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TMI Blog2004 (10) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... to be re-exported on payment of fine and penalty. Before parting with this case, we would also like to observe that, if an importer were to pay duty also (in addition to fine and penalty), on the goods permitted, to be re-exported, he need not undergo the various complex and time consuming formalities of re-export again and he is free to dispose of the goods in the domestic market itself, once duty and other charges have been paid on it. Thus, we allow re-export of the excess quantity of goods on payment of redemption fine of Rs. 1,00,000/- (Rupees One lakh) and impose a penalty of Rs. 25,000/- (Rupees Twenty-five thousand) which would meet the ends of justice and we order accordingly. The appeal is thus disposed of in the above terms. The appellants are entitled to consequential relief, if any - S/Shri P.G. Chacko, Member (J) and Jeet Ram Kait, Member (T) [Order per : Jeet Ram Kait, Member (T) (Oral)]. - This appeal is directed against the order-in-Original No. 1164/2003, dated 27-10-2003 passed by the Commissioner of Customs (Imports) Chennai, by which the Commissioner has rejected the invoice value of Rs. 8,18,063/- and enhanced the invoice value to Rs. 22,83,215/- besides or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e K.R. Vijeya Shankar, who looked after the work of clearance of the goods. It was in these circumstances that show cause notice was issued to the proprietrix of the appellants firm and also to K.R. Vijeya Shankar which culminated in the order of adjudication whereby the adjudicating authority has passed the order as noted in Para 1 above. 3.Shri S. Murugappan, learned Counsel appeared for the appellants and referred to the grounds of appeal and submitted that the appellants had specifically prayed for allowing re-export of the goods as they had faced many problems because of the mix-up that had happened. He has also submitted that in the present case, the supplier of the goods had agreed for the re-shipments of the goods but the adjudicating authority has held that since the goods are tainted, re-export cannot be permitted. He has pleaded that the appellants cannot be penalised for no fault of theirs since the quantity in excess was supplied by the foreign supplier without the knowledge of the importer and immediately on coming to know of the supply of excess quantity, the foreign supplier had agreed for the re-shipment of the goods. It was in these circumstances that the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s without payment of duty. He has also relied upon the judgment of the Larger Bench in the case of A.K. Jewellers v. CC, Mumbai reported in 2003 (155) E.L.T. 585 wherein also re-export of the imported goods was allowed. The Larger Bench while doing so has relied upon the judgment of the Apex Court in the case of Collector v. Elephanta Oil Industries Ltd. reported in 2003 (152) E.L.T. 257 (S.C.). During the course of hearing, the learned Counsel also cited the order of the CEGAT, Kolkata, in the case of Grand Prime Ltd. v. CC, Calcutta reported in 2001 (137) E.L.T. 795 wherein it was held that when importer had not paid for the goods, exporter continues to be the owner and entitled to re-export the goods. 4.In the light of the above decisions, the learned Counsel submitted that the principle laid down in the above rulings is that re-export of goods is permitted on payment of redemption fine and without payment of duty. He has also pressed into service the judgment of the Hon'ble Apex Court in the case of Commissioner of Income-tax v. Sun Engineering Works P. Ltd. reported in 1992 (SC 2) GJX-0573-SC wherein the Hon'ble Apex Court has ruled that "while applying a decision to a later c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods. He has further cited the order of the Tribunal in the case of Hongkong Polychem Company v. CC, Madras reported in 2003 (162) E.L.T. 1088. He has referred to Paras 2, 11 and 13 thereof and submitted that in the cited case also it was found on investigation that it was a case of fraud on the Revenue by circumventing restrictions and hence not a fit case for allowing re-shipment. He has further referred to the order of the West Zonal Bench of the Tribunal in the case of Sedco Forex International Drilling Inc. reported in 2001 (135) E.L.T. 625 wherein in Para 33 the Tribunal has discussed Section 125 of the Act, as it existed prior to 1985 and subsequently. He has submitted that in Para 34 thereof, the Tribunal has held that the owner of the goods or the person from whose possession or custody the goods were seized, shall be liable to duty and other charges payable. He has submitted that the appeal filed by the party against the order of the Tribunal has been dismissed by the Hon'ble Apex Court as reported in 2002 (141) E.L.T. A180. During the course of hearing the learned JCDR also referred to the judgment of the Hon'ble Supreme Court in the case of CC (Import), Mumbai v. Jagd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the background of the above facts, the issue that arises for determination is whether the prayer for re-export can be allowed and if allowed, duty is payable in addition to redemption fine and penalty. Examining this issue, we observe that the adjudicating authority has rejected the prayer for re-export of the goods on the ground that the goods were held to be confiscable and while holding so, he has relied on the judgment of the Hon'ble Apex Court in the case of Commissioner of Customs, Kolkata v. Grand Prime Ltd. reported in 2003 (155) E.L.T. 417, particularly Para 14 thereof. The said para is reproduced below for convenience of reference : "The points of distinction between the present case and Dugar's case (supra) are that the importer did not disappear in that case. Rather it appeared before the Customs Authorities and claimed the right to take delivery of the goods. The importer in Dugar's case participated in adjudication proceedings before the Customs authorities and during the course of the proceedings the exporter appeared on its own and pleaded that the goods be not confiscated as the title of the goods had not passed. In Dugar's case, there was a valid import licence, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, CEGAT Calcutta has clearly misunderstood the order passed by the Hon'ble High Court at Calcutta and observed that : "The Hon'ble High Court vide order dated 5-7-2000, directed the Tribunal to dispose of the appellants' appeal (Appellants before CEGAT, Calcutta - Grand Prime Ltd.) in the light of the Hon'ble Supreme Court decision in the case of UOI v. Sampat Raj Dugar reported in 1992 (58) E.L.T. 163 (S.C.)