1995 (12) TMI 144 - AT - Customs

Summary

Issues:
1. Confiscation of PVC leather cloth and imposition of penalties by Additional Collector of Customs, New Delhi.
2. Alleged fabrication of documents for export obligations against different licenses.
3. Jurisdiction of adjudicating authority at Delhi over consignment cleared by Customs authorities at Calcutta.

Analysis:
1. The appellants contested the order of the Additional Collector of Customs, New Delhi, which confiscated 56 rolls of PVC leather cloth valued at Rs. 37,936 CIF and imposed a penalty of Rs. 5 lakhs each on the appellant and its proprietor. The counsel argued that the action was based on alleged fabrication of documents for goods exported against different licenses, but the export obligations were certified to have been fulfilled by the licensing authorities. The DEEC Books and customs audit supported this claim. The counsel also contended that penalties on both the sole proprietary concern and its proprietor were unjustified as they are not separate entities. Furthermore, the consignment had already been cleared by Customs authorities in Calcutta, questioning the jurisdiction of the adjudicating authority in Delhi.

2. The Department, represented by Shri D.S. Malik, highlighted discrepancies in the airway bills related to other licenses, suggesting that the appellant had filed forged documents to evade duty by showing false fulfillment of export obligations. The Additional Collector's findings were reiterated to support this claim.

3. The Tribunal examined the submissions and found merit in the appellant's argument that the action taken against the consignment meant for export under a specific license was improper, considering the fulfillment of export obligations against other licenses. Citing a judgment of the Madras High Court, the Tribunal emphasized the role of the licensing authority in verifying export obligations. The High Court's ruling clarified that Customs authorities cannot demand duty payment until the Controller of Imports and Exports determines the duty liability. As all three licenses had endorsements confirming the fulfillment of export obligations, the Tribunal concluded that confiscation of the PVC leather cloth and the penalties imposed were unwarranted. Therefore, the impugned order was set aside, and the appeals were allowed.