1997 (5) TMI 193 - AT - Customs

Summary

Issues Involved:
The issues involved in this case include the validity of transferred licenses for import goods, entitlement to duty exemption under specific notifications, and the requirement to establish a nexus between imported goods and goods exported.

Validity of Transferred Licenses for Import Goods:
The case involved two separate appeals concerning the import of goods under transferred licenses. The Customs authorities initially proposed confiscation of the goods due to discrepancies in denierage compared to the exported material. The importers argued that the licenses had been validly transferred to them after the export obligation had been fulfilled. The Commissioner (Appeals) accepted the appellants' contentions, ruling that the licenses had been validly transferred and that the nexus did not need to be established again.

Entitlement to Duty Exemption:
The Departmental Representative contended that the Customs must ensure that imported goods qualify for the benefits of the notification, and the transferee of the license must fulfill the same obligations as the original licensee. The Advocate for the respondents argued that once the export obligation is met and the license is transferred, the Customs cannot demand re-establishment of the nexus between the imported and exported goods. Various legal precedents and circulars were cited to support both arguments.

Requirement to Establish Nexus:
Notification No. 80 of 1995 provides duty exemption for materials required for export products. The Department argued that only materials actually used in the export products are eligible for the exemption. However, circulars and decisions highlighted that a close nexus need not be established again for transferred licenses, as the eligibility for duty-free import had already been examined by different authorities.

Conclusion:
The Tribunal concluded that the Customs were not justified in demanding the establishment of a nexus between the imported and exported goods once the export obligation was fulfilled and the license was transferred. Therefore, the appeals were dismissed, upholding the order of the Commissioner (Appeals).