9911796707
TMI Blog2012 (10) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Indian Customs and Napalese Customs to the factory of the exporter to find out the correctness of the certificate issued Whether goods could have been confiscated absolutely – alleged that goods were prohibited goods and liable to confiscation under 111(d) of the Customs Act – Held that:- Goods in question is not of a type which causes injury to public health or can cause damage or threat to the society if released into Indian market - goods have been sold by the Customs in Indian market - goods should have been released to the importer against a redemption fine rather than the customs department selling the goods after absolute confiscation. Value of the goods - Appellants have raised the objection that the basis for such assessment is not disclosed in the SCN or in the order-in-original - When the description was wrong the value declared cannot be accepted – Penalty – Held that:- Penalty imposed on the firm is about 45% of the assessed value of seized goods - Considering that goods were absolutely confiscated, and the relief from such order is being granted only after more than 8 years, and thus the appellant has suffered severe penal consequence we reduce the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Central Excise Tariff Heading 23.02 with the fraudulent intention of claiming the said exemption. It was alleged by the Department that the import was in contravention of provisions of Indo Nepal Treaty of Trade, conditions of Notification 40/2002-Cus. and Notification No. 9/96-Cus. (N.T.), dated 22-1-1996 issued under Section 11 of the Customs Act. 4. A Show Cause Notice issued in this matter to eight persons, including the four appellants before us, proposed confiscation of the seized goods under Section 111 of the Customs Act and proposed penalties under Section 112 of the Customs Act. 5. The Show Cause Notice was adjudicated by the order impugned before us. Under the order the impugned goods were absolutely confiscated and penalties were imposed on five persons as under : (i) M/s. Sonam International Rs. 15,00,000 (ii) Shri. Nailesh Shah Karta of M/s. Sonam International Rs. 15,00,000 (iii) Shri Pradeep Soni, Manager Power of Attorney Holder of M/s. Sonam International Rs. 5,00,000 (iv) Shri Pradeep Phatak, Representative of the firm who cleared the goods from Customs Rs. 15,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up of sets), washing, painting, cutting up; (iii) Changes of packing and breaking up and assembly of consignments; (iv) Slicing, cutting, slitting, re-packing, placing in bottles or flasks or bags or boxes or other containers, fixing on cards or boards, etc., and all other packing or re-packing operations; (v) The affixing of marks, labels or other like distinguishing signs on articles or their packaging; (vi) Mixing of articles, whether or not of different kinds, where one or more components of the mixture do not meet the conditions laid down in para 1(b) of Protocol to the Article V of the Treaty of Trade between His Majesty s Government of Nepal and the Government of India to enable them to be considered as manufactured or produced or made in Nepal; (vii) Assembly of parts of an articles to constitute a complete article; (viii) A combination of two or more operations specified in (i) to (vii) above. B. The importer produces a certificate of origin in the Form indicated below, duly certified by an agency designated by His Majesty s Government of Nepal, in respect of the consignment, to the satisfaction of the Assistant Commissioner of Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt visit should have been done to the factory in Nepal. 8.2 The goods were cleared after due scrutiny of documents, examination of goods and testing of samples by the Land Customs Station. So seizure of the goods subsequent to such clearance is bad in law. The proper authority to check the origin of goods is the customs authorities at India-Nepal border and not DRI officers from Lucknow. 8.3 The samples were not drawn by DRI in the presence of the Appellant and hence relying on test report of such samples is bad in law. 8.4 Statement of Shri Sanjay P. Shah, Proprietor of M/s. Sanjay Agencies which was one of the buyers of vitamins from the Appellant cannot be relied because he gave such statement due to trade rivalry and his cross examination was not allowed. 8.5 Statement of Shri Pradeep Phatak, who was acting as the authorized representative of the Appellant at the Indo Nepal border for getting the goods cleared from customs, cannot be relied upon because it was taken under duress and was retracted. 8.6 The importer relies on Board s Circular No. 188/22/96-CX dated 26-3-96 to argue that animal feed supplements are classifiable under Heading 23.09 of the Customs Tariff A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Customs authorities can visit the premises of the factories located in Nepal that are exporting goods to India. Hence, in a way the condition of the Notification can be verified. 5. The Conference came to the conclusion that the provisions under Indo-Nepal Treaty would override the conditions of the notification and hence, in the case of imports from Nepal under claim of the said Central Excise Notification, benefit can be extended on the basis of a declaration by the manufacturing company in Nepal. The option to undertake some physical verification of the premises of the manufacturer in Nepal would always be available with the Indian Customs, in terms of the provisions of the Treaty. In the case of copper/brass sheets, such verification may be undertaken by the Customs stations where such imports are noticed in large measure and the results of such verification may be circulated to all other formations. 