9911796707
TMI Blog2007 (3) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner received a representation from M/s. World wide Trading Est. Pvt. Ltd., Lucknow (WTL, for short), appellants in Appeal No. C/235/2001, which was. to the effect that the seized mulberry silk weighing 2633 kgs. covered under the second and third bills of entry had been transferred to them by M/s. STC and, therefore, they (WTL) should be permitted to clear the same. This claim of M/s. WTL was rejected by the Commissioner, who, in adjudication of show-cause notice dated 20-11-1997 issued after DRI investigation into the imports, confiscated the entire quantity (3917 kgs.) of raw silk valued at Rs. 58.5 lakhs, with option for redemption on payment of a fine of Rs. 30 lakhs. He also imposed a penalty of Rs. 1 lakh on the proprietor of M/s. Pariston Exim, Rajkot. After this order was passed by the Commissioner, he received a report from M/s. STC on 18-4-1998, wherein the suppliers of the goods sought, permission to take back the goods to Hong Kong or to sell it to any other buyer in India. The Commissioner informed M/s. STC that nothing could be done in the matter at that stage and they were at liberty to go in appeal to the Tribunal against the above order dated 06-3-1998. Subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner that persons belonging to M/s. Pariston Exim were not available and licences cancelled : 23-5-1997 Goods seized on : 31-5-1997 Letter for withdrawal of B/E by M/s. Pariston Exim Ltd. (*based on a letter dated 20-6-1997 received from M/s. Pariston Exim) : 15-7-1997* Payment by M/s. Worldwide Trading : 2-6-1997 Requested Commissioner to transfer B/E in their name M/s. Worldwide Trading Ltd. : 16-6-1997 Show Cause Notice issued : Nov. 1997 Case adjudicated on : 6-3-1998 From the above chronology of events, it appeared to learned Commissioner that M/s. STC had sold the same consignment to two different buyers viz. M/s. Pariston Exim, Rajkot and M/s. WTL, Lucknow. It appeared to him that M/s. STC were keeping sale documents in duplicate for the same consignment, one in the name of M/s. Pariston Exim, Rajkot and the other in the name of M/s. WTL, Lucknow. He further inferred that there was collusion between M/s. STC and M/s. Pariston Exim, Rajkot. On this basis, learned Commissioner proceeded to examine the applicability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at M/s. WTL had clear title, to 1294 kgs. of raw silk covered under second bill of entry while M/s. STC retained title to 1339 kgs. of raw silk covered under the third bill of entry. They must get seizure value of the goods rather than its sale value. In this connection, Counsel relied on the Calcutta High Court s judgment in Bhogilal Mehta v. Union of India [2004 (164) E.L.T. 239 (Cal.)]. Alternatively, it was argued that the appellants were entitled to receive proportionate shares of sale proceeds of the goods auctioned by the department, in terms of Section 150 of the Customs Act. 5. Learned SDR did not think that the adjudicating authority had travelled beyond the scope of the Tribunal s remand order. According to her, it would appear from the operative part of the said order that it was an open remand enabling the Commissioner to consider all claims and contentions of the parties. With reference to Counsel s claim under Section 150 of the Customs Act, learned SDR pointed out that the provision was applicable only to sale proceeds of goods not confiscated. In the present case, the goods were confiscated and thereafter auctioned. Hence the provision would not be applicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has also held in that case that such person who filed the BE cannot be treated as owner of the goods even in such state. The Hon ble Supreme Court has clearly held that holding otherwise would place the exporter in a very difficult position as he loses the goods without receiving payment and his only remedy is to sue the importer for the price of the goods and for such other damages that he may have suffered and this would not be conducive to international trade. Therefore, the Supreme Court clearly held that owner of the goods is entitled to seek re-export of the goods. The Supreme Court has also clearly observed in that case that the goods should not have been confiscated as on the date of the said importation there was no prohibition inasmuch as the import was covered by valid import licence. It was also held that subsequent cancellation of licence is of no relevance nor does it retrospectively render the import illegal. In this regard reference was also made to earlier judgment rendered in the case of East India Commercial Co. Ltd. v. CC reported in 1983 (13) E.L.T. 1342 (S.C.) = 1963 (S.C.R.) 338. The facts and circumstances in Sampthraj Dugar also is almost identical to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Yokohama Japan and permitted them to re-export the goods. 10. It is now seen that both the parties had been representing to the Commissioner to permit them to participate in the proceedings. M/s. Sanchan Trading Co. had also filed writ petition and there was direction from the Hon ble High Court to the Commissioner to consider their case. Therefore, the Commissioner having auctioned the goods within the limitation period of appeal is not a justified action in law. However, now that the auction has already taken place, both the parties are seeking for a direction to give them the sale proceeds of the goods. They have also contended that the goods cannot be confiscated in terms of the judgment cited. These contentions are required to be considered by the Commissioner after granting them an opportunity of hearing and permitting them to produce sufficient evidence to satisfy him. The Commissioner shall hear them and pass a detailed order in the light of the law laid down by the Hon ble Supreme Court and the Tribunal in the noted judgments. The appeals are thus allowed by remand. 