ORDER
P.S. Bajaj, Member (J)
1. These two appeals have been filed by the appellants against the Order-in-Original dated 9-4-1997 passed by the Commissioner of Customs vide which he had raised demand for payment of differential duty of Rs. 4,59,449/- under Section 28(i) in respect of goods already cleared and of Rs. 11,05,868/- regarding the goods to be cleared under the proviso to said Section of the Customs Act and also imposed penalty of Rs. 5,00,000/- on the appellant firm and of Rs. 1,00,000/- on its Manager (Imports) under Section 112(a) of the Customs Act.
2. The facts giving rise to these appeals may briefly be stated as under :
3. The appellants have been importing Polypropylene Dyed Chips through Delhi Port. They filed two Bills of Entry viz. B/E No. 272643 and 272455 both dated 24/23/98 (sic) for CIF value of Rs. 3,11,168/- and Rs. 2,90,223 /- respectively. The item under import was declared then as Polypropylene Dyed Chips and classified under CTH No. 3902.10. They also claimed benefit of Notification 227/76 (Cus.) but the intelligence report revealed that they were deliberately classifying the item as Polypropylene Dyed Chips wrongly under Chapter 39 but in fact were importing master batches falling under Chapter 32.02/32.06 which were chargeable to duty. Their premises were searched and some documents were recovered. One of the documents recovered pertained to estimate of cost of production and showed that the raw material being used in the production process was master batch of U.V. One telex message 91/6th August from Shri B.B. Verma to Dr. Curone was also recovered. That message had the wording “PLS SND THRU DHL YR PROFORMA” 376/13.07 removing words ‘Duty Tariff 32.04/17. The statement of B.B. Verma was thereafter recorded on 10-1-1989 under Section 108 of the Customs Act who admitted that PP Chips were Polypropylene coloured and that PP Dyed Chips contained 30% 40% colour. He admitted of having sent this telex message to Dr. Curone of M/s. Sarma SPA, Italy asking him to remove the words “Duty Tariff 3204.17”. Thereafter statement of Arun Kumar Mittal, General Manager (Technical) was recorded on 10-1-1989 who admitted that the raw materials being used in the manufacture of multi-filament polypropylene yarn were (i) PP Chips, (ii) PP Dyed Chips and (iii) Spin Finish. He also admitted with reference to his letter dated 27-10-1987 addressed to M/s. Sarma, SPA Italy that pigment master batches were combination of polypropylene and pigment. Show cause notice dated 8-2-1989 was issued to the appellants alleging that they had manipulated certain documents to show master batches as PP Dyed Chips and asked their suppliers to describe the goods in a manner so as to enable them to classify the goods under CTH 3902.10 in order to evade Customs duty. They instead of classifying the goods under 32.02/32.06 has wrongly showed the goods under CTH 3902.10. They were asked to show cause as to why the goods imported vide Bs/E 272455 and 272643 both dated 24-12-1998 be not classified under 32.02/32.06 and charged Customs duty accordingly. They were further asked to show cause why the goods of these Bs/E be not confiscated under Section 111(d) and (m) of the Customs Act. They were required to show cause as to why an amount of Rs. 4,59,449/- on account of short payment of duty in respect of earlier Bs/E, dated 24-9-1988,25-10-1988 and 12-12-1988 be not recovered. They were supplied with details of the 12 Bs/E and extended period of five years on account of wilful misstatement or suppression of facts was also proposed to be invoked. Penalty amount was also proposed to be imposed under Section 112(a) of the Customs Act.
4. The appellants in their reply contested the correctness of the show cause notice and maintained that it was the responsibility of the Customs authorities to classify the goods properly and to allow or not to allow the benefit of notification and as such the clearances of the goods allowed under Section 47 of the Customs Act could not be reviewed. Regarding classification of master batches they avered that their goods fell outside the scope of Chapter Heading 32.02/32.06 being not covered by Note 3(2) of Chapter 32. They further avered that there had been no mis-declaration or suppression of the facts and as such the extended period of limitation cannot be invoked.
5. The Commissioner of Customs after considering the evidence adduced before him by the parties confirmed demand of Rs. 14,51,158/- on account of the duty due on the goods imported vide two Bills of Entry both dated 24-12-1988 and ordered the appellants to pay differential duty of Rs. 4,59,449/- and of Rs. 11,05,868/- in respect of the two Bills of Entry by which the goods were imported under Section 28(i) of the Customs Act. He also imposed penalty of Rs. 5,00,000/- on its factory Manager (Imports), Shri B.B. Verma under Section 112(a) of the Customs Act.
6. Feeling aggrieved with this order of the Commissioner of Customs the appellants have filed these two appeals before the Tribunal.
