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TMI Blog2007 (9) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... The applicant filed a B/E No. 396475 dated 26-9-2006 for clearance of consignment of 'Polyster Fabrics declared as Dyed Woven Polyster Fabric containing 85% or more by weight of non-texturized polyster filament yarn classifiable under sub-heading 5407 61 90 of the Customs Tariff. Based on information that the applicant was trying to clear the consignment availing Customs duty exemption under Notification No.14/2006-Cus.(Sl. No.51) that the goods were actually fabrics containing 85% or more by weight of texturized filament yarns which attracts BCD @1 Rs.23/- sq. m., the officers of DRI took up the case for investigation On 4-10-2006, the goods were examined by the officers of DRI and the same were found to be Dyed Woven Polyster Fabric of width 58" Samples were drawn and sent to Central Silk Technological Research Institute, Bangalore to ascertain whether the sample fabric was made up of polyster filament yarn and if so to report the actual percentage by weight of texturized and non-texturized filament yarn contained in the sample. The report indicated that the fabrics were made up of 100% polyster filament yarn and the % non-texturized filament yarn is 0%. Consequently, the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under Notification No.14/2006-Cus.(Sl. No. 51) was claimed by the importers. However, they admitted that the imported goods were in fact containing 85% or more by weight of texturised filament yarn and thus, they were not entitled to exemption under the above said Notification. They admitted that there was a mis-declaration of the fabrics to claim partial Customs duty exemption by claiming that the imported goods contained non-texturised polyster filament yarn 85% or more by weight. They submitted that the total duty demanded in the Show Cause Notice from them is Rs.21,15,276/- as against the total Customs duty of Rs.2,29,918/- sought to be paid by them in the Bill of Entry. Thus, the differential duty demanded was Rs.18,85,358/- which has been paid in advance before issue of the Show Cause Notice. They pleaded that all the conditions for admission of the application in terms of Section 127B of the Customs Act, 1962 have been fulfilled and, therefore, their application should be admitted by the Bench. When asked about the contention by Revenue for not admitting the application on the ground that the imported goods were specified under a Notification issued under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitting the application on the ground of the goods having been specified under a Notification issued under Section 123 of the Customs Act, 1962 read with the third proviso to sub-section (1) of Section 127B of the Customs Act, 1962, has to be examined and decided first before looking into other merits of the case. The Bench looked into the legal provisions in this regard. It is found that the third proviso to sub-section (1) of Section 127B reads as follows "(3) Provided also that no application under this sub-section shall be made in relation to goods to which Section 123 applies or to goods in relation to which any offence under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985) has been committed" Section 123 of the Customs Act, 1962 reads as follows :- "Section 123. Burden of proof in certain cases - (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be - (a) in a case where such seizure is made from the possession of any person (i) on the person from whose possession the goods were seized, and (ii) if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Act would come into play. The issues referred to Special Bench for decision can be answered as below:- (a) Whether applications, per se , are barred in relation to goods which are listed under sub-section (2) of Section 123 or are notified under the said sub-section? Answer : The applications per se are not barred in relation to goods which are listed or notified under sub-section (2) of Section 123 of the Act. (b) Whether applications are barred in respect of the above cited goods, only when the said goods are seized on reasonable belief that they are smuggled goods, in terms of sub-section (1) of aforesaid Section 123? Answer : The applications may not get barred merely because the goods are seized on reasonable belief that they are smuggled goods under sub-section (1) of Section 123 of the Act. The Commission itself can also determine, whether there was justifiable ground for reasonable belief in the facts and circumstances of the case and whether the provisions of the said section are rightly invoked in the Show Cause Notice. Similarly, even if provisions of Section 123 are not invoked in a Show Cause Notice, the Commission can come to its own conclusion on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y seized under the provisions of the Act on the reasonable belief that they are smuggled goods, if the Revenue holds that the goods do not tally with the particulars contained in the said Bill of Entry on which the said goods had been admittedly got cleared. This Bench finds that in this case, the Bill of Entry had been filed to clear the goods which were admittedly specified under a Notification issued under sub-section (2) of Section 123 of the Customs Act, 1962. Further, it has been found by Revenue and proved by chemical tests and admitted by the applicants that the goods under import did not tally with the particulars declared and contained in the Bill of Entry filed. In such circumstances, the goods were seized by Revenue under the reasonable belief that they were smuggled goods. The Show Cause Notice has also been issued by Revenue to the applicants asking them to show cause as to why the goods should not be confiscated under the provisions of the Customs Act, which itself, as per definition of "smuggling' in terms of Section 2(39) of the Customs Act, 1962 goes to prove that the Revenue had reasonable belief that the goods were smuggled goods. With these facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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