2018 (6) TMI 653 - AT - Customs

Benefit of N/N. 32/1997-Cus. dated 01.04.1997 - Job-Work - High-Seas Sale - It was alleged that the imported materials were in fact supplied for execution of job work order by Swathi Enterprises and not by New Karunai Granites. The Department also alleged that conditions requiring compliance with Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods Rules 1996) (herein after referred as Rules) were also violated - Held that - The goods though cleared by M/s. New Karunai Granites have been nonetheless been subjected to job work as per the directions of the foreign supplier. There is also no dispute that the goods after completion of job work have been re-exported and the export proceeds thereof realized. While the department has raised the allegation that the high sea Sale agreement is fake there has been no evidence brought forth to substantiate the same. In respect of the live consignments, the Ld. Advocate even produced the export certificate which indicates that these consignments too have been re-exported after being job worked upon - appeal dismissed - decided against Revenue.

Issues:
1. Ownership of goods in the context of high sea sale agreement
2. Validity of high sea sale agreement
3. Revenue loss establishment
4. Consideration of all aspects by the appellate authority

Ownership of Goods:
The case involved two consignments of polished granite slabs and past consignments imported under different names. The department alleged that a "fake" high sea sale agreement was used to circumvent duty benefits. The department claimed that the goods were supplied for job work by one entity but imported by another. The original authority confiscated the live consignments and imposed penalties. The Commissioner (Appeals) set aside the demand for past consignments and allowed the release of live consignments to the original importer. The department appealed, arguing that the supplier remains the owner of the goods, and the high sea sale agreement was illegal. However, the appellate tribunal found no evidence to substantiate the allegation of a "fake" agreement and upheld the lower authority's decision.

Validity of High Sea Sale Agreement:
The department contended that the high sea sale agreement was illegal due to the absence of sale consideration and violated customs rules. They argued that the supplier should be considered the owner of the goods. The tribunal noted that the goods were subjected to job work and re-exported, with no evidence supporting the claim of a "fake" agreement. The lower authority's conclusion that the goods were job worked upon and re-exported was upheld, leading to the dismissal of the department's appeals.

Revenue Loss Establishment:
The department challenged the finding of the Commissioner (Appeals) that no revenue loss was established. However, the tribunal did not find merit in this argument, as there was no evidence presented to support the claim of revenue loss. The appeals filed by the department were dismissed based on the lack of substantiated revenue loss.

Consideration of All Aspects:
The department argued that the Commissioner (Appeals) failed to consider all aspects discussed by the adjudicating authority. The tribunal acknowledged that the original order discussed all aspects in detail but found no fault with the conclusions reached by the lower authority. As a result, the appeals filed by the department were dismissed.

In conclusion, the appellate tribunal upheld the lower authority's decision regarding the ownership of goods, validity of the high sea sale agreement, lack of established revenue loss, and consideration of all relevant aspects. The department's appeals were dismissed, and the original order was upheld.

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