1997 (6) TMI 105 - AT - Customs

Summary

Issues:
1. Interpretation of value to be debited to the import licence.
2. Validity of debiting the licence value for enhanced assessable value.
3. Nature of the offence in importing goods exceeding the licence value.
4. Consideration of advance licence under Duty Exemption Entitlement Certificate.

Analysis:
1. The case involved the appellants importing aniline oil against their advance licence with a duty exemption entitlement certificate. The Customs House found the value balance in the licence insufficient for the imported goods. The appellants argued that the shortfall was due to the Customs House loading the assessable value of a previous consignment of bon acid against the same licence, resulting in the present shortfall. The Dy. Collector rejected this defence, leading to the present appeal challenging the order to pay duty on goods exceeding the licence value.

2. The Sr. Manager reiterated the defence, citing a Customs Advisory Committee meeting where it was stated that debiting the licence should only occur in cases of fraud or illegal compensation to foreign suppliers. The Department argued that the appellants should have raised the issue earlier. The Tribunal referred to a Bombay High Court judgment emphasizing the distinction between valuation for customs duty assessment and the cif value to be debited to the licence. The Court highlighted the Customs officers' duty to safeguard revenue and accurately debit the licence value based on actual cif price.

3. The Tribunal considered the nature of the offence in importing goods exceeding the licence value under an advance licence with a Duty Exemption Entitlement Certificate. Such licences are issued based on estimated input requirements for export goods, subject to export obligations and value addition. The Tribunal found merit in the appellants' defence, noting that the previous loading of value for bon acid had led to the current shortfall in the licence balance. The Tribunal also referenced the Chairman's remarks from the Customs Advisory Committee meeting, supporting the appellants' position.

4. Given the circumstances and the appellants being actual users engaged in export production, the Tribunal deemed it unjust to penalize them for the Customs House's previous actions. The Tribunal, considering the interest of justice, allowed the appeal, granting the appellants consequential relief. The decision was based on the procedural aspects of issuing the licence, the Bombay High Court's interpretation of debiting licence value, and the specific conditions of the advance licence under the Duty Exemption Entitlement Certificate.