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TMI Blog2007 (2) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... ral, who was a senior officer of Customs. Earlier, in a letter, M/s. Samwin Hong Kong Ltd. (who had supplied the goods to the appellants) had informed the Commissioner that the appellants were the rightful owners of the goods and were eligible to get the same back, as the ultimate buyer in Chennai had failed to take delivery. From all these documentary materials, which were not examined by the Commissioner, it would appear that the appellants were only doing genuine business in relation to the subject goods and were not colluding with their Indian customer. Therefore we hold that the appellants are entitled to claim re-export of the goods. Against such a claim, the absolute confiscation of the goods by the Commissioner is bad in law. He should have permitted the appellants to redeem the goods on payment of a reasonable fine, for the purpose of re-export. In the result, while upholding the confiscation (not absolute) of the goods, we direct the lower authority to allow the appellants to redeem the goods, for the purpose of re-export, on payment of a fine to be determined by the Commissioner u/s 125 of the Customs Act by taking into account the present market value of the go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the cargo, they issued cargo arrival notice to the consignees, M/s. Arks Appliances, No. 140, Anna Salai, Pondicherry. Shri Padmanabhan further informed that he did not receive any reply from M/s. Arks Appliances, Pondicherry. On the basis of the results of investigations, DRI issued a show cause notice dated 22-9-2003 to M/s. Arks Appliances, No. 140, Anna Salai, Pondicherry and/or the claimant(s) proposing to confiscate the seized goods under Section 111(d) of the Customs Act and to impose penalties on the claimant(s) . The notice to the claimant(s) was served on them through its display on the notice board of the Customs House. 2. M/s. Al-Futtaim Engineering, UAE, the appellants in the present appeal, sent a reply to the above show-cause notice through their advocate claiming the goods which had been abandoned by the importer and requesting for permission to re-export the same. In this connection, they relied on certain decisions of the apex court, this Tribunal and a High Court. Para 12 of the impugned order contains an account of the submissions made by M/s. Al-Futtaim Engineering, which are reproduced below :- (a) Mr. Akbari H., Director of M/s. Arks Appliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., Hong Kong vide letter dt. 19-7-2003 informed Commissioner of Customs, Chennai, that the goods were supplied to M/s. Arks Appliances Pvt. Ltd. on behalf of the claimants and that the payment has been received and that the claimants were the owners of the goods and requested for permission to reship the goods to Dubai. In the meantime, the forwarding agent M/s. W.W. Shipping Forwarding Pvt. Ltd, Chennai, informed the claimants that the DRI, Chennai has started investigation and thereafter the claimants visited Chennai to take stock of the situation. (f) While the claimants were pursuing legal formalities to seek re-export of the goods, the claimant received a letter from the Consulate General of India - Dubai seeking clarification regarding the goods lying uncleared in Chennai Port. The claimant vide letter dt. 2-9-2003 informed the Consulate about the facts, circumstances and in the reasons for non-clearance of the goods lying at Chennai Port and in the meantime DRI-Chennai seized the impugned goods and issued the Show Cause Notice. The subject Show Cause Notice alleged that the importer s name as declared in the export documents was not in existence at the declared add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply of 1,620 Nos. of Compact VCD Players, Model AFVCD0010 at US $ 32 per piece and 1,220 Nos. of VCD Players, Model No. AFVCD0020 at US $ 35 per piece. The Proforma invoice was duly signed by Mr. Akbari H, for M/s. Arks Appliances Pvt Ltd., Pondicherry. In addition, the Claimants referred to letter dated 22-24-03/2003 of M/s. Arks Appliances Pvt. Ltd., Pondicherry, informing the noticees that they were unable to release the Container since they do not have the approval of their Bankers, due to financial problems. This letter has been signed by Mr. Akbari, H. as the Director of M/s. Arks Appliances Pvt. Ltd., Pondicherry. (i) The claimants submitted that the impugned goods were to be cleared by M/s. Arks Appliances Pvt. Ltd., Pondicherry, by filing the Ex-bond Bill of Entry and as explained in the above mentioned letter dated 22-3-2003, M/s. Arks Appliances Pvt. Ltd., Pondicherry were unable to obtain the approval of their Bankers and as such abandoned the impugned goods. Therefore, the Noticees as Noticee/Claimant/Owner of the impugned goods, were entitled to get back the goods exported by them. For this purpose they requested the Adjudicating Authority to permit them to re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to show that the impugned goods have violated the provisions of the Customs Act, 1962, or the Foreign Trade (Development and Regulation) Act, 1992, or the Rules made thereunder. It is under these circumstances and in view of the fact that the importer was unable to open a letter of credit the Noticees/Claimants were requesting to permit the re-exportation of the impugned goods. The Noticees/Claimants, would like to further submit that since the importer had not paid for the goods and had not opened the Letter of Credit/retired the documents from the Bank, the ownership of the goods continued to remain with the Noticees/Claimants. In the case of; (n) Union of India