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Collector of Customs Vs. Shree Ganesh Steel Rolling Mills - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(21)ELT304Tri(Chennai)
AppellantCollector of Customs
RespondentShree Ganesh Steel Rolling Mills
Excerpt:
.....goods was carried out from 25-11-1982 till 14-12-1982; weighment records have been signed by the customs officers and shortage was also noticed by them ; during the operation the appellants had no access to the goods as they were in the custody of madras port trust.as the weighments were completed on 14-12-1982 it should be the date on which the pass order should be taken ; on this premise he held that the rejection of the claim in terms of section 13 of the act was not in order vide his order referred to supra. he ordered refund. the collector of customs, madras, has come up in appeal against this order.4. in the appeal it is submitted that provisions of section 13 are clear that shortage has to be brought to the notice of the department before the proper officer has made an order for.....
Judgment:
1. Appeal under Section 129A of the Customs Act, 1962 praying that in the circumstances stated therein, the Tribunal will be pleased to set aside the order of the Collector of Customs (Appeals), Madras dated 28-5-1984 in No. C-3/1568/1983 and to restore the Order C. No.S25/1441/83, dated 23-7-1983 passed by the Assistant Collector of Customs, Madras.

2. This appeal coming up for orders upon perusing the records and upon hearing the arguments of Shri D. Ramachandran, Senior Departmental Representative for the appellant and upon hearing the arguments of Shri Ramanathan, Advocate for the respondent, the Tribunal makes the following Order : 3. The Assistant Collector of Customs, Madras, rejected a claim for refund of duty paid on shortages noticed at the time of survey on a finding that the order passing relevant goods out of Customs control was given on 25-11-1982 whereas the survey was conducted subsequently and the actual shortage recorded on 1-2-1983 subsequent to the order clearing the goods out of Customs control. The appellant went in appeal to the Collector of Customs (Appeals), Madras. The Collector held that weighment of the goods was carried out from 25-11-1982 till 14-12-1982; weighment records have been signed by the Customs Officers and shortage was also noticed by them ; during the operation the appellants had no access to the goods as they were in the custody of Madras Port Trust.

As the weighments were completed on 14-12-1982 it should be the date on which the pass order should be taken ; on this premise he held that the rejection of the claim in terms of Section 13 of the Act was not in order vide his order referred to supra. He ordered refund. The Collector of Customs, Madras, has come up in appeal against this order.

4. In the appeal it is submitted that provisions of Section 13 are clear that shortage has to be brought to the notice of the department before the proper officer has made an order for clearance. In the present case as an order for clearance had been made well before the date of discovery of the shortage, it was not open to the Collector (Appeals) to have relaxed or ignored the provisions of Section 13 of the Act.

5. The Senior Departmental Representative reiterated substantially the same points.

6. The Cousel for the respondent pointed out that the concerned goods imported were re-rollable scrap ; according to the Import Policy, used steel scrap can be imported only if imported items composing the goods conforms to certain dimensional restrictions. The order passed by the proper officer reads as follows : "Passed out of Customs Charge subject to the condition that the weighment to be done in the presence of Customs at the time of delivery (vide mark X above)" "Weighment to be done in the presence of Customs and re-inspection of the goods to be done at the time of delivery and report submitted to AC (Docks) daily by the concerned A.O." A perusal of the record of action on 26-11-1982, 27-11-1982, 29-11-1982, 1-12-1982, 2-12-1982, 7-12-1982,9-12-1982, 10-12-1982 and 13-12-1982 would show that the goods were actually inspected on these dates at the time of weighment and the reports duly submitted to the Asstt. Collector (Docks). Thus, a provisional order for clearance was endorsed on the Bill of Entry on 25-11-1982 ; the important work of inspection of the goods as well as their weighment was done on various days by the Customs Officers. There was continuity of action regarding the passing of the goods which were noted only on 14-12-1982. Hence, the goods cannot be considered to have been passed out of customs control until the weighments were completed. He, therefore, submitted that provisions of Section 13 were satisfied in the present case.

7. In reply, the Senior Departmental Representative stated that the order is a full pass order. The second part of the order is in terms of an undertaking by the respondent here in dated 23-11-1982 reading as follows :- "Pass orders may be given for comparing the I.A. with Bill of Entry ; weighment will be done in the presence of Customs at the time of delivery at M.P.T. lorry weighbridge." Having, thus, obtained a full pass order it is not open to the appellant to plead that the order of 23-11-1982 is not a proper order or a final one. Alternatively, he submitted that even a conditional pass order is still a valid order in terms of the order.

8. We have considered the arguments of both parties. Section 47 of the Act provides that, "Where the proper officer is satisfied that any goods entered for home consumption are not prohibited goods...the proper officer may make an order permitting clearance of the goods for home consumption." It is open to the proper officer to pass an order permitting clearance with or without such checks as considered necessary and sufficient; but it would not be open to the officer to pass an order of clearance under the Section reserving himself the right to be satisfied on an important criterion such as the nature of the goods and their conformity with Import Trade Control Regulations. As rightly urged by the advocate for the respondent, dimensional requirement have to be satisfied before used steel scrap is allowed to be cleared as such. It was open for the Department to have satisfied itself by a superficial inspection that the goods are in conformity with the Import Trade Control Regulations, but this was not done. The Department commenced weighment after 25-11-1982 and in fact, inspected the goods as and when found necessary. The report of inspection was also submitted to the Assistant Collector. Thus, the so-called order of clearance dated 14-12-1982 is not, in our view an order under Section 47 of the Act. The inspection of the goods having been completed when they were weighed in lorry loads, the satisfaction of the Department about non-prohibited nature of the goods, came to be established only after the date of formal clearance, we consider that the date of effective clearance of the goods is only 13-12-1982. In this view of the matter, the claim for refund is not hit by the provisions of Section 13 of the Act, but is maintainable. The appeal is, therefore, dismissed.


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