2015 (1) TMI 885 - AT - Customs

Violation of Advance license - notification No. 79/95-Cus dated 31/03/95 - Import of excess quantity - Held that - When the goods were cleared by filling bills of entry, the customs had examined the licence issued to the appellants both by the licence section and by the audit section and after satisfying that the appellant complied with the requirements of the licences, the benefit of Notification No. 79/95-Cus was extended. There was no suppression or mis-statement on the part of the appellants and the customs also believed that only the value limit specified in the licence needs to be adhered to and not the quantity restrictions. Thereafter, it appears that the customs had made reference to the licensing authorities who advised that both the quantity as well as the value limits specified in the advance licence should be complied with and accordingly, show-cause notices were issued alleging suppression. At the time of clearance of the goods both the appellant and the department entertained the belief that if the value restrictions are complied with, the same would suffice and accordingly, the benefit of notification No. 79/95-Cus was extended and the assessment finalized accordingly. Therefore, the show-cause notice and the consequential demands are clearly time barred and therefore, the demand of differential duty along with interest thereon would not sustain in law. Inasmuch as there is no suppression on the part of the appellants, imposition of penalties on the employees of the importing firms and the licence broker are also not warranted. - Decided in favour of assesse.

Summary

Issues:
- Customs duty demand confirmation and penalties imposition on importing firms and individuals under Customs Act, 1962.
- Compliance with advance licence restrictions regarding quantity and value.
- Time bar on show-cause notice issuance and demand of differential duty.
- Imposition of penalties on employees of importing firms and licence broker.

Analysis:
1. Customs Duty Demand and Penalties:
The judgment involves five appeals challenging the Order-in-Original passed by the Commissioner of Central Excise & Customs confirming customs duty demands and penalties on importing firms and individuals. The appellants contested the demands imposed on them and brought the matter before the Appellate Tribunal.

2. Compliance with Advance Licence Restrictions:
The issue revolved around the compliance with restrictions specified in the advance licence regarding the quantity and value of imports. The appellant, in one case, imported goods exceeding the quantity stipulated in the licence, although the value was within the prescribed limit. The appellant argued that they acted in good faith believing they were entitled to import within the value limits, as assessed and cleared by customs.

3. Time Bar on Show-Cause Notice and Differential Duty Demand:
The appellants raised the contention that the show-cause notice was issued after the goods were cleared, and the assessment had become final. They argued that there was no suppression on their part, and the demand for differential duty, along with interest, was time-barred. The Tribunal agreed that the show-cause notice and consequential demands were time-barred, as both the appellants and the customs believed compliance with value restrictions was sufficient.

4. Imposition of Penalties:
Regarding the penalties imposed on employees of importing firms and the licence broker, the Tribunal found that since there was no suppression on the part of the appellants, the imposition of penalties was unwarranted. The Tribunal concluded that the demands and penalties were unsustainable in law, as there was no deliberate misstatement or suppression by the appellants.

5. Decision:
After considering the submissions from both sides and examining the evidence, the Tribunal allowed the appeals, providing consequential relief in accordance with the law. The judgment highlighted the importance of adherence to licence restrictions, the time limit on show-cause notices, and the absence of suppression in determining the outcome of the appeals.