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2018 (12) TMI 957 - AT - CustomsViolation of import condition - actual user condition - N/N. 97/2004-Cus dated 17-9-2004 - whether the appellants were actual users in terms of Notification No 97/2004-CUS dated 17.09.2004 and as to whether they have violated any of the conditions of the Notification so as to be ineligible for the exemption claimed on the impugned goods? Held that:- The licenses were obtained disclosing to the DGFT authorities that they were manufacturer exporter. For being a manufacturer, the appellants should be owners/lessee of the mines or get the ore mined with the help of job workers. The appellant’s case doesn‘t fall under either of these categories. Even if one accepts the argument of the appellants that mining is an activity that amounts to manufacture for the purposes of FTP, the essential condition should be that they are owners of the product even if they get the same manufactured with the help of a job worker. In the instant case the onus for establishing their claimed status of being a manufacturer exporter and fulfilling the conditions of the licence obtained is squarely on the appellants. The status of the appellant decides the eligibility to the Licences. It is not the appellant‘s case that their status as a manufacturer exporter was fixed by the authorities. It was accorded as per their own declarations. Therefore, it is to be observed that the appellants have not passed the eligibility criteria to lay claim for the benefit of the exemption claimed. The actual user (Industrial) definition as per Para 9.4 of the FTP during the relevant period “means a person who utilses the imported goods for manufacturing in his own industrial unit or manufacturing for his own use in another unit including a jobbing unit”. Thus, the appellant having obtained the Licenses under the said category as Manufacturer exporter had to fall within this stipulated definition of actual user and as noticed from his activities has failed to comply with this requirement as he has neither used it in his own premises or in a job worker premises for his own use. They are in fact Job worker for M/s OMC who have at no point of time parted with the ownership of either the premises or the product to the appellants - by no stretch of imagination the appellants can be treated as manufacturer exporter. As discussed above, they have suppressed the facts in the course of obtaining the licences. Therefore, they have violated the eligibility criterion of the Licences and thus violated the provisions of Notification 97/2004 and there is no ambiguity in the language of Notification or the policy. There is no ambiguity in the Customs Notification, FTP and Licences issued thereunder, the terms have to be strictly interpreted as per the plain wordings thereof. This being the case, by obtaining Licences by way of misrepresentation of the status being that of a manufacturer and not complying with the conditions of Licences or Customs Notification do not confer any benefit to the appellants for concessional rate of duty - As the conditions of the Notification have been violated, the appellants have rendered the imported goods liable for confiscation under Section 111(o) of Customs Act, 1962. Penalty u/s 114A and Section 114AA of Customs Act, 1962 - Held that:- Notification does not provide for levy of penalty. When confiscation and demand of duty is on account of violations of conditions of the Notification, one need not traverse beyond the Notification for the purpose of demand of duty and imposition of penalty - the penalty imposed on the main appellants i.e., M/s. KCC is not maintainable. Appeal allowed in part.
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