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TMI Blog2025 (4) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... s also revealed through intelligence that the subject consignments were earlier exported by the Appellant from some other port by availing the benefit of DEPB. The containers were shipped from Odessa Port of Ukraine by M/s Private Party Oderig and were said to contain Pharmaceuticals/Medicines and the consignments were consigned to the appellant. Appellant as per its version came to know about the above consignment only after receiving the summons from the department. The appellant had earlier exported the goods in question to M/s Biologica (UK) Ltd and not to M/s Private Party Oderig and M/s Private Party Oderig was the customer of Biologica and the appellant never exported those goods directly to M/s Private Party Oderig. Appellant had refused to accept and clear the above consignment since as per them they were not aware of the said shipment and they have not imported the said goods. The appellant had remitted Rs. 13,00,219/- being the amount of Central Excise duty not paid at the time of export of such medicines. Further, benefit of DEPB amounting to Rs, 3,36,333/- availed on export of the said medicines and which was later utilized in payment of import duty was also reim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . * The goods are totally expired and hence the value of the goods should be NIL * The statement given by the directors clearly stated that they were not aware of re-import at all and came to know only when the summons came from DRI. * The levy was equal to excise duty. However notification 94/96-customs cannot be applied for the following reasons; * The central excise duty payable on such goods at the time of importation is NIL as the value of the goods is NIL * ii. The goods were re-imported after the period of one year and hence notification 94/96-Cus. cannot be applied. * iii. The appellant has not returned any amount outside India for the exports made and hence there is no requirement to claim back DEPB benefits. * Appellant had requested to destroy the goods as abandoned under section 23 of the act. As the appellant had never imported or ordered to import, always appellant can request for the destruction of the goods. * As per section 20 of the Act, all the provisions of valuation under customs is applicable for re-imported goods. In the given case, value of the goods is Nil as held in the order itself. Therefore, there should not have been any duty on such NI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds should be re-imported within one year from the date of export. Once the goods are re-imported beyond the said period, the question of taking back the benefit of DEPB or applying the Notification No 94/96-cus does not arise. In view of this, the learned Addl. Commissioner has wrongly applied the Notification, which has been wrongly upheld by the FAA. As per Section 20 of the Customs act, all the provisions of valuation are applicable for the re- imported goods. In other words, the provisions of Section 14 read with any valuation rule are applicable for re-imported goods also. It is held in the order in appeal that the goods are not fit for human consumption and also the shelf life of the goods are expired. Once the shelf life is expired, the value of the goods is zero and hence based on the provisions of Section 14 read with provisions of Section 20 and 23 of the Act, the learned Commissioner should not have confirmed duty demanded from the appellant. Appellant is neither the importer nor the owner and it is only the department's assumption and presumption that appellant is the owner / importer of the goods, the relinquishment of the same should have been allowed. The impugned OI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the sticker pasted on each of the cardboard boxes had the name of the manufacturing company as Genom Biotech Private Ltd. It is also a fact that the Bills of Lading produced by Shri Bhavik Chandarana, Executive Operations, Maersk India Pvt. Ltd clearly showed the consignee of the said consignment as GBPL, Andheri, Kurla Road, Mumbai. I also find that Shri CMP Singh has admitted to the fact that they had exported the goods in question to M/s Biologica (UK) Ltd., UK and M/s Private Party Oderig was a customer of M/s Biologica (UK) Ltd. It is also a fact on record that Shri Sashi Singh, admitted in his statement that the email id through which M/s Safamarine had communicated the details regarding the re-import of the said consignment, was their official email id. He also admitted to the fact that the invoices w.r.to the reimport of the consignment were for the shipment of the rejected export consignments to India back to their company M/s Genom Biotech Pvt Ltd., Mumbai. Shri Sashi Singh has also admitted in his statement dated 01.03.2011. the medicines exported by them were exported back by their buyers due to losing the expiry date and its potency. It is also an admitted fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prescribed under Section 110 (1B) of the Customs Act 1962. The question framed at para 21(a) is answered accordingly. 