SAI ENTERPRISES Vs. CC

JUDGEMENT

(1.) THE above appeal arises out of the order of Commissioner of Customs, New Delhi by which he has confiscated 94,130 pieces of nail polish bottles collectively valued at Rs. 3,78,080/ - under Section 113(d) of the Customs Act, 1962 with an option to redeem the goods on payment of a fine of Rs. 50,000/ - and imposed a penalty of Rs. 10 lakhs only on the appellants. The goods have been held to be liable to confiscation on the ground of mis -declaration of particulars of quantity and value of export goods, resulting in contravention of Section 18(1)(a) read with Section 67 of the Foreign Exchange Regulation Act, 1973, read with Section 11 of the Customs Act, 1962.

(2.) THE brief facts of the case are that the appellants had sought to export l,20,000/ -bottles of nail polish (15 ml) packed in 70 card board boxes vide Shipping bill No. 17211 dated 5.10.1995 to Hongkong declaring the FOB value as Rs. 40,40,400/ -. The export was under the DEEC Scheme on value based advance licence. On the shipping bill, M/s Farina Chemical Works, Krishna Nagar, Delhi was declared as the supporting manufacturer. Before the goods were examined, Shri M.L. Chandra, Prop of M/s Sai Enterprises, requested under cover of letter dated 9.11.1995 for cancellation/withdrawal of the shipping bill and the Assistant Commissioner of Customs had ordered return of consignment to exporter after 100% examination of the goods. Packages No. 5, 30, 31, 50, 51, 27 were examined; in the first five packages, quantity of nail polish was found short and in the sixth package, 48 pieces were found in excess of the declared quantity and this package contained 628 pieces of empty glass bottles. Enquiries revealed that M/s Sai Enterprises had been closed for the past two to three months. The Prop of M/s Farina Chemical Works stated that they do not manufacture nail polish but only trade in the same. The Representative of the Customs House agent stated that the Prop, of M/s Sai Enterprises contacted him and told him that consignments of nail polish were to be exported to Hongkong. On 5th November, 1995, he visited Shri M.L. Chandra who asked him to prepare export documents as early as possible; that he sent the consignment to ICD on 3.11.1995; the goods were examined by the officers and found to contain less quantity than the quantity declared and that one package contained excess quantity, and empty glass bottles. The statement of Shri M.L. Chandra was recorded on 22.11.1995 in which he deposed inter alia that he had filed the shipping bill dated 5.10.1995 for export of nail polish bottles to Hongkong; that M/s Farina Chemical Works had expressed inability to supply the same and therefore, he purchased 60,000 bottles of nail polish from M/s. Butex International and 60,000 bottles of nail polish from M/s. Natural Cosmetics; he directed his CHA to lift the consignment from the factory of the supporting manufacturer; on 10.11.1985 (sic), he came to know that one factory owner had sent the wrong package and he immediately directed his CHA for withdrawal of the consignment (which was done on 10.11.1995). He further requested that the goods be examined 100% in the presence of his CHA.

(3.) EXAMINATION took place on 22/23.11.1995 and out of a declared quantity of 1,20,000 bottles, 94,130 bottles were found and out of them, 32,448 were found empty; thus 25,870 bottles were found short. Further the value assessed was Rs. 3,78,080/ - (on the basis of statement of Shri M.L. Chandra) as against the declared value of Rs. 40,40,400/ -. The shortage of empty bottles in the consignment was admitted by Shri Chandra in his statement of 4th December 1995. In his further statement recorded on 11.1.1996, Shri Chandra stated that in November 1995, he was sick and he was on bed rest and the entire business was being looked after by Shri Mohan Ram and he was not aware of the packing in which M/s Natural Cosmetics supplied the goods and he had not personally inspected the consignment and the goods were sent to the ICD in the same package in which they were received.