2018 (7) TMI 1138 - AT - Customs

Advance License Scheme - import of brass scrap without payment of customs duty - N/N. 48/99-Cus dated 29.04.1999 - M/s The Village Art could not discharge the export obligation and, therefore, customs duty were demanded from them - Held that - The Original Authority has ordered recovery of customs duty of ₹ 19,88,113/- alongwith interest in terms of bond from Shri Manoj Sikka, the appellant, Smt. Madhu Vij and Smt. Hema Sikka - It is found that the appellant is not signatory to the bond and he has not bound himself to pay customs duty in the event of non-fulfilment of export obligation - the customs duty adjust through the original order which has survived through the impugned Order-in-Appeal and penalty and interest ordered therein cannot be recovered from present appellant - appeal allowed - decided in favor of appellant.

Issues:
1. Appeal against Order-in-Appeal No. 8-9 CUS/MRT-II/2011 dated 31.05.2011.
2. Import of brass scrap under Advance License and failure to fulfill export obligation.
3. Confiscation of goods, imposition of penalties, and recovery of customs duty.
4. Appeal before Commissioner (Appeals) and subsequent appeal before the Tribunal.
5. Signatory liability under the bond for payment of customs duty.

Analysis:

1. The appeal was directed against Order-in-Appeal No. 8-9 CUS/MRT-II/2011 dated 31.05.2011 passed by the Commissioner (Appeals), Customs and Central Excise, Meerut-II. The case involved M/s The Village Art, Moradabad, which imported brass scrap under an Advance License with an obligation to export handicrafts. The customs duty amounting to &8377; 19,88,113/- was demanded due to non-fulfillment of the export obligation, leading to adjudication by the Original Authority through Order-in-Original dated 24.01.2011.

2. The Original Authority confirmed the demand of customs duty and ordered confiscation of the imported brass scrap under relevant sections of the Customs Act, 1962. Additionally, penalties and interest were imposed on the importers for contravention of the exemption notification conditions. The appeal was filed before the Commissioner (Appeals) who upheld the decision, leading to the appellant approaching the Tribunal.

3. During the proceedings, it was highlighted that the appellant was not a signatory to the bond, and the responsibility to pay customs duty in case of non-fulfillment of export obligation rested with Shri Manoj Sikka. The Tribunal observed that the appellant had not bound himself to pay customs duty under the bond. Consequently, the Tribunal held that the customs duty, penalties, and interest ordered in the previous decisions could not be recovered from the present appellant, leading to the allowance of the appeal.

4. The Tribunal's decision emphasized the importance of signatory liability under the bond for payment obligations related to customs duty. The ruling provided relief to the appellant by absolving them of the responsibility for payment as they were not a signatory to the bond. The judgment highlighted the legal principles governing liability in customs duty cases and the significance of contractual obligations in such matters.

5. In conclusion, the Tribunal's decision set a precedent regarding signatory liability under bonds for customs duty payments and clarified the extent of responsibility of parties involved in import-export transactions. The ruling provided a clear interpretation of the legal framework surrounding customs duty obligations and emphasized the need for adherence to contractual agreements in such matters to determine liability accurately.

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