ORDER
Moheb Ali M., Member (T)
1. The above appeals arising out of the order of the Commissioner of Customs Kandla, are taken up for disposal together.
2. The facts are that M/s. Satyam Enterprises filed 8 DEEC Shipping Bills before the Customs authorities at Kandla for export of Indian Guargum treated and Pulverised. The exports are sought to be made on behalf of one M/s. Stonemann Mumbai, who applied for a DEEC licence. On verification the Customs authorities found that M/s. Stonemann claimed before the Zonal Advance Licensing Committee constituted by the Ministry of Commerce that their end product,
Guargum Pulverised and treated, whould require the following 10 chemicals. The licensing authority granted them to DEEC licence which would entail them to import the chemicals the chemicals are 1 to 10.
(A) Acrylamide (B) Dicyandiamide (C) Ascorbic Acid (D) Laboratry/Chemical/Drug/reagent Betamethsone (E) Amino Acid (L.Lysine) (F) General Pesticide (G) Printing Ink. (H) HDPE/DCPE/LLDPE/PP/Moulding (I) Multiwall paper sacks with plastics liners (J) Phenol.
3. Since the 8 shipping bills in question did not indicate that
the export product did contain the above chemicals they (Shipping Bills)
were converted into Free Shipping Bills and exports were allowed.
Further investigation revealed that M/s. Satyam Enterprises exported the
same goods under cover of 20 Shipping Bills, for their logged in a DEEC
Book issued along with and another DEEC lincnce No. 03025826 dated
13.10.98. However it was noticed that no import of the entitled
chemicals stated in the licence took place. The Customs authorities
allege that M/s. Stonemann and M/s. Satyam Enterprises connived with
each other to defraud the goof of their import duty on the 10 chemicals
mentioned in the DEEC licence had being imported therin and that by
making false declaration before the licensing authorities they rendered
the export goods liable to confiscation and rendered themselves liable to
penal action under Section 114 of the Customs Act,
4. The Commissioner confirmed the allegations contained in
the show cause notice. In the impugned order the Commissioner ordered
de-logging of the 20 Shipping Bills already logged in the DEEC Book,
imposed a penalty of Rs. 1 crore on M/s. Stonemann, Rs. 50 lakhs on
M/s. Satyam Enterprises and Rs. 50 lakhs on Shri Mukesh Shah partner
of M/s. Stonemann.
5. Heard both sides.
6. The Commissioner imposes penalties under Section 114 of
the Customs Act which stipulates that any person who in relation to any
goods does are omits to do any act which act are omission would render
such goods liable to confiscation under Section 113 or abates doing so
or omission of such an act is liable for penalties. In the impugned order
the Commissioner nowhere has held that the goods sought to be exported
or already exported were liable to confiscation. Such a liability to
confiscation is vaguely mentioned in the show cause notice but nowhere
does the Commissioner in his order give a finding as to whether he holds
the goods are liable to confiscation at all. Imposition of penalty under
Section 114 of the Customs Act without giving a finding on the liability
of the goods for confiscation cannot be sustained. Secondly, we observe
that there is no mis-declaration before any customs authorities as to the
actual contents of the goods under exporter. The department holds that
there was a mis-declaration before the ZALC. There is a separate
enactment in the form of Foreign Trade Regulations Act and Rules made
there-under to take care of such a situation. The Customs authorities
cannot invoke the provisions of the Customs Act to impose penalties for
some mis-declaraiton, if any, made before other authorities. In so far as
the exports are concerned a correct declaration has been made in respect
of the goods. We also observe that the Tribunal in the case of Fitwell
Exports Pvt. Ltd. v. Commissioner of Customs, New Delhi [1999 (107)
E.L.T. 221 (Tribunal)] held that it is not a condition at the time of export
that the components in the case of which the benefit is claimed later had
to be incorporated in the export document. The Tribunal also held that if
the customs authorities were to suspect that the exporter would be entitled to un-entitled benefits they should take care to either inform the licensing authorities or to log the DEEC Book. It is not open to the Customs to invoke the provisions of Section 114 of the Act, where no offence under the Customs Act, in so far as the export goods are concerned is committed. We also notice that the Commissioner imposed separate penalties on the partnership firm M/s. Stonemann and its partner.
7. The Commissioner’s order in so far as it related to the penalties imposed on the appellants is set aside.
8. All the three appeals are allowed.
(Pronounced in Court)