6. The Board has accepted the recommendation of the Conference that the provisions of the notification should be read with the provisions of the Indo-Nepal treaty. It is accordingly clarified that in the case of imports from Nepal under claim of Notification 6/2002-C.E. Sl. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir report No TR-77785 dated 11-6-2003 reported that the sample is Calcium D-Pantothenate (99.01% w/w - Assay on dried basis - microbiological method). (d) Report S/23-20(5)/2003 Lab dated 13-6-2003 of the New Custom House Laboratory Mumbai reporting that the sample is in the form of white fine crystalline powder, composed of D-Calcium Pantothenate (Vitamin B-5). (e) Certificate No. D/1309 dated 16-6-2003 of the Government Analyst, Uttar Pradesh, Lucknow reporting that the sample is of standard quality as defined in the Drugs Act, 1940 and the rules thereunder and is in the form of white powder and shows identify test positive for Calcium Pantothenate (100.6% w/w). 9.2 He points out that as per the admission of Shri Pradeep Pathak, who was the authorized representative to get goods cleared from the customs, the goods were cleared on the basis of a report obtained from Analytical Test Corporation Lucknow by replacing the sample and the endorsement in the Bill of Entry regarding test result is this fraudulent report. 9.3 He further points out that a preliminary statement of Shri Nailesh Shah was taken on 3-6-2003, when he stated that he was actually looking after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so drawn on 4-3-2003 was sent through Shri Pradeep Pathak who replaced the sample to get desired report. This report dated 28-2-2005 from the said laboratory which showed content of Calcium Di-Pantothenate only to the extent of 49.37% only. After seizure of the goods by DRI, again samples were drawn and reports were sought from four different laboratories and all the reports confirmed that the goods were pure Calcium Di-Pantothenate. 9.6 Shri Pradeep Pathak also informed that the certificate of origin attached to the Bill of Entry was a forged document. 10. We have considered arguments on both sides. The Appellant in the appeal memorandum had raised the issue that DRI had no jurisdiction to issue notice in this regard though this matter was not argued during hearing. This matter is now settled by the retrospective amendment brought out by the Customs (Amendment and Validation) Act, 2011 in Section 28 of Customs Act, 1962. 11. In this case the main issue to be decided is what was the nature of the goods imported and whether there was any manufacturing process done in Nepal on the imported goods to claim exemption under Notification No. 40/2002-Cus., dated 12-4-2002. The claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation. The statements of the buyers of the goods support the case of the department but it has hardly any evidentiary value because cross-examination of these witnesses was denied. When the goods were available for testing and were tested and found to be different from what was declared, the appellant was just trying to avoid coming before the department. His agent was accepting that the certificate was forged. In such circumstances the fact that department did not make enquiries with the Nepal Chamber of Commerce which is stated to have issued the certificate is not a major flaw in investigation. We do not find any need for any joint visit by the Indian Customs and Napalese Customs to the factory of the exporter to find out the correctness of the certificate issued. 13. Now the question is whether goods could have been confiscated absolutely. There is prohibition under Notification No. 9/96-Cus.(N.T.) (see para 5 above) dated 22-1-1996 for import of goods of third country origin from Nepal to India. Therefore the impugned goods were prohibited goods and liable to confiscation under 111(d) of the Customs Act. It is noted that this clause is specifically not quoted in SCN and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,25,100/-. The value of seized goods was assessed at 33,00,000. Appellants have raised the objection that the basis for such assessment is not disclosed in the SCN or in the order-in-original. When the description was wrong the value declared cannot be accepted. This position is supported by Rule 10A of Customs Valuation (Determination of Price of Imported Goods) Rules, 1988. The goods on test was actually found to be pure Calcium D-Pantothenate. The adjudicating authority had before him the price of pure DL Calcium Panthothenate declared by the appellant in cost sheets submitted by them as per documents at Sl. No. 34 and Sl. No. 35 of the RUDs annexed to the Show Cause Notice. So the value assessed cannot be faulted though this issue is not dealt with in the impugned order. This is a reasonable basis. Further it is seen that this point was not taken before the adjudicating authority. So we do not see any reason why this argument has to be accepted at this stage. 16. Thus overall we are in agreement with the findings in the impugned order. We find that the decision in the case of Badar Schulz Laboratories (supra) is not applicable to the facts of the case because the sized goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
