ORDER
Archana Wadhwa, Member (J)
1. The appellants herein, during the relevant period had taken on lease a refinery plant for refining of De-gummed Soya Oil for the period 15-5-2000 to 14-10-2000. For the said purpose, they were importing Crude Soya Vegetable Oil of edible grade on concessional rate of duty under Notification No. 16/2000-Cus., dated 1-3-2000. During the lease period the appellants had imported a total quantity of 5123.206 MT of Crude Oil. However, it was found that they had utilized only 4989.421 MT of oil. Inasmuch as the entire oil was not utilized for refining, the benefit of concessional rate of Customs duty under Serial No. 30 of the said notification was sought to be denied to them in respect of the balance quantity of 133.785 MT. Accordingly, show cause notice dated 30-3-2001 was issued to them proposing to confirm differential duty to the tune of Rs. 5,85,826/- under the provisions of Section 28 of the Customs Act, 1962. The notice also proposed imposition of personal penalty.
2. During adjudication, the appellants contended before the authorities that out of the total quantity of 133.785 MT of Crude Soyabean Oil imported by them, quantity of 49.85 MT has been sold by them in the open market under intimation to the department. Another quantity of 73 MT of oil was short received by them from the port itself for which they have also made refund claim before the authorities. Balance quantity of about 10.989 MT was transportation loss.
3. The Deputy Commissioner adjudicated the said show cause notice and observed that the appellants have accepted the demand of differential duty on the quantity sold in the open market as also on account of transportation loss. As regards on 73 MT of oil, he referred to the appellant’s contention that as per the surveyor’s report, there was short receipt of the imported material itself. However, the adjudicating authority did not accept the stand of the appellants on the ground that the surveyor’s report was neither conducted in the presence of the Customs officers nor was the same endorsed/verified by the Customs officers of the port of importation. The bills of entry also do not have any endorsement regarding short receipt of the material. As such, not accepting that the crude oil was short landed, he observed that the appellants has not been able to fulfill the conditions of Notification No. 16/2000-Cus., dated 1-3-2000 and accordingly confirmed the differential duty to the tune of Rs. 5,85,826/- and also imposed personal penalty of Rs. 1 lakh upon the appellants. On appeal against the above order, the appellate authority did not find favour with the appellant’s pleas and rejected the appeal. Hence the present appeal.
4. Shri M.L. Grover, Ld. Advocate appearing for the appellants submitted that as per the survey report, dated 22-8-2000, the Crude Soyabean Oil delivered from shore tank was less than the quantity as shown in the Bill of Lading. The total shortages were to the extent of 73 MT. He submits that the authorities have not accepted the said shortage on the sole ground that the Customs was not endorsed the survey report and, as such, the quantity mentioned in the bill of entry has to be taken as the exact quantity imported into India. For the above proposition, reference has been made to Board’s Circular No. 96/2002-Cus., dated 27-12-2002 as also to the Tribunal’s decision in the case of Garg Associates Pvt. Ltd., v. Collector of Customs [1991 (56) E.L.T. 420 (Tribunal)].
5. Countering the arguments Shri Sanjay Singhal, Ld. JDR submits that the concessional rate of duty was available to the appellants in terms of the said notification subject to the conditions that the oil so imported by them is used for Vanaspati. Inasmuch as the appellants had not been able to account for the use of the entire oil for the said purposes the demand was correctly raised and confirmed against them. As regards the appellant’s plea that a quantity of 73 MT was short received by them Ld. JDR submits that the appellant’s entire reliance is on the survey report when the liquid cargo was delivered from shore tank. The said survey report was not conducted in the presence of the Customs Officers and there is no endorsement or verification of the same. As such, the appellant’s plea has been rightly rejected by the authorities below. He has also drawn our attention to the various decisions of the Tribunal, which we shall be discussing in the subsequent paragraphs, to the effect that satisfaction of the Customs authorities as regards the short delivery of the imported cargo is essential.
6. We have considered the submissions made by both sides and have gone through the impugned order. There is no dispute by the appellants for payment of duty in respect of quantities sold by them and loss on account of transportation. The only dispute relates to the quantity of 73 MT of Crude Soya-bean oil, which they claimed was less received by them from their foreign supplier. For the above proposition they have relied upon the survey report.
7. It is seen that the Tribunal in the case of Partap Steels Ltd. v. Commissioner of Customs, Chennai [2001 (135) E.L.T. 168 (Tri. – Chennai)] held that the issue of short receipt of the goods having not been raised at the time of taking delivery before the Customs authorities, remission of duty under Section 23 of the Customs Act cannot be entertained. The Tribunal further observed that if the appellants would have done so, the Customs authorities could have participated themselves in ascertaining the actual quantity available with the port trust and which was delivered to them and could have given Customs clearances only to that quantity. Since the issue was not before the Customs authorities, once the goods manifested and documented on the statutory documents including bill of entries were cleared out of the Customs charge, no refund made available under law to the appellants.
