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TMI Blog2021 (2) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... rity cannot take action in terms of the conditions subject to which the licence had been granted without seeking the opinion of the DGFT? 2. Whether the tribunal was right in taking the view that importing a different material than one permitted under the licence does not amount to violation of the conditions of licence or it is not even mis-utilization of the licence? 3. Whether the tribunal was right in taking the view that imported material can be disposed of or utilized in any manner including local sale once the export obligations are fulfilled and if such view is not in the teeth of Condition No.7 imposed under the advance licence in terms of customs notification No30 of 1997 dated 1-4-1997?" 2. Facts leading to filing of this appeal briefly stated are that the respondent is leading exporter of branded Men's readymade garments. In addition to export, the branded readymade garments are sold on domestic market on payment of applicable central excise duties. The respondent was carrying on the business of division of M/s Madura Coats Ltd. till 31.12.1999. M/s Madura Coats Ltd. had obtained two advance licenses dated 21.08.1998 and 13.05.1999 from the Joint Director Gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter to high court for de novo consideration of the appeal on merits. In the aforesaid factual background, this appeal has come up before us. 4. Learned counsel for the appellant while inviting the attention of this court to paragraph 130 of the order passed by the adjudicating authority submitted that the respondent had obtained two advance licences with actual user condition and the respondent got manufactured around 41,600 and 76,500 number of trousers by utilizing polyester / cotton blended fabrics imported against advance licenses dated 21.08.1998 and 13.05.1999 through M/s Classical Menswear Private Limited and M/s Art Clothing Company and M/s Tristar. It was also pointed out that in addition to above quantities, the respondent also got manufactured about 8,300/- trousers of various style codes by utilizing the said imported polyester / cotton blended fabrics and the raw materials i.e., the fabrics were used for manufacture of trousers and the respondent had diverted the balance quantity of trousers to local / domestic market through the retail outlets and thus had violated conditions (vii) and (viii) of the Notification No.30/97-Cus. It is further submitted that the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as Export Obligation Discharge Certificate (EODC), as the customs authorities cannot now sit in judgment over such action taken by the authorities, more so, when no proceedings have been initiated by Directorate General of Foreign Trade. It is also urged that principles of constructive res judicata applies to the fact situation of the case as the issue of grant of Export Obligation Discharge Certificate (EODC) has been exempted by two authorities independently and have been accepted after scrutiny and therefore, the appellant cannot repeatedly examine the same licences at various intervals and raise new objections at each time. In support of aforesaid submissions, reliance has been placed on decisions in 'OBLUM ELECTRICAL INDUSTRIES PVT. LTD. VS. CC, BOMBAY', 1997 (94) ELT 449 (SC), 'CC, KOLKATA VS. RUPA AND CO. LTD.', 2004 (170) ELT 129 (SC), 'TITAN INDUSTRIES LTD. VS. ADDL. COMMISSIOER OF CUSTOMS', 2003 (158) ELT 437 (MAD), 'AUTOLITE (I) LTD. VS. UNION OF INDIA REPORTEDI N 2003 (157) ELT 13 AND 'TITAN MEDICAL SYSTEMS VS. CC, NEW DELHI, 2003 (151) ELT 254 (SC). 6. We have considered the submissions made by learned counsel for the parties and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in Part (E) of Duty Entitlement Exemption Certificate. The part (E) specified both the quantity and FOB value of export products which has to be exported as also the quality and technical characteristics of the export product. So long as the exported product meets the requirements indicated in Part (E) of DEEC Book, Customs House should not go into any extraneous questions pertaining to the size of the Garment and utilization of total quantity of fabric permitted for import in Part-I-C of DEEC Book. The satisfaction of Assistant Commissioner at the stage of logging is not doubt with regard to the conditions specified in Exemption Notification, but it must be exercised without asking for information which goes beyond the ingredients specified in the Exemption Notification and in the format of DEEC Book appended to the Notification. 7. Now we may advert to the first issue whether the respondent has violated the actual use condition as envisaged under Section Notification 30/1997. It is pertinent to note that none of the terms and conditions of Notification No.30/1997 envisgge physical incorporation of imported material in the goods that are exported towards fulfillment of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent inasmuch as there has been a proper account of imported material as well as exported goods details of which were furnished to the officer which were duly accepted. Therefore, there is no violation of actual user condition. 9. In the instant case, the licensing authority competent to grant licences allowed the respondent to import polyester / cotton blended fabrics without payment of duty against the export of men's shirts. The Directorate General of Foreign Trade has issued the advance licence for duty free import after due Notification that materials can be used for production of export goods. The respondent fulfilled the export obligations in respect of exporting men's full sleeve shirts of specified value, which was examined by Joint Director of Foreign Trade and Export Obligation Discharge Certificate (EODC) was issued. Thereafter, it is not open for the officers of the customs department to contend that the imported material cannot be used for manufacture of shirts and that respondent has not discharged its export obligation by violating the conditions of the exemption Notification. In this connection, reference may be made to decision of the Supreme Court in TI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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