7. The facts are not much in dispute.
8. Appellants are admittedly importers. They imported the impugned goods which were master batches by declaring the same as PP Dyed Chips. They classified the goods under CTH 3902.10, while they were required to classify the same under 32.02/32.06 of the CTH. They evaded the payment of the Customs duty. The appellants, no doubt, contested before the Commissioner of Customs the classification of their imported goods under 32.02/32.06 and claimed the classification under 3902.10 of the CTH. But controversy in this regard had already been set at rest in the earlier identical proceedings taken against the appellants in respect of the Bills of Entry vide which they imported these very goods at Bombay Port vide Tribunal’s order in their own case reported in 1994 (72) E.L.T. 603 (T). This very contention as now raised in the instant case, was raised by them in those proceedings that their goods were not covered under Chapter 32 of the Customs Tariff Act but the same was not were accepted. This fact even has been conceded during the course of arguments by the learned Counsel for the appellants. That decision of the Tribunal in the earlier case is binding on the appellants and they cannot be permitted to wriggle out of the same.
9. The main contention now raised by the learned Counsel for the appellants is that post clearances made under Section 47 of the Customs Act could not be legally reviewed and extended period of limitation also could not be invoked by Commissioner of Customs for want of any suppression of material facts by the appellants. But in our view this contention of the learned Counsel is legally not tenable. They imported the goods through 12 Bills of Entry of the value of Rs. 11,41,425/- prior to six months. While the three consignments were imported on the strength of 3 Bills of Entry within six months of the value of Rs. 2,88,963/-, the other two consignments are the present one when the mis-description of the goods and suppression of the material facts were detected. The Bills of Entry regarding these consignments are dated 24-12-1988. The perusal of the show cause notice shows that the earlier 15 consignments imported by the appellants pertain to the period Sept., 1986 to November, 1988.
10. This very plea that their earlier clearances under Section 47 of the Customs Act could not be reviewed was put forth by the appellants while on the basis of these very facts identical proceedings were taken against them at Bombay when they imported these very goods by mis-declaration and suppression of facts. They wrongly and illegally classified the goods under CTH 3902.10 and their plea of bona fide classification under wrong subheading of the Tariff was not accepted. From the documents recovered on taking the search of their premises in that case, it was proved that they had in fact played fraud and wilfully gave mis-declaration while exporting [importing] the goods in question. They deliberately described the goods as polypropylene dyed chips although those were master batches, which were chargeable to the Customs duty. The Tribunal while dismissing their plea, against the order of the adjudicating authority, Bombay, reopening their previous clearances, of the bar of Section 47 of the Customs Act, was pleased to observe as under :-
“That order passed under Section 47 of the Customs attains finality but show cause notice for confiscation or imposing the penalty can be issued where the department can successfully show that there was a fraud or deliberate suppression. As a result of search of the appellants’ premises several incriminating documents were recovered which established that the appellants were aware that the disputed goods were not intentionally traded as PP chips covered by Chapter 39. Their correspondence also showed that they instructed their foreign supplier not to give correct description of the goods or their classification under Chapter 32 in the relevant proforma invoices. Therefore, the issuance of show cause even in the cases where the goods had been cleared under Section 47 for reviewing the order of clearances passed by the concerned officer was not illegal.”
11. Similarly, on the question of limitation for invoking extended period, the Tribunal in that case of the appellants, was pleased to hold that –
“in case of fraud or suppression extended period of limitation could be invoked. The appellants deliberately suppressed the true facts and composition of the imported goods. They even gave instructions to their supplier not to indicate their correct description or the classification of the goods in the proforma invoices.”
12. In the instant case also the facts and circumstances are the same. The incriminating documents recovered from the search of the premises of the appellants clearly revealed that they deliberately described the goods as PP Dyed Chips under Chapter Heading 39.02/39.06 instead of master batches classifiable under 39.02/39.06. The telex message found from their factory premises, showed that they gave specific instructions on 6th of August, 1998 to their supplier in Italy not to mention the correct description as well as classification of the goods in the invoices. Therefore, the suppression of the true facts and exercise of fraud and mis-representation by them on the Government, in order to evade the Customs duty, stands amply proved. On the basis of these very documents and material they had already been held to be guilty of playing fraud and mis-representation with the Revenue department in the earlier identical proceedings taken out against them at Bombay when they imported these very goods at Bombay Port as is clear from the findings of the Tribunal in their own case referred to above. Therefore, they are even legally estoped in view of those earlier findings of the Tribunal, from pleading that there had been no deliberate suppression of the facts and exercise of fraud or mis-representation on their part. The provisions of Section 47 did not, therefore, debar the Revenue from reopening their earlier clearances. As such the extended period of limitation had been rightly invoked against them.
13. In view of the discussions made above, there is no merit in both the appeals of the appellants and the same are ordered to be dismissed.