K. Sreedharan, J. (President)
1. These two appeals arise out of order-in-original No. BKG/CC/ICD/TKD/26/2000 dated 31.03.2000. By that order, Commissioner of Customs, ICDS, New Delhi levied customs duty of Rs. 30,37,436.00 and imposed a penalty of Rs. 6 lakhs on the firm and another penalty of Rs. 1 lakh on Mr. Ravinder Rastogi, partner of the firm. Short facts necessary for the disposal of the stay petitions are as follows.
2. The firm got Zinc inported into India for converting into Zinc Oxide for export purpose. The Zinc so imported was duty free in view of the export obligation. Instead of exporting Zinc Oxide, goods exported were Carbonate of Calcium and Magnesium which was declared as Zinc Oxide. Consequently, duty was imposed on the quantity of Zinc imported and penalty imposed. The shipping bill produced by the company seen at page 19 contains the following declaration :-
“We hereby declare that the export covered by this shipping bill being made towards discharge of the export obligation in application of getting DEEC Book No. 009084 and advance licence No. P/L/1978525 dated 29.06.1989 under duty free scheme by the JCCI and E, Kanpur.”
The goods covered by this document remained uncleared in Hong Kong for a pretty long period. Sample taken therefrom was subjected to analysis. It was found that it contained no trace of Zinc Oxide. Consequently, proceedings were initiated by issue of show cause notice dated 01.12.1994. After prolonged investigation and inquiries, the impugned order has been passed.
3. Learned counsel representing the appellants vehemently argued that the goods shipped were inspected by the Customs department and found them to contain Zinc Oxide. In the light of that report given by the Customs officers, according to counsel, adjudicating authority was not justified in relying on the analysis of the sample taken from the containers which were lying in Hong Kong Port. At this juncture, it is worthwhile to note that the goods exported by the appellants remained uncleared at the Hong Kong Port for more than a year. It was during that period that the sample was taken. The appellants are alleged to have received the money towards the value of the exported goods nearly eight years after the export. Report dated 04.05.1990 shows :
“The sample is in the form of white powder. It is composed of carbonates of calcium and magnesium along with traces of iron and insoluble matters. It is free from Zinc Oxide.”
In the circumstances detailed above, we are of the view that the appellants were trying to misappropriate the Zinc imported under the duty free licence and were exporting entirely unconnected goods against that licence. In such a situation, we direct the appellants to deposit the entire duty amount claimed in the order impugned and also to deposit Rs. 4 lakhs out of Rs. 6 lakhs imposed as penalty. Since the appellant firm is a partnership firm, we do not find any justification to impose an additional penalty of Rs. 1 lakh on the partner of that firm. So, penalty imposed on Ravinder Rastogi is waived. The stay applications are disposed of in the above terms. For reporting compliance adjourned to 29.09.2000.