1993 (3) TMI 240 - AT - Customs

Issues Involved:
1. Non-existence of the appellant firm.
2. Validity of the registration certificate.
3. Applicability of Section 111(d) of the Customs Act, 1962.
4. Compliance with the Import Policy AM 1988-91.
5. Opportunity of hearing and principles of natural justice.
6. Imposition of penalty under Section 112 of the Customs Act, 1962.

Detailed Analysis:

1. Non-existence of the appellant firm:
The primary issue was whether the first appellant firm existed at the time of importation. The Directorate of Revenue Intelligence conducted investigations and found no firm by the name of Agarwal Udyog at the address mentioned in the import documents. The premises were residential, and the father of the second appellant confirmed that no commercial activities were conducted there. The appellants failed to provide evidence of the firm's existence, leading to the conclusion that the firm was non-existent.

2. Validity of the registration certificate:
The appellants argued that they had a provisional Small Scale Industry (SSI) registration certificate dated 16-3-1988, initially valid for one year, with potential extensions. The Customs authorities contended that the certificate had expired and was not extended. The Tribunal noted that the appellants did not provide proof of a valid registration certificate at the time of clearance. The Tribunal upheld that the first appellant firm did not have a valid registration certificate beyond the initial one-year period.

3. Applicability of Section 111(d) of the Customs Act, 1962:
The appellants contended that Section 111(d) was not applicable as the import was permissible under the Open General License (OGL). They argued that the Import Policy does not have the force of law. However, the Tribunal found that the import was unauthorized due to the non-existence of the appellant firm and the lack of a valid registration certificate. Thus, the confiscation under Section 111(d) was justified.

4. Compliance with the Import Policy AM 1988-91:
The Import Policy allowed import under OGL to actual users. The appellants claimed they were actual users as per Para 6(3) of the Import Export Policy 1988-91. The Tribunal, however, found that the appellants did not meet the criteria of actual users due to the non-existence of the firm and the invalid registration certificate. The cited case laws were distinguished on the facts, and the Tribunal concluded that the appellants were not entitled to import under OGL.

5. Opportunity of hearing and principles of natural justice:
The appellants argued that they were not given sufficient opportunity for a hearing. The Tribunal noted that a personal hearing was granted on 19-10-1990 and rescheduled to 12-11-1990 at the appellants' request. The appellants failed to attend the second hearing, and the adjudicating authority proceeded based on available records. The Tribunal concluded that sufficient opportunity was provided, and the principles of natural justice were not violated.

6. Imposition of penalty under Section 112 of the Customs Act, 1962:
The appellants contended that the penalty order was invalid due to the non-mention of the specific sub-section of Section 112. The Tribunal held that as long as the order made it clear which sub-clause was relied upon, the non-mention was not fatal. The Tribunal upheld the imposition of the penalty, finding it justified based on the unauthorized import and non-existence of the appellant firm.

Conclusion:
The Tribunal upheld the findings of non-existence of the appellant firm, unauthorized import of machinery, and the consequent confiscation and penalty. The appeal was dismissed, affirming the adjudication order.

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