v. Sampath Raj Dugar 1992 (58) E.L.T. 163 (S.C.) the Hon ble Supreme Court, inter alia, observed as follows : Since the second respondent (importer) did not pay for and receive the documents of the title, she did not become the owner of the said goods, which means that the respondent continued to be the owner. How do the aforesaid provisions made any difference to this position? The definition of importer in Section 2(26) of the Customs Act is not really relevant to the question of title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase where he abandons them, that is, in a situation where he does not pay for and receive the documents of title. It may be that for such act of abandonment, actions 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 the owner of the goods even in such a case. Holding otherwise would lace 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 goods and for such damage as he may have suffered. This would not be conducive to international trade. We can well imagine situations where for one or other reason, an importer chooses or fails to pay for and take delivery of the imported goods. He just abandons them. We may reiterate that we are speaking of a case where the import is not contrary to law. It is only with such a situation that we are concerned in this case and our decision is also confined only to such a situation. Condition (ii) in sub-clause (3) of Clause 5, in our opinion does not operate to deprive the exporter of his title to said goods in such a situation . ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not claim REP benefits . (q) Similar decisions were given in the following cases : (1) East Metal v. Collector of Customs, Bombay 1994 (74) E.L.T. 329 (T). (2) Taiping International v. Collector of Customs 1997 (89) E.L.T. 457 (Cal). (3) Grand Prime Ltd. v. Commissioner of Customs, Calcutta 2001 (137) E.L.T. 795 (T) In their reply to the show cause notice, the appellants also requested for cross-examination of (1) Shri Akbari, Director of M/s. Arks Appliances and (2) the Senior Intelligence Officer of DRI, Chennai. Shri Akbari on cross-examination stated that he was one of the four Directors of the company engaged in the business of importing goods; that he visited Dubai on 13-8-2002 and met executives of M/s. Al-Futtaim Engineering and discussed importation of goods to India; that he confirmed the Import Export Code No. 040028182 dated 29-3-2001 issued to them by the Foreign Trade Development Officer, Chennai; that M/s. Al-Futtaim Engineering raised Invoice dated 31-10-2002 on M/s. Arks Appliances but the same was not received by him as he had not opened Letter of Credit as agreed; that their bankers (Union Bank of India, Triplicane Branch, Chennai) r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment reached Chennai port some time in October 2002 and stored in custom bonded warehouse. However, Arks Appliances failed to open the LC and clear the consignment. 5. During the period between November 2002 and March 2003, Arks Appliances kept informing us that they are in the process of opening LC or arranging to send us payment by TT, and that the consignment would be cleared soon. 6. However, on 22 March 2003, Arks Appliances informed us that they have not got the approval from their bank due to some financial problems, and as such they are unable to send us payment for the consignment (Copy of Arks Appliances letter attached as Annexure 3). 7. We then asked our shipping agents to reship the container to Dubai. 8. During April to July 2003, on following up with our shipping agents, we were informed that they are in the process of obtaining permission from Customs authorities in Chennai to ship the container to Dubai/Hong Kong. 9. In August 2003, our shipping agents informed us that Customs/DRI authorities have destuffed the container containing the VCD Players and the VCD Players have been seized for certain investigations. How ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s-examination. Learned Commissioner also ought to have taken into account the correspondence between the appellants and the Consulate General. According to learned Counsel, the order passed by the Commissioner without taking into account these vital materials was vitiated by total non-application of mind. 4. Learned Counsel contended that the importers, M/s. Arks Appliances should be considered to have abandoned the goods. The appellants continued to retain ownership over the goods for which they had not received the price from the importers. In the circumstances, the appellants should be permitted to take the goods back. In this connection, reliance was placed on the Supreme Court s judgments in M.J. Exporters Ltd v. CEGAT [1992 (60) E.L.T. 161 (S.C.)] and Union of India v. Sampat Raj Dugar [1992 (58) E.L.T. 163 (S.C.)] and the Tribunal s decision in Savitri Electronics Co. v. Collector of Customs [1992 (62) E.L.T. 395 (Tribunal)]. Learned Counsel sought to distinguish, from the case on hand, the facts of the case of Commissioner of Customs, Kolkata v. Grand Prime Ltd. [2003 (155) E.L.T. 417 (S.C.)] relied on by the Commissioner in the impugned order. He also submitted that VC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erring to the appellants claim for re-export of the goods, learned SDR submitted that no such claim had ever been made by them prior to the reply to the show-cause notice and, therefore, the claim should be rejected as bereft of bona fides. 