." Whereas in fact, there was no such direction by the Hon'ble High Court at Calcutta to CEGAT, Calcutta to decide case in accordance with Sampat Raj Dugar's case. This position is clear from Para 5 of their judgment reported in 2003 (155) E.L.T. 417 (S.C.), relied upon by the Revenue. Further, in the case of Grand Prime Ltd. the Hon'ble Supreme Court has clearly noted about the fraud and misrepresentation played by the party therein and has also held that there was doubt in their mind about the genuineness of the transaction. The Hon'ble Apex Court in Para 8 of the judgment has made an observation in the context of the facts and circumstances arising in the case of Grand Prime Ltd. that the Customs Act does not contain any provision regarding re-export of goods and the Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble High Court at Calcutta. This judgment also supports the plea of the appellants. In the case of Siemens Limited v. CC, reported in 1999 (113) E.L.T. 776 (S.C.), the adjudicating authority itself allowed the assessee to re-export the goods without payment of duty. The Apex Court also ordered refund of Rs. 6.00 lakhs paid by the assessee after the re-export took place. In the case of A.K. Jewellers v. CC, Mumbai reported in 2003 (155) E.L.T. 585 (Tri. - LB), it is held in Para 10 as under : "...Re-export is a facility permitting export of goods which have already been permitted to be imported. Except in cases where import is prohibited by law, those goods which have been imported may be permitted to be exported. There is no prohibition on the adjudicating authority from permitting re-export of the goods. It is also held therein that when an adjudicating authority after ordering confiscation of imported goods permits their re-export, he is in effect ordering the redemption of the goods on payment of fine and thereafter permitting them to be re-exported. Each of them is independent and is permitted by law. An order thereby both are combined therefore, it's not contrary to la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing authority while permitting the re-export of the goods subject to payment of fine acted within his jurisdiction and the Tribunal held that there was no provision under the Act empowering the Collector to order re-export of the goods. The Tribunal however permitted to redeem the goods on payment of fine only of Rs. 5,000/-. There was no order regarding payment of duty. In the case of Kothari Filaments v. CC, (Port) Calcutta, reported in 2002 (144) E.L.T. 80, relied upon by the Revenue, plea was made by the party for quashing the fine and penalties on the ground that the Commissioner has allowed re-export of the goods. That was also case where huge fraud was under way as goods viz. Tetracycline was concealed in a consignment of Lithopone and imported in the garb of Lithopone. The majority order while rejecting the plea for quashing redemption fine and penalty has only made an observation that there was no provision in the Act giving jurisdiction to the Commissioner to grant permission for re-export. The majority order did not rule that re-export was not permissible. Further, in Para 22 of the order, it was also noted that there was no different view between the Members of the Orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also held therein that fine and penalty are imposable when goods are allowed to be re-exported. We also note that the Bangalore Bench of the Tribunal in the case of Unisindo Trading Pvt. Ltd. v. CC, Hyderabad reported in 2003 (153) E.L.T. 81 has allowed re-shipment of goods on payment of nominal fine, even when some of the goods imported were found to be restricted/banned. We further find that the South Zonal Bench in the case of Alukkas Exporters v. CC, Coimbatore reported in 2002 (145) E.L.T. 227 (T) = 2002 (48) RLT 311 has allowed re-export of offending goods on payment of penalty. Further, the Tribunal in the case of Raj Guhan Exports Imports v. CC, Chennai reported in 2004 (164) E.L.T. 441 wherein the Department itself allowed re-export of the goods on payment of fine and penalty while upholding the order of Commissioner, the Tribunal has reduced the quantum of penalty. In the case of Venus Gems Jewellery v. CC, (ACU), New Delhi, reported in 2002 (142) E.L.T. 388, it was held that the importer was entitled to re-export the goods and while holding so, redemption fine and penalty were set aside. In the said decision, the Tribunal has relied a number of decisions of the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 129 while dealing with a case of imported goods where the importer had abandoned the goods and prayed for re-export of the imported goods had ruled that the party will be entitled to re-export the goods if the title had not passed to the importer. In the present case, the records show that the appellants have not made payment to the supplier and the supplier has agreed to take back the goods, as the title has not passed to the importer. We find force in the submission of the learned Counsel for appellant as could be seen from the various case laws cited above, the department itself has been permitting re-export of imported goods. To co-ordinate Benches of the Tribunal throughout the country have also been taking a view that permission to re-export the goods is not contrary to law. Therefore, relying on the various decisions rendered by the Tribunal, the High Courts, and the Hon'ble Supreme Court as noted above, we hold that the plea of the Revenue that re-export of the imported goods is not permitted by law, cannot be countenanced and we reject the same. We hold that the appellants are entitled to re-export the goods on payment of fine and penalty. While coming to this conclusion, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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