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2010 (2) TMI 6 - SC - CustomsShip Spares - Wrong availment of benefit of exemption notification - Notification No.211/83-Cus dated 23rd July, 1983 - import of multiple consignments of engineering cargo as Ship Spares held that - It is evident that the unequivocal stand of the appellant was that the material imported by them was installed/used for repairs of ocean going vessels directly by them with the assistance of M/s Elektronik Lab, an authorised agent in India of the foreign supplier from whom the appellant had imported the goods - the Revenue produced sale invoices and delivery challans, showing sale of imported cargo by the appellant to M/s Elektronik Lab, who in turn, sold these goods to the ship owners for which necessary documents, such as, bills were raised - before the High Court an unsuccessful attempt was made to lay more emphasis on exemption from payment of customs duty on eight consignments in terms of Sections 54 and 69 of the Act (export of warehoused goods) and not under the Exemption Notification No.211/83-CUS dated 23rd July, 1983 Appellant is not entitled for exemption order of settlement commission and high court maintained. decided in favor of revenue.
Issues Involved:
1. Legality of the High Court's dismissal of the writ petition affirming the Settlement Commission's decision. 2. Applicability of Exemption Notification No. 211/83-Cus dated 23rd July, 1983. 3. Applicability of Sections 54 and 69 of the Customs Act, 1962. 4. Full and true disclosure by the appellant under Section 127B of the Customs Act, 1962. Detailed Analysis: Issue 1: Legality of the High Court's Dismissal of the Writ Petition Affirming the Settlement Commission's Decision The Supreme Court upheld the High Court's decision to dismiss the writ petition, affirming the Settlement Commission's decision. The High Court found no error in the Settlement Commission's order, which concluded that the appellant had sold the imported goods to M/s Elektronik Lab, disqualifying them from duty exemption under Notification No. 211/83. The High Court also rejected the appellant's attempt to introduce a new ground of appeal regarding Sections 54 and 69 of the Customs Act, as it was contradictory to their earlier stance and involved factual investigation. Issue 2: Applicability of Exemption Notification No. 211/83-Cus dated 23rd July, 1983 The Settlement Commission found that the appellant did not fulfill the conditions of the Exemption Notification No. 211/83-Cus, which required the imported goods to be used for repairs of ocean-going vessels by a registered ship repair unit. The appellant sold the goods to M/s Elektronik Lab, which was not registered with the Director General of Shipping. The Commission concluded that the transactions between the appellant and M/s Elektronik Lab were trading transactions, making the appellant ineligible for the duty exemption. Issue 3: Applicability of Sections 54 and 69 of the Customs Act, 1962 The Supreme Court agreed with the High Court that the appellant's plea regarding Sections 54 and 69 was raised too late and involved factual investigation. The appellant had not raised this plea before the adjudicating authority, the Tribunal, or the Settlement Commission. The Court noted that the appellant's application under Section 127B would not be maintainable if no customs duty was payable, as the section requires a disclosure of concealed additional customs duty. Issue 4: Full and True Disclosure by the Appellant under Section 127B of the Customs Act, 1962 The Supreme Court found that the appellant had not made a full and true disclosure of their duty liability, as required under Section 127B. The appellant's application should have been rejected by the Settlement Commission on this ground alone. However, since the Settlement Commission's order allowing the application to proceed was not challenged by the Commissioner, the Court did not reject the application at this stage. The Court emphasized that the appellant could not accept favorable parts of the Settlement Commission's order while rejecting unfavorable parts. Conclusion: The Supreme Court dismissed the appeal, upholding the High Court's decision and the Settlement Commission's findings. The Court found no merit in the appellant's contentions and imposed costs of Rs. 50,000/- on the appellant.
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