ORDER
P.K. Desai, Member (J)
1. This is an appeal directed against the order-in-Appeal No. 1802/88 BCH dated 25-4-1988 passed by the Collector of Central Excise & Customs (Appeals), Bombay, confirming the Order-in-Original No. S/10-57/870 PCC dated 21-9-1987 ordering confiscation of the consignment of 2000 kgs of rough cubic zirconic scrap, unworked, uncut, unset but granting option to the appellants to redeem the same on payment of fine of Rs. 15,000/- and also imposing a personal penalty of Rs. 5,000/- under Section 112 of the Customs Act on the appellants.
2. The appellants imported the aforesaid consignment and filed the Bill of Entry on 25-5-1987 declaring the invoice value of the cosignment at 5.25 US Dollars per kg. As per the department, the consignment was got examined by the experts and it was reported that there was an excess of 58.6 kgs and shortage of 12.8 kgs and the value of the consignment as put was excessive and it could be only US $ 3.00 per kg. A Show Cause Notice was accordingly issued and adjudication was conducted and the impugned order was passed, which was confirmed by the Collector (Appeals).
3. Shri G .K. Rana, the ld. Advocate submitted that there was no mala fide on the part of the appellants inasmuch as, they did file the Bill of Entry as per the value mentioned in the Invoice despatched by the suppliers. However, the suppliers, on their own, sent a cable on 30-5-1987 informing them that by mistake they sent the goods of inferior quality and the value was US $ 3.10 per kg and they were sending the revised invoice and further requesting them to send back the goods if so desired. According to him the revised invoice was received by them and therefore, they wrote a letter dated 12-6-1987 to the Assistant Collector, Jewellery Section, where the Bill of Entry was pending for clearance, intimating the revised valuation. He has submitted that it is only thereafter that the Department took action and drew samples and got the same examined for the purpose of valuation and made out a case against them. In his submission therefore, the appellants were vigilant enough to get the valuation amended even before the Bill of Entry was assessed for the purpose of duty and that there was no intentional misdeclartion on their part and confiscation ordered under Section 111(m) of the Customs Act was not sustainable. He has also referred to the decision of CEGAT reported in 1992 (57) E.L.T. 609 and also the case reported in 1988 (33) E.L.T. 383 and has submitted that here is not a case of wilful miscalculation. On enquiry, the ld. Advocate has submitted that though they were initially requesting for re-shipment of the goods, they are interested in clearing the goods for home consumption.
4. Shri K.M. Mondal, the Ld. SDR, however, has submitted that the confiscation of the goods as misdeclared was not only on the ground of overvaluation but was also on account of excess found to the extent of 58.600 kgs and shortage noticed to the extend of 12.800 kgs. He has submitted that the goods were received as early as on 15-5-1987 and the Bill of Entry, after being presented, was forwarded to the Jewellery section. In his submission, it was very probable that at that particular time, the officer in-charge might have expressed the need to get the consignment examined by the jewellery experts for valuation and hence the Bill of Entry was kept aside without assessment and during that time lag, having suspected some foul play, the entire correspondences could have been manipulated. He has submitted that if there was a bona fide, the letter seeking amendment in the Bill of entry would have been addressed, not to the Jewellery department, but to the Assistant Collector in charge of imports, who was the only authority to sanction amendment in the Bill of Entry. In that view of the matter, the entire correspondences produced has to be considered which could lead to show that the appellants were trying to shield themselves against the alleged misdeclaration. As to the shortage and excess noticed, he has referred to the reply to the Show Cause Notice, where the appellants themselves have admitted the excess to the extent of 45.250 kgs. He has pleaded that therefore on both the counts, the impugned order is justified.
5. Shri Rana, the ld. Advocate, in reply, has submitted that so far as the excess is concerned, they have admitted to the extent of 45.250 kgs and has submitted that looking to the total bulk imported, this excess has to be taken as a negligible one and ought to be condoned.
