Decided on September 30,1991

Shivkumar Exports Appellant


P.K. Desai, Member (J) - (1.) THIS appeal is directed against the Order -in -Original No. S/6 -B -3131/91 Exp, dated 15 -4 -1991 of the Additional Collector of Customs, Exports Deptt, Bombay, rejecting the claim of the drawback claimed in relation the Export Item 100%, Rayon Powerlooms Readymade Garments, and holding the Exporter to have contravened the provisions of Section 50(2) of the Customs Act, 1962, and further ordering confiscation of the same vide Section 113(1) of the Act, but granting option to pay fine of Rs. 40,000/ - and further imposing personal penalty of Rs. 2,0007 -vide Section 114 of the said Act.
(2.) THOUGH the issue raised is in relation to grant of drawback, as the adjudication is by the Additional Collector, the jurisdiction is invested in the Tribunal, and as both the sides have pleaded that the jurisdiction of the Tribunal from any angle is not ousted, the appeal is heard and is being disposed of by this order.
(3.) THE appellants, on 2 -4 -1991, filed Shipping Bill No. 162970, declaring the export item as 100% Rayon Powerloom Readymade Garments, amongst others, comprising of 132 sets of Rayon Sequins Embroidered skirts and blouse sets, and 102 pieces of Rayon Sequins embroidered taps, showing the total value of consignment as Rs. 1,89,388 FOB and claimed drawback under Sr. No. 27 sub -serial 2707 to the Customs and Central Excise Duties Drawback Rules, 1971, at the rate of 8% FOB. On scrutiny, the aforementioned 132 and 102 pieces were found to have been completely embedded with sequin made of plastics and percentage of Rayon in them was much less than 50% by weight, and embedded sequin were much more than 50% and as such, it was felt that they could not be branded as garments made of Rayon, but the garments were of Rayon fabrics and plastic sequin and for that, the drawback, to the extent of Rs. 4,631.00 was not admissible. The appellants however maintained them to be garments of Rayon and hence adjudication proceedings were conducted and after hearing the appellants, the impugned order was passed. Shri L.U. Balani, the Ld. Adv. for the appellant, submitted that there was no attempt to misdeclare the goods, as both, the invoice and the Shipping Bill, gave all the requisite information and details in relation to the subject garments. Referring to sub -serial No. 2707, he pleaded that in the subject goods the entire garments were made of Rayon fabric and only embroidering was done with plastic, however the garment retained its character being Rayon garment, as embroidery was only an embellishment and that merely because weightwise, plastic contents were more, the article could not be branded as not being the one of rayon. He also referred to a letter dated 19 -4 -1991, addressed to the Additional Collector, by Apparel Export Promotion Council; sponsored by the Ministry of Commerce, Government of India, stating that on being approached by the appellant, the Textile Commission, Govt. of India, Ministry of Textiles, at Bombay, was consulted, and that said committee, vide its letter dt. 19 -4 -1991, had opined that in the sample furnished, basic structure being made from woven fabrics with sequins only attached, the rate of woven fabrics was more as compared to rate of sequins, as, without basic fabrics, the garments, would not exist. The Ld. Adv. pleaded that, with this opinion from the competent authority, the denial of drawback as also confiscation and imposition of fine and penalty were not justified and deserved to be set aside, and direction be given to sanction the drawback.;

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