1997 (2) TMI 537 - AT - Customs

Issues Involved:
1. Under-declaration of value of imported goods.
2. Ineligibility for duty-free import under Notification 203/92-Cus due to Modvat credit availed by the original licensee.
3. Non-eligibility of imported goods for duty-free import as per Notification 203/92-Cus.
4. Incorrect declared unit value of imported goods.
5. Importation of goods against an expired license.
6. Confiscation and penal actions proposed by the Commissioner of Customs.
7. Validity of the ex-parte order passed by the Commissioner of Customs.

Detailed Analysis:

1. Under-declaration of Value of Imported Goods:
The Tribunal examined the allegations of under-declaration of the value of copper wire bars imported by the appellant. The declared value was US $1680 per metric tonne CIF Calcutta, while the Customs authorities contended it should be US $2675 per metric tonne. The Tribunal found that the contract dated 1st December 1993 was genuine despite the appellant firm being established in August 1994. The Tribunal accepted the appellant's explanation and the contract's validity, thus rejecting the Customs' contention of under-declaration.

2. Ineligibility for Duty-Free Import under Notification 203/92-Cus:
The Customs authorities argued that the benefit of Notification 203/92-Cus could not be extended because the original licensee, VSP, had availed Modvat credit. The Tribunal noted that VSP had reversed the Modvat credit of Rs. 3 crores on 19-5-1994, which was confirmed by the Addl. D.G.F.T.'s order dated 28-9-1995. The Tribunal held that the reversal of Modvat credit satisfied condition (v)(a) of the Notification and thus, there was no breach.

3. Non-eligibility of Imported Goods for Duty-Free Import:
The Customs authorities contended that copper wire bars (electrolytic grade) were not required for manufacturing the export product (non-alloy steel rods and billets). The Tribunal found that the DGFT had allowed copper wire bars as permissible inputs under the VBAL. The Tribunal held that Customs authorities could not question the DGFT's decision, and thus, the imported goods were eligible for duty-free import under Notification 203/92-Cus.

4. Incorrect Declared Unit Value of Imported Goods:
The Customs authorities challenged the declared unit value of US $1680 per metric tonne, suggesting it should be US $2675 per metric tonne. The Tribunal found that the contract price was genuine and supported by substantial correspondence. The Tribunal rejected the Customs' contention and accepted the declared value.

5. Importation of Goods against an Expired License:
The Customs authorities alleged that goods covered by Bills of Entry Nos. 1770 & 1771 were imported against an expired license. The Tribunal found that the goods were transshipped at Singapore and originally shipped from Rotterdam within the license's validity period. The Tribunal accepted the appellant's explanation and held that the importation was authorized.

6. Confiscation and Penal Actions Proposed by the Commissioner of Customs:
The Tribunal set aside the confiscation of goods and the fine of Rs. 3 crores in lieu of confiscation. The personal penalty of Rs. 2 crores imposed on Mr. Navneet Kumar was also set aside. The Tribunal directed the release of goods covered within the balance available in the advance license produced.

7. Validity of the Ex-parte Order Passed by the Commissioner of Customs:
The Tribunal noted that the Commissioner of Customs passed the order ex-parte without giving the appellant an opportunity to be heard. The Tribunal found this to be a violation of principles of natural justice and set aside the ex-parte order.

Conclusion:
The Tribunal allowed the appeal, setting aside the confiscation, fines, and penalties imposed by the Commissioner of Customs. The Tribunal directed the release of the goods covered within the balance available in the advance license and provided an opportunity for the appellant to produce a valid license or T.R.O. for the excess value goods. The Tribunal upheld the appellant's eligibility for duty-free import under Notification 203/92-Cus and accepted the declared value of the imported goods.

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