Gypsum Studio Designs vs Commissioner of Customs, Bangalore

H. Billappa, J.—In this petition under Articles 226 and 227 of the Constitution of India, the petitioner has called in question, the letter dated 14-9-2012, vide Annexure-H and has sought for writ of mandamus directing the respondents to re-measure the fabric rolls seized on 10-2-2012, vide Annexure-A and to furnish complete English translation of the Chinese declaration vide Annexure-C. Briefly stated the facts are;

The petitioner is engaged in the trading of gypsum boards and other goods. The petitioner imported a consignment and filed a Bill of entry dated 9-2-2012. The description of the goods as per the Bill of entry and Invoice was 1,057 pcs. of gypsum boards. The value declared was USD 3065.30 ( Rs. 1,53,878) C.F. The basis for filing of the Bill of entry was the documents received by the petitioner from the suppliers. Pending assessment and clearance of the import consignment, the DRI conducted an open examination of the container bearing No. GLDU 2167308. Allegedly, it was found that there were 646 pcs. of Gypsum boards and 137 rolls of fabric. It was seized under a mahazar dated 10-2-2012. The total quantity of fabrics was shown to be 13,093 Mts. and it was annexed to the seizure mahazar.

The statement of Mr. Anand Kothari, the Proprietor of the petitioner concern was recorded. He has denied the contents of fabric in the import consignment. He has stated that he had placed order with the supplier for 1057 pcs. of gypsum boards only.

The DRI sent samples of fabrics for testing to the Textile Committee. Vide report dated 15/16-3-2013, it has been confirmed that the fabrics were linen and classifiable under Customs Tariff Heading 53.09. The DRI sent a letter to Consulate General of India, Hong Kong, to investigate the matter. The Consulate General of India, Hong Kong, replied to the DRI stating that as per the trade declaration filed by the overseas supplier with the Chinese Customs there was a mis-declaration by the importer and the total value of the goods has been declared at USD 49969.00. The Consulate further stated that the goods were declared at 12,000 Kgs. of gypsum boards and 22,890 Sq. Mts. of Polyester fabrics with the Chinese Customs.

Thereafter, the DRI conducted a second inspection of the consignment. A fresh mahazar dated 3-7-2012 was drawn. In the said mahazar, it was stated that the total quantity of fabrics is approximately 22,230 Sq. Mts. (15,000 Mts.). It is stated, the mahazar was drawn only to match the figures stated in the Consulate General letter dated 28-5-2012.

The DRI recorded the statement of Sri. Anand Khothari, the Proprietor of the petitioner concern on 11-7-2012 and 17-7-2012. He was constrained to state and agree that the total quantity of fabrics seized was 15,000 Mts. and he had placed order for 646 pieces of gypsum boards and 22,230 sq. mts. of assorted linen fabrics. He was forced to admit that the value of the gypsum boards and fabrics is USD 31200 and USD 18769.50 respectively. The statements were forcibly taken.

A show cause notice dated 31-7-2012 was issued to the petitioner calling upon him to show cause as to why the duty to the extent of Rs. 24,55,361.28 should not be demanded. The petitioner through letter dated 18-8-2012 requested the department to re-measure the quantity of the fabric rolls in view of the fact that there were two mahazars indicating two different quantities i.e., mahazar dated 10-2-2012 indicating 13,093 mts. and mahazar dated 3-7-2012 indicating 15,000 mts. The petitioner also requested to furnish complete translation of customs declaration which is in the Chinese language.

The petitioner filed an application for settlement u/s 127(B) of the Customs Act, 1962 admitting the duty liability at Rs. 7,60,183.70/-. The petitioner requested the Adjudicating Authority for provisional release of the goods as the goods were suffering demurrages and the condition of the goods was deteriorating. The Adjudicating Authority vide its letter dated 18-2-2013 permitted provisional release of the goods subject to the execution of Bond to the extent of the value of the goods and also securing the differential duty and possible fines and penalties by way of Bank Guarantees.

The grievance of the petitioner is that the Mahazar dated 10-2-2012 shows the quantity of the fabrics as 13,093 mts. and the mahazar dated 3-7-2012 shows the quantity of the fabrics as 15000 Mts. Therefore, the petitioner has requested the respondents to re-measure the fabrics and to furnish translated version of customs declaration which is in the Chinese language. The respondents denied to re-measure the fabrics and provide translated version of the document which is in Chinese language. Therefore, this writ petition.

The respondents have filed the statement of objections contending that the petitioner had imported consignment of gypsum boards and filed Bill of Entry No. 596037, dated 9-2-2012 at Inland Container Depot (ICD), Bangalore for clearance of the said 1,057 pcs. of gypsum boards and the value declared was USD 3065.30 ( Rs. 1,53,878/-) CF. On specific information that the petitioner was resorting to misdeclaration in the import documents, the Officers of DRI, Bangalore, examined the container. It was found to contain 646 pieces of Gypsum Boards and 137 rolls of fabrics totally measuring 13,093 mts.

The DRI, through letter dated 8-5-2012 sought the assistance of the Consul (Economic), Consulate General of India, Hongkong. The Consul (Economic), Hong Kong vide letter dated 28-5-2012 forwarded the declaration filed by the exporter along with the comparative chart showing the declaration before the Indian Customs viz-a-viz China Customs in respect of the consignment and informed that the consignment was declared as 12,000 kgs of Gypsum Boards valued at USD 31200 (FOB) along with 22,890 square meters of fabrics valued at USD 18769.80.

