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TMI Blog1996 (4) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... wo Show Cause Notices, both dated 23rd February, 1989, were issued by the Customs Authorities to the importers alleging that they had contravened the provisions of the Customs Act, 1962 by misdeclaring at least 40% of the imported goods as copper scraps when they were, in fact, copper wires and by seeking to import copper wires unauthorisedly and without any valid licence. No Show Cause Notice was issued to the appellants, nor did the Show Cause Notice, issued to the importers, contain any allegation or charge against the appellants. Copies of the Show Cause Notices, issued to the importers, however, were forwarded to the appellants. 3.The importers did not submit any answer to the Show Cause Notices. The appellants did. In their answer the appellants claimed, inter alia, that the goods had been sent to India by the appellants pursuant to the orders placed by the importers and that the importers not having cleared the goods, the appellants should be permitted to re-ship the goods to Singapore. It was prayed that the Customs Authorities should `allow any fresh buyer nominated by shipper/Banker to come forward and clear the goods upon payment of duty' and `if no buyer is available, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... International for mutilation or for re-export of the goods cannot be permitted. 8.It will be seen that the basis of imposition of penalty and confiscation was a finding of the violation by the importers of provisions of the Customs Act, 1962 by misdeclaring 40% of the goods and unauthorisedly importing the same. 9.The importers then preferred an appeal before the Tribunal from the order of the Adjudicating Authority. The Adjudicating Authority was of the view, on the basis of the materials on record, that it was very doubtful whether there was any contract at all between the appellants and the importers. The Tribunal further held that the Adjudicating Authority itself had allowed the appellants the right to redeem the goods. It was clear, the Tribunal held, that the Adjudicating Authority had accepted the appellants as the owners of the goods. The Tribunal also held that there could be no question of misdeclaration as no Bill of Entry had been filed. According to the Tribunal, even assuming that there was an Agreement between the importers and the appellants herein, the Agreement was for supply of copper scraps and that if the appellants had sent something other than what had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal having found that the offence had not been established, the imposition of sentence either by way of personal penalty or confiscation of the goods could not also stand. Finally it is submitted that the learned Single Judge should have permitted the appellant to either re-ship the goods or permitted clearance of the 40% of the goods after mutilation of the same into scrap and payment of duty on such basis. Several decisions have been cited by the [appellant] in this context which will be considered subsequently. 13.The respondents have submitted that the show cause notice was in fact, made available to the appellant. The appellant had submitted an answer thereto. Reliance was also placed on the finding of the Tribunal in which certain adverse comments had been made regarding the Appellant. It is further submitted that if the Court were to allow the prayer of the appellant to clear the goods upon mutilation, the duty should be paid on the basis that 40% of the goods were copper wire and not copper scrap. 14.We are of the view that none of the submissions of the respondent can withstand scrutiny. The appellant is correct in its submission that there was no basis whatsoev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n), 1990 paragraph 93 provides that the Customs authorities may when it is of the view that goods imported do not come within the definition of scrap, if no mala fide intention is suspected, allow clearance of the goods after mutilation of the goods at the rates applicable to scrap. As already found there has been no allegation by the Customs Authorities against the appellant at any stage regarding lack of bona fides in the show cause notice or in the order of adjudication. 19.In a series of decisions the High Courts as well as the CEGAT have permitted clearance of goods after mutilation when there was a dispute as to the nature of the goods imported. [See Lakhotia Udyog v. Union of India - 1992 (58) E.L.T. 385; Appeal No. C-168/90, Order No. A-643/Cal/91, dated 7-10-1991; Hirdik Industrial Corporation, 108, Unique Industrial Estate, Cardinal Gracious Rd. v. Collector of Customs, Bombay - 1996 (81) E.L.T. 172 (Tri.) = 1995 (11) RLT 245 (CEGAT-A); The Gwalior Rayon Silk Mfg. Co. Ltd. v. Collector of Central Excise, Indore - 1996 (83) E.L.T. 212 (Tri.) = 1995 (11) RLT 248 (CEGAT-A)]. 20.Having held that the order of the adjudicating authority cannot stand and having regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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