2010 (11) TMI 238 - HC - Customs

Exemption - Export through third party - Export obligation - proof of export - 100% export - parallel proceedings by the Excise Department and the Foreign Trade Department - Held that - Order passed by the tribunal despite the proceedings initiated by Foreign Trade Department - In view of finding recorded by the Development Commissioner and the Tribunal on merits holding that the assessee did not violate the conditions for availing the exemption from customs duty, which has not been challenged by the revenue, the questions raised on behalf of the revenue cannot be held to be substantial questions of law and need not be gone into.

Summary

Issues:
1. Interpretation of statutory powers of Customs Authorities and DGFT.
2. Legality of customs authorities initiating action without waiting for DGFT's finding.
3. Granting dual benefit of exports by ignoring procedural requirements.
4. Maintainability of parallel proceedings by Excise Department and Foreign Trade Department.
5. Merits of the case regarding violation of exemption conditions.

Analysis:
1. The judgment dealt with the interpretation of statutory powers of Customs Authorities and DGFT. The Tribunal concluded that the two authorities act independently under separate enactments and cannot undertake parallel proceedings with opposite findings. The judgment referred to CBEC Circular and highlighted the legal sustainability of customs authorities initiating action without waiting for DGFT's finding. The Tribunal was questioned for granting dual benefit of exports without following statutory procedural requirements.

2. The case involved a 100% export-oriented unit manufacturing Buffalo meat that imported capital goods under exemption without paying customs duty. The Excise Department alleged violation of exemption conditions, leading to a demand of duty and confiscation of goods. However, the Tribunal set aside the order, stating that both Excise and Foreign Trade Departments cannot proceed simultaneously. The Tribunal found no violation of exemption conditions on merits.

3. The revenue contended that parallel proceedings by Excise and Foreign Trade Departments could be initiated as their scopes were different. Legal arguments were based on previous judgments by the Supreme Court and the High Court. The assessee argued that the Tribunal's finding on maintainability might be erroneous, but the Tribunal had ruled in their favor on merits, citing the Development Commissioner's order accepting the export obligation performance.

4. The judgment discussed the maintainability of parallel proceedings by the Excise and Foreign Trade Departments. The revenue argued that both departments had distinct roles, while the assessee pointed out the Tribunal's favorable finding on merits based on the Development Commissioner's order. The Tribunal's decision on maintainability and merits was crucial in resolving the case.

5. The judgment concluded by dismissing the appeals based on the finding that the assessee did not violate exemption conditions for customs duty. Since the revenue did not challenge the Development Commissioner's and Tribunal's findings on merits, the questions raised by the revenue were not considered substantial questions of law. The judgment highlighted the importance of adherence to statutory requirements and the significance of findings on merits in legal proceedings.