2020 (5) TMI 368 - AT - Customs

DFIA (duty free import authorisation) License - requirement of disclosure of technical characteristics, quality and specifications of the essential oil said to have been used in manufacture of Paan Masala/Gutka - contention of the exporter that the declaration requirement of the exception notification is applicable only if the exported goods are included in the list of items enumerated in paragraph 4.55.3 was not accepted by the Hon ble High court - HELD THAT - No doubt the show cause notice in the present case has been issued after a period of expiry of two years as mentioned in the said section. But the show cause notice itself has alleged the suppression of facts on part of the exporter. The same has even been confirmed by the original adjudicating authority as in Para-21 of the order dated 04.06.2015 it is appreciated that the non-disclosure of the technical characteristics as a consciously done at of the exporter. When this order was challenged before the Hon'ble High court in para-6 of the order by high court, the commissioner's view that DFI licences were obtained by suppression and distortion of facts has been observed with no contrary finding to the said observations. From the record, no other reason found to differ from the said observations of suppression and distortion of facts and the act being a consciously done act of the exporter - the Department has committed no error by invoking the extended period of limitation. Appeal dismissed.

Summary

Issues:
1. Interpretation of Notification No. 40/2006-Cus and para 4.55.3 of the Handbook of Procedure for Export and Import.
2. Appreciation of specifications and declaration requirements under the above Notification and Handbook.
3. Consideration of limitations for invoking section 28 of the Customs and Excise Act.

Analysis:

1. The case involved a show cause notice issued to the Appellant for contravention of provisions related to disclosing technical characteristics in export documentation. The original adjudicating authority proposed confiscation of goods and imposition of penalties, which was later set aside by the Tribunal but appealed by the Revenue. The High Court upheld the Revenue's arguments, emphasizing the requirement to disclose technical characteristics as per the relevant provisions.

2. The High Court framed questions regarding the Tribunal's interpretation of Notification No. 40/2006-Cus and para 4.55.3 of the Handbook. The Court rejected the exporter's argument that the declaration requirement only applied if the goods were listed in paragraph 4.55.3. The issues were decided in favor of Revenue, leading to a remand for reconsideration of certain aspects, including limitations, by the Tribunal.

3. The Appellant raised the issue of limitation, arguing that section 28 of the Customs and Excise Act was not invoked in the show cause notice. However, the notice alleged suppression of facts by the exporter, confirmed by the original adjudicating authority. The High Court concurred with the view that DFIA licenses were obtained through suppression and distortion of facts. The Tribunal found no reason to differ from this observation, supporting the invocation of the extended period of limitation.

In conclusion, the Tribunal dismissed the appeal based on the High Court's decision, emphasizing that the merits were already decided and limitations were extendable. The order highlighted the binding nature of the High Court's decision and affirmed the dismissal of the appeal based on the discussed grounds.