2004 (97) ECC 764 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(S)

Shri P.S. Bajaj, Member (J)

Ganesh Enterprises Pvt. Ltd. & Subrat Nair, Director

Versus

C.C., Mumbai

Appeals No. C/37 & 38/2004-NB(S)

[Arising out of Order-in-Appeal No. 139/2003/APTS dated 22.9.2003 passed by the Commissioner of Customs (Appeals), Airport, Mumbai]

Final Order No. A/1203-1204/2004-NB(S/M), dt. 13.8.2004,
Certified on 15.9.2004

Duty Drawback

Shipping bill for export -- claim -- Assessee applied for the cancellation of the shipping bills before passing of any such order under Section 51 of the Customs Act and the same was allowed and they were even permitted to take back the goods. There was in fact virtually no submission of the shipping bills by them for exportation of goods. The seizure of the goods was made by the officers of M & P wings of Custom after permission was granted to the assessees to take back the goods, on cancellation of the shipping bills. Therefore, no violation of Rule 13 of the Customs and Central Excise Duties Drawback Rules, 1995, can be attributed to the assessee -- Section 74 of Customs Act.

Interpretation

Clause (1) of Rule 13 makes it clear that the triplicate copy of the shipping bill for export of the goods under a claim for drawback shall be deemed to be a claim for drawback filed on the date on which the proper officer of Customs makes an order permitting clearance and loading of goods for exportation under Section 51 of the Customs Act.

Appeal allowed

PRESENT :

Shri P.C. Jain, Advocate for the appellant.

Shri Randhir Singh, JDR for the respondent.

Case Cited :

Prayag Exporters Pvt. Ltd. v. CC, Mumbai, 2000 (121) ELT 819 (T)........................ [Para 6]

Per : P.S. Bajaj

The above captioned two appeals have been directed; against the common Order-in-Appeal vide which the Commissioner (Appeals) has confirmed the Order-in-Original of the Adjudicating Authority who directed the confiscation of the goods under Section 113(d) and 113(i) of the Customs Act with an option to get the goods redeemed on payment of redemption fine of Rs. 2,00,000 and imposed also penalties on both the appellants as detailed therein i.e. Rs. 5,00,000 on the company (Appellant No. 1) and Rs. 2,00,000 on its Director (Appellant No. 2).

2. The validity of the impugned order has been challenged by the learned counsel mainly on two grounds. Firstly, that the provisions of Section 113(d) and (i) of the Customs Act are not at all attracted to the case of the appellants. Secondly, there had been no violation of Rule 13 of the Customs & Central Excise, Duties Drawback Rules, 1995 (in short Rules, 1995).

3. To elaborate the first ground, the learned counsel has contended that the goods sought to be exported were only garments and the export of the same was neither contrary to any prohibition imposed by, or under the Act or by any other law for time being in force and as such provisions of clause (d) of Section 113 of the Customs Act, are not attracted. Similarly, the provisions of clause (i) of the said Section, according to the counsel, cannot be invoked as the conditions laid down therein do not stand satisfied. To controvert this contention of the learned counsel, the learned JDR has argued that since the goods were brought in the customs area for export and were found to be highly inflated in price, the provisions of clauses (d) and (i) of Section 113 of the Customs Act have been rightly invoked for ordering the confiscation and imposition of penalty on the appellants.

4. I have gone through the record and in my view, the contention raised by the learned counsel deserves to be accepted. From the record, it is evident that the appellants no doubt brought the goods (garments) to the customs area and filed three shipping bills with the custom authorities under the Drawback scheme. These bills were submitted by them on 9.12.98 but they later on submitted an application on 18.1.99 for the cancellation of these bills on the ground that their buyer had cancelled the contract. The copy of that application is at page 24 of the paper book. On that application the A.C. (exports) allowed the taking back of the goods by the appellants subject to the examination of 5% of the goods by the shed appraiser. The shed appraiser, then conducted the examination and the goods were thus allowed to be taken back as is evident from the examination report dated 22.1.99. It is only thereafter that the seizure of the goods was made by the M & P wing of the Customs Commissionerate, on the belief that these goods were brought in the customs area for export with inflated price in order to claim more drawback.

