ORIENTAL CONTAINERS LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) IN this petition, the petitioners challenge the order in original dated 9-6-1988 (issued on 16-9-1988) passed by the then Collector of Customs, Bombay seeking to confiscate the goods imported by the Petitioners under Section 125 of the Customs Act, 1962 ("act" for short) with an option to redeem the same on redemption fine of Rs. 28,00,000/ -.

(2.) THE petitioners inter alia manufacture containers and for that purpose import tin sheets from time to time. On or about 24th August, 1987 the petitioners entered into a contract with an American Firm for import of 1,000 metric tonnes of prime quality tin plate. On entering into the contract, the petitioners opened irrevocable letter of credit to cover the value of 1000 metric tons of tin plate prime. The foreign supplier shipped 388 bundles of Tin Plate Prime equivalent to 482. 63 metric tonnes from Mexico on vessel s. s. "lucky SCOPE" and the said vessel arrived at Bombay some time in Janurary, 1988. The certificate of origin, bill of lading, packing list, test certificate and the invoice issued by the foreign supplier specifically state that the goods shipped were Tin Plate prime as per the terms of the contract. On arrival of the said ship, the Petitioners filed the Bill of Entry seeking clearance of Tin Plate Prime with the benefit of exemption Notification No. 57/87, dated 1-3-1987 read with Notification No. 342 of 1976, dated 2nd August, 1976.

(3.) ON 25th February, 1988 and 26th February, 1988, 10% of the imported goods were examined by the Customs Authorities and on examination, it was found that the goods imported were Tin Plate Waste/waste instead of Tin Plate Prime as declared in the Bill of Entry. In view of this discrepancy which was not known to the Petitioners, the Petitioners sought permission to place the goods in a Bonded Warehouse. On 3rd March, 1988, the said consignment was provisionally assessed and the nine replenishment licences furnished by the Petitioners in respect of the Tin Plate Prime were provisionally debited by the Customs authorities. Accordingly, Petitioners have paid the provisional customs duty of Rs. 30,98,492/- payable on Tin Plate Prime. Thereafter at the instance of the Petitioners, the goods were re-examined and even on re-examination, it was found that the goods shipped were Tin Plate Waste/waste having various defects. The Petitioners waived the show cause notice and sought personal hearing. At the personal hearing, the Petitioners pointed out that they had suffered heavy losses due to the inferior quality of the material supplied by the shippers, even though the contract was for supply of Tin Plate Prime. It was submitted that as the foreign supplier had cheated them they have cancelled the contract for the supply of balance quantity of the Tin Plate Prime. It was submitted that the Petitioners have paid the price of Tin Plate Prime, but have received Tin Plate Waste which is of inferior quality and have also paid customs duty payable on Tin Plate Prime which is higher than the duty payable on Tin Plate Waste. It was submitted that since there was no mala fide intention on the part of the petitioners, a sympathetic and lenient view be taken and the goods be released.