2018 (8) TMI 1700 - AT - Customs

100% EOU - benefit of exemption of N/N. 52/2003-Cus dated 31st March 2003 - Duty free imports - Mis-declaration of quantity of goods - Demand of differential duty with interest - confiscation - redemption fine - penalty - Held that - To the extent that the imported goods are utilised for export, the quantity imported is irrelevant; nor is it of relevance in the context of the manufactured goods being cleared into the domestic tariff area. Even if the goods are found to be in excess of that declared, benefit of exemption notification should not have been denied. The recovery of duty ordered in the order of the adjudicating authority, as upheld by the appellate authority, is therefore, not correct in law. It is amply clear from the contents of the various documents that there has been no mis-declaration inasmuch as the gross weight and the netted weight have been detailed. The goods cannot, therefore, be said to have been mis-declared and the confiscation thereof is also without authority of law. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Appeal against recovery of duty, confiscation of goods, and imposition of penalties under Customs Act, 1962.
- Claim of duty-free imports by 100% Export Oriented Units under notification no. 52/2003-Cus.
- Discrepancy in the weight of imported goods as per assessing authority's finding.
- Interpretation of value of imported chemical based on 'amino content'.
- Allegation of mis-declaration and confiscation of goods without legal authority.

Analysis:
The judgment pertains to appeals filed by M/s Micro Inks Limited and M/s International Shipping Corporation against Orders-in-Appeal upholding the recovery of duty, confiscation of goods, and imposition of penalties under the Customs Act, 1962. The appellants had imported 'dichlorobenzidine dihydrochloride' claiming duty-free imports for 100% Export Oriented Units under notification no. 52/2003-Cus. The contention was that all necessary documents were filed, and the import details were accurately declared, including the price based on '100% of the amino content'. The packing list also matched the declared gross weight for clearance.

The Learned Counsel argued that the goods' weight discrepancy, as noted by the assessing authority, was minimal and should not affect the duty-free import benefit. The judgment highlighted that as a 100% export-oriented unit, the quantity of imported goods is irrelevant if utilized for export, and any excess quantity should not negate the exemption notification. Therefore, the recovery of duty and confiscation of goods were deemed incorrect in law.

Furthermore, the Counsel emphasized valuing the imported chemical based on its 'amino content', challenging the enhancement of value due to gross weight without a valid basis. The judgment noted the lack of examination on this aspect by lower authorities and deemed the across-the-board enhancement of value unsustainable. There was no evidence of mis-declaration, as the gross and netted weights were accurately detailed in the documents, leading to the conclusion that the confiscation of goods lacked legal authority.

In conclusion, the impugned order was set aside, and the appeals were allowed, emphasizing the correct application of duty-free import benefits and the necessity for accurate valuation based on the chemical's specific content.

Note: The judgment was pronounced by Shri C J Mathew, Member (Technical), on 14/08/2018.