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TMI Blog1978 (8) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... (India) Ltd. Two letters of authority both dated September 6, 1968 were also issued permitting the petitioners to import goods, open letters of credit and make remittances against the said two Import Licences. The petitioners negotiated with one Nomura Trading Co. Ltd., Tokyo and their agents in Calcutta and entered into a contract for supply of goods. The goods were thereafter shipped under the Cover of Invoice dated January 21, 1969 and mentioned the description "Stainless Steel Angles" AISI 30 4 type 2B finish SWG 26 in thickness of sizes 6" x 6" x 10', 61/2" x 61/2" x 10, and 71/2" x 71/2" x 10'. On the importation of the goods at Bombay the petitioners submitted a Bill of Entry No. 1548/21 on 27th February, 1969 for clearance of the goods, claiming it under item No. 63(2) I.C.T. After the submission of the said Bill of Entry, the concerned Customs Officers took the opinion of Shri Brahma Prakash, Director Metallurgy Group, Bhabha Atomic Centre, Bombay; Prof. V.A. Alterkar, Prof. of Metallurgical Engineering and Shri N.D. Sahukar, Manager of Godrej and Boyce Mfg. Co. Pvt. Ltd., Bombay. The Dock Appraiser, the Scrutinising Appraiser and the Principal Appraiser examined the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector of Customs, Bombay in the first impugned order dated February 7, 1971 came to the conclusion, that the goods imported are correctly classifiable as "stainless steel sheet" under Item 63 (20A) I.C.T. and the import licence originally produced for their clearance is not valid. He ordered that the seized goods shall be confiscated under Section 111(d) of the Act. The owners were given an option to pay a fine of Rs. 21,00,000/- in lieu of such confiscation. A personal penalty of Rs. 4,00,000/- was also imposed under Section 112 of the Act. A demand of the short levy on the goods, viz., Rs. 6,13,841.59 was raised. The Collector of Customs also held that the previous order of clearance was illegal and improper and as such justified the proceedings under Section 130 of the Act. 4.The petitioners then preferred a Revision Application before the Central Government. In the second impugned order dated May 18, 1972, the Central Government held that the so-called angles were sheets and as such were liable to duty only at 10% ad valorem whilst the petitioners had been assessed to duty at 27½ percent, but the petitioners cannot be given the benefit of the lower rate as they have not l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Customs Authorities had to hold that the charge was not proved beyond a reasonable doubt. Reliance is placed on Amba Lal v. Union of India, 1983 (13) E.L.T. 1321 (S.C.) = AIR l961 S.C. 264 wherein it was held (at p. 266): "This Court has held that a Customs officer is not a judicial tribunal and that a proceeding before him is not a prosecution. But it cannot be denied that the relevant provisions of the Sea Customs Act and the Land Customs Act are penal in character. The appropriate customs authority is empowered to make an inquiry in respect of an offence alleged to have been committed by a person under the said Acts, summon and examine witnesses, decide whether an offence is committed, make an order of confiscation of the goods in respect of which the offence is committed and impose penalty on the person concerned, see Sections 168 and 171A of the Sea Customs Act and Sections 5 and 7 of the Land Customs Act. To such a situation, though the provisions of the Code of Criminal Procedure or the Evidence Act may not apply except in so far as they are statutorily made applicable, the fundamental principles of criminal jurisprudence and of natural justice must necessarily apply. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel Angles". The said two Import Licences also permit the import of "Stainless Steel Angles". The Import Licences which were utilised by the petitioners for the purpose of clearing the goods, according to the findings of the Customs Authorities, did not cover the goods imported, thus the import of the goods cannot be valid. Goods imported, therefore, cannot be treated to be lawfully imported goods. If the finding of the Central Government is correct, the goods must be held to have been brought into India contrary to a prohibition imposed by law as contemplated by Section 111(d) of the Act and in that case the goods imported are liable to confiscation. Even in the case relied upon by the petitioners' Counsel, "East India Commercial Co. Ltd., Calcutta v. Collector of Customs" 1983 (13) E.L.T. 1342 (S.C.) = (1963) 3 SCR 338 : (AIR 1962 S.C. 1893) it was held that by reason of Section 3(2) of the Imports and Exports (Control) Act, 1947, all goods to which any order under sub-section (1) of Section 3 applies, shall be deemed to be goods of which the import and export has been prohibited, under Section 19 of the Sea Customs Act, 1878. This provision in its turn attracts, along with oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e produced letters from two reportedly well-known manufacturers of U. K. to show that such angles are formed from sheets for the purpose of manufacture of hospital equipment. However, it appears that the letters of foreign manufacturers only show that the stainless steel sheets have to be bent into the form of angles before the hospital equipment such as tanks, racks, etc. are manufactured. Obviously, the formation of an angle is merely an intermediary process and not that the angles exist as such. However, the fact remains that the clarification given by the Iron Steel Controller does introduce a certain amount of ambiguity, in the matter". The finding thus is that the petitioners were authorised to import "Stainless Steel Angles" by the said licences and that the goods imported were not stainless steel angles. The affidavit of the respondent about the classification from the office of the Iron Steel Controller is that the letter expressing the opinion had been issued on the basis of examination undertaken when a third party approached the Iron Steel Controller. This is factually correct as the Bill of Entry was submitted on 27th February, 1969 and clearance made on 17th M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot covered by the licence; because they could not be classified as "stainless steel angles". 