2002 (5) TMI 88 - AT - Customs

Summary

Issues:
1. Violation of DEEC Scheme by exporting goods not manufactured by the license holder.
2. Requirement of endorsement of jobber or other manufacturer in Advance Licence.
3. Applicability of Para 120 of the EXIM Policy - 1992-97 to manufacturer-exporters.
4. Confiscation of goods, redemption fine, and penalty under Customs Act, 1962.

Issue 1: Violation of DEEC Scheme
The appellants held an Advance Licence as manufacturer-exporter but exported goods not manufactured by them, leading to proceedings against them. The Addl. Commissioner found the goods were procured from other manufacturers, in contravention of the DEEC Scheme. He held the exported goods liable for confiscation under Section 113(d) of the Customs Act, 1962, with an option to redeem on payment of a fine. A penalty of Rs. 50,000 was imposed.

Issue 2: Requirement of Endorsement in Advance Licence
The Commissioner of Customs (Appeals) observed that under Para 120 of the EXIM Policy - 1992-97, endorsement of jobber or other manufacturer is mandatory where prior import before export is a condition of the Advance Licence. As the appellants did not get the Advance Licence endorsed in the names of other manufacturers or jobbers, the appeal was rejected.

Issue 3: Applicability of Para 120 to Manufacturer-Exporters
The appellants contended that the conditions under Para 120 of the Policy were not applicable to them as they were manufacturer-exporters. However, the Tribunal found that the conditions under Para 120 were mandatory for Advance Licences granted under the DEEC Scheme to both manufacturer-exporters and merchant-exporters. The appellants were held to have violated this condition.

Issue 4: Confiscation, Redemption Fine, and Penalty
The Tribunal upheld the orders of liability to confiscation of the goods, imposition of redemption fine, and penalty on the appellants. While reducing the redemption fine to Rs. 1 lakh and penalty to Rs. 20,000 due to the export being duly effected with permission, the Tribunal rejected the appeal, emphasizing the mandatory nature of the conditions under Para 120 of the EXIM Policy - 1992-97 for Advance Licences.