2005 (3) TMI 545 - AT - Customs

Summary

Issues Involved:
1. Validity of the import license at the time of shipment.
2. Allegation of manipulated documents and mis-declaration.
3. Eligibility to clear goods under an alternate license.
4. Imposition of penalties and confiscation of goods.

Issue-wise Detailed Analysis:

1. Validity of the Import License at the Time of Shipment:
The primary issue was whether the import license (QBAL No. 2009426) was valid at the time the goods were shipped. The Appellant company imported a consignment of Shoe Uppers and claimed the goods were taken for shipment on 30-6-1998, the last day of the license validity. The Appellants argued that the goods were received at Odessa Port on 29-6-1998, taken for shipment on 30-6-1998, and thus within the validity period of their Advance license. They relied on the Bill of Lading No. SENU-00155, dated 30-6-1998, which stated "goods taken for shipment - 30-6-1998."

2. Allegation of Manipulated Documents and Mis-declaration:
The Directorate of Revenue Intelligence alleged that the import license had expired by the time the goods were shipped, making the exemption under Notification No. 204/92-Cus. inapplicable. It was alleged that the Bill of Lading was managed to reflect a shipment date within the license validity period. The investigation revealed discrepancies, such as the goods being of Ukraine/Russian origin, initially stuffed into container CAXU-411749-4, and later restuffed into container INBU 5053110, which was shipped on 15-8-1998. The Revenue argued that the Bill of Lading was backdated to 30-6-1998 to falsely claim duty-free clearance. Statements from involved parties confirmed that the documents were manipulated.

3. Eligibility to Clear Goods under an Alternate License:
The Appellants contended that if the goods could not be cleared under the expired Advance Quantity Based Licence, they should be allowed to clear them under an Alternate Licence obtained on 17-3-1998. This license was endorsed in the Appellant company's name. The Appellants argued that Para 7.18 of the Export-Import Policy allowed the endorsement of any manufacturer on the license, making them jointly and severally liable for the export obligation. The Tribunal found this argument well-founded, noting that the Appellants' name was endorsed as a "supporting manufacturer" before the Bill of Entry was filed.

4. Imposition of Penalties and Confiscation of Goods:
The Commissioner of Customs had confirmed the demand for Customs duty, imposed penalties on the Appellants, and confiscated the goods with an option to redeem them on payment of a fine. The Appellants argued that there was no ground for alleging suppression or mis-statement, as the goods were cleared after scrutiny by Customs Officers. They also contended that the situation was revenue-neutral, as they would have been eligible for duty drawback if duty was paid. The Tribunal, considering the endorsement on the Alternate Licence, concluded that the Appellants were entitled to import the goods under QBAL No. 0091571, and consequently, all three appeals were allowed.

Conclusion:
The Tribunal found that the Appellants could not prove the goods were shipped within the validity period of the original license. However, the Tribunal accepted the argument regarding the alternate license, allowing the import under QBAL No. 0091571. As a result, the appeals were allowed, and the penalties and confiscation orders were set aside.