ORDER
S. Kalyanam, Member
1. The above appeals arise out of a common impugned order of the Collector of Customs (Appeals), Trichy dated 10.9.1993 confirming the order of the Deputy Collector of Customs, Tuticorin, dated 8.9.1993, and confirming the quantum of fine levied in lieu of confiscation of import of poppy seeds under the contravention of the Customs Act, 1962, the ‘Act’ for short.
2. The appellant herein imported poppy seeds at the port of Tuticorin in July 1993 and the goods were found to have been imported in contravention of the law under the Act and the authorities permitted redemption of the same on payment of fine besides penalty as detailed hereunder:
A.No. D.C's Order-in-Original Redemption fine Penalty imposed
No. & Date imposed
C24B/19/93 34/93 DC TIN (C.No. Rs. 11,00,000/- Rs. 1,00,000/-
VIII/10/19/93 dated
8.9.1993)
C24B/20/93 35/93 (C.No. Rs. 7,40,000/- Rs. 60,000/-
VIII/10/20/93) dated
8.9.1993
C24B/21/93 36/93-DC TIN (CNo. Rs. 17,25,000/- Rs. 1,50,000/-
VIII/10/21/93) dated
8.9.1993
3. Shri Vijayaraghavan, the learned Consultant for the appellant submitted that the appellant is not contesting the appeals on merit and would only plead for substantial reduction in the quantum of fine and penalty and urged inter alia that the appellant is the actual user having a SSI certificate and manufacturing ayurvedic drugs. The poppy seeds imported were from Karachi and are of inferior quality and are not comparable to the variety of seeds grown in India and the poppy seeds are used only for the manufacture of ayurvedic drugs. In respect of the import of the identical goods at the same port in the month of June 1993 the learned adjudicating authority levied only a fine of 20% by his order dated 17.6.1993 (Order No. 22/93 DC) relating to the import of poppy seeds by M/s Kannan and Co. The learned Consultant submitted that in respect of the appellant’s goods the import took place only in July, 1993 and the learned adjudicating authority imposed a fine of 300% and the only reason given for levy of such a huge quantum of fine was that the profit margin would work out to 375% on the basis of the market value of the goods, which according to the learned adjudicating authority was Rs. 46/-.to Rs. 55/- per kg. as per the report in the ‘Economic Times’. The learned Consultant submitted that the market price in the report of the Economic Times does not refer to the goods imported from Karachi and there is a difference in quality between the goods cultivated at Karachi and the one cultivated in India and this factor is also evidenced from the report published in Capital’s Truth, a commercial journal which has been.in existence for the past about two years. It was submitted that as per the report published under the column Commodity Markets in the commercial journal Capital’s Truth for the period August 1 to 15th of 1993 the price of Pakistan variety of poppy seeds is far less than the poppy seeds of India. It was further urged even according to another commercial journal known as “Vyapar Samachar” the poppy seeds grown in Pakistan is quoted at only Rs. 35 to Rs. 39 per kg. It was further urged that the question of profit, strictly speaking would not arise in the case of appellant, because the appellant is only using the goods in the manufacture of Ayurvedic drugs and being an actual user with licence to manufacture the drug the adjudicating authority should not have on the basis of the report in the Economic Times adopted a price and worked out the profit margin. It was further submitted that in respect of an identical import at about the same period by a trader in the same port, the adjudicating authority had levied only a fine of 20% on the value of the goods. This marked discrimination in the standard adopted in respect of two importers, one trader and the other actual user, is a point to be taken into account in favour of the appellant. It was further urged that the goods have not been cleared since the date of import and have been incurring demurrage at the rate of Rs. 6500 per day and the total demurrage as on date would come approximately to Rs. 4 lakhs. It was further urged that if transportation charges and the wastage loss because of dryage, the item being an agricultural commodity, and other charges like the bank charges are taken into reckoning, the appellant would incur only loss. The learned Consultant, therefore, submitted that in the peculiar fact and circumstances of this case, having regard to the enormous loss already incurred and also taking note of the fact that the appellant is the actual user and the goods are to be used for the manufacture of Ayurvedic drugs the Tribunal may be pleased to give a substantial reduction in the fine and penalty.
4. Shri Gregory, the learned SDR submitted that the order passed by the adjudicating authority in respect of another importer, viz., M/s Kannan and Co., who is a trader, cannot be taken as the guideline for fixing the fine in this case. In that case the adjudicating authority has not given any reason at all for fixing the lower rate of fine and penalty and the Department is contemplating to file an appeal in this regard.
5. We have considered the submissions made before us. The appellants are not contesting the appeals on merits. The plea is only for reduction in the quantum of fine and penalty. We note that the appellant is an actual user and is a small scale unit and the goods imported are Pakistani variety intended for use in the preparation of ayurvedic drugs. We also take note of the fact that the price of Pakistan variety is far less than the price of the same goods of Indian variety, as is reflected in the evidence cited supra. We further note that in spite of the fact that this plea was specifically taken before the lower authorities the same has not been considered. It would have been open to the lower authority to make a verification of the quality and nature of the goods imported, particularly in the context of the plea urged before him. We also cannot ignore the fact, as it exists today that in respect of import of the identical goods by a trader for commercial purpose, in the same port, the adjudicating authority has adopted an inexplicably low quantum of fine and penalty. We should confess we are at a loss to understand as to how there could be such a wide variation or divergence or discrepancy in the quantum of fine between a trader-importer and an actual user-importer and it should be noted that in respect of the import of goods by an actual user the adjudicating authority should have taken a far more lenient and sympathetic attitude than the one that he has taken in the case of a trader-importer. Be that as it may, in the light of the plea of the learned SDR that the Department is contemplating to prefer an appeal against that order on the ground that the same is not sustainable either in law or on facts, we are not inclined to attach importance to the same and to take it as a guiding factor for fixing up the quantum of fine in the present case. We cannot fail to make an observation in this context that such an attitude on the part of the adjudicating authority in adopting such divergent and different standards in regard to fixing of fine between two importers of the same goods at the same port, more particularly when one of the importers happened to be actual user suffering more disadvantage and detriment, leaves very much to be desired to say the least of it. In the present case taking note of the value of the goods, the price reported, the time interval that has lapsed between the date of import and this date and also other expenses like demurrage, transportation and surcharge, loss etc., which the appellant will have to incur, we are inclined to think that the interests of justice would be met if the quantum of fine is reduced to 65% (Sixty five per cent) of the assessable value of the goods and we order accordingly. We make it clear that we have taken this view only in the light of the peculiar facts and circumstances of the above case. We also reduce the total penalty to Rs. 50,000/- (Rupees fifty thousand). Except for the above modifications the appeals are otherwise dismissed.
(Pronounced in the open Court).