2004 (9) TMI 178 - AT - Customs

Eligibility for export benefits on SS utensils manufactured by non-declared job workers - Validity of export benefits claimed for exports made without prior imports under specific advance licenses -Whether the appellants committed any breach of conditions of Notification Nos. 30/97-Cus. and 51/2000-Cus. disentitling themselves to the benefit of exemption from payment of duty on the subject imports and rendering themselves liable for penalty u/s 112 of the Customs Act along with rendering any goods liable for confiscation u/s 111 of the Act - HELD THAT - The JDGFT s order passed is in adjudication of show cause notice issued at the instance of the Revenue. The order is in favour of the importer. It holds that the importer has duly fulfilled export obligation under all the 7 advance licences. The findings recorded in the said order are by and large contradictory to the allegations raised by the Revenue in the SCN adjudicated by the Commissioner. Hence the Revenue is covered by the expression any person aggrieved in Section 15 ibid Nevertheless no appeal has been preferred against the JDGFT s order. Apparently the period of limitation prescribed for such appeal has already expired. In the result it has to be held that the JDGFT s order stands accepted by the Revenue. With regard to licence conditions the licensing authority has certified full discharge of export obligation by the appellants. The adjudicating authority under the Foreign Trade (D R) Act has found no violation of licence conditions on their part and its order has been accepted by the Revenue. Hence the Revenue cannot be seen to be critical of that order nor can the DR be heard to argue against it. It goes without saying that the case law cited by ld. SDR cannot improve the Revenue s case or plight. The Revenue s allegation was that the appellants had violated conditions (vii) and (viii) of Notification 30/97 and similar conditions of Notification 51/2000. But in this regard the JDGFT s order has taken the wind out of the Revenue s sails. In the result the charge of breach of conditions of the Customs Notifications does not survive. Hence now there is no reason to deny the benefit of the Notifications to the appellants or to take any penal action against them. Accordingly we set aside the impugned order and allow this appeal.

Summary

Issues Involved:
1. Eligibility for export benefits on SS utensils manufactured by non-declared job workers.
2. Validity of export benefits claimed for exports made without prior imports under specific advance licenses.
3. Liability for duty and interest on imported raw materials.
4. Confiscation of raw materials and SS utensils.
5. Imposition of penalty u/s 112 of the Customs Act.

Summary:

1. Eligibility for Export Benefits on SS Utensils Manufactured by Non-Declared Job Workers:
The appellants were accused of violating conditions of Customs Notifications by sending 68.972 MTs of imported raw materials to job workers other than the declared "supporting manufacturers." The Commissioner held that this action rendered the appellants ineligible for export benefits. However, the JDGFT found that it was not mandatory to get supporting manufacturers' names endorsed on the advance licenses, thus permitting the appellants to process the raw materials through non-declared jobbers. Consequently, there was no breach of condition (vii) of Notification 30/97.

2. Validity of Export Benefits Claimed for Exports Made Without Prior Imports:
The Commissioner denied export benefits for 68.785 MTs of SS utensils exported under two advance licenses, citing the absence of prior imports. However, the JDGFT's order, which became final and binding due to the lack of appeal, accepted these exports as fulfilling the export obligation under all seven licenses.

3. Liability for Duty and Interest on Imported Raw Materials:
The Commissioner demanded duty and interest on 68.972 MTs of imported SS coils/sheets, asserting that the appellants violated the conditions of the Customs Notifications. The JDGFT's order, however, confirmed that the appellants had fulfilled their export obligations, negating the demand for duty and interest.

4. Confiscation of Raw Materials and SS Utensils:
The Commissioner ordered the confiscation of 68.972 MTs of raw materials and 53.060 MTs of SS utensils u/s 111(o) of the Customs Act, allowing redemption on payment of a fine. The JDGFT's findings contradicted this, as the appellants were found to have complied with the conditions of the licenses and Notifications.

5. Imposition of Penalty u/s 112 of the Customs Act:
A penalty of Rs. 1,00,000/- was imposed on the appellants. Given the JDGFT's findings that the appellants fulfilled their export obligations, the penalty was deemed unsustainable.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal based on the JDGFT's final and binding order, which confirmed that the appellants had duly fulfilled their export obligations under all seven advance licenses. The charge of breach of conditions of the Customs Notifications did not survive, and no penal action was warranted.