2003 PLP (Trib (PTD)

Goods imported into the country in breach of restriction or conditions imposed under Chapter 3 of the prevalent Import Policy Order and goods mentioned in the Negative List of the prevalent Import Policy Order made under the Imports and Exports (Control) Act: 195P (XXXIX of 1950). . . Sr. No. Goods Extent of Redemption Fine on the Ascertained Value 1 Offending goods imported in the bales of second hand clothing imported in violation of provisions of Imports and Exports (Control) Act, 1950 (XXXIX of 1950). 25 % 2 Nil 3 4 Cars, 4x4 vehicles, trucks, tankers, prime movers, trailers, dumpers, tractors, buses, coaches, vans, wagons and pick‑ups for which customs duties and taxes are paid by the 15th , March, 2000. 5 Vehicles imported under the Transfer of Residence/ Baggage Scheme in violation of any condition as envisaged in the Notification No. S.R.O. 599(I)/93, dated the 17th July, 1993, for which clearance permit/no objection certificate for release has been issued by the Ministry of Commerce. 2% 6 7 8 A plain reading of the relevant portion of the S.R.O. leads us to frame the following issues:‑‑‑ (a) Are the clauses (a) and (d) not the regulatory clauses and the tables are to be read/interpreted in the light of these clauses or/are the tables independent of these clauses? (b) Why the vehicles have been separately placed under Table‑III of the S.R.O. if the same were already covered at Serial No.1 of Table.I of the S.R.O.? (c) Was the entry at Serial No.4 of Table‑III of the S.R.O. valid only up to 15‑3‑2000 and had it become redundant thereafter These issues had been framed during the hearing held on 3‑4‑2002 and both the learned counsel and the learned D.R. were asked, that in addition to their own pleadings, they must address the Tribunal on the above mentioned issues. As is evident from the contentions of the learned counsel as well as the learned D.R. both have presented their view points in respect of these issues.

5. In the ensuing paras. we would discuss the merits of the contentions of each side before giving our findings as to Whether the cases of these vehicles fall in the category of Table‑I of the S.R.O. and by operation of its clause (a) and therefore, option to redeem the vehicles on payment of fine in lieu of confiscation could not be allowed or, whether these cases were covered in Table‑III of the said S.R.O. and hence the vehicles in question could be allowed release on payment of fine in lieu of confiscation. Table‑I of the S.R.O. in question covers three categories of goods‑‑‑ (i) smuggled goods; (ii) goods imported in violation of section 15 or a notification issued under section 16 of the Customs Act, 1969; and (iii) goods imported into the country in breach of restriction or conditions imposed under Chapter 3 of the prevalent Import Policy Order and goods mentioned in the Negative List of the prevalent Import Policy Order. The vehicles in question do not fall in Serial Nos. 2 and 3 and the department's case is that these are listed in the notification issued under section 2(s) read with section 156(2) of the Customs Act, 1969 and therefore, being smuggled goods, these are covered at Serial No. 1 and Table‑I of the S.R.O. However, the said Serial No.1 of Table I of the S.R.O. excludes "goods mentioned in Serial No.4 of Table‑III below". Serial No.4 of Table‑III of the S.R.O. specifies different types of vehicles like cars, trucks, tankers, buses, coaches, vans, pick‑ups and wagons etc. for which customs duty and taxes are paid by 15th March, 2000 and pitch of fine indicated against the said entry is "Nil". Vehicles imported under transfer of residence/baggage scheme, where some violation takes place, .are listed at Serial No. 5 of the said Table‑III and the pitch of fine in such cases is indicated as 2 %. Clause (d) of the S.R.O., dated 17‑12‑1998 indicates the quantum of fine in lieu of confiscation in respect of the goods specified in Table‑III.