24.1 I find that the medicine consignment, imported in two containers was earlier exported by GBPL, under various shipping bills availing the benefit of exemption from payment of excise duty either by way of claiming rebate or by way of export without payment of duty under bond. Hence it is an undisputed fact that the said goods have not suffered the duty of excise hence in view of provisions contained in Notification 94/96- Cus dtd 19.12.1996, they are liable to pay the customs duty equivalent to the duty of excise leviable at the time of export. Section 46 (1) provides that "the importer of any goods, other than goods intended for transit or transshipment, shall make entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form". GBPL was therefore required to file the Bill of entry for clearing the imported consignment on payment of appropriate duty of customs. They however failed to come forward to file the bill of entry and claim the goods in spite of repeated letters and correspondence in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposited through TR-6 Challan. The amount may not be exactly the same however we undertake to make differential payment whatever arises and intimated to us by your office." (b) Statement dated 01.03.2011 of Shri Bashi Singh. Director. "Question.6. Do you agree to the fact that it was illegal on part of GBPL to allow re-import of the medicines after the same lost it's potency Le after it was expired? Also was not this illegal on part of GBPL to allow even re-import at Port of Pipavav and then not coming forward to claim the same? Answer. 6. I agree to the fact that we have suppressed the fact of import from Customs and thereby violated provisions of Customs Law. Further I accept that violation of Customs Act, 1962 has taken place by Importing expired medicine in India and which took place at Port of Pipavav which was not notified for such imports. Because of the reasons realizing the mistake as explained above we made payment of duty voluntarily on the re-imported consignments equivalent to the amount of Central Excise Duty, leviable on such goods at the time of export and also reimbursed the amount of DEPB credit proportionately availed against such exports subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not file the Bill of entry in violation of the provisions of Section 46 of the Customs Act 1962 with the intention of not paying the duty of customs due thereon and to illegally retain the benefit of DEPB credit availed by them on export of such goods. I also find that this illegal import was made suppressing the fact that the import pertained to expired medicines, import of which is specifically prohibited under the Drugs and Cosmetics Rules, 1945. Hence the extended period of limitation is rightly invokable in the present case. GBPL had defrauded the department by illegally importing medicinal consignment and trying to retain the undue DEPB benefit availed by them. Hence they are required to reimburse the benefit of DEPB availed on such returned goods as calculated in the Annexure-A to the Show Cause Notice. Since the said Hiotech Pvt. Ltd. For Gen duty has already been paid by GBPL, the same should be appropriated against the confirmed dues. The question framed at Para 21 (c) is answered accordingly. 26. I find from the discussions in the foregoing paras that, GBPL has deliberately suppressed the fact of import of expired medicinal goods, which was specifically prohibited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question framed at Para 21 (f) is answered accordingly. 28. I find from the discussions in the foregoing paras that, GBPL has deliberately suppressed the fact of import of expired medicinal goods, which was specifically prohibited under Rule 30 of the Drugs and Cosmetics Rules, 1945 and secondly the Port of Pipavav was not a notified port for import of medicines in terms of Rule 43A of the Drugs and Cosmetics Rules 1945. It is also a fact that GBPL was involved in the business of manufacture and export of medicine and ignorance of the above facts on their part cannot be accepted by any stretch of imagination. Hence GBPL have willingly caused the said violation of the Provisions of Customs Act and have rendered the imported goods liable for confiscation and have also rendered themselves liable to penal action under Section 112(a) and Section 114 A of the Customs Act 1962. I find that the goods imported are specifically prohibited under the Drugs and Cosmetics Rules, 1945, hence this offence committed by GBPL had rendered themselves liable to penal action under Section 112(a). Hence I hold that GBPL is liable to penalty under Section 112(a) as well as Section 114 A of the Customs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it etc., which too has been paid them, is correctly appropriated by the adjudicating authority. Same is upheld. Since, there was no retraction about admission that the goods were same as exported from India, the submission at such belated stage by the appellant that they were forced under threat to pay or face consequences in future is clearly properly rejected by adjudicating authority as after thought and not worthy of any credence. The department has correctly and with testimonial and other evidences as indicated above in produced part of the order rejected various claims of the party. Party has also represented itself as owner while requesting under Section 23 of Customs Act, 1962, while relinquishing and is also an importer as per various documents. Therefore, the contention of no knowledge till summons is clearly intended to misguide. We also endorse various submissions rejected by the adjudicating authority, as appropriate in law and on facts. We find that a highly damaging attempt on importing expired medicines on Indian soil was made, though thwarted by the Indian Customs, it is also noted that once pointed out the appellant duly paid back the benefits and deserve consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requested to destroy the goods as abandoned under Section 23(2) of the Customs Act, 1962. 