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TMI Blog2008 (7) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... o.A/42/WZB/A'bad/07,[2007 (210) E.L.T.599(Tribunal)] whereby the Tribunal set aside the order of the Commissioner of Customs, Kandla dated 16.05.2006 being Order in Original No.KDL/COMMR/21/2006 and issued following directions:- "7. Taking into account the ratio of various judgments quoted by the learned Advocate for the appellant, the order of the Commissioner is set aside with the following directions:- (a) The bills of entry filed by M/s Magpie Overseas Co. should be treated as cancelled. (b) The present appellant shall be permitted to file fresh bill of entry / bills of entry in respect of the entire quantity of 500Mts. (c)The appellant shall file fresh bill of entry without claiming exemption under Notification No.21/02 and the same shall be processed as per law and applicable duty and interest shall be collected. (d)The appellants are also directed to produce indemnity Bond to the satisfaction of the Commissioner of Customs for value of the goods indemnifying the department against claim/damage by M/s Magpie Overseas Co. in respect of this consignment. (e)No order is being passed with regard to duty remitted by M/s Magpie Overseas Co. on the basis of assessment ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, we deem it proper to hear the appeal itself finally on 20th November, 2007. Learned counsel for the Revenue prays time to prepare paper book. List the appeal on 20th November,2007." Later on, the Court directed the learned counsel for the Revenue to place on record notification dated 01.03.2002 on the basis of which the duty was assessed originally in 2005. Similarly, on 20.12.2007, the Court asked the counsel for the parties to place on record the relevant agreement entered into between respondent and M/s Magpie Overseas Company. Brief Facts of the Case 5. The brief facts set out by the appellant are as under:- 5.1 M/s. Jhunjunwala Vanaspati Ltd. (hereinafter referred to as "the respondent") imported a consignment of Crude palm oil-non-edible grade/industrial grade falling under Chapter Heading No.1511 90 90 of the Customs Tariff Act, 1975. Out of the same, the respondent sold quantity of 500 MT to M/s. Magpie Overseas Company, Delhi (hereinafter referred to as "M/s. Magpiea") on High Sea Sale basis under an agreement dated 06.09.2005. 5.2 On the basis of the said High Sea Sale Agreement, M/s. Magpie filed two bills of entry Nos.119410 and 119384 on 12.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is unable to accept the request which was made by the petitioners in the said letters. A copy of the order of this Court disposing of Special Civil Application No.5037 of 2006 is produced at Annexure-A to this appeal. 5.6 After the disposal of the aforesaid Special civil Application by this Court, the respondent submitted letter dated 04.04.2006 requesting to release the seized goods by treating High Sea Sale Agreement as cancelled and permit them to substitute the bills of entry in place of M/s. Magpie by adjusting the duty paid by M/s. Magpie at normal rate of 65% ad valorem. 5.7 Pursuant to the aforesaid order passed by this Court in Special Civil Application No.5037 of 2006 the respondent as well as M/s. Magpie were issued notice bearing No.F.No.S/23-3/ Jhunjhunwala/2006 Gr.-I dated 02.05.2006 in the following terms: The respondent was called upon to show cause on or before 09.05.2006. (a)In respect of bill of entry No.119410 where the clearance for home consumption under Section 47 of the Customs Act, 1962 has already been passed, why the request for cancellation and permission for filing a fresh bill of entry be not rejected. (b)Why the seized goods covered by the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted by Customs Law. There is no provision under Customs law for cancellation of a bill of entry once goods are given out of charge. M/s. Magpie on the basis of High Sea Sale agreement had held themselves out to be the importer and it cannot be said that there was any documentary evidence as envisaged under Section 149 of Customs Act, 1962 so as to consider amendment in the bill of entry with regard to name of importer..... III. As far as the second bill of entry is concerned which has been presented to the department on the basis of High Sea Sale agreement effected by the Noticee in the name of Magpie, claiming concessional rate of duty in terms of notification No.21/2002 Cus., as amended, it may be seen that this bill of entry has already been assessed and released for payment of duty on 26.09.2005. In this case, Magpie has already held themselves out as importer and filed bill of entry on the basis of High Sea Sale Agreement. The definition of the term importer in Section 2(26) of the Customs Act, 1962 very clearly specifies that importer, in relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, the foreign supplier's rights with reference to the goods were sought to be established for smooth functioning of foreign trade. This case, however, as explained above, is with regard to a high sea sale effected by the Noticee who has initially imported the goods and then transferred it on high sea sale basis to a fictitious firm, with or without motive, and once that firm was investigated and vanished from the scene, seeks to substitute themselves as the importer. The bill of entry filed by M/s. Magpie which has been duly assessed by the department is still very much on record. As such, the element of fraud which is very much involved in the present case was not an issue before Hon. Supreme Court in the case of Sampat Raj Dugar....." 5.11 After recording the aforesaid findings and relying upon the decisions, set out in paragraph No.5.2.5, the Commissioner of Customs passed the Order in Original rejecting the request of the respondent for cancellation of bills of entry Nos.119410 and 119384 dated 12.09.2005 filed by M/s. Magpie, which the Commissioner of Customs found to be a fictitious company. The Commissioner of Customs also declined to accept the request made by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, in the prescribed form. He submitted that in the present case, it was M/s. Magpie who presented the bill of entries for the goods in question. 