2007(06)LCX0157

In the Customs, Excise & Service Tax Appellate Tribunal, Chennai

Shri P.G. Chacko, Member (Judicial) and Shri P. Karthikeyan, Member (Technical)

Amusement & Picnic Resorts (P) Ltd.

Versus

Commissioner of Customs, Chennai

Final Order Nos. 733-734/2007 dt. 14.6.2007 certified on 21.6.2007 in Appeal Nos. C/13 & 14/2000

Cases Quoted -

Star Paper Mills Ltd. Vs. CCE, 1989(08)LCX0030 Eq 1989 (043) ELT 0178 (SC) - Referred [Para 3]

Indo-International Industries Vs. CST, 1981 ELT 325-Referred [Para 3]

Advocated By -

Shri S. Murugappan, Adv. for Appellants
Smt. R. Bhagya Devi, SDR for Respondent

Per P.G. Chacko :

M/s. Amusement Picnic & Resorts (00P) Ltd. (M/s. APRL for short) (appellants in Appeal No. C/14/2000) had imported 8 sea lions valued at Rs. 2,62,460/- in January 1995 and 3 Dolphins valued at Rs. 97,80,783/- in May 1998 and filed Bills of Entry dated 27.1.95 and 29.5.98 respectively, declaring themselves to be 'zoo' and classifying the animals under CTH 9908.00 for the purpose of duty-free clearance. These imports were from Bulgaria. After duty-free clearance, the animals were used for performance and shows by the importers for amusing the public against payment of fee. Later on, after investigations, the Commissioner of Customs, Chennai issued a show-cause notice dated 6.11.1998 to M/s. APRL and their Managing Director (appellant in Appeal No. C/13/2000) alleging that they had misdeclared themselves to be 'zoo' with intent to evade payment of duty as applicable to live animals classifiable under CTH 0106.00. The notice demanded duty of Rs. 45,71,951/ - from M/s. APRL in respect of the animals covered by the two Bills of Entry, held the animals to be liable for confiscation and proposed penalties on the company and their Managing Director. The notice was contested. In adjudication of the dispute, learned Commissioner confirmed the demand of duty against M/s. APRL under Section 28 (2) of the Customs Act by invoking the extended period of limitation under the proviso to Section 28 (1) of the Act, and also ordered payment of interest on the duty amount under Section 28AB of the Act. The 5 sea lions, which were alive out of the animals imported by the appellants, were confiscated under Section 111 (m) and (o) of the Act, with option for redemption against payment of a fine of Rs. 1.50 lakhs. Penalty equal to duty was imposed on M/s. APRL under Section 114A of the Act and a penalty of Rs. 50,000/- on the Managing Director of the company under Section 112 (a) of the Act. The appeals are directed against the Commissioner's decision.


2. After examining the records and hearing both sides, we find that, during the material period, animals and birds imported by a zoo were classifiable under CTH 9908.00 and the same were exempt from payment of duty. Dolphins and sea lions, when imported by anybody other than zoo, would be classifiable as 'other live animals' under CTH 0106.00, which entry attracted duty @ 65% for sea lions and 45% for dolphins on the respective dates of import. In the relevant Bills of Entry, M/s. APRL had declared themselves to be 'zoo'. In the show-cause notice, the department alleged misdeclaration and invoked the larger period of limitation for recovering duty from M/s. APRL at the rates applicable to CTH 0106.00. On these facts, the short question arising for consideration is whether M/s. APRL had the status of a 'zoo' at the time of the subject imports.


3. Learned Commissioner in the impugned order found that the Central Zoo Authority [CZA] under the Wild Life (Protection) Act, 1972 had not recognized M/s. APRL as a 'zoo' and, on this basis, he proceeded to confirm the demand of duty against them. The appellants have challenged this decision on the ground that the Wild Life (Protection) Act is not applicable to this case. Without prejudice to this ground of the appeal, they have pointed out that the CZA had initially recognized them as 'zoo'. It is submitted that, in the absence of a definition of the term 'zoo' under the Customs Tariff Act, the term should be construed by applying common parlance test. It is claimed that a dolphinarium is understood as 'marine zoo' all over the world. Learned counsel has sought to develop this case of the appellants by referring to Oxford Dictionary of English which gives the meaning of the word 'zoo' thus:-

an establishment which maintains a collection of wild animals, typically in a park or gardens, for study, conservation, or display to the public.

Learned counsel has submitted that M/s. APRL, as an establishment, were maintaining a collection of sea lions and dolphins for display to the public and hence they deserved to be considered as zoo. In this connection, he has cited the Supreme Court's decision in Star Paper Mills Ltd. Vs. CCE, 1989(08)LCX0030 Eq 1989 (043) ELT 0178 (SC) wherein dictionary meanings of certain words and expressions were adopted in the absence of definition in statute. He has also relied on the apex court's judgment in Indo-International Industries Vs. Commissioner of Sales Tax, 1981 ELT 325, wherein the common parlance was considered in the absence of definition in statute. On the other hand, learned SDR has referred to the definition of 'zoo' under Section 3 (039) of the Wild Life (Protection) Act, 1972, which reads as follows:

zoo means an establishment, whether stationary or mobile, where captive animals are kept for exhibition to the public and includes a circus and rescue centres but does not include an establishment of a licensed dealer in captive animals.

