownership by fiction of law created for proper and effective implementation of the Act as held by the Hon ble Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the matter is required to be re-considered by the Commissioner as he has not heard owner of the goods viz. Sunchan Trading Co. who had tendered representation for participation in the proceedings. M/s Pariston Exim had also abandoned the goods and had not opted for clearance or claimed onwership. M/s WWTE Ltd had purchased a part of the goods and had been pressing for clearing the same in terms of the Customs House practice. In the opinion of the Commissioner the goods were tainted ones and hence liable for confiscation. However, the Commissioner should have decided as to who should pay the redemption fine and get the goods released. In the present case, as held by Supreme Court in the case of Sampath Raj Dugar, the goods at the time of import had a valid licence. Therefore, the goods could not be confiscated at that stage of filing the Bill of Entry and it cannot be held as tainted goods. Subsequent action of M/s Pariston Exim or earlier fraudulent action cannot result in denial of opportunity to the appellants for seeking clearance of the goods in terms of the ruling of the Hon ble Supreme Court in Sampathraj Dugar s case and also the ownership of the goods had flowed to them i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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