8. Similarly, we find that the Tribunal in the case of jhoonjhunwala Vanaspati Ltd., v. Commissioner of Central Excise, Allahabad reported in 2004 (166) E.L.T. 369 (Tri. – Del.) has held that short receipt of goods imported at concessional rate of duty under Notification No. 16/2000-Cus., cannot be made the basis for not demanding duty in respect of the said quantity, if the same has not been used for manufacture of Vanaspati. We find that the facts of the present case are pan materia with the facts of the above decision, inasmuch as it is the same Notification No. 16/2000-Cus., and the Crude Oil imported for the purposes of refining. The Tribunal while rejecting the appeal observed that once the imported goods are received less in quantity in the factory of importer it cannot be claimed by them that the goods imported by them have been used for the intended purpose.
9. We also note that in another decision in the case of Agarwal Industries Ltd. v. Commissioner of Customs, Hyderabad [2004 (169) E.L.T. 196 (Tri. – Bang.)] it was held that quantity of goods received at warehouse being lesser than the quantity stated in the invoice and no explanation for such difference being forwarded and the foreign supplier being paid as per the invoice quantity, Customs duty is to be levied on the value of the goods as imported at the place of import and not on value of goods as received in the factory. In the instant case also, when queried, Ld. Advocate fairly agreed that no claim has been put forward to the foreign supplier as regards the short quantity received by them and he has been paid for the full quantity.
10. The Tribunal in the case of Andhra Pradesh Civil Supplies Corporation Ltd. v. Collector of Customs [1992 (62) E.L.T. 188 (Tri.)], Tribunal has held that abatement of duty is not applicable when assessment of damage has not been done before clearances by Customs authorities and the subsequent survey was conducted without the Customs authorities taking part in it. As Such, no point of law was held to have been made for reference to High Court. We may at this stage take note of the Hon’ble Madras High Court’s decision in the case of Bharat Earth Movers ltd. v. Collector of Customs, Madras [2001 (133) E.L.T. 564 (Mad.)] holding that remission of duty is not permissible when the destruction of the goods is not at a time before the clearance for home consumption. The Hon’ble Bombay High Court’s decision in the case SLM Maneklal Industries Ltd. v. Union of India [1988 (36) E.L.T. 545 (Bom.)] has upheld the Revenue’s point of view that if the survey was not done in the presence of the Customs Officers, the remission of duty was not permissible.
11. Hon’ble Supreme Court in the case of All India Glass Manufacturers’ Federation v. Collector of Customs [1991 (55) E.L.T. 5 (S.C.)] has held in para 14 of their judgment that once the assessment of the duty on the basis of the invoice is completed by the Customs Officers, there is no express provision which enables the proper officer to make a re-assessment for the purpose of remission on the ground that the goods at the time of their importation or at the time of clearance was sub-standard or damaged and the invoice price does not represent the real value. Section 23 alone provides for abatement of duty and it is necessary for the importer to prove to the satisfaction of the proper officer that the goods at the time of clearance was chargeable to a lower duty for anyone of the reasons contained in Section 22. The Court further observe that it may be open to the buyer to realize from the seller such damages as he would in law be entitled to. That claim for damages cannot have any bearing to the assessment at the time of clearance.
12. By applying the ratio of the above decisions and the facts and circumstances of the case, we are of the view that there is no infirmity in the order of the authorities below. Admittedly, the survey was got done in the absence of the Customs Officers and without their association. There was no verification of such shortages from the shore tank. It is further admitted that the appellants have not lodged any claim with the foreign supplier for the value of the quantity so less received by them. The ratio of the above decisions referred by us is to the effect that if no such survey is conducted in the presence of the Customs Officers, no abatement would be available.
13. We may refer to the decision relied upon by the appellants in the case of Garg Associates Pvt. Ltd. v. Collector of Customs [1991 (56) E.L.T. 420 (Tri.)], wherein the appellant had lodged an F.I.R. for the pilferage of the goods after landing and before clearance of the goods and on police verification, some lost goods were also recovered from the port area. It was in these circumstances, the Bench observed that remission of duty is permissible. The facts of the instant decision are entirely different and as such the ratio does not advance the appellants case. As regards the Circular No. 96/2002-Cus., we find that the same in relation to the issue as to the point of clearance which has to be taken for the purpose of assessment to duty. The said circular lays down that it is the quantity determined as shore tank receipt and not on the ship ullage survey report has to be taken into account for the purpose of duty. The said Circular has no application to the facts and circumstances of the present case.
14. In view of our discussion above, we do not find any merit in the appeal and reject the same. However keeping in view the overall facts and circumstances of the case, we reduce the penalty from Rs. 1 lakhs to Rs. 50,000/-. But for the above modification in the quantum of penalty, the appeal is otherwise rejected.