J B TRADING CORPORATION Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) THESE three appeals relate to the same issue of import of 75 bales of Mulberry Raw Silk which arrived at Madras Harbour on 27-9-1986. The supplier of the goods was Brightex (H.K.) Corporation. Appeal No. 19/88 filed by JB Trading Corporation and Appeal No. 98/88 filed by appellant Brightex (HK) Corporation are directed against the order dated 15-9-1987 passed by the Collector of Customs, Madras confiscating the consignment of raw silk absolutely under Section 111(d) of the Customs Act, 1962 read with Section 3 (2) of Import & Export (Control) Act, 1947 on the ground that import was unauthorised and without a valid import licence. Appeal No. C/384/88 is filed by appellant J.B. Trading Corporation against Order-in-Appeal dated 22-3-1988 passed by the Collector of Customs (Appeals), Madras by which he had confirmed the order of the Deputy Collector of Customs, Customs House, Madras in which the Deputy Collector had held that the Bills of entry filed for the clearance of the consignment of raw silk by appellant JB Trading Corporation as importers cannot be allowed to be noted in the Customs House under the law.

(2.) The facts in brief are that on 29-9-1986 M/s. Jeena & Co. Customs House agent filed three Bills of entry with invoices dated 4-9-1986 of appellant Brightex (HK) Corporation on behalf of M/s. Continental Silk House. The Bills of entry were accepted by the Customs House. The goods covered by the three Bills of entry were valued at Rs. 3,43,651/-( Rs. 3,45,910/- and Rs. 3,45,792/- c.i.f. Meanwhile information was received to the effect that the said importers were not in existence and import licence was obtained by fraud and mis-representation. The Joint Chief Controller of Imports and Exports also took action to cancel the import licence in the name of M/s. Continental Silk House by way of issue of show cause notice. Show cause notice was not served on the importers. There was no such company on the said address. The JCCIE made further enquiries and also initiated proceedings which culminated in the cancellation of the licence issued to the said party on the ground that licence was obtained by fraud and mis-representation and forged documents. Adjudication proceedings were also initiated by the Customs House proposing to confiscate the goods under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Import & Export (Control) Act, 1947. The show cause notice issued to the party was returned un-delivered. Meanwhile Shri LU Balani counsel for appellant JB Trading Corporation requested the Customs to note the Bills of entry filed by them namely JB Trading Corporation as they were in possession of the original Bill of lading in respect of the very same goods mentioned above. Since three Bills of entry had already been filed by M/s. Continental Silk House for the clearance of the same goods and adjudication proceedings had already been initiated by way of issue of show cause notice, the Customs House informed Counsel Balani by letter dated 31-3-1987 that the request of the party could not be acceded to and the Bills of entry filed by appellant JB Trading Corporation were not noted in the Customs House for this reason. Appellant JB Trading Corporation filed writ petition before the High Court, Madras seeking direction to the Customs House to receive the Bills of entry filed by them. The writ petition filed by them was dismissed by the High Court, and on appeal therefrom, a Division Bench of the High Court directed the Deputy Collector of Customs to receive the Bills of entry and consider whether the Bills of entry will have to be sent for further processing or not on merits and make an order if he wanted to reject the same on any ground. The High Court also made it clear that investigations in regard to the earlier Bills of entry filed by M/s. Continental Silk House can be proceeded with. Upon the directions of the Madras High Court, the Bills of entry were received and after considering the submissions made on behalf of the appellant JB Trading Corporation, the Deputy Collector of Customs by his order dated 1-9-1987 held that they cannot be permitted to note the Bills of entry in the Customs House for further processing. The order of the Deputy Collector was also communicated to M/s. JB Trading Corporation on 10-9-1987. In their letter dated 19-8-1987, Shri Balani, Counsel for the appellant informed the Deputy Collector of Customs that JB Trading Corporation is the owner of the goods under reference and they should be made a party in the proceedings before the Collector on the basis of certain decisions of the Madras High Court in the case of Indian Overseas Bank \. Collector of Customs, Madras reported in 1984 TAX. L.R. 2427. The Counsel's contention was considered by the Department and he was informed by the Department that the facts and circumstances cited by him were entirely different from those of the present case and the decision of the Madras High Court was not applicable to the present proceedings and hence his request for impleading his client could not be accepted. Thereafter the Collector proceeded to adjudicate the case and held that as the importation of the goods had already taken place in the name of M/s. Continental Silk House against specific licence issued which had since been cancelled by the licensing authorities, the goods were not covered by valid licence and hence ordered absolute confiscation of the goods under Section 111(d) of the Customs Act, 1962. Appellant JB Trading Corporation later filed a Writ Petition before the Madras High Court and the Court in its order dated 21-12-1987 dismissed the same with the direction that the appellant JB Trading Corporation should approach the Ministry of Finance for redressal and relief. Further appeal was filed before the Hon'ble High Court of Madras and the Division Bench in its order in Writ Appeal No. 243/86, dated 9-12-1988 rejected the appeal with the direction that it is open to the appellants to urge all the points before the Tribunal and that certified copy of the order of confiscation be supplied by the Customs Authorities to the appellant within two days. The High Court also stayed the order of confiscation until the final disposal of the application pending before the Tribunal. The appellant JB Trading Corporation are thus before the Tribunal with their appeals.

(3.) IN respect of their appeal against order of confiscation passed by the Collector of Customs (Appeal No. C/19/88), the learned Counsel submitted that the Collector failed to appreciate that the appellants being the owner of the goods were entitled under Section 124 of the Customs Act to be heard in the matter and the adjudication order of the Collector has been passed without complying with the provisions of Section 124 of the Act. The Collector, according to the learned Counsel, was in grave error in not affording an opportunity of hearing against the confiscation of the goods. The Collector had failed to consider that M/s. Continental Silk House was never the owner of the goods and could not have therefore been the importer as defined under Section 2(26) of the Customs Act. Therefore, the learned Counsel pleaded that the appellants should be given the opportunity to put forth their case before the adjudicating authority. He also relied upon the decision of the CEGAT reported in 1987 (28) E.L.T. 521 in the case of Jagir Singh v. Collector of Customs and Central Excise, Chandigarh that the adjudicating authority was bound to decide the case after affording a reasonable opportunity to the person claiming ownership of the goods during the adjudication proceedings.