1998 (4) TMI 320 - AT - Central Excise

Summary

Issues:
Challenge to Order-in-Original for duty recovery under Notification No. 116/88 based on difference in characteristics/specifications between exported goods and imported replenishment materials. Jurisdiction of Customs Authorities vs. Licensing Authorities under Export-Import Policy.

Analysis:
In this case, the appellants contested the duty recovery order issued by the Collector of Customs, Bombay, under Notification No. 116/88 due to alleged discrepancies in characteristics/specifications between exported goods and imported replenishment materials. The appellants argued that the imported materials were used in manufacturing exported goods and should qualify for duty exemption. They relied on previous Supreme Court directions and contended that Customs Authorities cannot question Licensing Authority decisions. The appellants emphasized that the thickness difference in materials should not disqualify them from duty exemption, as they could be processed to meet specifications.

The Customs Authorities, represented by the JDR, countered the appellants' arguments by referring to a previous Tribunal order that found the imported goods did not match the technical characteristics of exported products, thus disqualifying them from duty exemption under Notification No. 116/88. The JDR also addressed the issue of limitation, highlighting Supreme Court directions allowing duty recovery if goods did not match the import license description.

Upon thorough consideration, the Tribunal addressed the jurisdictional issue between Customs and Licensing Authorities. It held that Customs must clear goods conforming to the import license description but could confiscate goods not covered by the license. The Tribunal reiterated that imported goods must meet technical specifications of exported products for duty exemption under Notification No. 116/88. In this case, the discrepancy in thickness between imported and exported items raised doubts on the appellants' ability to convert materials to meet specifications. The Tribunal noted the appellants' failure to provide evidence of such capability, leading to the rejection of their argument and upholding of the duty recovery order.

Ultimately, the Tribunal rejected the appeal, affirming the duty recovery order based on the discrepancy in technical characteristics between the imported replenishment materials and the exported goods. The decision emphasized the necessity for imported goods to align with the technical specifications of exported products to qualify for duty exemption under relevant notifications.