2008 (4) TMI 117 - SC - Customs

Appellant purchased transferable Value Based Advance Licenses(VABAL) allegation of contravention of conditions of not. No. 203/92 - Customs department cannot compel the appellants importer, who are the transferee, to once again prove that the export obligation has been fulfilled by the original licence-holder in accordance with the notification and without availing input stage credit - It is the original licencee, who has to satisfy the above condition, but not the transferee of the licence

Summary

Issues:
Challenge to order passed by Customs, Excise & Service Tax Appellate Tribunal (CESTAT) allowing the appeal filed by the appellant.

Analysis:
The appellant acquired transferable Value Based Advance Licenses (VABAL) and imported consignment based on it. A show cause notice was issued alleging contravention of certain conditions of Notification No. 203/92-Cus. The Commissioner confirmed the demand, holding the goods liable for confiscation under Section 111 of the Customs Act, 1962. Penalties were also levied under Section 112(a) of the Act. The matter was referred to a larger Bench of the Tribunal.

The Tribunal held that the satisfaction regarding export obligations is final and binding on the customs department, and the transferee cannot be compelled to prove fulfillment of conditions by the original license holder. The transferee is not required to fulfill the conditions of the notification. The Tribunal's decision was based on these considerations.

In the appeal, the challenge was made to the conclusions reached by the Tribunal. However, it was noted that the show cause notice did not reference the alleged infraction by the original license holder, M/s. Amar Taran Exports. As a result, the judgment of the CESTAT was found to be free from any infirmity that would justify interference. Therefore, the appeal was dismissed.