1997 (9) TMI 366 - AT - Customs

Summary

Issues Involved:

1. Confiscation of goods under 10 bills of entry.
2. Eligibility for the benefit of Notification No. 206/76.
3. Veracity of General Certificates submitted by the respondents.
4. Cross-examination of officers from HAL and Ministry of Defence.
5. Use of certificates twice for duty-free importation.
6. Adjudicating authority's handling of evidence and principles of natural justice.

Issue-wise Detailed Analysis:

1. Confiscation of Goods under 10 Bills of Entry:

The appeals were filed against the adjudicating authority's order, which held that the goods covered under 10 bills of entry were not liable for confiscation. The adjudicating authority found that the demand for short levy of duty indicated in the show cause notice was not tenable, and the respondents were eligible for the benefit of Notification No. 206/76. The department filed 10 appeals corresponding to the 10 bills of entry involved.

2. Eligibility for the Benefit of Notification No. 206/76:

The learned JDR argued that Notification No. 206/76-Cus exempts certain articles from customs duty when imported by the Government of India or State Government departments. The adjudicating authority had held that the respondents were eligible for this exemption. However, the department contested this, pointing out that the certificates submitted by the respondents to claim this exemption were allegedly not genuine.

3. Veracity of General Certificates Submitted by the Respondents:

The department conducted an investigation and found that the General Certificates submitted by the respondents, claimed to be issued by Hindustan Aeronautics Ltd. (HAL), Nasik Division, were not genuine. Mr. K. Balasubramaniam, Purchase Officer of HAL, and the Chief Manager of HAL, Nasik Division, confirmed that no such certificates were issued. The adjudicating authority did not adequately address these findings and instead concluded that the certificates were genuine based on insufficient verification.

4. Cross-examination of Officers from HAL and Ministry of Defence:

The respondents had requested to cross-examine the officers from HAL and the Ministry of Defence. The adjudicating authority did not address this request adequately. The learned JDR pointed out that the adjudicating authority disposed of the matter without referring to this request, which was a significant oversight.

5. Use of Certificates Twice for Duty-Free Importation:

The department alleged that two of the General Certificates were used twice for duty-free importation. The respondents admitted that if there was a genuine mistake, they would pay the duty. The adjudicating authority did not examine this aspect thoroughly, despite the respondents' willingness to pay the duty if the certificates were used twice.

6. Adjudicating Authority's Handling of Evidence and Principles of Natural Justice:

The adjudicating authority's order was criticized for being cryptic and not addressing the substantial evidence provided by the department. The adjudicating authority ignored the statements from HAL officials and the Chief Manager, which confirmed that the General Certificates were not issued by HAL, Nasik Division. The adjudicating authority's failure to consider this evidence resulted in a violation of principles of natural justice.

The Tribunal concluded that the adjudicating authority's order was not in accordance with law and required a fresh adjudication. The matter was remanded for de novo adjudication proceedings, with a direction to consider the evidence produced by the department and afford an opportunity of personal hearing to the respondents. The Tribunal emphasized that all issues were left open for reconsideration, and the appeals were allowed by remand.