1996 (9) TMI 326 - AT - Customs

Import - Advance Licence - Import Policy - Polyester fabrics - Confiscation and Redemption fine - Penalty

Issues Involved:
1. Confiscation and Redemption Fine
2. Imposition of Penalty
3. Applicability of Notification No. 159/90-Cus and Notification No. 204/92-Cus
4. Suitability of Imported Goods for Intended Use
5. Validity of Import License
6. Excess Quantity of Imported Goods
7. Imposition of Storage Charges

Issue-wise Detailed Analysis:

1. Confiscation and Redemption Fine:
The adjudicating authority confiscated 50,088.18 meters of polyester fabrics and allowed the appellant to redeem them on payment of a redemption fine of Rs. 2.00 lacs. The appellant challenged the quantum of the redemption fine. The Tribunal reduced the redemption fine to Rs. 1.50 lacs, considering the goods' diminished value over 5 1/2 years.

2. Imposition of Penalty:
A penalty of Rs. 20 lacs was imposed on the appellant under section 112 of the Customs Act. The appellant contested the imposition and quantum of the penalty. The Tribunal reduced the penalty to Rs. 75,000, noting that the adjudicating officer did not provide specific reasons for the high penalty and considering that the penalty should only pertain to the excess quantity of goods.

3. Applicability of Notification No. 159/90-Cus and Notification No. 204/92-Cus:
The appellant sought the benefit of Notification No. 159/90-Cus and alternatively Notification No. 204/92-Cus. The Tribunal held that the appellant is entitled to the benefit of Notification No. 159/90-Cus. Additionally, since the bill of entry was filed after Notification No. 204/92-Cus was issued, the appellant is also entitled to its benefits. The Tribunal found that the import of goods is permissible under these notifications.

4. Suitability of Imported Goods for Intended Use:
The department alleged that the imported polyester fabrics were not suitable for use in ladies' garments, which were exported. The Tribunal found that the only witness produced for cross-examination, Sri Venkateswara Rao, admitted that 100% polyester fabrics were used in manufacturing coats, skirts, and ladies' dresses. Therefore, the Tribunal concluded that the goods are suitable for the intended use, contrary to the department's allegations.

5. Validity of Import License:
The adjudicating authority accepted the import license's validity for replenishment purposes but denied its validity for the import. The Tribunal found this contradictory and held that the license is valid for both purposes. The Tribunal also referred to Para 4 of Chapter 1 of EXIM Policy 1992-97, which states that licenses issued before the policy's commencement shall continue to be valid.

6. Excess Quantity of Imported Goods:
The goods weighing 50,088.18 meters were found in excess of the license and declared invoiced quantity. The Tribunal upheld the confiscation of the excess goods but reduced the redemption fine to Rs. 1.50 lacs and the penalty to Rs. 75,000. The Tribunal noted that there was no evidence of mis-declaration by the appellant as the bill of entry had not yet been filed.

7. Imposition of Storage Charges:
The appellant contended that the show cause notice did not mention the payment of storage charges. The Tribunal agreed that the adjudicating authority should not have given a finding on this matter and directed the administrative Collector to make appropriate orders regarding storage charges.

Conclusion:
The appeal was disposed of by reducing the redemption fine to Rs. 1.50 lacs and the penalty to Rs. 75,000. The Tribunal held that the appellant is entitled to the benefits of Notification No. 159/90-Cus and Notification No. 204/92-Cus and found that the imported goods are suitable for the intended use. The Tribunal also directed the administrative Collector to address the issue of storage charges.

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