AERO EXPORTS Vs. CC

JUDGEMENT

(1.) M /s. Aero Exports have filed the present appeal being aggrieved with the order -in -appeal dated 24.11.1997 passed by the Commissioner (Appeals), New Delhi.

(2.) BRIEFLY stated the facts are that M/s. Aero Exports, a merchant exporter, filed a shipping bill for export of 4184 dozen of Marble Composition Note Book weighing 19000 kgs. under Value Based Advance Licence Scheme (VBAL). On examination, the net weight of goods was found to be 13,556 kgs. which was admitted by Shri K.C. Dey, Manager of the appellants, who requested that the case be decided without issue of show cause notice and without any personal hearing. The Additional Commissioner, Customs, after hearing Shri Dey on 17.10.1996, adjudicated the matter and ordered confiscation of the goods under Section 113(i) and (ii) of the Customs Act with an option to the appellant to redeem the same on payment of fine of Rs. 1,00,000/ - and imposed a penalty of Rs. 50,000/ - under Section 114 of the Customs Act, holding that the appellants had attempted to fraudulently fulfil export obligation under DEEC by declaring excess weight of 5144 kgs. valued at Rs. 2,09,423/ - and also attempted to evade Customs duty Rs. 51,845/ - on imported goods against short supplied goods by claiming excess drawback amounting to Rs. 17,693/ -. On appeal, the Commissioner (Appeals) rejected the appeal holding that they had deliberately declared the weight of the consignment without bifurcating the same into net weight of paper and net weight of mill board/strawboard with the intention of claiming higher drawback on the total consignment because the rate of draw -back on paper is manifold as compared to the mill board/straw board; that Shri Dey and Customs House Agent were fully authorised to depose on their behalf; that by merely disowning Shri Dey, they could not absolve themselves of the offence.

(3.) SHRI R.K. Kapoor, learned Consultant, submitted that the case was adjudicated without issue of a show cause notice and without grant of personal hearing; that Shri K.C. Dey is neither their manager nor does he represent them in any manner and as such he had no authority to make a statement on their behalf; that whether the Department verified that Shri Dey was duly authorised by them in this behalf; that as such principle of natural justice was not followed. He, further, submitted that the import licence did not specify and individual value limit for printing paper and graphic art film nor did the import specify any quantity of each item to be imported; that the export obligation was mentioned in terms of value as well as quantity expressed in dozens and not in weight; that as such declaration of weight could only be considered relevant for the purpose of drawback and it was in no way related to the export obligation; that accordingly there was no short shipment; that their future import entitlement would have been considered as per ITC licence; that they could not have imported excess quantity of goods permitted for import under the ITC licence as the limiting factor was the value; that, therefore, the allegation that they would have imported excess raw material and would have sold the excess quantity on a premium is not substantiated by facts of the case; that similarly allegation of evasion of customs duty is not based on any valid reasoning as they could not have imported excess quantity since weight was not the criteria for any purpose. He also contended that as import had not at all been made by them, they cannot be penalised for an offence which had not been committed; that the cause of action would have arisen had they imported excess quantity against the licence. He also mentioned that there was no mistake in declaring the net weight as 19000 kgs; that they did not bifurcate the net weight into paper i.e. 13556 kgs. and weight of mill board/straw board i.e. 5444 kgs. for the purpose of drawback claim; that this lapse was not intentional as they were not aware that separate rates of drawback were admissible; that Customs Department could have guided them to show the weight differently and Customs Officer should have indicated the weight separately after examining the consignment. He referred to the decision of Collector (Appeals) in Re Nitco Marble and Granite Ltd. 1996 (85) ELT 203 Collr. Appeals : 1995 (58) ECR 96 (Bom) in which it was held that when the exporter makes a declaration, it is the duty of Deptt. to verify its veracity and if the goods are not found in accordance with declaration, suitable observation can be made on shipping bill and export can be allowed. He further mentioned that as per Rule 12 of Drawback Rules (DBK Rules), they were required to state on shipping bill the description, quantity and other necessary particulars for deciding whether goods are eligible for drawback claims; that the amount or quantum of Drawback is left to the Department and accordingly the variation in weight would not be considered as misdeclaration; that in case of payment of erroneous claim, the same is recoverable under Rule 16 of DBK Rules and recourse to action under Section 113 of the Customs Act was not warranted.