2005 (1) TMI 544 - AT - Customs

Summary

Issues:
1. Validity of import under advance licence scheme.
2. Liability to pay differential duty.
3. Confiscation and penalty imposition.

Analysis:
1. The appellant imported Oxytetracycline under an advance licence, which was later modified by the licensing authority, reducing the permitted quantity. The appellant was asked to pay a differential duty due to excess import. The appellant argued that the import was valid at the time with a valid licence, and subsequent modifications should only affect duty concessions, not the legality of the import. Citing precedents like East India Commercial and Union of India v. Sampat Raj Dugar, the appellant contended that the import was legal when made under a valid licence. The Tribunal agreed, stating that subsequent modifications do not retroactively render the import illegal if a valid licence covered the initial quantity. The demand for differential duty was upheld, but the import itself was deemed proper.

2. The issue of liability to pay differential duty arose due to the subsequent reduction in the import eligibility under the advance licence. The appellant argued that since the import was made under a valid licence, any changes in the licence should only affect duty concessions, not the legality of the import itself. The Tribunal concurred, holding that the subsequent modification did not invalidate the initial import made under a valid licence. The demand for payment of differential duty was deemed correct, but the import itself was considered legal.

3. The original authority had imposed a Redemption Fine on the appellant, alleging that the impugned goods were liable for confiscation. The appellant appealed, and the Redemption Fine was reduced. The Tribunal, considering the validity of the import under the advance licence scheme and the liability for differential duty, set aside the impugned order, allowing the appeal and granting consequential relief to the appellant.

This judgment clarifies that modifications in import licences under the advance licence scheme may impact duty concessions but do not render the initial import illegal if made under a valid licence. The liability for payment of differential duty remains valid, but the import itself is considered proper if conducted under a valid licence, as per established legal precedents and tribunal decisions.