1998 (9) TMI 176 - AT - Customs

Summary

Issues:
1. Whether the goods exported were distribution panels as per the contract.
2. Whether the goods fulfilled the conditions under Notification No. 116/88-Cus., dated 30-3-1988.
3. Whether the goods were liable for confiscation under Section 113(b) of the Customs Act.
4. Whether penal action could be taken under Section 112(1) of the Customs Act.
5. Whether the respondents had the necessary manufacturing capacity as per the Import-Export Policy.

Issue 1:
The appeal was filed against a decision where the Collector held that the goods exported were distribution panels and not liable for confiscation under Section 113(b) of the Customs Act. The respondents had entered into a contract for the supply of distribution panels, and the examining officer objected to the last consignment, leading to a show cause notice for confiscation. After hearing the parties and examining evidence, the Collector concluded that the goods were distribution panels in an incomplete state and not subject to confiscation.

Issue 2:
The argument presented was that the goods did not conform to the description declared in the shipping bill and were incomplete, lacking input or output wires and internal wiring. The Customs Act provisions were cited to support the claim that the goods were not distribution panels as they did not meet the necessary criteria.

Issue 3:
The contention was that the goods exported were not actual distribution panels as they lacked essential features like input/output wires and internal wiring. The defense argued that these deficiencies could be rectified at the buyer's premises, but the examining officer's observation highlighted the incomplete nature of the exported items, making them unsuitable for export under the EDDC scheme.

Issue 4:
The argument focused on the manufacturing capacity of the respondents as per the Import-Export Policy. It was contended that the respondents did not possess the required manufacturing capacity to export the goods as distribution panels, as evidenced by the lack of essential features and the inability to meet the policy's substantial manufacturing activities criteria.

Issue 5:
The judgment allowed the appeal and imposed a penalty of Rs. 5 lakhs on the respondents for rendering the goods liable for confiscation under Section 113(d) and (i) of the Customs Act. The decision was based on the findings that the goods exported were incomplete and did not meet the necessary criteria to be considered distribution panels, thereby violating the Import-Export Policy requirements.

This detailed analysis of the legal judgment highlights the key issues involved, the arguments presented by both parties, and the ultimate decision reached by the Appellate Tribunal CEGAT, Mumbai.