ORDER
R. Jayaraman, Member (T)
1. The Misc. Applications have been moved by the importers for implementing the final order of this Bench No. 1533/37/93/WRB, dated 30-8-1993. In the aforesaid order this Bench allowed reshipment of the consignments declared to be brass scrap but on examination were found to be containing serviceable used brass sheets and nails. This Bench, while passing the aforesaid order took note of the undisputed factual position as below:
2. Both the importers are actual users, who have placed orders only for import of brass scrap, which is required for manufacture of export goods and these consignments have been imported against DEEC licences held by them. We also took note of the factual position recorded in the order that it is for the first time the consignments contained the serviceable material and these importers have not come to any adverse notice previously. It is also observed from the order that there is no evidence to show that the importers have deliberately imported the serviceable materials. Moreover, these serviceable materials are used once but not in the form of scrap. The importers had also requested the Department to consider their plight and allow the goods to be mutilated. However, the Collector ordered confiscation but allowed redemption for home consumption on payment of fine with enhancement in value as applicable to serviceable materials. In the appeal before us, we considered the situation in | the context of the Gujarat High Court judgment in the case of Rupani Spinning Mills. However, since mutilation is not practically possible of such a huge quantity, and the importers pleaded that it would not be worthwhile to clear the consignment on payment of duty as serviceable material, we allowed reshipment without any fine but sustained a penalty of Rs. 10,000/- in each case. However, in the present Misc. applications made by the importers, we find that the said order has not been implemented. The Department have moved Reference application in both the cases and also requested for staying the operation of the order of this Bench. On a perusal of the reference application, we find that no point of law requiring to be referred to the High Court has been framed.
3. The points of law as indicated by the Collector are re-produced below:
(i) The importers had been supplied brass sheets at the price of brass scrap, though they professedly indented for brass scrap only. Albeit, there is no direct evidence to Sustain the charge of deliberate import, this can always be inferred from circumstantial evidence. The party has export obligations in respect of radiators for which they need brass strips. If the brass scrap is imported, it has to be melted, sheets made and then strips have to be cut out of it. If sheets are imported, the whole process is much simpler for them.
(ii) The goods had not been imported from any manufacturer but from a trader. The importer had agreed to the loading of the assessable value of the goods as ascertained and proposed by the Department without demur. This shows that the importer did have the knowledge regarding the condition of the goods and that the goods had been undervalued.
(iii) The Hon’ble Tribunal had relied upon the Gujarat High Court’s decision, 1992 (60) E.L.T. 77 in the case of Rupani Spinning Mills. This case relates to the import of woollen/synthetic rags for which the rules of mutilation have already been framed by the Central Govt. In the case of woollen/synthetic rags, mutilation can easily be carried out in the Customs area. In respect of brass sheets, no rules for mutilation have been framed and such mutilation is not feasible in the Customs area. The case law cited is thus not relevant to the instant case.
(iv) It has been the common practice of the importers to adopt such modus operandi of indenting for certain item and actually importing altogether different goods of higher value. Such apparently innocent modus operandi are fraught with revenue implications and thus need to be curbed. The permission to reship the goods against a meagre penalty will only encourage such fradulent practices in future by the same importer and other importers.
4. Though the application is titled as reference application, the aforesaid points appear to be the grounds of appeal. The Tribunal’s order, on ‘ factual position is final and only on points of law, reference is permissible. Even in the aforesaid points, the factual position which was taken note of by this Bench, is not disputed. However, it is pleaded that the parties have export obligation in respect of radiators for which they need brass strips. If the brass scrap is imported, it has to be melted, sheets made and then strips have to be cut out of it. If the sheets are imported, the whole process is much simpler for them. We find that this is nothing but presumption and this was not even discussed in the adjudication order. In any case, an order cannot be passed on the basis of presumption and this cannot also be agitated as a point of law. The other point raised is that the goods had not been imported from any manufacturer but from a trader and the importers had agreed to the loading of the assessable value of the goods and hence the knowledge regarding the condition of the goods is attributed. Even before us, they did not dispute the condition of the goods arrived and once the condition of goods on examination was known to them they were fair enough not to dispute it and the value applicable thereto . On that ground, we cannot come to a conclusion that they had prior knowledge about the arrival of serviceable materials,-instead of scrap. There is also a possibility for the supplier abroad to treat such used articles as scrap in their country. However, in view of these proceedings, if the importers do not take proper precautions to get the goods specifically in the form of scrap, they would be put to serious difficulties in future. Since this is the first case of this type noticed in respect of two actual users and in the absence of any evidence of any pre-planned nature of the import of used serviceable items, our order based on the judgment of the Gujarat High Court does not call for any modification either on facts or on point of law. As regards the apprehension that this may lead to unscrupulous elements importing goods under misdeclaration and resorting to profess innocence, we may observe that the findlings given by us in these two cases are entirely based on the facts noticed and they cannot be made applicable or be cited as case laws for all situations, where mala fides are discernable. Moreover, an apprehension expressed cannot be a point of law for reference to the High Court.
5. In view of the above discussions, we reject both the Reference applications filed by the revenue and direct the authorities to implement our order dated 30-8-1993, without any further delay. On request from the applicants (importers), we also extend the time limit for reshipment till 31-12-1993.