2001 (3) TMI 214 - AT - Customs

Summary

Issues Involved:
1. Non-fulfillment of export obligation under Advance Licence.
2. Demand of duty and interest on unutilized imported components.
3. Issuance of multiple show cause notices by different authorities.
4. Confiscation of goods and imposition of redemption fine and penalty.
5. Jurisdiction and authority of Customs officers in monitoring and enforcing export obligations.

Issue-wise Detailed Analysis:

1. Non-fulfillment of export obligation under Advance Licence:
The appellants were engaged in the manufacture and export of 'Pagers' and had obtained Advance Licences under the DEEC Scheme to import duty-free components. They executed a Bond with the Customs Authorities, undertaking to export the required quantity of final products. However, for Licence No. 07001273, dated 14-10-1997, they could only meet the export obligation for 39,502 out of 70,000 pagers due to the Asian Currency Melt Down, which led to the cancellation of export orders.

2. Demand of duty and interest on unutilized imported components:
A show cause notice dated 5-2-2000 was issued by the Assistant Commissioner of Customs, demanding duty amounting to Rs. 4,07,44,992/-. The appellants responded, pointing out that they had already paid Rs. 57,25,647/- and interest for the unutilized components. The Assistant Commissioner accepted this payment and discharged the Bond. Subsequently, the Joint Director General of Foreign Trade issued a certificate discharging the export obligation, and the Customs Bond was canceled.

3. Issuance of multiple show cause notices by different authorities:
Despite the Assistant Commissioner's actions, the Commissioner issued another show cause notice on 8-3-2000, demanding duty on the unutilized parts and proposing their confiscation. The Tribunal found this to be improper, emphasizing the need for "self-imposed discipline" and the "Theory of Comity of Courts," which discourages concurrent jurisdictions from issuing multiple proceedings on the same issue. The Tribunal cited the Supreme Court's emphasis on maintaining decorum and comity among institutions.

4. Confiscation of goods and imposition of redemption fine and penalty:
The Commissioner ordered the confiscation of goods and imposed a redemption fine of Rs. 3,50,000/- and a penalty of Rs. 50,000/- under Section 112 of the Customs Act, 1962. The Tribunal found that the Commissioner's actions were based on a flawed understanding of the facts and the law. The Tribunal noted that the DGFT had already issued a waiver of the export obligation, and the Assistant Commissioner had withdrawn his notice. Therefore, the Commissioner's order for confiscation and fine was not justified.

5. Jurisdiction and authority of Customs officers in monitoring and enforcing export obligations:
The Tribunal upheld the Assistant Commissioner as the proper officer for monitoring export obligations and duty exemptions. The Commissioner's attempt to re-determine duty and interest was found to be improper, as the Assistant Commissioner had already settled the matter. The Tribunal emphasized that the proper procedure would have been for the Commissioner to review the Assistant Commissioner's withdrawal of the notice and file an appeal if necessary.

Conclusion:
The Tribunal set aside the Commissioner's order, finding no justification for the confiscation of goods, imposition of redemption fine, or penalty. The Tribunal highlighted the importance of maintaining institutional decorum and following established legal procedures. The appeal was allowed, and the order-in-original was overturned.