9.The Custom Authorities have adduced satisfactory evidence as is detailed in paras 5 to 9 of the show-cause notice dated 17th July, 1969 and the accompanying documents on the basis of which the finding is returned. This, in my opinion, discharges the burden of proof by the Customs Authorities to the charge of importation contrary to the prohibition imposed by law as contemplated by Section 111(d) of the Act and satisfies the test laid down in Amba Lal's case [1983 (13) E.L.T. 1321 (S.C.)] (supra) that the Customs Authorities have to bring home the guilt to the person alleged to have committed a particular offence under the Act by adducing satisfactory evidence. 10.Reliance by the petitioner's Counsel on Shanti Prasad Jain's case (AIR 1962 S.C. 1764) is misplaced. Section 111 (d) of the Act provides in case of the goods imported contrary to the prohibition for confiscation of the goods which is an order in rem. A distinction has to be drawn between an action in rem and a proceeding in personam. Proceedings under the Foreign Exchange Regulations Act is a proceeding against an offender an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds imported were stainless steel angles. The Counsel submits that the action of the Collector of Customs in ignoring these records and considering the material subsequent to the order of clearance is without jurisdiction vitiating the entire proceedings. It is also urged that in exercise of the revisional power the Collector of Customs could only proceed to take action on the basis of the material already present on the record and was not entitled to institute any enquiry so as to include additional material in order to judge the correctness of the order sought to be revised. Reliance is placed on State of Kerala v. K. M. Charia Abdulla, AIR 1965 S.C. 1585, wherein their Lordships of the Supreme Court considered the provisions of Section 12 of the Madras General Sales Tax Act, 1939, which are pari materia to Section 130 of the Act. It was held (at p. 1585) : "There is no doubt that the revising authority may only call for the record of the order or the proceeding and the record alone may be scrutinised for ascertaining the legality or propriety of an order or regularity of the proceeding. But there is nothing in the Act that for passing an order in exercise of his revisional juri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentions the facts that Collector of Customs had called for and examined this record to satisfy himself about the legality and propriety of the orders of clearance. It mentions that the goods imported are stainless steel sheets of S.W.G. 26 and of widths 12", 13", 15" and length 10' and are bent in the middle along the length. The material in support of it, ante orders of clearance, inter alia, is the labels attached to the cases in which the goods in dispute are imported showing the following dimensions of the goods: - S.W.G. 26 12" x 10' S.W.G. 26 13" x 10' S.W.G. 26 15" x 10' As against the above, the following particulars of the goods are declared in the relative Bill of Entry Stainless Steels Angles I.C.T. Item 63(2) 6" x 6" x 10' 61/2" x 61/2" x 10' 71/2" x 71/2" x 10' This clearly indicates the importation of stainless steel sheets in the boxes which contained sheets of 12", 13" and 15". The Collector of Customs also notes that the examination and obtaining the opinion of the experts was on the basis of a cut sample from the goods imported. If the above material alone is considered, then, in my opinion, the proceedings for revision are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct an enquiry to be held and for that purpose admit additional evidence. To arrive at a proper and just decision, there can be no bar to the revising authority to rely upon additional material. This power to admit additional material has been upheld by the Supreme Court even in the case relied upon by the petitioners' Counsel. "27 (3) Where, as a result of any order passed in appeal or revision under this Act, refund of any duty becomes due to any person, the proper officer may refund the amount to such person without his having to make any claim in that behalf." 18.Lastly I may notice two more arguments feebly advanced but not pursued. The first is that there was no justification for confiscation when personal penalty was remitted. Suffice it to say that there are two independent provisions in Sections 111(d) and 112 of the Act. The order of confiscation of improperly imported goods is not dependent on the personal penalty under Section 112 but it is otherwise. The second is that the copies of the first opinion of the three experts were not supplied to the petitioners and thus the petitioners were handicapped in the cross-examination of the three experts. The substance of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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