1999 (12) TMI 62 - SC - Customs

Whether the Department in this appeal has made out a case which calls for interference by this Court with the orders passed by the authorities below? Held that - The question whether the machinery imported by the respondent pursuant to the import licence granted to it is in accordance with the terms of import licence granted or not is primarily a question of fact that is for the fact-finding authorities below and the Tribunal to decide. Their decision on technical matters as to what could be imported and what was imported must prevail. The authorities below and the Tribunal after considering the case of the Department as well as that of the respondent and taking into consideration the entire material concurrently arrived at the conclusion that the importation in question was in conformity with the terms of import licence. The argument of the Department that an adverse inference in regard to the legality of the import should be drawn itself based on certain inferences like the excess production by the respondent was considered and for reasons recorded not accepted and we are not inclined to disagree with the same. The question as to the jurisdiction of an authority in deciding as to the legality of importation based on the description of the goods imported is well-settled. See Union of India v. Tara Chand Gupta Bros. 1971 (1) TMI 53 - SUPREME COURT OF INDIA . Appeal dismissed.

Summary

Issues:
1. Appeal under Section 130E of the Customs Act, 1962 against CEGAT order.
2. Allegations of misdeclaration and unauthorized import of machinery.
3. Confiscation of plant, penalty imposition, and duty recovery.
4. Preliminary points, legal submissions, and assessment issues.
5. Jurisdiction, natural justice, and defense impairment claims.
6. Capacity exceedance allegations and findings.
7. Appraisal of pump motors, duty assessment, and charges valuation.
8. Appeals to CEGAT and subsequent findings.
9. Departmental appeal against CEGAT order.
10. Logical inference regarding misdeclaration and excess import.
11. Collector and CEGAT findings on import license compliance.
12. Legal principles on import description and compliance.

Analysis:
The case involves an appeal under Section 130E of the Customs Act, 1962 by the Collector of Customs against a CEGAT order. The respondent, a company granted a letter of intent for manufacturing Polyester Filament Yarn (PFY), faced allegations of misdeclaration and unauthorized import of machinery. The issues included confiscation of plant, penalty imposition, and duty recovery. The Collector framed various issues for consideration, including preliminary points, legal submissions, and assessment matters. The respondent's claims of jurisdiction, natural justice, and defense impairment were rejected. The Collector found no misdeclaration regarding the import of spinning machines and concluded that the charges could not be sustained.

Regarding capacity exceedance allegations, the Collector determined that the actual production did not surpass the plant capacity. Appraisal of pump motors and duty assessment were ordered based on specific criteria. Both the appellant and respondent appealed to CEGAT, which upheld the Collector's findings. The Department appealed against CEGAT's decision, arguing misdeclaration based on increased production capacity due to alleged unauthorized imports. However, both the Collector and CEGAT found the import to be in conformity with the terms of the license.

The legal principles applied emphasized the importance of factual findings by lower authorities on import compliance. The case highlighted the need to consider technical aspects of import descriptions and compliance with licensing terms. The judgment affirmed the decisions of the authorities below, dismissing the appeal. The court upheld the findings that the importation was in accordance with the terms of the license, based on factual assessments and legal principles established in previous cases.