6. After considering the submissions, we find that this is a case in which no Bill of Entry was filed for clearance of the goods in question. The Bill of Lading, wherein the goods were described as VCD players of AFTRON brand , named the importer as M/s. Arks Appliances P. Ltd., No. 140, Anna Salai, Pondicherry 605 001. Nobody came forward to claim the consignment. In his statement dated 1-8-2003 given under Section 108 of the Customs Act, Shri Akbari, Managing Director of the above company disowned the goods by stating that they had not ordered for VCD players; that their IE Code had not been given to anybody for import of such goods and that they did not have any office at Pondicherry. The fact that the consignment was disowned by M/s. Arks Appliances P. Ltd. was also stated in the mahazar dated 5-8-2003 whereunder the goods were seized. Shri S. Padmanabhan of M/s. W.W. Shipping Forwarding P. Ltd., in his statement under Section 108 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ack from Chennai. The impugned order does not say that this letter was not received by the Commissioner. It would appear from all these documentary materials that M/s. Arks Appliances P. Ltd. holding IE Code No. 040028182 issued by the Foreign Trade Development Officer, Chennai had placed an order for supply of 2840 pcs. of VCD players of 2 different models on the appellants but could not take delivery of the goods shipped by the latter. They did not pay for the goods either. They did not respond to the cargo arrival notice and did not file Bill of Entry. The goods remained unclaimed and uncleared for months together. It was in such circumstances that the show-cause notice was issued to M/s. Arks Appliances P. Ltd. (at the address shown in the Bill of Lading) and other claimants if any, for confiscating the goods under Section 111(d) of the Customs Act and for imposing penalty under Section 112(a) of the Act. The show-cause notice issued to M/s. Arks Appliances P. Ltd. (at the Pondicherry address) was returned to the DRI with the postal remarks: no such address . Hence the show-cause notice to the said party and other claimants was displayed on the notice board of the Customs h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to open Letter of Credit. Apparently, it was in such circumstances that the appellants requested their shipping agents to make arrangements for re-export of the goods from Chennai. That M/s. Arks Appliances P. Ltd. did not come forward to clear the goods by filing Bill of Entry, was no evidence of collusion between them and the appellants. Thus the case is distinguishable. 9. The story narrated by the appellants through Counsel before the adjudicating authority seems to get support from the letter dated 22-3-2003 of M/s. Arks Appliances P. Ltd. to the appellants as also from what Shri Akbari deposed in cross-examination before the adjudicating authority. The letter dated 22-3-2003 of M/s. Arks Appliances P. Ltd. to the appellants reads thus: We are not in a position to release the container, since we have not got the approval from our bank due to some financial problems. We regret for the inconvenience caused by us in this regard. In the impugned order, learned Commissioner did not examine this correspondence between the appellants and their Indian customer. Some of the submissions made by Shri Akbari, in cross-examination, before the Commissioner are consiste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be inculpatory of M/s. Arks Appliances P. Ltd. 10. Nevertheless, the fact remains that M/s. Arks Appliances P. Ltd., named as importer in all the documents accompanying the consignment, did not come forward to file a Bill of Entry as required under Section 46 of the Customs Act. They had an IE Code allotted by the competent authority and were liable to file Bill of Entry within the time prescribed for this purpose under the Customs Act. The IE Code Certificate was issued in their Royapettah address, but the same had also mentioned the Pondicherry address. The Bill of Lading was raised in the Pondicherry address and, apparently on this basis, the cargo arrival notice was issued to the Pondicherry address. But, as they had no office at Pondicherry, they did not receive the notice. There is no explanation as to why the Bill of Lading was not made in the genuine address (Royapettah) as in the IE Code. Further it would appear from their letter dated 22-3-2003 addressed to the appellants that they were aware of the arrival of the container at Chennai Port. In that letter, they wrote: we are not in a position to release the container . It was only in July, 2003 that DRI started i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke delivery. From all these documentary materials, which were not examined by the Commissioner, it would appear that the appellants were only doing genuine business in relation to the subject goods and were not colluding with their Indian customer. Therefore we hold that the appellants are entitled to claim re-export of the goods. This claim is not affected by anything contained in any of the judgements relied on by learned SDR. On the other hand, it is supported by the Apex Court s decision in Sampath Raj Dugar (supra). In that case, the goods imported was covered by a valid import licence at the time of import, but that licence was cancelled later. The importer abandoned the goods by not paying for it. The foreign exporter, who was found not to be a party to any fraud in relation to the import, was held to be entitled for re-export of goods qua owner of the goods. In the case of Savitri Electronics (supra), on a more or less similar set of facts, the foreign supplier was held entitled to resell the goods which were abandoned by the Indian buyer and, accordingly, the third party, in whose favour the documents had been transferred by the foreign exporter was given an opportunity t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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