M/S J. P. Exports vs Commissioner Of Customs (Airport), ...

(Arising out of Order-in-appeal No. 156/CUS/(DBK)/KOL(P)/2013 dated 26/09/2013 passed by the Commissioner of Customs (Appeals), Kolkata.

FOR APPROVAL AND SIGNATURE HONBLE SHRI H.K.THAKUR, MEMBER (TECHNICAL)

1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the CESTAT(Procedure) Rules, 1982 for publication in any Authorative report or not?

3. Whether Their Lordship wishes to see the fair copy of the Order?

4. Whether Order is to be circulated to the Departmental Authorities?

M/s J. P. Exports.

Applicant (s)/Appellant (s)

Vs.

Commissioner of Customs (Airport), Kolkata.

Respondent (s)

Appearance:

Shri Saurabh Bagariar, Adv & Shri Partha Banerjee, Advocate for the Appellant (s)

Shri K. C. Jena, ADC (AR) for the Revenue (s)

CORAM:

Honble Shri H.K.Thakur, Member(Technical)

Date of Hearing/Decision: 05.09.2016

ORDER No.FO/A/75989/16

Per Shri H.K.Thakur

This appeal has been filed by the appellant with respect to OIA No. 156/CUS (DBK)/KOL (P)/2013 dt 26/9/2013 passed by CC (Appeals), Kolkata as first appellate authority. Under this OIA dt 26/8/2013 first appellate authority has upheld OIO dated 26/11/2013 passed by the Adjudicating authority.

2. Sh. Saurabh Bagaria (Advocate) and Sh. Partho Banerjee (Advocate) appeared on behalf of the appellant Sh. Bagaria argued that Appellant received a consignment of Imitation Ostrich Bird Feathers from the supplier through courier Agency TNT India Private Ltd and the description in the invoice was shown as Free Trade sample for work purpose Ostrich Bird Feathers and all the Customs procedures were executed by the supplier to whom the finished goods were consigned as per shipping Bill No. 4217966 dated 22/6/2011 where the description was given as Silk Fabrics containing 85% or more by weigh of silk with embroidery ( beads and feathers). Learned Advocate made the bench go through the statements of Sh. R. P. Sharma (AR) and Sh. Nikhil Agarwal (Partner) of the appellant) as recorded in Para 7 & 8 of the OIO dt 26/11/2012. That as per Convention on International Trade in Endangered Species of Wild Fauna & Flore (CITES) only Ostrich (Struthio camelus) feathers from Algeria, Burkina, Faso, Cameroon, the Central African Republic, Chad Modi, Mauritania Morocco, the Niger, Nigeria, Senegal & Sudan are covered under CITES. That appellant received Ostrich feathers from Spain without any knowledge of being prohibited. That department has failed to establish that imported goods contained in finished fabric at the time of export were of prohibited area origin. That neither the export goods are liable to confiscation under Sec 113 (d) of the Customs Act 1962 nor appellant is liable to penalties under Sec- 114 (i) & Sec 114 AA of the Customs Act 1962. That no penalty is imposable on his clients in view of ratio laid by Calcutta High Court in the case of Gopal Saha Vs. Union of India [2016 (336) ELT 230 (Cal.)]. That appellant had received certain documents from the supplier of imported goods that feathers were of invitation nature which were received without appellants knowledge that the same were prohibited and no objection was raised by the department at the time of import.

3. Sh. K. C. Jena ADC (AR) appearing on behalf of the Revenue argued that supplier was under obligation to produce a certificate of origin from appropriate authority to establish that feathers of ostrich have not originated from the countries specified in CITES. Learned AR strongly defended the orders passed by the lower authorities

4. Heard both sides & perused the case records. The issues involved in the present proceedings are:-

(i) Whether feathers used in the making of silk fabrics, being exported by the appellant, are prohibited Ostrich feathers as per CITES?

(ii) Whether appellant is liable for penalty under Sec 114 (i) & Sec 114 AA of the Customs Act 1962.

