ORDER
A.C.C. Unni, Member (J)
1. These are four appeals filed by the Department against the order of the Collector of Customs (Appeals) dated 31-1-1994.
2. I have heard Shri K.M. Patwari, ld. DR for the appellant Commissioner and Shri R.S. Rao and P.K. Shetty, advocates for the respondents.
3. The Departments’ case is that the Order-in-Original passed by the Assistant Collector directing confiscation of certain quantities of dyes and chemicals imported by M/s. Feroz Carpet Industries in contravention of the Import Control Restrictions and imposition of penalties on the respondents had been erroneously set aside by the Collector (Appeals) by the impugned order. The prayer is for upholding the Order-in-Original and for setting aside the Order-in-Appeal.
4. Brief facts are that Show Cause Notice issued to the four appellants, among others, asked them to show cause why various types of dyes (imported under Bill of Entry No. 2297, dated 26-10-1990) which were seized on 22-4-1991 should not be confiscated under Section 111(d) of the Customs Act and penalties not imposed on them under Section 112, thereof. It was alleged that the Departments investigation had shown that the Import Export passbook No. 0011268, dated 13-3-1989 issued to M/s. Feroz Carpet Industries, Varanasi had been acquired on payment of 100% premium by Shri Vik-ram Garodia of M/s. Vikram and Co., Bombay and the import of the goods had been made in contravention of the provisions of paragraph 281 of the Import Export Policy (1988-91). After considering the replies filed by the no-ticees and after giving them personal hearing, the Additional Collector by Order-in-Original found that the consignment of 100 drums of shangdacryl dye imported in the name of M/s. Feroz Carpet Industries had been made by misusing Import Export Pass Book and in violation of the relevant paragraph of the Import Export Policy. The Department claimed that the said consignment was sought to be cleared by the respondents duty free in violation of the provisions of the Notification No. 117/88 and the provisions of paragraph 281 of Import Export Policy. Reliance was placed on the statements given by the respondents herein. The Additional Commissioner found that the purchase of pass book was in contravention of the conditions of Notification No. 117/88. Hence the import could not be considered as covered by a valid licence. He also found that M/s. Feroz Carpet Industries had in collusion with Shri Prabhudas Ganatra and Vikram Garodia and Mahendrabhai Shrimankar indulged in trafficking of Import Export Pass book and therefore the goods had become liable to confiscation under Section 111(d) and the said persons liable to penal action under Section 112(a) of the Customs Act.
5. When the matter came up in appeal before the Collector (Appeals), the Collector (Appeals) by the impugned order set aside the Order-in-Original. He found that the allegation that there was a sale of the licence by M/s. Feroz Carpet Industries had not been proved since the basis for making the said allegation was the statement given by Shri Prabhudas Ganatra. Collector (Appeals) found that the order of the Additional Collector directing confiscation of the goods for the alleged contravention of Notification No. 117/88 was inconsistent with the option given to M/s. Feroz Carpet Industries to pay redemption fine. Since the option of paying redemption fine could be allowed only to the owner of the confiscated goods and since this had been allowed to M/s. Feroz Carpet Industries, who were also the holders of the pass book, this itself would show that there was no sale of the said pass book by M/s. Feroz Carpet Industries and consequently, no contravention of the conditions of the Notification No. 117/88 as amended as well as Export Import (Control) Order, 1955 under which the Import Export Pass Book was issued to M/s. Feroz Carpet Industries. The Collector (Appeals) further found that since M/s. Feroz Carpet Industries figured both in the invoice as well as in the Bill of Lading as importer, M/s. Feroz Carpet Industries continued to be the owner of the goods and therefore there was no justification for directing confiscation of the goods for the alleged contravention of the conditions of Notification No. 117/88 or Section 111(d) of the Customs Act. The Collector (Appeals) found that the facts on record were contrary to the findings in the adjudication order inasmuch as Shri Prabhudas Ganatra whose statements had been relied on for the alleged sale of the pass book/licence did not have any other document to support the said statement. Further both Shri Vikram Garodia and Prabhudas Ganatra had retracted their statements. In the absence of any material to corroborate the statement originally given, the retraction cannot be brushed aside. Further, since the import had taken place under a valid licence, the provisions of neither Section 111(d) nor Section 111(o) were attracted in the facts of the case.
6. On behalf of the Department, it is argued that the appellants namely, Shri Prabhudas Ganatra Mahindra Shrimankar and Vikram Garodia had given clear confessional statements admitting to sale and purchase of the Import-Export pass book. Further the retractions made by Shri Prabhudas Ganatra and Vikram Garodia were made at a very late stage and they cannot be accepted. Further in the case of Mahindra Shrimankar, there was not even such a retraction. Inasmuch as M/s. Feroz Carpet Industries had knowingly indulged in trafficking in Import Export Pass book, they had clearly contravened the provisions of paragraph 281 of the Import Export Policy.
7. Ld. Advocates for the respondents referred to the finding and the detailed reasons given by Collector (Appeals) in the impugned order for setting aside the Order-in-Original. They therefore, submitted that no case has been made out warranting any interference with the impugned order.
8. On consideration of the submissions made and on perusal of the record, I find that the reasons given by the Collector (Appeals) for setting aside the Order-in-Original are legally sound and factually correct. He has emphasised the fact that in the face of the Additional Collector allowing M/s. Feroz Carpet Industries to exercise the option under Section 125 of the Customs Act as owner of the goods, the allegation of contravention of the conditions of Notification No. 117/88 cannot sustain. He had also found that M/s. Feroz Carpet Industries continued to be shown as the importer in the invoice as well as in the Bill of Lading and Section 2(26) of the Customs Act, 1962 squarely recognised the owner as the importer. Since these documents clearly establish the title of M/s. Feroz Carpet Industries to the imported goods, no contravention of Section 111(d) can also be alleged. I also find that the original statements of Shri Vikram Garodia and Shri Prabhudas Ganatra have not been corroborated by any other independent evidence. I also find that since the goods have been directed to be confiscated when they were still at the docks, any alleged contravention of Section 111(o) cannot also be said to have been established. I therefore, concur with the reasoning given by the Collector (Appeals) on the above point in the impugned order. I also concur with the view taken by him that the Order-in-Original has to be set aside.
9. In the result, the impugned order is upheld and the four appeals filed by the Department rejected.