ORDER
P.G. Chacko, Member (J)
1. The appellants in Appeal No. C/99/2004 imported from China what they declared as ‘Mulberry Raw Silk – 4A grade’, and filed a Bill of Entry on 27-6-2003 for clearance of the goods. The goods were subjected to first check and samples thereof were drawn and forwarded to the Central Silk and Technological Research Institute (CSTRI) [under Central Silk Board, Ministry of Textiles, Govt. of India] for ascertaining whether the goods attracted antidumping duty under Notification No. 106/2003, dated 10-7-2003 which prescribed anti-dumping duty on ‘Mulberry Raw Silk’ of grade ‘2A’ imported from China. The CSTRI report showed that the subject goods were of grade ‘B’ as against the declared grade ‘4A’. ‘Mulberry Raw Silk’ of grade ‘B’ was chargeable to anti-dumping duty under the above Notification. The importer subsequently requested for re-testing fresh samples of the goods. However, later, they withdrew this request and applied for permission of the department to return the consignment to the Chinese supplier. This request for re-export was contained in their letter dated 1-8-2003 addressed to the Deputy Commissioner of Customs (copy available on record). The party also furnished a letter dated 19-8-2003 of the Chinese supplier, wherein, the consignment was required to be returned to them. The original authority did not permit the importer to re-export the goods. It confiscated the goods under Sections III(f) and (m) of the Customs Act with option for redemption thereof on payment of a fine of Rs. One lakh under Section 125 of the Act. The original authority also imposed a penalty of Rs. 25,000/- on the importer under Section 112 (a) of the Act. The order of confiscation and penalty was based on a finding of misdeclaration of the grade of ‘Mulberry Raw Silk’. Aggrieved by the decision of the original authority, the importer preferred an appeal to the Commissioner (Appeals) and the latter reduced the quanta of fine and penalty to Rs. 50,000/- and Rs. 10,000/- respectively while allowing re-export of the goods. The importer’s appeal is against the order of confiscation (with fine) and penalty. In their Appeal No. C/88/2004, the Revenue has challenged the order of the Commissioner (Appeals) in its entirety and has prayed for restoring the order passed by the original authority.
2. Heard both sides and considered their submissions. In the appeal filed by the importers, they have challenged the finding of misdeclaration. This challenge appears to be supported by the evidence available on record. One of the available documents is a copy of the letter dated 8-5-2003 of the importer addressed to M/s. Nevin A. Almeida (Mumbai), who are said to be indenting agents. This letter seems to throw much light on the bona fides of the importer’s plea against the allegation of misdeclaration, and the same reads as under :-
“With reference to the above, we have pleasure in placing our order for import of 900 Kgs. of mulberry raw silk, 27/29 Dur., 4A Gr. for our main unit as under :
1. Commodity : Mulberry Raw Silk 27/29 Dur., Cathaya Brand,
4A Grade with CIQ Certificate
2. Quantity : 900 Kgs.
3. Despatch : On or before 15th May 2003
4. Rate : US $ 14.20 per kg. CIF, Chennai
5. Payment : On DP basis as usual
6. Bankers : The documents are to be sent to our bankers :
Indian Overseas Bank, No. 7, Srisailam, 1st Main
Road Gandhinagar, Bangalore - 560 009 (India).
You are aware of the intricacies of anti-dumping duty and so we want 4A Gr. And above only. Even in case of 4A Gr. If according to C.S.B. Test, the grade falls below 3A Gr., we will reject and return the consignment. So, please pass on this condition to your suppliers while confirming the above order with them,"
The above letter, genuineness of which has not been disputed, clearly indicates that the importer was aware of the fact that ‘Mulberry Raw Silk’ of any grade falling below 3A was chargeable to anti-dumping duty. With this awareness, the importer placed a specific order for supply of ‘Mulberry Raw Silk’ Grade 4A. They categorically requested the indenting agents to communicate to the foreign supplier the significance of asking for Grade 4A. Another document, which was also filed with the relevant Bill of Entry, is the foreign supplier’s invoice. This invoice described the goods as “Mulberry Raw Silk 27/29D CATHAYA BRAND 4A”. What was declared by the importer in the Bill of Entry was also ‘Mulberry Raw Silk 27/29D 4A GRADE’. Thus the documentary evidence in this case clearly indicates that the description of the goods was the same in the purchase order placed by the importer on the indenting agents, invoice issued by the Chinese supplier and the Bill of Entry filed by the importer. Hence the above description of goods in the Bill of Entry can not be said to be ‘misdeclaration’. The mere fact that the grade of the imported silk was shown, in a subsequent test report, to be different from what was declared in the Bill of Entry would not per se lead to the inference of misdeclaration. The circumstances of the case do not admit of misdeclaration. Consequently, the imported goods did not offend any of the provisions of Section 111 of the Customs Act, to be confiscated-The order of confiscation is therefore set aside. The penalty imposed on the party under Section 112(a) of the Act is integrally related to confiscation. Where the goods are not liable to confiscation under Section 111, the importer thereof is not liable to any penalty under Section 112. Accordingly, the penalty is also set aside. Appeal No! C/99/20C4 stands allowed.
3. The Revenue’s appeal is against re-export of the goods. The only ground raised against re-export is a proposition that where any imported goods attracts Section 111, re-export is not to be permitted. This ground is based on the Hon’ble Supreme Court’s ruling in the case of Commissioner v. M/s. Grand Prime Ltd. [2003 (155) E.L.T. 417 (S.C.)], in which case certain goods imported without valid licence were held liable to confiscation under Section 111 and the importer’s request for permission to re-export the goods was disallowed. In the instant case, I have already exonerated the subject goods from the liability of confiscation under Section 111. Therefore, even going by the Revenue’s proposition, one has to allow re-export of the goods. Nothing contained in the Supreme Court’s judgement affects re-export of the goods. This view is supported by Final Order No. 861/2004, dated 8-10-2004 [2004 (178) E.L.T. 1034 (T)] passed by the Division Bench in Appeal No. C/14/2004 (M.V. Marketing & Supplies). Ld. Commissioner (Appeals) has allowed re-export correctly. The Revenue’s appeal gets rejected. The application filed by the Department, in this appeal, seeking stay of operation of the impugned order stands dismissed.