ADITYA MILLS LTD Vs. CC

JUDGEMENT

(1.) THESE appeals are against the order of the Principal Collector of Customs, Mumbai confiscating under Section 113 I of the Act, seven consignments of polyester blended yarn with an option to redeem on payment of fine, imposing penalty under Section 114 of the Act on the exporter and its managing director.

(2.) THE common advocate for the two appellants explains that in his order the Commissioner has found that the yarn was made from waste fibre and not as claimed by the exporter from virgin polyester fibre. He says that the sole evidence relied upon, opinion of the Silk and Art Silk Mills Industries Research Association (SASMIRA) is unreliable. Ms. A. Kaplash, Dy. Director of SASMIRA who was cross -examined with regard to the certificate given, had stated to an -y other exporter that it was not possible to technically distinguish between yarn from virgin fibre and yarn from waste fibre in view of the process to which fibre is subjected during spinning. He next contends that in any event, the goods were not liable to confiscation. Clause (i) of Section 113 of the Act will only apply when the exported goods were dutiable or prohibited; the goods in this case were neither dutiable nor prohibited. The notice placed reliance upon Clause 3(3) of the Export Control Order, 1977. This clause has no application in the facts of the case and refers to export of goods in Schedule 3 of the order, with which the appellant was not concerned. He cites the decision of the Tribunal in Badriprasad and Sons v. CCE . It is next contended in the alternative that the exporter had not received or sought to receive any benefit of the advance licence. Therefore, there was no evasion of duty, confiscation and imposition of penalty were uncalled for. A first time contravention does not justify penalty and confiscation. Case of Dolphine v. CCE was cited in support.

(3.) THE departmental representative contends that the Collector in his order has based his order on the testimony of the experts. He further contends that the background to the letter issued by Ms. Kaplash on which the appellant relies is not known. He contends that reference to Clause 3(3) of the Export Control Order the notice in the order is a typographical error. The notice specifically reproduces Sub -clause 3 of Clause 3 of the order which deems as prohibited goods the value, sort, specification, quality and description of which did not tally with the declaration filed in the export contract. The declaration and export contract were for yarn made of virgin fibre. The applicability of Section 3(3) was not an issue before the Tribunal in Badriprasad and Sons v. CCE. The statement of the managing director and others shows that they had knowledge of the use of the waste fibre in the spinning of the yarn exported. Had the attempt gone unchecked it that appellant would have wrongly benefited to the extent of Rs. 30 lakhs.