2004 (6) TMI 445 - AT - Customs

Issues Involved:
1. Non-fulfillment of export obligations under Advance License No. 07000790.
2. Jurisdiction of the Commissioner of Customs to demand customs duty.
3. Applicability of Notification No. 31/97-Cus. vs. Notification No. 49/94-C.E. (N.T.).

Detailed Analysis:

1. Non-fulfillment of Export Obligations:
The appellants, M/s. Choice Apparels, obtained an Advance License No. 07000790, dated 3-7-1997, for importing 100% wool fabrics under DEEC No. 235174, with the condition to export 58332 ladies' wool pants and 11273 men's wool pants within 18 months. They amended the license twice to procure raw wool indigenously and later to fabrics. Despite these amendments, they failed to fulfill the export obligations, leading to a show cause notice by the Commissioner of Customs for contravention of the licence conditions and Notification No. 31/97-Cus., dated 1-4-1997. The Commissioner adjudicated, denying the benefit of the notification, confiscating the seized woolen fabrics, demanding customs duty, cess, and imposing penalties on the appellants.

2. Jurisdiction of the Commissioner of Customs:
The appellants contended that since they procured raw materials from M/s. Grasim Industries under Notification No. 49/94-C.E. (N.T.), dated 22-9-1994, only central excise duty was applicable, and not customs duty. They argued that the Commissioner of Customs lacked jurisdiction to demand customs duty. However, the Tribunal noted that the appellants did not raise this issue during the adjudication or in their written appeal. The Tribunal found no evidence supporting the claim that goods were cleared under Notification No. 49/94-C.E. (N.T.) and upheld the Commissioner's jurisdiction, citing that the DEEC book registered with Customs bound the appellants to the terms of Notification No. 31/97-Cus.

3. Applicability of Notification No. 31/97-Cus. vs. Notification No. 49/94-C.E. (N.T.):
The appellants argued that the goods were procured under Notification No. 49/94-C.E. (N.T.), thus central excise duty, not customs duty, should apply. The Tribunal rejected this argument, emphasizing that the license was issued under Notification No. 31/97-Cus., and the licensing authority did not amend this condition. The Tribunal referenced the Supreme Court rulings in Titan Medical Systems Pvt. Ltd. v. CC and Autolite (India) Limited v. UOI, which held that Customs Authorities must abide by the terms of the license. Therefore, the duty demand under Notification No. 31/97-Cus. was upheld as lawful.

Conclusion:
The Tribunal concluded that the appellants failed to fulfill their export obligations and could not substantiate their claim regarding the applicability of Notification No. 49/94-C.E. (N.T.). The Commissioner of Customs acted within jurisdiction in demanding customs duty and imposing penalties. The Tribunal found no merit in the appeal and upheld the Commissioner's order, rejecting both appeals.

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