She submits that no zoo could be operated without being recognized by the CZA. In the instant case, though the CZA had initially recognized the appellants as zoo under Section 38H of the above Act, it derecognized them subsequently. According to learned SDR, where the term 'zoo' was not defined under the Customs Tariff Act, it was permissible for the department to adopt its definition available under the statute governing the subject. Accordingly, she supported the impugned order, wherein M/s. APRL were found to be not a zoo recognized under the Wildlife (Protection) Act.


4. After giving careful consideration to the submissions, we must accept the counsel's argument that, for any establishment to be recognized as a zoo for the purpose of CTH 9908.00, it is not necessary that it should be 'zoo' defined or recognized under the Wild Life (Protection) Act. Had there been such a requirement, it would have been expressly mentioned in the description of article against Heading 99.08 in the Table under Chapter 99 of the First Schedule to the Customs Tariff Act. In the absence of such mention and in the absence of definition of 'zoo' in Chapter 99 or elsewhere in the First Schedule to the Customs Tariff Act, one has to understand the meaning of the word from common parlance. Often, it is common parlance which makes its way into dictionaries of languages. The Oxford Dictionary of English gives the meaning of 'zoo' as an establishment which maintains a collection of wild animals, typically in a park or gardens, for study, conservation or display to the public. The counsel has submitted that the company, as an establishment, had maintained the collection of dolphins and sea lions in a park for display to the public. The appellants have no case that they were maintaining these animals for study or conservation. In fact, they could not 'conserve' these animals; 3 dolphins and some of the sea lions died while in their captivity. It is also on record that the appellants were not simply displaying the animals to the public. They were using these animals for amusement purposes. The Addl. Commissioner of Customs (Air Cargo Complex) in his letter dated 21.7.1998 addressed to the Additional Inspector-General of Forests (Wild Life) narrates how the appellants used the animals for live show of performance, as follows:-

'The show lasts for about an hour (1/2 hour each for the Dolphins and Sea Lions). The environment has a carnival atmosphere with loud music and the show is slickly compered and choreographed and includes the animals performing several maneuvers and tricks such as 'singing', 'dancing' playing football and basket ball and balancing balls on their noses, fetching plastic rings, pulling a boat with a passenger and several other tricks to entertain and amuse the audience. All these activities are carried out under the orders and supervision of their Bulgarian and Indian trainers and also the compere of the show'.

The facts stated in the above narration are not in dispute. These are not characteristic of a 'zoo' as understood in common parlance. Moreover, a zoo is understood by the common people as a place where a variety of wild animals are maintained for study, conservation or display to the public. When M/s. APRL imported the sea lions, they were not already having any collection of wild animals for public display. In other words, when they imported the sea lions, they were not at all a 'zoo'. Later on, when they imported the dolphins, what they were already maintaining was a collection of sea lions only, which by itself did not constitute a 'zoo'. According to the dictionary meaning or common parlance, a zoo is a collection of wild animals maintained by an establishment in a park or gardens for study, conservation or public display. There must be a variety of wild animals. A collection of wild animals of the same species is not a zoo for the common man, who looks for a variety of animals in a zoo. It is thus evident that neither at the time of import of the sea lions nor at the time of import of the dolphins were M/ s. APRL a 'zoo' as understood in the common parlance. The appellants' case does not pass the test of the case law cited by their counsel.


5. Obviously, M/s. APRL were misdeclaring themselves to be zoo for the purpose of classifying the animals under CTH 9908.00 for duty-free clearance. By this conduct, they had rendered the animals liable for confiscation under Section 111 (m) and (o) of the Customs Act. Only 5 sea lions were alive when the impugned order was passed. Learned Commissioner imposed a fine of Rs. 1.50 lakhs in lieu of confiscation of these animals. In the facts and circumstances of the case and having regard to the value of the sea lions, we reduce the fine to Rs. 50,000/- (Rupees fifty thousand only). It goes without saying that M/s. APRL are liable to pay duty on both the consignments in terms of CTH 0106.00. Learned Commissioner has rightly demanded this duty by invoking the larger period of limitation on the ground of misdeclaration/suppression. Where duty has not been levied on account of wilful misstatement or suppression of facts, provisions of Section 114A also get attracted. Learned Commissioner imposed the maximum penalty under this provision on M/s. APRL. Considering the facts and circumstances of the case, we reduce this penalty to Rs. 10,00,000/- (Rupees ten lakhs only).


6. The lower authority also imposed a penalty on the Managing Director of the company under Section 112 (a) of the Act. The impugned order says that the Managing Director by various 'acts of omission and commission' rendered the animals liable for confiscation. It, however, does not specify any omission or commission of the Managing Director. The order only says that Shri Pinherio was instrumental in importation of the animals. This is no reason for imposing a penalty on him under Section 112 (a) and we set aside the same.


7. In the result, Appeal No. C/13/2000 stands allowed and Appeal No. C/14/2000 is dismissed, but with reduction of penalty and redemption fine as above.

Operative portion of the order was pronounced in open Court on 14.6.2007.

Equivalent 2007 (082) RLT 0791 (CESTAT-Che.)

Equivalent 2007 (217) ELT 0070 (Tri.- Chennai)