6.5 The learned Assistant Solicitor General of India invited attention of the Court to Section 47 of the Act, which deals with, 'clearance of goods for home consumption'. Section 47 of the Act reads as under:- "47. Clearance of goods for home consumption.- (1) Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods and the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance of the goods for home consumption. (2) Where the importer fails to pay the import duty under sub-section (1) [within [five days], excluding holidays] from the date on which the bill of entry is returned to him for payment of duty, he shall pay interest [at such rate, not below [ten per cent] and not exceeding thirty-six per cent, per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette] on such duty till the date of payment of said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imported goods are cleared for home consumption or deposited in a warehouse, meaning thereby except in the aforesaid circumstance, an officer can exercise the discretion vested in him. So far as in eventualities contemplated in the proviso are concerned, the proper officer has no discretion to allow any amendment. 6.9 The learned Assistant Solicitor General of India submitted that in the present case, there was no question of exercise of discretion by the proper officer because after the goods landed, M/s. Magpie filed the bill of entry after which the same were not only assessed but in case of one of the bills of entry, even the duty was paid. 6.10 The learned Assistant Solicitor General of India relied upon a decision of the Hon'ble the Apex Court in the case Bharat Commerce Inds. Ltd., New Delhi, reported in 1997 (93) E.L.T. 653(S.C.) = (1997) 11 S.C.C. 62. Paragraph Nos.1 to 3 and 8 to 12 of the said judgment read as under:- "1. On 16-8-1985, the appellant, through its clearing agents, lodged a bill of entry for home consumption. On 20-8-1985, the appellate wrote the following letter to the Assistant Collector of Customs: Sub: 40 Bales Cashmilon Brand Acrylic Fib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such bill of entry and to produce documents in support of such declaration. It is difficult to see in the context of these provisions how the letter could be treated as a bill of entry for warehousing. What sub-section (5) contemplates is substitution of one bill of entry for another. In order to effect the substitution, a second bill of entry must be lodged which will be in substitution of the first bill of entry. 11. Out attention was drawn to a judgment of the Bombay High Court in the case of Chowgule Co. (P) Ltd. v. Union of India. It was contended on the strength of this judgment that the wordings of Section 46 and particularly the expression "shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form" make it appear at the first glance that the filing of the bill of entry in the prescribed form was mandatory and that, therefore, non-compliance thereof may make the importer liable to the penalty. This view, however, overlooked that presentation of a bill of entry in the prescribed form was only procedural, non-compliance of which could not be visited with penalty. 12. We do not have a case of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n records. 36. The learned Commissioner had opined that their existed serious discrepancies in the bills or vouchers. The Tribunal, in our opinion, should have dealt with the aforementioned findings of the Commissioner. 37. Mr. Vella Palli has strongly relied upon Meenakshi Mills, Madurai vs. The Commissioner of Income Tax, Madras [1956 SCR 691], wherein it was held: ".....On these facts, the Tribunal came to the conclusion that the contentions of the Department had been fully established, namely, that the intermediaries were dummies brought into existence by the appellant for concealing its profits, that the sales standing in their names were sham and fictitious, and that the profits ostensibly earned by them on those transactions were, in fact, earned by the appellant, and should be added to the amounts shown as profits in its accounts. The point for decision is whether there arises out of the order of the Tribunal any question which can be the subject of reference under section 66(1) of the Act. Under that section, it is only a question of law that can be referred for decision of the court, and it is impossible to argue that the conclusion of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide clause (c) of paragraph No.7 that:- "The appellant shall file fresh bill of entry without claiming exemption under Notification No.21/02 and the same shall be processed as per law and applicable duty and interest shall be collected." 7.3 But then, unfortunately, the Tribunal lost sight of the fact that, the case of the revenue is that, 'respondent (M/s. Jhunjhunwala Vanaspati Ltd.) cannot be allowed to file fresh bill of entry, more particularly in light of the fact that the revenue has found M/s. Magpie to be a fictitious entity'. Not only that, 'the respondent is not able to procure presence of M/s. Magpie at the time of hearing, which was fixed by the authorities after the matter was ordered to be decided by taking a final decision on applications / letters submitted by the respondents dated 06.10.2005 and 30.12.2005 within 4 weeks from the date of receipt of order of this Court'. 7.4 Learned advocate for the respondent emphatically submitted that as the duty was not paid by M/s. Magpie, the respondent continues to be the owner and therefore, the authorities ought to have allowed the respondent to file fresh bill of entry, though M/s. Magpie had filed two bills of en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emphatically submitted that the authorities have mis-read and misinterpreted Clause 26 of Section 2 of the Customs Act, which provides the definition of the term 'importer'. He submitted that until the goods are cleared for home consumption, a request for filing fresh bill of entry ought to have been allowed by the authorities. He submitted that as M/s. Magpie did not pay to the respondent, which fact was intimated to the authorities by letter dated 06.10.2005, the respondent continued to be the importer and therefore, the respondent ought to have been allowed to file fresh bill of entry. 