6. In order to analyze the whole issue in its correct perspective it would be necessary to study the developments which have been taken place in S.R.O. 1374(I)/98 in respect of vehicles. In the original S.R.O. there were only three clauses (a), (b), (c) and two Tables‑ (Table‑1 and Table‑2). Table‑I, covered those goods where option to pay fine in lieu of confiscation was not to be allowed after the expiry of the specified date and clauses (b) and (c) dealt with the extent of fine to be levied in lieu of confiscation as specified in Table‑II and also those where misdeclaration in respect of value, weight, quantity origin and description etc. was involved. Said S.R.O. was amended vide S.R.O. 496(I)/99; dated 22‑4‑1999 where under clause (d) was added, which existed till today and has been re‑produced at para. 4 above. Table‑III was also added to S.R.O. 1374(I)/98 vide the said amending S.R.O., dated 22‑4-1999. In addition to Serial Nos. 1 and 2 (which related to second hand clothing and stock lot goods), Serial No.3 of the newly‑added Table‑III covered "old and used buses, coaches and trucks imported under Non‑Repatriable Investment Scheme in violation of provision of Imports and Exports (Control) Act, 1950 ....and for which Import General Manifest has been filed on or before the 2nd April, 1999" and these were allowed to be released on payment of 50% fine in lieu of confiscation. Another amendment vide S.R.O. 739(I)/99, dated 12‑6‑1999 was made in S.R.O. 1374(I)/98, dated 17‑12‑1998, which excluded "goods mentioned in Serial No.4 of Table‑III below" from Serial No.1 of Table‑I of the S.R.O. 1374(I)/98. After Serial No.3 in Table‑III of S.R.O. 1374(I)/98, Serial No.4 was added as under:‑‑‑ "Trucks, tankers, prime movers, trailers, dumpers, tractors, buses and coaches for which customs duties are paid by the 31st August, 1999. 10%" The said amendment meant that the vehicles mentioned Serial No.4 of Table‑III of S.R.O. 1374(I)/98 were excluded from the category of smuggled goods mentioned at Serial No.1 of Table‑I of the S.R.O. in question and now those could be released on payment of fine equal to 10% of the ascertained value in lieu of confiscation. Next amendment in S.R.O. 1374(I)/98 was made vide S.R.O. 843(I)/99, dated 13‑7‑1999 where under at Serial No.4 of Table‑III (as quoted above)" coaches, vans and wagons (heading 87.02)" were added and after the said Serial No.4, Serial No. 5 was added to Table‑III of the S.R.O. relating to the vehicles imported under the transfer of residence/baggage scheme which were imported in violation of the conditions specified for the importation of such vehicle in its relevant notification S.R.O. 599(I)/93, dated 17‑7‑1993 and which were to be released on payment of fine equal to 2% of the value in lieu of confiscation. The said entry at Serial No.5 of Table‑III existed till today and has been reproduced at para. 4 above. Next amendment in S.R.O. 1374(I)98 was made vide S.R.O. 1014(I)99, dated 4‑9‑1999 and here amendment at Serial No.4 of Table‑III, as referred to above, was only in respect of extension of date from 31st August, 1999 to 30th September, 1999. Next amendment in S.R.O. 1374(I)/98 was made vide S.R.O. 1355(I)/99, dated 16‑12‑1999 and Serial No.4 of Table‑III was substituted as under:‑‑‑ "

4. Cars, 4x4 vehicles, trucks, tankers, prime movers, dumpers, tractors, buses, coaches, vans and wagons for which customs duties and taxes are paid by the, 1st January 2002. Nil" Another amendment was made to S.R.O. 1374(I)/98 vide S.R.O. 1367(I)/99, dated 22‑12‑1999 and again Serial No.4 of Table‑III was substituted as under and the said amendment was deemed to have been effective from 16th December, 1999.‑‑‑ "

4. Cars, 4 x 4 vehicles, trucks, tankers, prime movers, trailers, dumpers, tractors, buses., coaches, vans, wagons and pick‑ups for which customs duties and taxes are paid by the 31st January, 2000. Nil" Next amendment in S.R.O. 1374(I)/98 was made vide S.R.O. 21(I)/2000, dated 24‑1‑2000 and here the date of 31st January, 2000 appearing in Serial No.4 of Table‑III was extended up to 15th February, 2000. Next amendment in S.R.O. 1374(I)/98 was made vide S.R.O. 58(I)2000, dated 15‑2‑2000 and the date of 15th February, 2000 was substituted with 15th March, 2000 in Serial No.4 of Table‑III of the said S.R.O. The said entry stands, intact till today.

