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2014 (1) TMI 67 - HC - CustomsDuty exemption - Exemption in terms of Notification No.38/96-Custom dated 23.07.1996 - Import of raw silk from China - Held that:- entire goods reached at Delhi from China without paying any custom duty - trade between India and China through Gunji shall be the 'border trade' as per the practice "exchange of commodities" (barter) by the residents along with the border of Tibet Autonomous Region of Chine and Pithoragarh (India) in the 'border trade market'. The exemption under notification No.38/96-Cus is thus permissible only in respect of border trade in the true spirit of provisions of Memorandum of Understanding between two governments. In the instant case, the assessees have misused this provision just to evade the custom duty. Hence, we are of the view that the import of the raw silk from Gunji by M/s. Elegant Industries, Delhi through M/s. Krishna Enterprises is not in accordance with the aforementioned provision of law - it is evident that the transaction is misuse of the provision. Neither M/s. Krishna Enterprises nor M/s Elegant Industries, Delhi are entitled to import the raw silk without paying the custom duty in a huge quantity. The transaction was performed as per the MOU executed between the parties. The raw silk was transported to the main land of the country to earn profit. Intention for the import of these goods has nothing to do with the object of the treaty i.e. to promote the border trade between the local residents of India and China. Dharchula is located about 80 Kilometer from the Gunji, Indo China border. The exemption granted by both the Government of India was misused just to evade the custom duty - Order is set aside - Decided in favour of Revenue.
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