ORDER
S.S. Kang, Member (J)
1. The following question of law is referred to the Larger Bench:
“Whether when part of goods imported is found to be liable to confiscation, department is entitled to confiscate the entire consignment of the goods and consequently penalty imposed or whether only the offending portion of the consignment is to be confiscated and penalty limited to that portion.”
2. The admitted facts of the case are that appellants made import of garments declaring the same in the Bill of Entry as completely pre-mutilated old Synthetic/Woollen rags. On examination, it was found that part of the consignment contained pre-mutilated Synthetic rags cut into two pieces and part of the consignment was found to be of non-mutilated serviceable garments. The adjudicating authority confiscated the non-mutilated serviceable garments and allowed the same on payment of redemption fine. The importers, as well as the Revenue, filed appeals before the Commissioner of Customs and Commissioner of Customs vide impugned order dismissed the appeal filed by the importer and allowed the appeal filed by the Revenue on the ground that the garments were not mutilated according to the norms of the Public Notice No. 86/94 dated 20-7-94 and imposed penalty after setting aside the order passed by the adjudicating authority in this regard.
3. We find no question of law as referred is arising out of the admitted facts as noted above, therefore, without answering the question of law we take up the appeals for disposal.
4. In appeal filed by M/s. Gee Tex Wool Agencies, the appellant is only contesting the portion of the impugned order whereby the appeal of Revenue was allowed. The contention of the appellant is that the adjudicating authority gave a finding that the garments were cut into 2 to 3 pieces, haphazardly cut, not alongwith the scams and that original garments could not be retrieved from these cut rags, therefore, these are pre-mutilated old rags and the Revenue is relying upon the Public Notice No. 86/94 dated 20-7-94 to say that the garments are not cut according to the norms prescribed in the Public Notice. Revenue is also relying upon the decision of the Hon’ble Kerala High Court in Original Petition Nos. 22874 & 24707/99 and Writ Appeal No. 2203/99 dated 24-12-99. In this case, Hon’ble Kerala High Court held that as per Public Notice No. 86/94 dated 20-7-94, the other Woollen/Synthetic articles including tailor cuttings should be cut into a minimum of 8 pieces and the importers are bound to satisfy the norms prescribed under the public notice. For ready reference Para-17 of the judgment is reproduced below :
“Apart from the above, in the present case, we find that public notice has been issued by the Collector of Customs on the direction issued by the Board. Ext. P3 is public notice No. 86/94 dated 20-7-94 issued by Collector of Customs, Cochin, prescribing norms of mutilation. Detailed guidelines are given therein. In the case of coat, frocks and similar garments, cutting should result in a minimum of 6 pieces. The manner in which the cloths are to be cut are also detailed therein. In the case of trousers and similar garments, it should be 7 to 8 pieces and how it has to be cut across each leg etc, are detailed. Any other Woollen/Synthetic articles including tailor cuttings should be cut into a minimum of 8 pieces. Here also, how it has to be cut is mentioned. There is reference to the manner in which hosiery and other rags and shoddy wool are to be cut. The above public notice was issued following the norms of mutilation laid down by Bombay Customs House in their public notice No. 60/88 as amended by public notice 80/93 pursuant to the instruction given by Central Board of Excise and Customs. It is true that the Collector of Customs addressed Ext. P4 dated 19-6-1996 to the Director, Central Board of Excise and Customs, seeking clarification regarding the earlier direction in the light of the decision of the Supreme Court in Swasthika Woolen Industries case. But the Board did not give any instruction which would go against their communication Ext. R1(b) produced along with the counter affidavit of respondents 1,3 and 4 in O.P. 22874/99. From the above communication, it is clear that the Board had taken a decision that all Customs Houses should follow the norms of mutilation as laid down by the Bombay Customs House in its public notice 60/88 as amended by public notice 80/93. It is futile to contend that Ext. P11 minutes of the meeting of the Wool and Shoddy Yarn Manufacturers’ Association with member (Anti Smuggling) and Commissioner of Customs Collector held on 15-10-1996 would show that the Board has retracted from its position as evidenced by Ext. R1(b) referred above. Ext. P11 has to be understood as a decision taken in order to deal with an emergent situation which had arisen at Calcutta Port due to the delay in clearing of the goods and impending arrival of winter season. It cannot be treated as a general direction given to all the Customs Houses to reduce the number of cuts into two. Therefore, when 1997-2002 Exim Policy came into force, the norms which were available, were those covered by Ext. P3 public notice. Subsequently, Ext. P24 public notice dated 22-2-1999 was issued only to satisfy the queries made by the Trading Public as to whether the norms of public notice 86/94 would continue to apply. Therefore, it is clear that the public notice which had been issued by the Collector of Customs had the approval of the Central Board of Excise and Customs. For both these reasons, according to us, the adjudicating authority has correctly taken the view that the petitioners are bound to satisfy the norms prescribed under Ext. P3 and as reiterated in Ext. P24. The public notices referred above have been issued in accordance with law.”
5. In the present case, in view of the admitted position that the garments in dispute were not cut in accordance with the norms laid down in the public notice No. 86/94 dated 20-7-94, therefore, we find no infirmity in the impugned order passed by the Commissioner of Customs (Appeals).
6. In appeal filed by M/s. B.M.C. Spinners Pvt. Ltd., the contention of the appellant is only in respect of redemption fine. The Commissioner (Appeals) in the impugned order after taking into consideration the margin of profit and landed cost imposed the redemption fine of Rs. 60,000/-. The margin of profit was worked out to be 30% of the landed cost, therefore, taking into consideration, the value of imported goods, we find no reason to interfere with this finding. In view of the above discussion, both the appeals are dismissed.