1986 (6) TMI 133 - AT - Customs

Summary

Issues Involved:
1. Validity of import licences for "Oxytetracycline."
2. Justification of confiscation and penalty on Raymonds.
3. Inclusion of indenting commission in the value for assessment under Section 14 of the Customs Act.
4. Justification of penalty on Voltas.

Detailed Analysis:

1. Validity of Import Licences for "Oxytetracycline":
Issue: Whether the licences cover imported goods consisting of "Oxytetracycline."

- Sub-Issue (a): Firm commitment by way of an indent and opening of Letter of Credit prior to 27-9-1977.
- Sub-Issue (b): Whether the Public Notice could restrict or prohibit importation under licences already issued.

Arguments:
- The appellants argued that the Department did not prove the substitution of indent and that Public Notices could not take away the right conferred by an import licence issued before the Public Notice.
- The Revenue argued that the licences are governed by Public Notices issued up to the arrival of the goods.

Judgment:
- The Tribunal held that the Public Notice must govern only licences issued after its issuance and not those previously issued. Therefore, the importation is covered by the licences produced by the appellants, as these licences were issued before the Public Notice imposing restrictions on the import of Oxytetracycline.

2. Justification of Confiscation and Penalty on Raymonds:
Issue: If the confiscation was correctly ordered, whether Raymonds were liable to a penalty.

Arguments:
- The appellants argued that the confiscation was not justified and that the penalty was not warranted.
- The Revenue justified the penalty and confiscation of goods in the circumstances.

Judgment:
- The Tribunal found that since the importation was covered by valid licences, the confiscation was not justified. Consequently, the penalty on Raymonds was also not warranted.

3. Inclusion of Indenting Commission in the Value for Assessment under Section 14 of the Customs Act:
Issue: Was the indenting commission paid locally includible in the value for assessment under Section 14 of the Customs Act?

Arguments:
- The appellants argued that Voltas were not indenting agents but merely sellers through Volkart Bros., Switzerland, and that the payment to Voltas was not indenting service charges.
- The Revenue argued that indenting commission, by any name, is includible in the value.

Judgment:
- The Tribunal agreed with the Board's finding that the amount paid to Voltas should form part of the value of the imported goods, considering it as indenting commission.

4. Justification of Penalty on Voltas:
Issue: Is the penalty imposed on Voltas justified?

Arguments:
- The appellants argued that Voltas were not liable to a penalty under Section 112 of the Customs Act.
- The Revenue justified the penalty on Voltas.

Judgment:
- The Tribunal set aside the penalty on Voltas, finding no justification for it.

Conclusion:
The appeals were disposed of as follows:
- The importation was covered by valid licences, rendering the confiscation and penalty on Raymonds unjustified.
- The indenting commission was includible in the value for assessment.
- The fine on Raymonds was reduced from Rs.3,80,000/- to Rs.10,000/- and the penalty from Rs.2,00,000/- to Rs.5,000/-.
- The penalty on Voltas was set aside.