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2008 DIGILAW 1601 (PNJ)

H. B. Fibres Ltd. v. Cegat

2008-09-18

ADARSH KUMAR GOEL, AJAY TEWARI

body2008
Judgment 1. This petition has been filed under Section 130A of the Customs Act, 1962 (for short, the Act) for a direction to the Tribunal to refer following questions of law for opinion of this Court arising out of order dated 30-4- 2002 [2003 (152) E.L.T. 335 (Tribunal)] of the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi :- (i Whether in the facts and circumstances of the case, penalty could be levied on the petitioner in as much as the petitioner was acting bona fide ? (ii Whether in the facts and circumstances of the case the Tribunal was justified in fixing Redemption Fine of Rs. 10 lakhs; when there was loss and the market price of the imported goods realized by the Appellant was lower than the duty chargeable thereon? (ii Whether in the facts and circumstances of the case, fine be imposed on the appellant under Section 125 inasmuch as the Commissioner in his order observed that goods belonged to Sh. Ravi Jagota of Youngman and it was he who had placed order for the goods? (iv Whether in the facts and circumstance of the case, the petitioner be liable for wrong doings of Sh. Ravi Jagota because it was he who had misdeclared and under-valued the goods and not the petitioner? (v) Whether in the facts and circumstances of the case, fine imposed on the petitioner be sustained since the petitioner had filled bill of entry as per documents given to him by the Supplier, petitioner was not aware obout the actual nature of goods and Sh. Ravi Jagota had misused the name of the petitioner-company to further his interests? (vi Whether in the facts and circumstance of the case, the contruction of Section 125 of the Customs Act, 1962 was proper, legal and justified? 2. The petitioner imported goods classified as Acrylic Fibre. A show cause notice was issued to the petitioner raising a demand of duty under Section 28AB of the Act for interest. Finally, the Commissioner (Customs) passed an order confirming the demand of duty with interest and directed confiscation under Section 111(m) of the Act. Since the goods were not available for confiscation, having already been provisionally released to the petitioner, redemption fine was also imposed, besides penalty. On appeal, the Tribunal upheld the redemption fine which was sought to be challenged by the petitioner. 3. Since the goods were not available for confiscation, having already been provisionally released to the petitioner, redemption fine was also imposed, besides penalty. On appeal, the Tribunal upheld the redemption fine which was sought to be challenged by the petitioner. 3. We have perused the order of this Court dated 16-3-2004 [2004 (175) E.L.T. 79 (P & H)] and order of the Honble Supreme Court dated 18-5-2007 [2007 (213) E.L.T. 3 (S.C.)]. 4. We have heard learned counsel for the parties. 5. Learned counsel for the petitioner submits that the goods-having been sold, the petitioner did not continue to be the owner and redemption fine could be imposed only against the owner or the person who was found in possession of the goods. The petitioner having sold the goods, only the purchaser Ravi Jagota was liable for redemption fine. It is further submitted that quantum of fine could not be more than the difference between the market price and the duty paid. The market price in the present case was lesser than the duty paid. Learned counsel for the petitioner submitted that goods having been sold to Ravi Jagota, he was the owner of the goods within the meaning of Section 125 of the Act and not the petitioner who imported the goods. 6. Learned counsel for the Department, however, opposed this submission and stated that the ownership of the goods had to be seen at the time when the duty was attracted i.e. at the time of import. At that time, the petitioner was the owner. Learned counsel points out that the contention on behalf of the petitioner before the Tribunal was that misdeclaration was made by Ravi Jagota and conduct of the petitioner was bona fide . No contention was raised before the Tribunal that the petitioner was not the owner of the goods at the time of import. 6. By consent of the parties, we treat the following questions to have been referred for opinion of this Court :- (i) Whether the petitioner was not liable to pay redemption fine after the goods having been sold to one Ravi Jagota of Youngman Industries? (ii Whether the duty paid was more than the market price and on that account, redemption fine could not be imposed? 8. Learned counsel for the petitioner does not press for any other question. 9. (ii Whether the duty paid was more than the market price and on that account, redemption fine could not be imposed? 8. Learned counsel for the petitioner does not press for any other question. 9. We proceed to decide the questions with the consent of counsel for the parties. 10. On perusal of order of the Tribunal, we find that no contention was raised on behalf of the petitioner that it was not the owner at the time of import when the duty was attracted. This being the position, the question No. 1 has to be answered against the petitioner and we do so, accordingly. 11. As regards question No. 2, there is no finding in the order of the Tribunal on the issue of market price of the goods. From perusal of order of the Commissioner, we find that value of goods has been taken to be Rs. 19,58,414/- while in the same order, it is mentioned that duty paid was Rs. 35,46,456/-. There is no allegation that market price was higher than the duty paid. Under proviso to Section 125 of the Act, redemption fine could not exceed the amount equal to market price of goods minus duty paid. This being in the negative, redemption fine could not be imposed. 12. In view of above, the question has to be answered in favour of the petitioner and against the respondents. The petitioner will, thus, not be liable to pay redemption fine. 13. The petition is accordingly, disposed of.