7.8 Learned advocate for the respondent heavily relied upon decision of the Hon'ble the Apex Court in the case of Union of India Vs. Sampat Raj Dugar, reported in 1992 (58) E.L.T. 163 (S.C.). Learned advocate for the respondent relied upon paragraph Nos.6, 7, 8, 10 and 19 of the judgment and submitted that the decision of the Hon'ble the Apex Court applies to the facts of the present case in all fours. The said paragraph read as under:- "6. The first respondent did not prefer an appeal against the said order. He directly challenged the same in the Bombay High Court by way of a Writ Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xport the same. 8. The Letters Patent Appeal preferred by the Collector of Customs and the Union of India was dismissed by the Division Bench affirming the reasoning of the learned single Judge in its entirety. 10. For a proper appreciation of the controversy arising herein, it is necessary to notice certain provisions of the Customs Act as well as of the Imports and Exports (Control) Act, 1947 and the Imports (Control) Order, 1955. 19. At this stage, it may be appropriate to clarify one aspect. There may be cases, where the importer opens a letter of credit and makes some other arrangement ensuring/ guaranteeing payment of price of imported goods. In such a case, it will be open to the exporter, in case of non-payment of price or abandonment by the importer, to collect the price by invoking such arrangement. In such a case, it is obvious, the exporter will not be allowed to claim title to and/ or to re-export the goods. (Indeed, it is unlikely that in such a case, the importer abandons the goods ordinarily speaking.) It is therefore necessary that in all such cases, the authority should issue a notice to the importer and/ or his agent before allowing the exporter to deal wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 MT. But the said bill of entry No.119384 was also assessed. It is only thereafter that on 06.10.2005, for the first time, the respondent wrote to the Commissioner of Customs particularly about non-payment of the amount by M/s. Magpie. For ready reference, relevant part of that communication dated 06.10.2005 is reproduced:- "We imported the above goods and sold the same in high-seas to M/s. Magpie Overseas Co. (the buyer) under the high-seas sales agreement dated 6th September 2005. The buyer has filed the bill of entry, but despite repeated reminders, through the broker he has failed to fulfill the conditions of the high sales agreement by not paying the payment for the goods. The buyer has informed us that the production in their unit has been suspended, due to which they are unable to accept the delivery of the goods and release the payment for the same. He wants to cancel the high-seas agreement......" (emphasis supplied) 9. The case of the authorities is that on the basis of the intelligence received and on the basis of preliminary investigation report received from the Headquarter, Preventive Wing of Delhi-II to the effect that the goods lying at Kandla Port would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, is found to be not well-founded. Even the Commissioner of Customs had considered the said decision of the Hon'ble the Apex Court and observed as under:- "The ratio of Hon. Supreme Court's judgment in the case of Sampat Raj Dugar, 1992 (58) E.L.T. 163 (S.C.) is with reference to an importation by a person who had an advance license issued in his name which got cancelled and as such, the foreign supplier's rights with reference to the goods were sought to be established for smooth functioning of foreign trade. 10.1 The Commissioner of Customs has considered the facts of the present case in the same paragraph as under:- "This case, however, as explained above, is with regard to a high sea sale effected by the Noticee (present respondent) who has initially imported and then transferred it on high sea sale basis to a fictitious firm, with or without motive, and once that firm was investigated and vanished from the scene, seeks to substitute themselves as the importer. The bill of entry filed by M/s Magpie which has been duly assessed by the department is still very much on record. As such, the element of fraud which is very much involved in the present case was not an iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntive Wing of Delhi-II Central Excise Commissionerate, this cannot be overlooked and it is rightly not overlooked by the Commission of Customs. Incidentally, it is required to be noted that the Tribunal has not taken note of this fact in the right perspective. 13. So far as amendment of documents is concerned, Section 149 holds the field. Section 149 reads as under:- "149. Amendment of documents.- Save as otherwise provided in sections 30 and 41, the proper officer may, in his discretion, authorise any document, after it has been presented in the customs house to be amended:.......". 13.1 The law is clear that it is the proper officer who is vested with the discretion to authorise any document after it has been presented in the customs house to allow the party to amend or not. In the opinion of this Court, the authorities the Commissioner of Customs has not committed any error in rejecting the request of the respondent in light of the facts of the case, which are set out in detail hereinabove. 14. Learned advocate for the respondent paid emphasis on the provisions of Section 149 which reads as under:- "Provided that no amendment of a bill of entry or shipping bill o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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