Subham Enterprises vs Commissioner Of Customs

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CHENNAI

Appeal No. C/178/2005

[Arising out of Order-in-Appeal No.803/2004 dated 29-10-2004 passed by the Commissioner of Customs (Appeals), Chennai]

Subham Enterprises Appellant

Versus

Commissioner of Customs, Chennai Respondent

Appearance:

Shri M.A. Mudimannan, Advocate For the Appellant

Shri Kailash Chandra Jena, ADC (AR) For the Respondent

CORAM :

Honble Shri R. Periasami, Technical Member Honble Shri P.K. Choudhary, Judicial Member

Date of Hearing/Decision : 16.10.2015

FINAL ORDER No.41447/2015

Per R. Periasami

The present appeal is arising out of Commissioner (Appeals) order. The issue relates to anti-dumping duty on the Mulberry Raw Silk imported from China. Appellants filed Bill of Entry No.510956 dt. 17.7.2003 for clearance of Mulberry Raw Silk and declared the Grade as 4A. The Customs on doubting the grade of Mulberry Raw Silk declared by the appellant subjected the goods for first check examination. Samples were drawn and the same were forwarded to the Central Silk Technological Research Institute (CSTRI), Bangalore for testing the samples of Raw Silk. Pending its report, provisional release of the goods was allowed on execution of Bank Guarantee of 50% of ADD. On receipt of the test report [TR No.TTL-STG-94 dt.11.8.2003], it was certified that the sample is of 2A grade. As per Notification 106/03-Cus. dt. 10.7.2003, the import of Mulberry Raw Silk of Grade 2A or below 2A attracts NIL rate of duty. The importer vide their letter dt.21.10.2003 requested to adjudicate the case and requested for waiver of SCN. The importer Shri Rakesh attended the personal hearing and pleaded for lenient view. Accordingly, the adjudicating authority confiscated the goods but allowed the goods for redemption on payment of RF of Rs.1 lakh and also demanded anti dumping duty of Rs.9,39,149/- and also imposed penalty of Rs.20,000/- under Section 112. On appeal, the Commissioner (Appeals) vide impugned order upheld the OIA and rejected the appeal.

2. Ld. Advocate for the appellant submits that appellant is a regular importer of Mulberry Raw Silk from China and they have declared the Bill of Entry as grade 4A as per the invoice and packing list. He also drew our attention to the certificate of inspection and quarantine certificate issued by the Peoples Republic of China accompanying the imported goods wherein it was certified by the supplier country as Grade 4A. He also drew attention to policy circular No.4(RE-2000)/1997-2002 dt. 7.4.2000 wherein it was clarified that all grade certificates issued by the Peoples Republic of China after 1.1.2000 shall be deemed to be valid in terms of Licensing Note No.2 to Chapter 50 of ITC (HS) Classification for import of Mulberry Raw Silk. He also relied letter dt. 3.4.2003 issued by ADGFT, Karnataka State Weavers Central Committee wherein it was clarified that Custom House decided to accept the C.I.Q certificate issued by the Foreign Inspection Agency, for customs purpose. He submits that though appellants had waived the SCN, copy of the test report was not given. Both the adjudicating authority and the appellate authority have not considered their plea that once the certificate of inspection declared the Grade as 4A, the same should be accepted. There is no mens rea with intention to evade payment as the goods were declared as per the invoice and packing list the goods are not liable for confiscation and not liable for penalty. He relied on the following citations :-

(1) Ruchi Infrastructure Ltd. Vs CC Visakhapatnam 2004 (168) ELT 49 (Tri.-Bang.) (2) Asha Enterprises Vs CC (Seaport) Chennai 2008 (230) ELT 461 (Tri.-Chennai) (3) Silkone International Vs CC Chennai 2007 (208) ELT 271(Tri.- Bang.) (4) Ruchi Soya Industries Ltd. Vs CC Bangalore 2015 (323) ELT 189 (Tri.-Bang.)

3. On the other hand, Ld. A.R reiterated the OIO and the impugned order. The appellant misdeclared the goods both in the invoice and the documents to evade anti-dumping duty. Samples were drawn as per the customs procedure in the presence of representatives of the importer and the same were forwarded to Central Silk Research Institute. Appellants were fully aware of the test report. As the importer himself appeared before the adjudicating authority for personal hearing had waived SCN and pleaded for leniency. The adjudicating authority had rightly confiscated the goods and imposed fine and penalty. He submits that citations relied by the appellants are not relevant to the issue.

4. After hearing both sides, we find that the adjudicating authority has allowed provisional release of the goods declared as "Mulberry Raw Silk Grade-4A" imported from China under above Bill of Entry pending Test Report. The test report of Central Silk Research Institute (CSRI) Bangalore revealed that the goods were of Grade-2A instead of declared Grade-4A.

5. It is pertinent to state that in terms of Notification No.106/2003 dt. 10.7.2003 anti-dumping duty is leviable on raw silk of any Grade 2A and below whereas the appellants imported and declared the goods as Raw Silk Goods Grade 4A. On receipt of the test report, the adjudicating authority after following the principles of natural justice rightly adjudicated the case and personal hearing was attended by the importer himself and he was aware of the test report and only pleaded for leniency. Therefore, we do not find any merit in the appellants contention that that they had not been provided with test report. Further appellants contention that quarantine certificate issued by Peoples of Republic of China should be accepted is not tenable as it is confirmed by the test report that the goods imported were found to be Grade-2A. Therefore the copy of bonafide of inspection certificate and quarantine certificate relied by the appellant is not valid. The adjudicating authority has rightly held that Anti dumping duty is chargeable and the appellants have misdeclared the goods as Grade 4A instead of 2A. The citations relied by the appellant are not applicable to the issue. Therefore, we do not find any infirmity in the adjudication order and the impugned order in so far as demand of ADD. As regards appellants' pleading for non-imposition of fine and penalty, we find that this Tribunal in a recent decision in the case of Silkone International Vs CC Chennai (supra) clearly upheld anti dumping duty, however, set aside the fine and penalty as there is no provision for fine and penalty on ADD by following apex court judgement in the case of CCE Ahmedabad Vs Orient Fabrics Pvt. Ltd.  2003 (158) ELT 545 (SC). Accordingly, we waive fine and penalty. The impugned order is upheld but for waiver of fine and penalty. Appeal is partly allowed.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) JUDICIAL MEMBER TECHNICAL MEMBER

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