5. So for as point at Para 4 (i) above is concerned, it is observed that Ostrich feathers were receipted by the appellant from a Madrid (Spain) party M/s Charo Azcona through a courier Agency Copy of invoice dt 17/5/2011 described the goods as Imitation Ostrich feather. As per Appendices II, interalia, following is prohibited :-

 Struthio camelus (Only the populations of Algeria, Burkina Faso, Cameroon, the Central African Republic, Chad, Mali Mauritania, Morocco, the Niger, Nigeria, Senegal and the Sudan; all other populations are not included in the Appendices) 5.1. Ostrich is a flightless bird of African origin & all the countries specified above in CITES are African countries. If the imported feather were of imitation nature or of non African origin then supplier of the feathers was required to produce a certificate from the appropriate authorities in Spain that the same were of non prohibited nature, to honour international convention on protection of wild flora & fauna. As a signatory to CITES it is the duty of member countries to be strict while dealing with endangered plant & animal species. In the absence of any certificate of origin from the an appropriate authority it can not be said that feathers used in the silk fabrics were from non prohibited area. Export of consignment valued at Rs. 1, 51, 303/- has thus been correctly confiscated by the Adjudicating authority & upheld by the first appellate authority. Appeal of the appellant, to the extent indicated in this Para, is dismissed.

6. So for as imposition of penalties upon the appellant as per Para-4(ii) above, under Sec 114 (i) & Sec 114 AA of the Customs Act 1962, are concerned it is observed that appellant did not play any role when the consignment of feathers was imported & received. The consignment of imported feathers processed through courier Agency was never got cleared by the Appellant. The documents received by the appellant from the supplier of imported goods indicated the same to be imitation ostrich bird feathers. There is no evidence on record that appellant had knowledge of prohibited nature of imported feathers. Appellant has not dealt with the feathers in the act of import. Ostrich feathers are not a prohibited item under wildlife (Protection) Act 1972,

6.1. Honable Calcutta High Court in the case of Gopal Saha Vs UOI (Supra) held as follows :-

 14. There is a distinction between Section 111 and Section 112 of the Act. The former provides for confiscation of improperly imported goods and the latter prescribes the penalty for improper importation of goods. The judgments relied upon by the Union reveal a liberal construction of a provision in favour of the State to deal with the mischief for which the statute and the provision have been enacted. However, such construction may not apply to a penalty as the cardinal rule for construing a penal provision is otherwise. It is possible for a provision providing for confiscation of goods to be liberally interpreted, but when a provision provides for punishment it has to be strictly construed.

15. The Expression goods in respect of which any prohibition is in force in the context of Section 112 of the Act would imply goods which are prohibited from being imported and not goods which have been smuggled into the country in contravention of the procedure established by law for the import thereof. Thus while the corresponding provision in Section 111 of the Act permits the confiscation of the goods on a broader construction of the relevant expression with reference to the definition of Prohibited goods the similar provision in Section 112 of the Act has to be strictly construed and confined to goods which are expressly prohibited from being imported into the country.

16. As a consequence, the order impugned dated November 24, 2015, insofar as it imposes a penalty on either petitioner bassed on the value of the goods, is set aside and the matter remanded for such limited purpose for the imposition of such other quantum of penalty that may be permissible.

6.1.1. In the above case law the petitioners were the mastermind & kingpin of gold smuggling operation & the principle accomplice. Inspite of the above Honable High Court has held that penalties are not imposable & were set aside. It is also held in the above case law that confiscation provisions should be liberally interpreted in favour of the State but provision providing for punishment should be strictly construed. In the present case there is no evidence on record that appellant was aware of the contraband nature of ostrich feathers received by them through a courier Agency.

6.2. In view of the above penalties imposed upon the appellant under Sec 114 (i) & Sec 114 AA of the Customs Act 1962 are not justified and are set aside.

7. Appeal filed by the appellant is allowed only to the extent indicated in Para 6.2 above.

(Operative part of the order already pronounced in the court.)

(H.K.THAKUR) MEMBER (TECHNICAL)

T.K

7 Appeal No.C/71385/2013