2006 (9) TMI 407 - AT - Customs

Summary

Issues:
Allegations of imported goods clearance contrary to Customs terms and penal liabilities under Customs Act, 1962.

Analysis:
The case involved two appeals regarding allegations of imported goods being cleared from the Customs area against the terms of permission and contravention of Customs Exemption Notification No. 21/02-Cus., dated 1-3-2002, leading to potential confiscation under Sections 111(j) and 111(o) of the Customs Act, 1962, and penal liabilities under Section 112(a) of the same Act.

The appellant companies, engaged in the manufacture and export of textile garments, claimed to have complied with the conditions of the Exemption Notification and used the imported goods for manufacturing textile garments for export. They provided necessary certificates from the Apparel Export Promotion Council (AEPC) regarding the value of garment exports. The customs authorities allowed the imports after being satisfied with the import certificates produced by the appellants.

However, the Revenue alleged that the lining and interlining materials imported by the companies were diverted and not used for manufacturing garments for export, as claimed by the appellants. The Revenue relied on certain statements, but the cross-examination of the individuals whose statements were crucial was not allowed on the scheduled date. The failure to produce these individuals for cross-examination raised doubts about the reliability of the statements and the fairness of the proceedings.

The Tribunal found that the failure to allow cross-examination and the reliance on potentially coerced statements violated the appellants' rights and rendered the orders void. As a result, the Tribunal set aside the impugned orders and allowed the appeals by remanding the case back to the Commissioner for de novo adjudication. The appellants were directed to cooperate with the adjudicator for a swift resolution of the matter.

In conclusion, the Tribunal emphasized the importance of allowing cross-examination, doubted the reliability of the statements, and called for a fresh adjudication of the case to ensure fairness and uphold the rights of the appellants.