2002 (1) TMI 184 - AT - Customs

Summary

Issues Involved:
1. Compliance with conditions of Notification 159/90-Cus.
2. Evidence supporting the utilization of imported goods in export products.
3. Sale of imported goods and its implications.
4. Validity of the Board's order and limitation period.
5. Imposition of penalties on the importer and associated individuals.
6. Double adjudication of imported goods.

Issue-wise Detailed Analysis:

1. Compliance with Conditions of Notification 159/90-Cus:
The respondent imported goods under an advance license, exempt from duty, subject to exporting specified leather goods. The Commissioner concluded that despite the supporting manufacturer not being operational, the export obligations were met. However, the Tribunal found the evidence insufficient to confirm that the imported goods were used in manufacturing export products. The Commissioner's inference was deemed unjustified as the diary entries and statements did not conclusively establish the use of imported goods in exports.

2. Evidence Supporting the Utilization of Imported Goods in Export Products:
The Commissioner relied on statements and diary entries to infer that the imported goods were used in exports. However, the Tribunal noted that these did not conclusively prove the utilization of imported goods in manufacturing export products. The denial by Alam and the absence of corroborative records from the firms purportedly manufacturing the goods weakened the Commissioner's conclusion.

3. Sale of Imported Goods and Its Implications:
The Tribunal rejected the contention that the sale of goods was a minor technical lapse. It emphasized that the respondent imported goods for sale, contrary to the notification's requirement to use them in manufacturing export goods. The statements of brokers Jobalia and Parekh confirmed the sale of imported goods, strengthening the department's case.

4. Validity of the Board's Order and Limitation Period:
The Tribunal addressed the contention that the Board's order was made beyond the statutory period. It clarified that the order must be made within one year, but communication can occur later. The Tribunal found no statutory provision specifying the period for communication, thus the Board's order was not barred by limitation. It emphasized that the application to the Tribunal must be within three months from the date of receipt of the communication.

5. Imposition of Penalties on the Importer and Associated Individuals:
Penalties were proposed on the importer, its director, manager, and brokers. The Tribunal upheld penalties on the company and its director and manager for contravening the notification and enriching themselves. However, it found no evidence of prior knowledge or involvement of the brokers and the purported buyer in the contravention, thus no penalties were imposed on them.

6. Double Adjudication of Imported Goods:
The Tribunal noted the contention that part of the imported goods had already been adjudicated by the Deputy Commissioner of Customs. It remanded this aspect to the Commissioner for verification, directing to adjudicate afresh on the liability to duty for these goods. The Tribunal held that duty was payable on the remaining goods as per the show cause notice and directed the Commissioner to work out and communicate the duty payable.

Conclusion:
The Tribunal concluded that the benefit of the notification was not available for the imported goods, and they were liable to duty. It upheld penalties on the importer and its directors but not on the brokers. The matter was remanded to the Commissioner for verifying the double adjudication claim and determining the duty payable on the remaining goods. The appeals were disposed of accordingly.