TMI Blog2007 (2) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... Order per: PG. Chacko, Member (J)]. - 1. The respondent M/s. Akshatt Forge, were holding three Quantity-Based Advance Licences (QBALs) issued by the office of the Chief Controller of Imports Exports (licensing authority). After making some exports under the licences and obtaining transferability endorsements from the licensing authority, they sold their licences in the market, which were ultimately purchased by one M/s. Kunal Engineering Co. Ltd., Chennai (M/s. Kunal, for short). M/s. Kunal used the licences for duty-free import of raw material under Notification No. 204/92-Cus., dated 19-5-92. Subsequent investigations held by the department revealed that the respondents had availed Modvat credit under Rule 57A of the Central Excise Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Central Govt. issued in relation to Notification No. 203/92-Cus. The demand of duty was dropped as time-barred. The present appeal of the Revenue is against the decision of the Commissioner. 2. Learned SDR reiterated the grounds of the appeal. He submitted that the Commissioner's order had been reviewed by the Board in relation to the respondents only. He referred to the relevant provisions of Notification No. 204/92-Cus. dated 19-5-92 and submitted that the respondents had suppressed before the licensing authority the fact that they had availed input-stage credit in respect of the goods, which they had exported under the QBALs. The transferability endorsements of the said authority were obtained fraudulently and therefore the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication granted exemption from payment of Customs duty on raw materials imported into India under a QBAL issued by the licensing authority, subject to certain substantive and procedural conditions. The substantive condition was that export obligation in relation to the imported input be discharged within the period specified by the licensing authority. It was further stipulated that, respect of the final product exported m discharge of such obligation, the facility under Rule 191A or 191B of the Central Excise Rules, 1944 had not been availed in respect of the imported materials and no refund or rebate had been obtained or claimed under Section 74 of the Customs Act or under the Customs and Central Excise Duty Drawback Rules, 1971. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed inasmuch as it was not the business of the Customs authorities to punish the respondents for having fraudulently obtained transferability endorsements on their QBALs from the licensing authority. The proper officer of Customs could have preferred appeal to the appellate authority under Section 18 of the Foreign Trade (Development Regulation) Act, 1992 against the transferability endorsements granted to the respondents by the licensing authority. 5. The proposal to impose penalty on the respondents under Section 112 is questionable from another angle also. A penalty under Section 112 of the Customs Act depends mainly on liability of imported goods for confiscation under Section 111 of the Act. In the present case, the show-cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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