1992 (1) TMI 108 - HC - Customs

Summary

Issues Involved:
1. Claim for customs duty benefit under Notification No. 224/85-Cus.
2. Validity of the show cause notice and subsequent order by the Additional Collector of Customs.
3. Applicability of the end-use bond procedure.
4. Assessment of customs duty at the point of entry.
5. Consideration of relevant materials and manufacturer's declaration.

Issue-wise Detailed Analysis:

1. Claim for Customs Duty Benefit under Notification No. 224/85-Cus:
The writ petitioners claimed exemption from customs duty for importing stamping foils for use in the leather industry under Notification No. 224/85-Cus. The notification exempts specified goods imported for use in the leather industry from a portion of customs duty and the whole of additional duty.

2. Validity of the Show Cause Notice and Subsequent Order by the Additional Collector of Customs:
The petitioners received show cause notices requiring them to justify the duty exemption claim. The Additional Collector of Customs issued an order on 19th February 1991, confiscating the goods "Luxor Special Alufin PVC" and denying the exemption under the notification. The court found that the order failed to consider the manufacturer's declaration and relevant materials, rendering it invalid.

3. Applicability of the End-Use Bond Procedure:
Justice Mitra's previous judgment in Shawkat Kamal v. The Collector of Customs permitted the use of end-use bonds to assure that imported goods would be used in the leather industry. The court recognized this procedure as practical but emphasized that customs duty assessment should be finalized at the point of entry.

4. Assessment of Customs Duty at the Point of Entry:
The court held that the assessment of customs duty must be finalized at the time and point of entry into India. The authorities should determine whether the goods are intended for use in the leather industry at the point of entry, regardless of their actual use post-importation.

5. Consideration of Relevant Materials and Manufacturer's Declaration:
The court found that the Additional Collector failed to consider the manufacturer's declaration that the goods were suitable for the leather industry. The decision did not address whether the PVC description referred to the carrier or the goods' use in the leather industry. The court emphasized that the deciding authority must apply its mind to all relevant materials and circumstances.

Conclusion:
The court quashed the show cause notices and the order of the Additional Collector of Customs dated 19th February 1991. The writ petitioners were entitled to obtain clearance of the consignments upon payment of customs duty in accordance with the exemption notification. The authorities were directed to release the goods within four weeks from the date of the order. No order as to costs was made.