RAZACK TRADING COMPANY Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) M /s. Razack Trading Company (RTC) imported 44 MTs of garlic under Bill of Entry No. 230273 dated 2.8.99 and 66 MTs under Bill of Entry No. 229625 dated 27.07.99. On test, the garlic under import was found to contain moisture to the extent of 62.1%. As per the Circular No. 32(RE -99)/99 -2000 dated 17.09.99 issued by the DGFT, garlic containing moisture above 10% not "dried garlic" of Exim code No. 071290.04 of ITC (HS) classification. Garlic other than dried was covered under CTH 0703.20 and its import required a specific import license. The consignments of garlic sought to be cleared under Bills of Entry dated 2.8.99 and 27.7.99 were found liable to confiscation under Section 111(d) of the Customs Act, 1962 (the Act). Considering evidence of contemporaneous imports of identical goods at US$ 565 per MT shown to RTC, they agreed for enhancement of the assessable value to US $ 565 per MT instead of the declared US$ 450 per MT (CIF). The transaction value was therefore misdeclared and the goods attracted confiscation also under Section 111(m) of the Act. Accordingly vide the impugned order, the two consignments of garlic weighing 110 MTs were confiscated under Section 111(d) & (m) of the Act. As the goods had already been released, the Commissioner ordered a redemption fine of Rs. six lakhs under Section 125 of the Act. Differential duty of Rs. 55,022/ - was demanded under Section 28(1) of the Act. The Commissioner also imposed a penalty of Rs. two lakhs on RTC under Section 112(a) of the Act.

(2.) BEFORE the Tribunal, RTC challenged the impugned order relying on a decision of the Tribunal in Jupiter Exports v. Chief Commissioner of Customs, Chennai reported in, 2008 (231) ELT 108. The appeal challenged the finding of liability to confiscation of the consignments of dried garlic under Section 111(d) as well as under Section 111(m) of the Act. It is submitted that DGFT had announced the import policy relating to garlic under Circular No. 32(RE -99)/99 -2000 dated 17.09.99. As per this circular, garlic containing moisture in excess of 10% was "fresh garlic". The policy contained in the circular did not govern imports of garlic made prior to 17.09.99. Both the consignments involved had been imported prior to the issuance of the said circular. The assessable value of the consignments of garlic was enhanced from US$ 450 to US$ 565 per MT without furnishing to RTC particulars of contemporaneous imports of identical goods at the higher price. The appellants had never agreed to enhancement of the value as ordered. The order of enhancement of assessable value was not sustainable in the absence of evidence of identical imports at such value.

(3.) THE Ld. JDR reiterates the findings contained in the impugned order.