1998 (3) TMI 213 - AT - Customs

Summary

Issues Involved:
1. Eligibility for concessional rate of duty under Notification 224/85-Cus.
2. Unauthorized importation and liability for confiscation under Section 111(d) of the Customs Act, 1962.
3. Compliance with the Import Policy and Actual User (Industrial) condition.
4. Adequacy of evidence provided to substantiate the actual use of imported goods in the leather industry.

Issue-wise Detailed Analysis:

1. Eligibility for Concessional Rate of Duty under Notification 224/85-Cus:
The appellants imported three consignments of stamping foils, claiming the benefit of Notification 224/85-Cus, which provides a concessional rate of duty for goods used in the leather industry. The Additional Collector of Customs found that the appellants failed to substantiate their claim with manufacturers' literature or catalogues. The Tribunal noted that the manufacturer's catalogue obtained by the Customs House did not support the appellants' claim that the imported goods were for use in the leather industry. Consequently, the goods were deemed ineligible for the concessional rate of duty.

2. Unauthorized Importation and Liability for Confiscation under Section 111(d) of the Customs Act, 1962:
The Additional Collector of Customs held that the import of the stamping foils was unauthorized under Section 3 of the Imports and Exports Control Act, 1947, read with Section 11 of the Customs Act, 1962. The goods were liable to be confiscated under Section 111(d) of the Customs Act. The appellants were given the option to redeem the goods on payment of a fine of Rs. 75,000/- for each consignment.

3. Compliance with the Import Policy and Actual User (Industrial) Condition:
The Tribunal referred to the judgments of the Calcutta High Court in Shawkat Kamal v. Collector of Customs, which emphasized that the production of the manufacturer's catalogue/literature is not relevant at the time of release of the goods. Instead, an end-use bond would suffice. The Tribunal granted the appellants four months to produce evidence of actual consumption of the imported stamping foils in their leather industry. The appellants submitted various documents, including invoices, Bills of Entry, and a Chartered Accountant's certificate, claiming that the goods were used in the manufacture of leather bags.

4. Adequacy of Evidence Provided to Substantiate the Actual Use of Imported Goods in the Leather Industry:
The Deputy Collector's report found discrepancies in the appellants' records, such as incorrect Bill of Entry numbers and lack of author identification for register entries. The Tribunal noted that the register did not reflect the actual stock and consumption of the imported items and appeared to be maintained irregularly. The Chartered Accountant's certificate was also deemed insufficient as it did not specify the records verified or account for the claimed loss of 118 inches of stamping foils. Consequently, the Tribunal concluded that the appellants failed to prove actual consumption of the imported stamping foils in their leather industry.

Conclusion:
The Tribunal upheld the order of the Additional Collector of Customs, rejecting the appeal. The imported stamping foils were not entitled to the concessional rate of duty under Notification 224/85-Cus, and the import was unauthorized and not covered by Open General License (OGL). The evidence provided by the appellants was insufficient to substantiate their claim of actual use in the leather industry, leading to the confirmation of the confiscation order.