7. The contention of the learned DR is that the existing entry at Serial No.4 of Table‑III related only to the amnesty period and those who paid duty/taxes upto 15th March, 200 availed the amnesty and thereafter this entry was no more relevant is contention is correct to the extent that such vehicles as specified at Serial No.4 of Table‑III in respect of which duty/taxes were paid by 15th March, 2000 were not to suffer any fine in lieu of confiscation. But we do not find ourselves in agreement with this part of his contention that after 15‑3‑2000, where duty/taxes were not paid, the main entry at Serial No.4 has become redundant. The chronological history of addition of Table‑III to be S.R.O. 1374(I)/98 in respect of vehicles revealed that for the first time clause (d) was added to the preamble of the said S.R.O. vide S.R.O. 496(I)/99, dated. 22‑4‑1999 alongwith Table‑III and at that time Serial No.3 allowed only old and used buses, coaches and trucks imported under NRI Scheme in violation of the Imports and Exports (Control) Act, 1950 and for which IGMs had been filed on or before 22‑4‑1999 and such vehicles were allowed to be released on payment of fine equal to 50% in lieu of confiscation. The amendment made in S.R.O. 1374(I)/98 vide S.R.O. 739(I)/99, dated 12‑6‑1999 for the first time excluded "goods mentioned in Serial No.4 of Table‑III" from the category of smuggled goods covered at Serial No.1 of Table‑I of S.R.O. 1374(I)/98 and inserted Serial No. 4 in Table‑III covering trucks, tankers, prime movers, tractors, buses and coaches etc. to be released on payment of fine equal to 10% of value if duty/taxes were paid up to 31‑8‑1999. Thereafter, some other categories of vehicles like coaches, vans and wagons were added in Serial No.4 of Table‑III and another Serial No.5 relating to vehicles imported under transfer of residence/baggage scheme, was added to Table‑III. Subsequently C.B.R. has been extending dates in respect of payment of duty/taxes by amending Serial No.4 of Table‑III I through different notifications. C.B.R. has been allowing release of vehicles oft payment of fine in lieu of confiscation through different instruments. For example, vide Letter C. No. 4(34)SSCC/91, dated 2‑6‑1996. It allowed release of smuggled vehicles on payment of fine` equal to 100% of value in lieu of confiscation and other vehicles imported in contravention of baggage/TR Rules release was allowed on payment of fine equal to 40% in lieu of confiscation. Vide its Letter C. No.5(7)/L&P/96, dated 27‑8‑1996 the C.B.R. extended the same facility to the vehicles seized on violation of any provisions of the Customs Act, 1969, which had earlier been imported under the Prime Minister's Scheme for Re‑vamping of Public Transport on payment of 50% fine in lieu of confiscation. Another scheme of legitimizing the smuggled vehicles on payment of duty/taxes by, 31‑5‑1998 was announced by C.B.R. vide its Letter C. No.1/27‑AS/97, dated 14th April, 1998, C.B.R. again announced "one time amnesty to smuggled vehicles" vide its C. No.1(11) Tar. II/98, dated 17‑12‑1999 wherein detailed procedure for implementing the scheme was announced and legal instrument adopted was the amendment vide S.RO. 1355(I)/99, dated 16‑12‑1999 in S.R.O. 1374(I)/98 when Serial No.4 of Table‑III was substituted and the pitch of fine which earlier was 10 % was made nil. The said date which originally was 31‑1‑2000 was extended twice, firstly up to 15‑2‑2000 and lastly to 15‑3‑2000. We find that vehicles have been specifically dealt with by the C.B.R. separately from Table‑I of S.R.O. 1374(I)/98, since ` amendment in the said S.R.O. vide S.R.O. 496(I)/99, dated 22‑4‑1999. Vide S.R.O. 496(I)/99 for the first time clause (d) was added and separate Serial. No.3 was added in the newly‑inserted Table‑III and specified vehicles were allowed to be released on payment of fine equal to 50% of the value with reference to which the IGMs had been filed by 22nd April, 1999. Thereafter, Serial No.4 in Table‑III of S.R.O. 1374(I)/98 was added on 12‑6‑1999 and the specified vehicles were allowed to be released on payment of fine equal to 10% in lieu of confiscation and goods mentioned in Serial No.4 of Table‑III were excluded for the first time from smuggled category of goods mentioned at Serial No.1 of Table‑I of the S.R.O. in question. This exclusion has never been removed thereafter. Similarly Serial No.4 of Table.