6. Considering the submissions made and examining the record, it is clear that the original invoice dated 15-4-1987 is for US $ 5.10 per kg. The Bill of Entry seeking clearance for home consumption, showing the said valuation, is filed on 15-5-1987. Telegram from the suppliers is dated 30-5-1987 and the letter referring to the telegram and sending the revised invoice is despatched on 30-5-1987. The revised invoice however bears the same date as the original invoice i.e. 15-4-1987. A letter dated 12-6-1987, addressed to the Assistant Collector, Jewellery Section, seeking amendment in the Bill of Entry, in relation to the valuation, though does not bear any endorsement as to its due receipt, on the reverse of the Bill of Entry, there is one endorsement referring the said letter, but that is scored off, however yet another endorsement dated 25-6-1987, has also a reference to the said letter, and as such there could be no doubt about receipt of the said letter by the appraising authorities. The endorsement on the Bill of Entry shows that the samples were drawn on 18-6-1987 and the endorsement dated 25-6-1987 shows that direction was given to put up samples as also letter dated 12-6-1987 before the competent authority.
7. The ld. SDR, has harped on the point that all subsequent maneuvering was on account of the department suspecting some foul play. However, none of the endorsements on the Bill of Entry, leads to this inference, and neither the Show Cause Notice nor the order-in-original whispers about that. It is true that the Bill of Entry though filed on 15-5-1987 and consignment also having arrived by that time, there has been no clearance of the said consignment for a considerably long time, but that could not be the sole ground to hold that the department had suspected the foul play and the appellants had reasons to believe that they would be caught. Similarly merely because the letter dated 12-6-1987 is addressed to the Assistant Collector, Jewellery Section and not to the Assistant Collector Import Section, also does not lead to draw an inference that the appellants were acting under some mala fide. Further, this is not the view taken by the authority below. He has on the contrary observed that the department was not informed of the change in value before the examination of the consignment, which gets falsified by the very endorsement on the reverse of the Bill of Entry. Receipt of the telegram only on 30-5-1987 when the consignment was despatched somewhere in April 1987 and duly received in India by the middle of May, has also been projected by the ld. SDR, as an abnormal one by posing a question as to what motivated the suppliers after a lapse of about one month, to realise that wrong consignment and inferior quality of goods were sent. The only inference, according to the ld. SDR, could be that the appellants having smelt the probable detection of the facts, must have persuaded the suppliers to initially send a telegram and then the revised invoice. The date of revised invoice also, as pleaded by the ld. SDR, has an important bearing on this suspicion. This reasoning does appear rational, but that leads only to the extent of raising a suspicion, and suspicion, however strong, cannot be taken as a proof, much less a conclusive proof.
8. The evidence on record clearly indicates that before the department took any action in relation to the Bill of Entry filed, the appellants have come forward with a letter dated 12-6-1987 addressed to the officer then in charge of appraisal, and have prayed that they be permitted to amend the Bill of Entry, in regard to the valuation. The department seems to have sprung into action only thereafter. The endorsements on the Bill of Entry bear testimony to the same.
9. The only reason given by the adjudicating authority in holding the consignment as liable to confiscation vide Section 111(m) of the Customs Act, on the ground of misdeclaration as to the value of the goods, is that there did not exist any evidence that the department was informed of the change in value before examination. From what has been discussed herein above, the said reasoning does not stand the scrutiny of the evidence and therefore, the order on that count, cannot be sustained.
10. The misdeclaration is also alleged on misdeclaration as to the weight. There has been practically no challenge to the same, except to the quantity found excess. The appellants plead the excess to be only 45.250 kgs and not 58.600 kgs as alleged. Plea is raised that in the total quantity of 2000 kgs such an excess ought to be ignored as negligible. The quantity found excess may provide some mitigating circumstances, but cannot be overlooked as pleaded by the appellants. Act of misdeclaration in relation thereto therefore, has to be held as proved, and that would attract the provision of Section 111(m) of the Customs Act. The order of confiscation on that count therefore has to be upheld.
11. The authorities below have, while ordering confiscation, permitted the appellants to re-export the goods, as was alternatively pleaded by them. The appellants now plead that they are interested in clearing the goods for home consumption. With the allegation of over-valuation as a ground of mis-declaration having not been sustained, there appears no reason not to permit the appellants to clear the consignment for home consumption. The said prayer is therefore granted.
12. In the result, the appeal is partly allowed, and while the allegation of over-valuation is not sustained, the order of confiscation vide Section 111(m) of the Customs Act is confirmed in relation to misdeclaration as to weight. However, considering the circumstances, the fine in lieu of confiscation is reduced to Rs. 5000/- (Rupees Five Thousand only) and the appellants are permitted to clear the consignment for home consumption. As there is no mala fide on the part of the appellants established, personal penalty imposed is set aside.
Prounced in the open court.