SIDDHARTHA TUBES LTD., Vs. UNION OF INDIA

JUDGEMENT

(1.) THOUGH this petition is captioned as a petition under Article 226/ 227 of the Constitution of India, in fact, it is a petition under Article 227 as the petitioners are assailing the order dated 15.3.2001 passed by the Customs Excise and Gold (Control) Appellate Tribunal (CEGAT for short), South Zone, Chennai in appeal against the order passed by the Commissioner of Customs, Trichy.

(2.) BRIEF survey of undisputed facts. Petitioner No. 1 is a public limited company and holds Certificate of Importer-Exporter Code (IEC) issued by the Ministry of Commerce, Government of India. Petitioner No. 2 is the manufacturer of Galvanised Pipes and holds an Advance Licence under the Scheme, 'Duty Exemption Entitlement Certificate' [DEEC] duly endorsed in favour of petitioner No. 1 for export. Petitioner No. 1 received an offer from a foreign buyer for export of Galvanised pipes. It dispatched the goods after getting due clearance from the Central Excise authorities to M/s. Hari and Co. Tuticorin, the Clearing and Forwarding Agent for putting the goods on board the vessle 'MV Omathu Fortune'. The Clearing House Agent, submitted necessary shipping documents, including the invoice, Shipping Bill No. 2673 dated 21.1.1995 to obtain clearance of the Customs Authorities for export. In the Shipping documents, net weight of the Galvanised pipes was mentioned as 224.260 MT. Before the goods were put on board for export, Officials of the Custom (Preventive) visited the port to verify the export consignment and directed for its weighment. This revealed that the actual weight of the consignment was only 163.060 MT as against the declared weight of 224.265 MT. As a result of larger quantity in terms of weight, the consignment was seized and proceedings for confiscation and penalty started against petitioners and M/s. Hari and Co., by issuing show cause notices. So far as petitioners are concerned, basically petitioner No. 1 contested the show cause notice. Petitioner No. 2, in reply submitted that they support whatever was stated by the petitioner No. 1 in the reply. The Commissioner of Customs and Central Excise by order dated 28.6.1999 found that because of misdeclaration in the shipping documents such as invoice, packing list, G.R. Form and the shipping Bill, the shipping consignment was of "prohibited goods" and as such it was liable for confiscation. Since the consignment was released provisionally for export on the bond executed by exporter subject to the out come of proceedings, both petitioners as well as M/s. Hari and Co. were held liable to pay penalty and as such were imposed penalty. On appeal, the CEGAT upheld the findings of the Commissioner so far as connivance of petitioners are concernd in the matter of misdeclaration and misrepresentation of fact regarding overweight of the shipping consignment, but reduced the amount of penalty to Rs. five lacs and two lacs. As regards M/s. Hari and Co., the C&E Agent, it was let off without any penalty or consequential action. Hence this petition by the petitioners as mentioned above.

(3.) LEARNED senior counsel appearing for petitioners made two fold submissions at the time of hearing, viz. since the goods were not confiscated, no penalty could be levied. Second, that export of goods was in the required measurement in size and number of bundles tallied with the invoice, the weight of the consignment mentioned on theoretical basis was not relevant, or at any rate, as per prevalent practice opportunity ought to have been given to petitioners to amend the shipping documents, therefore no penalty was attracted.