A detailed re-examination was done under a mahazar dated 3-7-2012 in the presence of Sri. Anand Kothari, Proprietor. On re-examination of the consignment, 646 pieces of gypsum boards and 137 rolls of fabrics measuring 15,000 meters (22,230 sq. mts.) were found.

It is stated, the voluntary statement of Anand Kothari, the Proprietor of the petitioner concern has been recorded. He was present at the time of mahazar dated 3-7-2012. The total length of linen fabric seized under mahazar dated 10-2-2012 is approximately 15,000 mts. having width of 57 mts. Order was placed for 646 pcs. of gypsum board and 22,200 sq. mts. of assorted linen fabric. Mr. Anand Kothari has admitted that he was aware of the concealment of assorted linen fabric and he did not disclose to the evade of payment of Customs Duty.

It is stated, the letter dated 28-5-2012 received from the Consul (Economic), Hongkong along with the free English translation of the declaration was shown to Anand Kothari. He has affixed his signature. Thereafter, show cause notice dated 31-7-2012 was issued demanding duty of Rs. 5,14,467/- on 646 pieces of gypsum boards and Rs. 19,40,894/- on 137 rolls (22,230 sq. mts.) of fabrics'' and proposing to confiscate the gypsum boards and fabrics.

It is stated, the petitioner requested for re-measurement of the fabrics and to furnish complete translation of Customs manifest. The Additional Commissioner of Customs, ICD, Bangalore, vide letter dated 14-9-2012 has rejected the request of the petitioner on the ground that Anand Kothari, was present at the time of mahazar dated 3-7-2012.

It is stated, re-examination was done under the second mahazar dated 3-7-2012 in the presence of Anand Kothari and independent witnesses. Therefore, it is not necessary to re-measure the goods. Therefore, the respondents have prayed for dismissal of the writ petition.

The learned counsel for the petitioner contended that the mahazar dated 10-2-2012 shows the quantity of fabrics as 13,093 mts. and the mahazar dated 3-7-2012 shows the quantity of fabrics as 15,000 meters. Therefore, the respondents may be directed to re-measure the fabrics. By order dated 18-2-2013, the adjudicating authority has permitted provisional release of the goods subject to the execution of Bond equivalent to the value of the goods or the amount of duty involved whichever is higher. The differential duty must be secured by payment in cash or by suitable Bank Guarantee. An amount equal to 30% of the differential duty must be secured to cover possible fine and penalties. The petitioner is ready to fulfill all the conditions. As the measurement of the fabrics differ in the mahazar dated 10-2-2012 and the mahazar dated 3-7-2012, the respondents may be directed to re-measure the fabrics at the cost of the petitioner. He also submitted that the respondents may be directed to furnish translation of Customs declaration which is in the Chinese language.

As against this, the learned counsel for the respondents submitted the writ petition itself is not maintainable. He also submitted that the statement of Mr. Anand Kothari, the Proprietor of the petitioner concern has been recorded. The mahazar has been drawn in the presence Mr. Anand Kothari. Therefore, there is no need to re-measure the fabrics once again. He also submitted that the translated version was shown to Mr. Anand Kothari. Therefore, there is no need to furnish translated version of customs declaration. He placed reliance on the decisions of the Hon''ble Supreme Court reported in 2010 (255) E.L.T. 490 (S.C.) and 2013-TIOL-40-SC-IT.

I have carefully considered the submissions made by the learned counsel for the parties.

It is not in dispute that the Gypsum boards and fabrics imported by the petitioner were seized under mahazar dated 10-2-2012 by the customs Authorities. It is also not in dispute that the statement of Sri. Anand Kothari, the Proprietor of the petitioner concern has been recorded and he has filed application u/s. 127B of the Customs Act, 1962. The adjudication proceedings are pending. In the meanwhile, the Adjudicating Authority through letter dated 18-2-2013 has permitted the provisional release of the goods subject to the execution of the Bond equivalent to the value of the goods or the amount of duty involved whichever is higher; The differential duty must be secured by payment in cash or by suitable bank guarantee; An amount equal to 30% of the differential duty must be secured to cover the possible fine and penalties.

The petitioner is ready to fulfill the conditions mentioned in the letter dated 18-2-2013. However, the grievance of the petitioner is, that the mahazars dated 10-2-2012 and 3-7-2012 show different quantity of fabrics. Therefore, the respondents may be directed to re-measure the fabrics at the cost of the petitioner. As the quantity of fabrics mentioned in the mahazars dated 10-2-2012 and 3-7-2012 differ, it is appropriate to direct the Respondent No. 3 to re-measure the fabrics at the cost of the petitioner, at the time of delivering possession, in the presence of the petitioner, after the petitioner fulfils all the conditions mentioned in the letter dated 18-2-2013.

Insofar as translated version is concerned, it is stated in the statement of objection that the translated version was not shown to Mr. Anand Kothari. The learned counsel for the petitioner submitted that the petitioner will furnish the translated version and the Authorities may verify the correctness of it before accepting it.

In the circumstances, the Respondent No. 3 is directed to re-measure the fabrics at the cost of the petitioner, at the time of delivering possession, in the presence of the petitioner, after the petitioner fulfils all the conditions mentioned in the letter dated 18-2-2013 vide Annexure-J. The petitioner can furnish the translated version of Annexure-C to the concerned Authorities. The concerned Authorities can verify the correctness of it before accepting it. The writ petition is disposed of as above.