6.1 It would appear from the above order of the Tribunal that the direction to the Commissioner was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that, in the impugned order, learned Commissioner held the goods liable for confiscation under Section 111(d) of the Customs Act, which decision is beyond the scope of the remand (as rightly submitted by learned Counsel) inasmuch as such confiscation was already ruled out in the remand order. 6.2 The real purport of the remand order was to make the adjudicating authority consider the appellants claim for sale proceeds of the goods in the light of Sampath Raj Dugar (supra). The remand order had also given a brief account of the facts of the case of Sampath Raj Dugar for the benefit of the lower authority. Learned Commissioner, however, chose to distinguish those facts and to hold, that the ratio of Sampath Raj Dugar was not applicable to the facts of the case of STC and WTL. He held M/s. STC to have colluded with M/s. Pariston Exim and to have acted with fraudulent intention. On this basis, learned Commissioner took the view that M/s. STC were not entitled to claim re-export of the goods. We are unable to accept the distinction drawn between the case of Sampath Raj Dugar and that of STC inasmuch as, in the remand order, this Bench has already found that the facts of the two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, they (STC) wanted to take it back. This letter was received by the Commissioner on 23-2-1998 as evidenced by the postal authority s certificate available on record (the impugned order contains an erroneous averment to the effect that the above letter of M/s. STC was received by Commissioner s office only on 19-5-1998). M/s. STC sent a reminder dated 18-4-1998 to the Commissioner and the same was received by the latter. A further reminder was sent by them on 21-8-1998, wherein they also requested the Commissioner to permit them to warehouse the goods in a Customs bonded warehouse pending consideration of their request for re-export of the goods. Subsequently, having come to know that the goods had already been confiscated and disposed of through auction, M/s. STC, in their letter dated 28-9-1998, asserted before the Commissioner that they were entitled to claim the goods back.. In these letters, they specifically claimed the benefit of the Apex Court s judgment in Sampath Raj Dugar (supra). They further made the following claim also :- Since it is reported that goods have already disposed off, we should be paid the full amount of USD 30,127.50 along with interest @ 9% p.a. ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The appellants further submit that there were never two sets of documents. Original set of documents were presented first to first customer s (Pariston) Bank Dena Bank, Debar Road, Rajkot on D/P terms negotiated through appellants Bank Standard Chartered Bank, Hong Kong on 4-2-1997. Being unable to get payment of the Bill Nos. 97 MAS 370 97 MAS 371, dated 3-2-1997, the appellant requested their banker Standard Chartered Bank, Hong Kong on 22-4-1997 to call original documents from Dena Bank, Rajkot. Accordingly, Standard Chartered Bank, Hong Kong requested Dena Bank, Rajkot to return the original-documents related to Bill Nos. 97 MAS 370 97 MAS 371. Dena Bank, Rajkot returned original documents to appellant s Bank Standard Chartered Bank, Hong Kong on 28-4-1997. Meanwhile, the new contract with second buyer (Worldwide) was negotiated on 25-4-1997. Thereafter, the appellants got the B/L amended from Shipping Company on 7-5.1997 and new invoices were made with the same Invoice No. date substituting the name of old buyer and bank with that of new buyer (Worldwide) and their bank (Union Bank of India, Aminabad, Lucknow). These were then again sent on 8-5-1997 through Standard Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere in constant and direct correspondence with the Commissioner. We have already examined this aspect and have found nothing which can be said to indicate that M/s. WTL were used as a front by M/s. STC to save their goods. In any case, the right claimed by M/s. WTL to clear 1294 kgs, of raw silk covered under the second bill of entry cannot be defeated on the sole ground that they acted as a front for M/s. STC to save the latter s goods. They had requested for permission to present bill of entry in their own name after the importer (Pariston Exim) had abandoned the goods. This request was made on the strength of a bill of lading and an invoice, both of which were in their own name. These documents along with banker s document evidencing payment of price of goods to the supplier should have been accepted as constituting genuine transaction between M/s. STC and M/s. WTL. By presenting such documents to the Customs authorities, M/s. WTL were holding themselves out to be importer of 1294 kgs. of raw silk in terms of Section 2 (26) of the Customs Act for the purpose of presenting a bill of entry under Section 46 (1) of the Act for clearing the goods. But they were also liable to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision should be understood as confiscated in accordance with law . In the present case, the goods were confiscated beyond the scope of the Tribunal s order and such confiscation cannot be said to be in accordance with law inasmuch as the remand order had become final and binding on the adjudicating authority. It would, follow that the sale proceeds of the goods will have to be applied in terms of Section 150 ibid. 7. In the result, we set aside the impugned order and allow these appeals by way of remand with the following directions to the Commissioner :- (a) The claim of M/s. STC for share of sale proceeds of 1339 kgs. of mulberry raw silk, shall be allowed to the extent permissible under Section 150 of the Customs Act after giving them an effective opportunity of being heard on the quantification aspect. (b) The claim of M/s. WTL for sale proceeds of 1294 kgs. of mulberry raw silk shall be considered afresh after giving them an effective opportunity of being heard. It shall not be rejected on any ground without prior notice in accordance with the principles of natural justice. In the event of the claim being allowed, the provisions of Section 150 of the Customs Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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