2007(08)LCX0065

IN THE SUPREME COURT OF INDIA

Ashok Bhan and V.S. Sirpurkar, JJ.

Commissioner of Customs, Mumbai

Versus

Ashish Bajpai

Civil Appeal Nos. 2778-2780 of 2001 with C.A. Nos. 3733 of 2001, 2007 of 2002, 3401-3403 of 2002, 3246,3479,3964, 3968 and 1090 of 2006, decided on 21-8-2007

Cases Quoted -

DEPARTMENTAL CLARIFICATION QUOTED

DGFT Policy Circular No. 32 (RE-99)/2000, dated 17-9-1999 [Paras 11,12]

Advocated By -

S/Shri T.A. Khan, Ms. Gargi Khanna and B. Krishna Prasad, Advocates, for the Appellant.
S/Shri Atul Nanda, Rajesh Kumar for P.N. Puri, Rupesh Kumar, M.L. Grover, Prakash Kumar Singh, Nitin Rai, K. Rajeev, S.K. Sinha, Arun Dhintan, Kavin Gulati, Ms. Ruby Singh Ahuja, Ms. Rashmi Singh, Avinish Pandey, and M.A. Chinnasamy, Advocates, for the Respondent.

[Order]. -

These appeals (C.A. Nos. 2778-2780/2001) under Section 130-E of the Customs Act, 1962 (for short "the Act") have been directed against the Final Order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, West Regional Bench at Mumbai (for short "the Tribunal") in Final Order No. C-II/2562-64/WZB/2000, dated 18th September, 2000 in appeal Nos. 489, 493,495-R/2000-Mum. whereby the Tribunal allowed the appeals of the Respondents-Assessees (hereinafter referred to as "the Assessees").

2. This batch of appeals is being taken up for disposal by this common order as the point involved in all these appeals is identical except with little variation.


3. The assessees imported "Dried Garlic" (Chinese White). Some of the assessees approached the sellers-exporters at Singapore. At the time when the contracts were entered into sometime in July, 1999, the position was reported to be that Dehydrated Garlic Powder, Fresh Garlic and Dried Garlic were importable freely, i.e., covered under the Open General Licence (OGL) category and therefore no licence was required for importation of such goods. This is clear from the policy provisions contained in EXIM Policy 1997-2002, namely, the ITC (HS) Classification of Export and Import Items which reads as under :

4. Subsequently, the Director General of Foreign Trade (DGFT) authorities on 17th September, 1999 examined the matter and issued a clarification by Policy Circular No. 32 (RE-99)/2000 of even date clarifying that "Dried Garlic" classified under EXIM Code No. 071290.04 of ITC(HS) Classification - 1997-2002 would be treated as Dried Garlic provided the moisture content thereof does not exceed 10% irrespective of the method of drying. This policy circular was signed by the Joint Director General of Foreign Trade with the approval of the Director General of Foreign Trade.


5. On the basis of the said circular, the Customs authorities objected to the import of goods which were imported sometime in the last week of August, 1999 and for which the contracts were entered into and also the Letters of Credit opened much earlier.


6. Various show cause notices were issued to the assessees proposing to take action under Sections 111(d), 111(m) and 112(a) of the Act. The parties were heard. Goods were examined at first check basis and sealed samples were called for in spite of the goods cleared after examining the samples. The moisture contents were found to be more than 10% by weight.


7. On the basis of the representations and the personal hearing, the adjudicating authority, i.e. Commissioner of Customs, confirmed the show cause notice and held that there was violation of Section 111(d) and (m) read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992. The authority in original imposed penalties at various sums and also imposed redemption fines at various quantum.


8. Aggrieved against the aforesaid order passed by the authority in original, the assessees filed the appeals before the Tribunal.


9. The Tribunal accepted the appeals and set aside the order-in-original, holding that since the contracts had been entered into sometimes in July, 1999 and the Letters of Credit opened in pursuance thereto sometimes in August, 1999, the clarification issued by the DGFT on 17th of September, 1999 could not apply to the cases of the assessees with retrospective effect. That it was also held that the clarificatory circular issued on 17th September, 1999 could not be issued by the DGFT. That the Circular could only be issued by the Central Government as per Sections 5 and 6 of the Foreign Trade (Development and Regulation) Act, 1992.


10. Against the aforesaid order passed by the Tribunal, the Revenue has filed the present appeals.


11. Prima facie, we find the findings recorded by the Tribunal on questions of law to be correct. But, we notice that in some of the cases the assessees themselves had conceded that the goods imported by them were not Dried Garlic but Fresh Garlic. The authority in original in its order has so recorded that some of the assessees had given such a concession under protest whereas others did not do so. The assessees who did not protest, simply accepted the applicability of the policy circular dated 17th September, 1999. The Tribunal while dealing with the questions raised by the assessees, did not advert to the concession made by the assessees either under protest or under mis-apprehension of law with the presumption that the policy circular dated 17th September, 1999 was applicable to them.


12. Counsel appearing for assessees states that the concession was made on a mis-apprehension of law and in the light of the policy circular dated 17th September, 1999 with a presumption that the same was applicable to the goods imported by the assessees.

13. Since the Tribunal did not record any finding on the issue of the concession on facts made by the assessees with or without protest, we deem it appropriate to remit the matter back to the Tribunal for a fresh decision thereon after taking into consideration the effect of the concession made by the assessees with or without protest. We order accordingly.


14. Parties would be at liberty to agitate the other allied questions as well before the Tribunal. Question of law decided by the Tribunal is left open at this stage.


15. For the reasons stated above, the appeals are disposed of. However, there shall be no order as to costs.


16. Keeping in view the facts and circumstances of the instant case and the fact that the cases are being remitted to the Tribunal for a fresh decision thereon, we would request the Tribunal to take up the appeals on priority basis and dispose them off as expeditiously as possible.


17. Nothing stated herein above be taken as an expression of opinion either on the point of law or on the issue of concession. The Tribunal would proceed with and dispose of the appeals in accordance with law.

Equivalent 2007 (217) ELT 0163 (S.C)

Equivalent 2007 (083) RLT 0311 (SC)