2023 (6) TMI 162 - HC - Customs

Non-fulfilment of condition of the advance authorization - locally procured Coco Butter as 50 MT of Coco Butter (imported) was lost during transit from the port to the factory - demand of duty was confirmed on the ground that imported goods were not used in the manufacture of goods exported - violation of any of the conditions of N/N. 93/2004-Cus dated 10.09.2004. HELD THAT - Learned counsel for the appellant-Revenue has not been able to cite any judgment on the proposition that once the export obligation has been discharged and the assessee has redeemed its bond executed with the licensing authority i.e. DGFT, the Customs Authorities can initiate proceedings against such assessee. Moreover, it is not the case of the Revenue that there is violation of any of the conditions of notification No. 93/2004-Cus dated 10.09.2004. After going through the impugned order, no illegality, much less perversity has been found therein warranting interference by this Court. The impugned order has been passed after appreciating the evidence in the right perspective. No substantial question of law arises for consideration. Appeal dismissed.

Summary

Issues involved:
The appeal under Section 130 of the Customs Act, 1962 against the final order passed by the Customs, Excise & Service Tax Appellate Tribunal, Chandigarh.

Details of the judgment:

Issue 1: Duty demand and penalty imposition
The respondent imported Cocoa Paste against an advance authorization but faced a loss of 50 MT due to melting in transit. The lost quantity was replaced by purchasing Cocoa Paste from the local market to fulfill export obligation. No benefit of rebate or duty draw back was claimed during the export. The Tribunal held that once the export obligation was fulfilled, Customs Authorities could not initiate proceedings against the respondent. The Tribunal also noted that there was no violation of the conditions of the relevant notification. As the respondent had discharged its export obligation and redeemed the bond with the licensing authorities, the impugned order was set aside.

Issue 2: Legal references and Tribunal's decision
During the appeal, the respondent's counsel cited various legal precedents. The Tribunal considered the replacement of the lost quantity by the respondent and the fulfillment of export obligations. It was observed that once the export obligation was met, Customs Authorities could not proceed against the respondent. The Tribunal found no violation of the conditions of the notification. As the export obligation was discharged and the bond redeemed, the appeal was allowed, and the impugned order was set aside.

Issue 3: Lack of legal grounds for appeal
The counsel for the appellant-Revenue failed to provide any legal precedent supporting the initiation of proceedings after the discharge of export obligations and redemption of the bond. The judgment found no illegality or perversity in the impugned order, stating that no substantial question of law arose for consideration. Consequently, the appeal was dismissed for lacking merit.

Conclusion:
The High Court dismissed the appeal, upholding the Tribunal's decision that once the export obligation was fulfilled and the bond redeemed, Customs Authorities could not take action against the respondent. The judgment emphasized the importance of meeting export obligations and complying with notification conditions in customs matters.