‑III if it had become redundant after 15‑3‑2000, has not been deleted. It is also not mentioned at Serial No.4 of Table‑III that the same would be valid only up to 15‑3‑2000. Serial No.4 of Table‑III was in existence since 12‑6‑1999 while the C.B.R. announced its "one time amnesty to smuggled vehicles" on 16‑12‑1999 and issued detailed instructions for its implementation vide C. No.1(11)/Tar. II of 1998, dated 17th December, 1999. Instead of adopting some other legal instrument the C.B.R. to its own wisdom decided to substitute Serial No.4 of Table‑III of S.R.O, 1374(I)/98 vide S.R.O. 1355(I)/99, dated 16‑12‑1999, which was again substituted vide S.R.O. 1367(I)/99, dated 22‑12‑1999 prescribing "Nil" fine if duty/taxes were paid initially by 31‑1‑2000 and subsequently by 15‑2‑2000 and finally by 15‑3‑2000. The said amnesty scheme got implemented by allowing release of smuggled' vehicles only on payment of duty/taxes but without fine. The only change after 15‑3‑2000 would be that such vehicles cannot be released without payment of fine in lieu of confiscation. However, it is against sanity to presume, what to talk of believing, that thereafter the vehicles reverted back to the category of smuggled goods at Serial No.1 of Table‑I of S.R.O. 1374(I)/98 despite the presence of detailed mention of the description of goods in Col. 2 of Table‑III at Serial No.4 and Serial No.5. The specific mention of vehicles at Serial Nos.4 and 5 of Table‑III of S.R.O. 1374(I)/98 proved that the, vehicles were covered only in Table‑III and .not in Table‑I of S.R.O, 1374(I)/98 and particularly when the C.B.R. vide its Notification S.R.O. 739(I)/99, dated 12‑6‑1999 had itself excluded goods mentioned in Serial No.4 of Table‑III from Serial No. 1 of Table‑I of the S.R.O. in question. If the intention of the C.B.R. was the same, as pleaded by the learned. D.R. then the only course of action was to cause necessary amendment in Serial No.1 of Table‑I by striking down the exclusion of goods mentioned at Serial No.4 of Table‑III, and omission of entry at Serial No.4 of Table‑III. That having not been done we find that the entry "Nil" in Col. No.3 of the goods mentioned in column‑2 against Serial No.4 of Table‑III of S.R.O. 1374(I)/98 was with reference to the date of 15‑3‑2000, meaning thereby that if duty/taxes in respect of the vehicles mentioned in Col. 2 against Serial No.4 was paid by 15‑3‑2000, those would not suffer any fine in lieu of confiscation but after the expiry of the date 15‑3‑2000, such vehicles are to be allowed release on payment of fine in lieu of confiscation, the limit in respect of which has not been specified in the said S.R.O. It is an established principle that when two interpretations of legal provisions can be adopted, the one favouring the subject is to be preferred. As discussed above, the interpretation adopted by the learned D.R. is in itself full of contradictions e.g. what is the implication of exclusion of "goods mentioned in Serial No.4 of Table‑III" From the smuggled category specified at Serial No.1 of Table‑I of S.R.O. 1374(I)/98, upto 15‑3‑2000 only despite the fact that vehicles remained listed in the list of notified goods in terms of section 2(s) read with section 156(2) of the Customs Act, 1969 during this period as well as thereafter? What is the purpose of keeping the entry at Serial No.4 of Table‑III after 15‑3‑2000? Can the vehicles (even upto 15‑3‑2000) remain simultaneously included in the list of smuggled goods vide S.R.O. 491(I)/85, dated 23‑5‑1985, issued in terms of section 2(s) read with section 156(2) of the Customs Act, 1969 and excluded from Serial No.1 of Table‑I (relating to smuggled goods) of S.R.O. 1374(I)/98 since amendment made vide S.R.O 739(I)/99 dated 12‑6‑1999? The "one time amnesty to smuggled vehicles" was announced by C.B.R. on 16‑12‑1999 but the said exclusion of vehicles from the category of smuggled goods at Serial No.1 of Table‑I of S.R.O. 1374(I)/98 is there since 12‑6‑1999 (amendment vide S.R.O. 739(I)/99, dated 12‑6‑1999 refers). This exclusion of vehicles from the category of smuggled goods (Serial No.1 of Table‑I of S.R.O. 1374(I)/98) since 12‑6‑1999 cannot be linked with the "one time amnesty to smuggled vehicles" announced by C.B.R. on 16‑12‑1999. The learned D.R. could not satisfy us on these issues. On the other hand we find the contentions of the learned counsels for the appellants very logical and just that the vehicles stand permanently excluded from the ambit of Serial No.1 of Table‑I of the S.R.O, and the payment of "Nil" fine was only if duty/taxes were paid up to 3‑2000 but even thereafter the goods mentioned in Col. No.2 against Serial No.4 .of Table‑III would remain in the said table and can be released op payment of fine in lieu of confiscation and this is exactly what the C.B.R. has itself been doing prior to 16‑12‑1999 That being so, we order that the vehicles in question shall be released to the respective appellants/owners on payment of fine equal to 100% (hundred per cent) of the assessed duties/taxes in lieu of confiscation and in addition to payment of assessed duties/taxes under the law.

8. All the appeals, mentioned in the title, stand partly accepted and the impugned orders are modified accordingly. S.A.K./558/Tax (Trib.) Appeals partly accepted.