1996 (5) TMI 251 - AT - Customs

Summary

Issues Involved:

1. Validity of the import licence at the time of importation.
2. Revalidation of the import licence.
3. Applicability of Customs Notification No. 159/88 for duty-free import.
4. Compliance with export obligations under the Duty Exemption Entitlement Certificate (DEEC) scheme.

Detailed Analysis:

1. Validity of the Import Licence at the Time of Importation:

The central issue in the appeal was whether the import licence was valid at the time of importation. The Revenue argued that the import licence had expired on 31-10-1991, and the goods were imported after this date, making the licence invalid for duty-free importation under Customs Notification No. 159/88. The Assistant Collector confirmed the demand for duty, stating that the consignment invoice indicated the goods were freely importable, but the licence was not valid at the time of import.

2. Revalidation of the Import Licence:

The respondents contended that they were under the impression that the licence had been revalidated based on a letter from the Chief Controller of Import and Export, which extended the export obligation period but not the licence validity. Subsequently, they obtained revalidation of the licence from the C.C.I. & E. The lower appellate authority condoned the technical lapse and set aside the demand for duty, allowing the benefit of Notification No. 159/88.

3. Applicability of Customs Notification No. 159/88 for Duty-Free Import:

The Revenue argued that the lower appellate authority failed to observe that the licence was dead at the time of import and revalidation was done to mislead Customs. They emphasized that the exemption under Notification No. 159/88 is permitted only against a valid advance licence. The importers had not applied for revalidation before the licence expired, which was a clear violation of the procedures laid down by the licensing authorities.

4. Compliance with Export Obligations under the DEEC Scheme:

The respondents argued that they had fulfilled the export obligation and the revalidated licence should cover the entire event of import. They maintained that if they had kept the goods in bond and produced the revalidated licence before clearance, it would have been accepted. The Tribunal observed that the respondents had been issued a licence under the export-oriented scheme, allowing duty-free import linked to export obligations. The DEEC endorsed by the licensing authorities extended the period for export obligation, and the importation was made during this extended period. The Tribunal noted that the respondents understood the licence extension to cover the importation and approached the authorities for revalidation, which was granted without conditions.

Conclusion:

The Tribunal upheld the lower appellate authority's order, concluding that the revalidation of the licence in the given circumstances covered the imports made earlier. The respondents had met the complete export obligation, and the revalidation should be taken to cover past imports used for manufacturing the export product. The appeal by the Revenue was dismissed.