1994 (12) TMI 191 - AT - Customs

Summary

Issues Involved:

1. Jurisdiction of DRI Officers.
2. Quality and description of the export goods.
3. Declaration of supporting manufacturer.
4. Applicability of Section 14 of the Customs Act, 1962.
5. Over-valuation of exported goods.
6. Penalty and confiscation under Section 113(d) and Section 114 of the Customs Act, 1962.

Summary:

1. Jurisdiction of DRI Officers:

The Collector of Customs, Kandla, held that the Senior Intelligence Officer and Director, Directorate of Revenue Intelligence (DRI), Bombay, did not have statutory jurisdiction over Kandla Customs House. However, the Tribunal found that the Additional Director General, DRI, Bombay, appointed as Collector of Customs for Gujarat, could assign functions to proper officers under Section 2(34) of the Customs Act, 1962. The Tribunal noted that even if the search and seizure were illegal, it would not affect the validity of the evidence or subsequent adjudication proceedings.

2. Quality and Description of Export Goods:

The Collector concluded that the exporter did not misdeclare the description, nature, and quality of the goods, relying on test reports from the Dy. Chief Chemist and IIT, Bombay. However, the Tribunal found that the export product, described as made out of HDPE granules/powder, was actually a blend of copolymers, including polypropylene. The presence of polypropylene indicated that the product was not made solely from HDPE, contradicting the export declaration.

3. Declaration of Supporting Manufacturer:

The Collector held that there was no statutory requirement for furnishing details of the supporting manufacturer at the time of export, as the mandatory requirement was introduced only from 1-4-1993. The Tribunal, however, noted that the licences issued bore the endorsement of the supporting manufacturer, M/s. Associated Plastic Industries, who did not possess the requisite facilities for manufacturing the export product. The Tribunal found that the respondents had procured the newars from other suppliers and not from the declared supporting manufacturer.

4. Applicability of Section 14 of the Customs Act, 1962:

The Collector held that Section 14, relating to valuation, did not apply to export goods. The Tribunal agreed, noting that Section 14 applies when a duty of customs is chargeable, which was not the case here. The Tribunal found no evidence to establish that the declared value was at variance with the value under Section 14.

5. Over-valuation of Exported Goods:

The Tribunal noted that there was no specific charge of over-valuation in the Show Cause Notice, and the Collector had accepted the respondents' defence on this aspect. The Tribunal found that the remittance of foreign exchange confirmed by the Enforcement Directorate supported the respondents' case.

6. Penalty and Confiscation:

The Tribunal held that the Collector erred in dropping the charges in the Show Cause Notice. The case was remanded to the Collector for fresh adjudication in light of the Tribunal's findings, including the questions of action under Section 113(d) and liability to penalty under Section 114 of the Customs Act, 1962.

Conclusion:

The Tribunal set aside the impugned order, except for the finding that Section 14 did not apply, and remanded the case for fresh adjudication. The appeal was disposed of, and the Cross Objection was dismissed.