Bhaskar Bhattacharya, J. - (1.) By this writ application the petitioners have prayed for quashing the order dated April 19, 2002 passed by the Customs, Excise and Gold (Control) Tribunal, Kolkata ("CEGAT") by which the said tribunal has affirmed the order of the Commissioner imposing redemption fine and personal penalty upon the petitioners. The petitioners have further prayed for direction upon respondent No. 1 to refund a sum of rupees thirty lakh which has been paid by the petitioners by way of redemption fine on the imported goods and also for refund of rupees five lakh paid by the petitioner No. 1 as the personal penalty and a further sum of rupees one lakh paid by petitioner No. 2 as personal penalty on him.
(2.) The facts giving rise to filing of the instant writ application may be summarised thus: The petitioners are importers of various items including lithophone. On the basis of the petitioners' order for import which was declared by the petitioners to be 21.5 MT of lithophone, the said amount of materials arrived at the port. Upon arrival of the goods, the petitioners filed a bill of entry dated June 3, 1999 for home consumption making the selfsame declaration. However, the Customs Authorities had some doubt in their mind and after investigation it was detected that out of the said declared amount of 21.5 MT of lithophone, there were actually 10 MT of tetracycline, a prohibited item and 11.5 MT of lithophone. Ultimately, a notice was issued under Section 124 of the Customs Act, 1962 asking the petitioners to show cause why the said consignment valued at Rs. 63,32,018.60p. should not be confiscated under Section 111(d) and 111(m) of the Customs Act and why the importers and their agent should not be penalised under Section 112(a) and 112(b) of the said Act. The petitioners were further asked to show cause why the attempted evasion of duty amounting to Rs. 38,16,729.40p. resulting from wilful mis-declaration of the imported goods should not be paid by them along with interest and why the imported prohibited goods viz. tetracycline should not be confiscated under Section 14 of the Drugs and Cosmetics Act, 1940 and the persons concerned should not be liable for punishment under Section 13 of the said Act.
(3.) The petitioners gave reply to show cause notice and the defences taken by the petitioners were as follows: (a) The petitioner No. 2 had placed an order for supply of 21.5MT of lithophone with Texpo International, Hong Kong. Upon arrival of the goods a bill of entry was filed and duty of 21.5 MT of lithophone was assessed and paid. On or about June 8, 1999 the goods were physically examined and it was found that the goods were really 11.5 MT of lithophone and 10 MT of tetracycline HCL BP 93. The bags containing lithophone and tetracycline were of different shapes and sizes and they could be distinguished easily. The lithophone has thus not been used for concealment of tetracycline. 11.5 MT of lithophone are, however, not offending goods and even no allegation has been made against the said quantity of lithophone for confiscation under Section 119 of the Customs Act, 1962. The 11.5 MT of lithophone, therefore, could be released straight away and the excess amount of duty paid by the noticee should be refunded. (b) Since the petitioners came to know that the goods found upon physical verification were not the goods which were ordered, they immediately contacted the foreign supplier in Hong Kong and the said supplier after making enquiries reported back to the noticee that due to some mistake in his godown, 11.5 MT of lithophone and 10 MT of tetracycline were sent instead of 21.5 MT of lithophone and he requested that 10 MT of tetracycline which were missent goods might be shipped back to him and he would pay the expenses for that. (c) It was a bona fide mistake on the part of the foreign supplier and the petitioners should not be blamed in any manner for what had happened by mistake. In paragraph 27 of the show cause notice, the Customs Authority had stated that evidence would not be disclosed since the enquiry was yet to be completed and if no evidence was disclosed to the petitioners, there was no reason for giving such show cause notice. In paragraph 28 of the show cause notice it was mentioned that some documents were in existence and those would not be provided to the petitioners. Thus, there was nothing on record to say that the explanation given by the petitioners were not true. (d) The burden to prove that the defence of the petitioners is baseless or wrong is on the department and the department not having discharged such burden, no action should be taken against the petitioners. (e) Tetracycline could not be confiscated under Section 14 of the Drugs and Cosmetics Act, 1940 and personal penalty could not be imposed under Section 13 of the said Act by the Commissioner of Customs inasmuch as power of confiscation and personal penalty vested only in the Court under Section 15 of the said Act.;