5. The goods brought by the appellants within the customs area were garments and there is nothing on the file to suggest if export of those goods was prohibited at that time on account of any prohibition imposed by or under the law or by any other law for the time being in force. These goods were also neither chargeable to duty. Having allowed permission to the appellants to take back the goods, it could not be said that the goods were attempted to be exported by them. Therefore, the seizure of the goods even if it is assumed that price of the same was inflated, could not be legally made as goods ceased to be the goods intended to be exported. If there had been no permission for taking back the goods, accorded to the appellants, only then it could be said that the goods were intended/attempted to be exported in terms of clause (d) of Section 113 of the Act and the seizure of the same could be made on the ground of having furnished inflated price for claiming drawback because at that stage, the goods were attempted to be exported. But the attempt on their part to export the goods ceased to exist when they were allowed to take back the goods on cancellation of their shipping bills. Therefore, neither the provisions of clause (d) nor of (i) of Section 113 of the Customs Act, stand attracted to the case of the appellants for want of any attempt on their part to export the goods in terms of these provisions.

6. Apart from this, the goods being neither prohibited goods nor chargeable to duty, the confiscation of the same could not be ordered on the ground that the value of the same was inflated to claim drawback in view of the law laid down by the Tribunal in the case of Prayag Exporters Pvt. Ltd. v. CC, Mumbai, 2000 (121) ELT 819 wherein it was so ruled. This Judgment of the Tribunal has been also approved by the Apex Court as reported in 2003(155) ELT-4.

7. This takes me to the second ground put forth by the learned counsel for disputing the correctness of the impugned order. According to the counsel, since there was no order passed by the Competent Authority under Section 51 of the Customs Act permitting the clearance and loading of the goods for export, the provisions of Rule 13 of the Rules, 1995, referred to above, did not stand attracted and as such, it could not be said that any deemed claim for drawback stood filed by the appellants. However, learned JDR on the other hand while refuting this argument of the learned counsel has contended that once the shipping bills were filed by the appellants, the claim for draw back was to be presumed to had been filed by them and as such, the violation of Rule 13 of the above said Rules, was complete.

8. In order to appreciate the contention and counter contention of both the sides, it would be beneficial to refer to the relevant clause (1) Rule 13 of the Customs & Central Excise Duties Drawback Rules, 1995. The said Clause reads as under:

"Triplicate copy of the Shipping Bill for export of goods under a claim for drawback shall be deemed to be a claim for drawback filed on the date on which the proper officer of Customs makes an order permitting clearance and loading of goods for exportation under Section 51 and said claim for drawback shall be retained by the proper officer making such order."

9. The bare perusal of this clause makes it clear that the triplicate copy of the shipping bill for export of the goods under a claim for drawback shall be deemed to be a claim for drawback filed on the date on which the proper officer of Customs makes an order permitting clearance and loading of goods for exportation under Section 51 of the Act. In the instant case, there had been no such order passed by the competent authority under Section 51 of the Act and as such, the triplicate copy of the shipping bills submitted by the appellants could not be deemed to be a claim for drawback. Moreover, they rather applied for the cancellation of the shipping bills before passing of any such order under Section 51 of the Customs Act and the same was allowed and they were even permitted to take back the goods. There was in fact virtually no submission of the shipping bills by them for exportation of the goods. The seizure of the goods was made by the officers of M & P wings of Customs after permission was granted to the appellants to take back the goods, on cancellation of the shipping bills. Therefore, no violation of Rule 13 of the Customs and Central Excise Duties Drawback Rules, 1995, can be attributed to the appellants.

10. In the light of the discussions made above, the impugned order of the Commissioner (Appeals) against the appellants cannot be sustained and the same is set aside. The appeals of the appellants are allowed with consequential relief, if any, permissible under the law.

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