11. Learned Commissioner had treated appellant as importer and charged the appellant that they had failed to file the bill of entry as required under Section 46 of the Act and hence the investigation started. 12. Earlier the appellant had received an order for certain medicines. The appellant had exported consignment of medicines under DEPB to M/s Private Party Oderig located in Ukraine on the basis of the order received from M/s Biologica (UK) Ltd located in U.K. M/s Biologica (UK) Ltd. had directed the appellants to send the goods to M/s Private Party Oderig located in Ukraine. The appellant had received the entire consideration for the export from M/s Biologica (UK) Ltd. and no part of the said consideration has been remitted back. 13. The proceedings in this case culminated in demand of customs duty, recovery of DEPB credit, imposition of penalty under Section 112A, 114A of M/s Genom Biotech Private Limited. Penalty was also imposed on Shri CMP Singh, Director of Genom Biotech Private Limited and on Shri Shashi Singh, Director of M/s Genom Biotech Private Limited under Section 112A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of customs, or (b) to deposit the goods in a public warehouse appointed under section 57 without warehousing the same. (2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor. [(3) The importer shall present the bill of entry under sub-section (1) [before the end of the day (including holidays) preceding the day] on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing : [Provided that the Board may, in such cases as it may deem fit, prescribe different time limits for presentation of the bill of entry, which shall not be later than the end of the day of such arrival: Provided further that] a bill of entry may be presented [at any time not exceeding thirty days prior to] the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India : [Provided also that] where the bill of ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd member with the following questions: * Whether in the facts and circumstances of the case, the appellant can be treated as an importer? * Whether the appellant is liable to any penalty in the present circumstances and on the basis of evidence available of construed knowledge? 2. Both sides have appeared before me and have made their oral and written submissions. 3. The main submissions of the learned consultant appearing on behalf of the appellant is that: (i) They have exported the goods to M/s Biologica (UK) Ltd. and not to M/s Private Party Oderig. (ii) The expired goods out of the consignments exported by the appellant was sent back by M/s Private Party Oderig without any intimation to the appellant. (iii) The export order was executed to M/s Biologica (UK) Ltd and payment has been received from them towards the export realization. Till date the amount is available with the appellant and has not been demanded back by the overseas importer. (iv) Without prejudice to the above submissions, the goods has zero value since they are all expired drugs, hence no duty can be demanded. (v) The demand has been made in terms of Notification No. 94/96-Cus dated 16.12.1996 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed above we made payment of duty voluntarily on the re-imported consignments equivalent to the amount of Central Excise Duty, leviable on such goods at time of export and also re-imbursed the amount of DEPB credit proportionately availed against such exports and subsequently utilized in payment of Customs Duty. Question.7. Your claim that GBPL was not aware of the Imported goods consigned at Pipavav Port In two containers, because Biologica (UK) Ltd, UK or M/s Private Party Oderig, Ukraine had not informed you about the goods being sent back to India, which were earlier exported by you is not acceptable looking to the fact that even after that you-still export the medicines to them regularly. Do you agree to above? Answer.7. Except for the fact that we have business still with M/s Private Party Oderig, Ukraine but not with Biologica (UK) Ltd, UK anymore, I agree to the above fact, however I have to explain that exporting goods even today to Mis private party Oderig, Ukraine are due to commercial considerations. But the medicines are exported back to India by these parties, due to losing the expiry date and It's potency. After medicines get expired or lose their potency, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come to their rescue only if the Pipavav Port is designated as a proper port for import of medicines. Since this could not have been imported at Pipavav Port, even in the case of normal pharma products, the import could not have been cleared on payment of customs duty. 12. In respect of the argument of the appellant about re-importation required to be made within one year, the office of Authorised Representative provides the copy of the Notification 135/99-cus dated 27.12.1999 wherein the period for re-importation has been increased from one year to three years. Therefore, even this argument of the appellant cannot be legally sustained. 13. After considering all these facts, I am in agreement with the conclusion arrived at by the Hon'ble Member (Judicial) to hold that in this case, modification of the penalties would serve the purpose, as has been held by him at para 7.2 and 7.3 of the interim order. 14. Matter to be posted before the regular bench. (Order pronounced in the open court on 21.03.2025) (R. MURALIDHAR) MEMBER ( JUDICIAL ) MAJORITY ORDER SOMESH ARORA : Date of Hearing : 08.04.2025 Date of Decision : 08.04.2025 In view of majority decision as above, the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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