2004 (5) TMI 212 - AT - Customs

Issues Involved:

1. Jurisdiction of the Commissioner of Customs to amend import licence or scale down import entitlement.
2. Validity of the import under the Value Based Advance Licence (VABAL).
3. Alleged mis-declaration of the price/value of LAM Coke.
4. Authority to demand duty and impose penalties under sections 111(d), 111(o), 112(a), and 114A of the Customs Act.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Commissioner of Customs to amend import licence or scale down import entitlement:

The appellants argued that the Commissioner of Customs lacked the authority to amend the import licence or reduce the import entitlement under the Import Licence. It was emphasized that the Commissioner's powers are confined to those granted under the Customs Act, and no jurisdiction was given to scale down the import entitlement mentioned in the Import Licences issued by the licensing authorities. This argument was supported by the Supreme Court's decision in Titan Medical Systems Pvt. Ltd. v. CC, which held that Customs authorities cannot refuse exemption based on alleged mis-representation if the licensing authority has not questioned the licence. The Tribunal agreed, stating that the Commissioner of Customs has no jurisdiction to question the Value Based Advance Licence or amend it, as such powers rest solely with the licensing authority.

2. Validity of the import under the Value Based Advance Licence (VABAL):

The appellants imported 6000 MTs of LAM Coke under VABAL No. 1957111, utilizing the total face value of US$ 901576.35. The Commissioner's order reduced the CIF value from US$ 909182 to US$ 656401, which the appellants contended was beyond his jurisdiction. The Tribunal found that the imports were within the value limit of the VABAL and noted that the appellants had completed their export obligation. Therefore, the Tribunal concluded that the imports were valid under the VABAL, and there was no excess import.

3. Alleged mis-declaration of the price/value of LAM Coke:

The Customs authorities alleged that the appellants mis-declared the price of LAM Coke in their application for the licence, declaring it as US$ 318.78 per MT while the actual import price was US$ 150.26 per MT. The Tribunal noted that the revised application filed by the appellants on 12-6-1995 corrected the initial mistake, and there was no inflation in the CIF value. The Tribunal also highlighted that the correspondence between the Commissioner of Customs and JDGFT, Calcutta, was not disclosed to the appellants, and no proceedings for amending the licence were initiated by the JDGFT. Therefore, the Tribunal found no basis for the allegation of mis-declaration.

4. Authority to demand duty and impose penalties under sections 111(d), 111(o), 112(a), and 114A of the Customs Act:

The Commissioner had demanded duty of Rs. 19,69,475.50, imposed interest at 24% per annum, confiscated goods valued at Rs. 78,12,635/- under section 111(o), and imposed a penalty of Rs. 12,00,000/-. The Tribunal, however, found that there was no violation of the Customs Act as the imports were within the VABAL value limit and the export obligation was fulfilled. The Tribunal emphasized that Customs authorities cannot modify the value limit given in VABAL or question the licence issued by the licensing authority. Therefore, the Tribunal set aside the Commissioner's order, finding no merit in the demand for duty, interest, confiscation, or penalties.

Conclusion:

The Tribunal allowed the appeal, setting aside the Commissioner's order, and held that the Commissioner of Customs had no jurisdiction to amend the import licence or scale down the import entitlement. The imports were valid under the VABAL, and there was no mis-declaration of the price/value of LAM Coke. Consequently, the demands for duty, interest, confiscation, and penalties were not justified.

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