2010 (1) TMI 517 - HC - Customs

- Duty free goods diversion - Petitioners did not have factory no manufacturing process was carried out to manufacture the goods much less from the imported inputs or goods - no goods were manufactured by them - view taken by the Commissioner is reasonable and possible.

Summary

Issues:
Challenge to duty liability determination by Settlement Commissioner regarding exported goods.

Analysis:
The petition challenged an order by the Settlement Commissioner regarding duty liability of the petitioners for exported goods. The order required the petitioners to deposit a balance amount within 30 days. The petitioners disputed the order concerning three shipping bills for the export of video cassettes. The first consignment was exported before the investigation began, and no representative samples were drawn. The third consignment was not part of the show cause notice. The petitioners contended that the goods were manufactured in their factory from imported raw materials. However, the Settlement Commissioner found that no documentary evidence was produced to support this claim. It was revealed that the petitioners were exporting only blank cassettes, diverting the imported material to the open market. The Settlement Commissioner directed both parties to produce evidence, but the petitioners failed to provide sufficient proof of manufacturing. Despite some documents presented, they were not considered adequate to establish the manufacturing process. The petitioners admitted to not manufacturing any goods, leading to the Settlement Commissioner's decision. The High Court upheld the Commissioner's findings, stating that the view taken was reasonable and no interference was warranted. The petition was dismissed, with the petitioners given 30 days to comply with the order, failing which legal consequences would ensue.