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TMI Blog1986 (7) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... ared intent as set forth in the aforesaid application for registration as well as the Bill of Entry dated 12-11-1979, (iii) apparent misdeclaration in the application as well as the Bill of Entry which would necessiate a reassessment under S. 17(4) of the Customs Act, 1962 (hereinafter, the Act) on merits without the benefit of the concessional assessment earlier granted on the faith of the aforesaid misrepresentation, (iv) liability of the machinery to confiscation in terms of S. 111 (m) and (o) and of the applicant to penalty under S. 112 of the Act, and requiring the appellant to show cause as to why the proviso to S. 28(1) may not be invoked, the assessment revised, the machinery confiscated and the penalty levied; (b) in a reply dated 7-7-1982 to the aforesaid notice to show cause (signed by a partner of the appellant and appearing at P. 51-55 of the Paper Book) while denying the allegations in toto and in particular the allegations of suppression of facts or misdeclaration, it was alleged that the import was in full accord and compliance with all legal requirements and on payment of the requisite amount of duty. However, the ownership in the machinery had to be tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Central Excise recorded the submissions in the oral hearing to the effect that the appellants had sold all their assets and liabilities (including old machinery) to M/s Jacsons Veneers and Panels Pvt. Ltd. (hereinafter, the Company) in which some of the partners of the appellant were taken as directors; and although the licensing authorities refused to agree to the transfer, since the shipment had already taken place, the transfer by sale of the imported machinery was noted by them without any objection and approved by the Ernakulam District Industries Centre, Government of Kerala. It would also appear that it was admitted before him that a technical error was committed in stating that the machinery was meant for substantial expansion of an existing unit, since in actual fact, it was required for setting up a new unit for the company. However, since the main condition for the project import concession was fulfilled, the technical irregularity may be condoned. It was further submitted before him that the appellant partnership existed only on paper and not carrying on any manufacturing activities. Their export obligations were being discharged by the company; (f) in the memorand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 to 28 of the Paper Book); (h) the instant appeal was the sequel. 2. On 28-10-1985, when the appeal was taken up for hearing, Shri Gulati, the learned advocate, who appeared for the appellant was directed to file eight documents. It was noted on 1-1-1986, that in the place of the documents desired by the Tribunal, Shri Gulati filed a number of other documents including a Supplementary Memorandum of appeal . Accordingly, Shri Gulati was told that if any of them were not already on record, he may have to file an application for their admission as additional evidence, if at all. Similarly, in regard to the Supplementary Memorandum of appeal as well, an application for amendment of the existing memorandum may have to be made (vide Tribunal s order dated 1-1-1986). On 14/15-1-1986 a miscellaneous application was filed for the admission of the new documents and also praying that the appeal originally filed (reserving appellants rights to refer and rely on the facts and grounds set therein) be taken as amended by the supplementary memorandum of appeal, though, in fact, it is a recasting of the original appeal . 3. We heard the application along with the appeal. 4. The documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. We do not propose to go into all these submissions seriatim regardless of their relevancy in the interests of brevity. 8. Suffice it to note, however, that - (a) in terms of the agreement dated 31-7-1979 (P. 31-36 of the Paper Book), the assets of the appellant agreed to be transferred (not merged with) to the company included not merely the import licences but leasehold rights in the premises of the appellant; (b) a transfer of such lease hold right or any other right in the land occupied by the factory of the appellant cannot take place without the execution of a registered document in terms of S.I 7 of the Registration Act on payment of the appropriate Stamp Duty, in a case where the value of the land exceeds Rs.100/- as, presumably, it would have; (c) on a query from us, no satisfactory reply as to whether any such document was duly executed and registered was forthcoming from the appellant. Nor was the document, if any, produced, although we desired its production. It was stated at the Bar on 4-3-1986 that all documents that were required to be stamped were duly stamped and they were filed with the Deputy Chief Controller of Imports and Exports; (d)(i) the Import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery would appear to have been installed in a place other than appellant s factory. This was also admitted during the course of the hearing. 9. In the facts and circumstances of the case, it would appear to us that - (a) concessional assessment of goods as meant for project is not a matter of right but subject to various conditions set forth not only in the relevant Heading No. 84.66 but the Project Imports (Registration of Contracts) Regulations, and the Import Licence as well; (b) the questions that arise in the appeal relate not merely to their contravention but to the contravention of the conditions of the Import Licence as well, the appellant s probable ineligibility or otherwise to the benefit of the concessional assessment, impropriety of the appellant s efforts to gain the benefit nevertheless, offence committed, if at all, in the context of the statements made on various occasions and the true facts and circumstances of the case and consequential action, if any, that could be statutorily initiated against the appellant or the goods that were imported; (c) while it may be that unless a document duly stamped and registered was executed, no transfer of any lease hold r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g such transfer after the import had taken place on 12-11-1979. Nor is there any such permission on record. Similarly, there is no question of the licensing authority according permission after the import on 12-11-1979, even if it may be that the sponsoring authority recommends it on or about 20-11-1979 (P. 42 of the Paper Book). When, therefore, the Appellant informed the licensing authority of the transfer by the letter dated 4-2-1980 [P. 19 of the Paper Book - the date is not 4-2-1979 as given in the Index] long after the import on 12-11-1979, his reply dated 26-2-1980 (P. 20 of the Paper Book) that it was noted cannot be read as a permission, seeing that he was incompetent, at that stage, to have accorded any permission whatsoever. Paragraphs 384-387 deal with amendments of licence once granted in case of any discrepancy therein and have thus no relevance; (f) the conclusion, in the circumstances, inevitably, is that not only was the transfer in flagrant violation of the conditions in the licence but even if such transfer could take place with prior permission of one or the other authorities, no requisite permission had ever been obtained for the transfer/sale of the imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the application, that the machinery was meant for the expansion of the appellant s existing plant. That an error was committed in such a declaration was even admitted in the course of the enquiry before the Collector and the admission never controverted, as already observed, (iii) even so with the misdeclaration in the entry made under the Act. As an entry is defined in terms of S. 2(16) of the Act, (in so far material), to mean an entry made in the bill of entry, shipping bill or bill of export only. The misdeclaration in the application for registration for project import is not comprehended within the ambit of S. 111(m); (iv) the confiscation of the goods under S. 111(O) of the Act was, however, another matter. The goods were partially exempted from duty subject to certain conditions incorporated in the Tariff heading 84.66 as well as in the Import Licence. Those conditions had to be fulfilled, since their non-observance, as already seen, had not been sanctioned by the proper officer. The conditions were cynically violated. The machinery was never installed for a substantial expansion of the specified industrial unit of the appellant but was diverted to another factor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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