2017 (10) TMI 410 - AT - Customs

Violation of import conditions - When the appellant made import of duty-free raw material but such raw materials were meant for use in manufacture of goods of prescribed composition, 7754.96 Kgs of imported raw materials were not used and inferred to have been diverted otherwise - Held that - It is strange how appellant when obtained advance licence with appropriate endorsement thereon, not disputed that document but ventured to export. At a belated stage when CRCL s finding is against appellant, it has come out to escape charge blaming DGFT issuing licence. During the course of investigation and interrogation of various persons it had come on record that the appellants / manufacturer had used blended spun yarns of polyester and cotton to manufacture using corresponding quantity of polyester filament yarn as per SION norms, Sr. No. J-32 - Further, it was found that the establishment was not keeping relevant records in the manufacturing unit - appeal dismissed - decided against appellant.

Summary

Issues: Violation of export license conditions, Misuse of duty-free raw materials, Quality test discrepancy, Failure to contest evidence, Dismissal of appeals

In this case, the appellant was issued an advance license for exporting synthetic blankets with specific compositions. However, during a search operation, it was discovered that the goods exported did not meet the prescribed composition requirements. The investigation revealed that the appellant had not used the duty-free imported raw materials as per the license conditions. The Central Revenue Control Laboratory (CRCL) confirmed these findings. The appellant failed to provide a defense against the evidence collected during the search, indicating a violation of the notification conditions. The appellant's argument that the CRCL report was erroneous and the license specifications were incorrect was rejected, especially since the appellant did not dispute the license when obtained. The investigation also revealed that the appellant used different materials than required, and the CRCL testing confirmed the discrepancies. The appellant's failure to contest the test reports and the acceptance of the findings by the Managing Director led to the dismissal of the appeal.

Furthermore, the dismissal of the main appeal led to the dismissal of related appeals as well. As a result, all three appeals were ultimately dismissed by the tribunal. The judgment highlights the importance of complying with export license conditions, using duty-free raw materials appropriately, contesting evidence effectively, and maintaining accurate records to avoid legal repercussions and appeal dismissals in such cases.