GANGADHARAM APPLIANCES LTD. Vs. CC

JUDGEMENT

(1.) BY this appeal the appellant is challenging the order of confiscation of the goods and imposition of redemption fine of Rs. 50,000/ - and penalty of Rs. 10,000/ -. The appellant filed shipping Bill No. 09944 dated 20.7.1995 for export of 40 MTs of stainless steel circles of AISI 304 grade of thickness declared as 0.8 mm and 0.5 mm. They sought for export under 7 " ZC licence where the description in the license was 8.0 mm and 5.0 mm as against 0.88 mm and 0.5 mm declared in the shipping bill. However, the party approached DGFT for amending the thickness to 0.8 mm and 0.5 mm and such amendment was done by DGFT. It was mentioned before the Commissioner that the party had imported stainless steel circles of varying thickness ranging 0.4 mm to 1.25 "mm and further it was found in the DEEC book and the letter issued by the DGFT that the permitted range was only 0.5 mm and 0.8 mm. The matter was adjudicated by order No. 253/95 wherein the party was allowed to export the goods of payment of fine of Rs. 1,15,000/ - and a penalty of Rs. 25,000/ -. However, the Tribunal set aside the order on the ground that the amendment in the DEEC had been issued by DGFT and the matter requires to be re -adjudicated in view of the DGFT having validly endorsed and amended the license to justify the export of the goods which were physically checked. On remand the Commissioner noted that originally the appellant had misdeclared the goods and therefore there was violation of provision to Section 113 of the Customs Act. Hence the fine and penalty is required to be imposed.

(2.) ARGUING for the appellant Ld. Chartered Accountant Shri Suresh Kumar and Shri Arockiasamy, Consultant contended that DGFT had amended the license and the Commissioner had permitted them to export. There was no question of imposition of penalty. The mistake had been committed by DGFT while recording the details in the license. Their application was in terms of the export they had to do and the DGFT had committed the mistake in recording the details. He contends that there is no mistake on the part of the party in recording the details. Therefore there is no mens rea in committing the offence. He relies on the Hon'ble Calcutta High Court judgment rendered in the case of Extrusion v. CC, Calcutta as reported in wherein the Hon'ble High Court has laid down that the conduct of the party and/or attending extenuating circumstances are material and relevant factors to be taken into consideration by imposition fine and penalty. It has also been noted that merely because action against goods is action in rem it does not mean that a person who had committed no offence in -respect of them or with reference to them could be made to suffer by way of payment of fine or otherwise. Imposition of fine, in effect amounts to awarding a punishment to the person held liable to pay the same and a person can be held liable to punishment only if he is found to be responsible for some act of omission or commission with reference to the law and the goods in question. Ld. Chartered Accountant also relied on the Apex Court judgment rendered in the case of Hindustan Steel Ltd. as reported in : ECR C 321 SC. Further reference is made in the judgment of the Apex Court rendered in the case of Akbar Badruddin Jiwani v. CC as reported in : 1990 (28) ECR 145 (SC).

(3.) ON a careful consideration of the submissions made by both the sides, the Tribunal originally by order No. 725/97 dated 14.3.1997 have clearly accepted the appellant's plea that the mistake had occurred on account of DGFT in recording incorrect details in the license as against their application. Tribunal also noted the amended license which was obtained by the exporter and on that ground the matter was remanded for de novo consideration. In the de novo consideration the Commissioner has accepted the assesses plea that the subsequent license issued amending the details by rectifying the mistake. However he has noted that originally they had misdeclared in the shipping bill calling for imposition of fine and penalty. We note that the appellant have not committed the mistake intentionally with a view to offend the law; in their application they had given the correct details and the mistake was committed by DGFT while making entries in the license. They have corrected the mistake and granted the amended license. In this circumstance the ratio laid down by the Apex Court in the case of Akbar Badruddin Jiwani v. CC Hindustan Steel Ltd. and IZxtrusion v. CC would apply. There is no intention on the part of the appellant to have committed the offence and they were under the bona fide belief that the entries in the DEEC license book had been made in terms of their application. The mistake had been brought to the notice of the DGFT who have corrected the same. In the earlier order of the Commissioner the appellants were granted permission to export goods. Therefore in the peculiar facts and circumstances we do not see any reason to impose fine and penalty and hence the impugned order is set aside and appeal allowed.