TMI Blog1987 (12) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... 166, dated 24-6-1983 was also issued to the appellants listing the materials (of c.i.f. value of Rs. 3,74,000/-) allowed to be imported duty free, one of them being 32 M.Ts. of white cardboard, other than ivory board. In part E of the DEEC Book, the resultant export products were shown as frozen shrimps etc. packed in packing materials made inter alia of white cardboard, for an F.O.B. value of Rs. 1,00,00,000/-. The appellants imported at Madras Port, among other things, 31.97054 M.Ts. of white cardboard and cleared it free of customs duty under Notification No. 117/78-Cus., dated 9-6-1978. The appellants filed at Cochin Port shipping bills commencing with one on 21-4-1983 for export of frozen shrimps in purported discharge of their export obligation in respect of the packing materials. It appears that the Cochin Customs had information that the appellants had not utilised the imported white cardboard for the purpose for which it was allowed to be imported but that they had exported only locally made packing materials. Search and investigation followed. In a statement recorded from him, Shri G.P. Nair, Managing Partner of the appellant-firm, deposed that the firm was under the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tons were made out of white cardboard. On this basis, it was alleged that the appellants had violated the provisions of clauses (d) and (e) of the aforesaid notification. (c) Since the goods covered by the 38 shipping bills in question did not correspond in material particulars with regard to the packing materials, with the entry made under Section 50 of the Customs Act, the goods were alleged to be liable to confiscation under Section 113(i) of the Customs Act. However, since the goods had already been exported, the appellants who had contravened section 113(i) of the Customs Act, read with Section 50 ibid, with deliberate intent to evade Customs duty on the imported white cardboard had thereby rendered themselves liable to a penalty under Section 114 ibid. 2.2 The appellants denied all the charges and requested that the proceedings be dropped. After holding adjudication proceedings, the Collector of Customs, Cochin, passed an order dated 6-4-1987 holding that the appellants had failed to comply with the conditions specified in Notification No. 117/78 and ordering them to pay customs duty of Rs. 5,53,971.51 and imposing a penalty of Rs. 50,000/- on them. It is this order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 117/78, dated 9-6-1978 exempted the goods specified in the schedule to the notification, imported against an Advance Licence, being materials required to be imported for the purpose of manufacture of goods, or replenishment of the materials used in the manufacture of goods or both for executing one or more export orders, from customs duty. There were several conditions laid down including the one about DEEC. One of the conditions was that the exempt materials shall not be sold or otherwise transferred to any other person, or utilised or permitted to be utilised or disposed of in any other manner without the previous permission of the competent authority. However, this condition was not applicable to exempt materials which are imported for replenishment of the materials used in the manufacture of goods. 5.3 Thus two important differences are noticeable in the 1978 scheme as compared to the earlier scheme. One is that the imported materials were allowed to be imported duty free not only for the manufacture of specified goods for export but also for replenishment of the materials used in the manufacture of such goods. Secondly, the prohibition on the disposal of the goods by sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Rule 196 which inter alia enjoins on the applicant-user of goods (procured free of duty from under Rule 192) to pay duty on such quantity of goods as are not accounted for to the satisfaction of the proper officer. Shri Naik cited in this context the Tribunal s decision in the case of Collector of Central Excise v. Amber Paints, Bombay, 1985 (22) E.L.T. 297 wherein it was held that the question of demanding duty on goods obtained under Rule 192 could not arise till the goods were taken into use in a manner otherwise than as provided or in the event of unsatisfactory accountal of the goods. It was further held that a demand for differential duty on the occurrence of such eventualities would not be the same thing as a demand for duty on account of non-levy or short-levy. Shri Naik also cited the Tribunal s decision in the case of Bajaj Tempo Ltd. v. Collector of Excise, Pune - 1984 (17) E.L.T. 205 = 1984 ECR 1160 (CEGAT). 65/162 10. Since the two preliminary submissions of Shri Jain are fundamental to the validity of the impugned order, we propose to deal with them first. Taking first the question of the Cochin Collector s jurisdiction to demand duty in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor was not really duty but only an amount equal to the duty leviable. This contention is, on the face of it, untenable. For one thing, what the notification makes the importer liable to pay on demand is an amount equal to the duty leviable but for the exemption. No doubt the duty has to be quantified in an amount but, for that reason, it does not cease to be duty. For another, the Collector himself has no such illusion. He has quite clearly and categorically asked the appellants to pay the customs duty demanded in the show cause notice. If indeed the amount in question was not duty it could not have been demanded in terms of an adjudication order under the Customs Act but only in enforcement of the bond or legal undertaking executed by the appellants, if necessary through appropriate proceedings in a Civil Court. Shri Naik's contention has, therefore, to be, and is, rejected. 11. The Department has not produced any notification or other legal provision (none has been placed before us) under which the Cochin Collector was conferred jurisdiction to demand duty in respect of goods imported at Madras and cleared by the Madras customs either generally or in this particular case. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Customs Act or any other law for the time being in force. It has not been shown before us that in respect of the exported goods, there was any such prohibition. This provision has no application to the present case. The Second type is dutiable goods other than prohibited goods. Dutiable goods in this context evidently means goods liable to export duty. The Department s case is not that the exported goods were dutiable or that they were exported without payment of duty. This provision again has no application. The third and the last type is goods that are exported under claim for drawback. In the present case, we are not concerned with goods which were exported under claim for drawback. In fact, the admitted position is that exports of the goods covered by the 38 shipping bills, including the four relating to goods shipped after the import of materials at Madras, were effected without claiming any drawback thereon. If this is so, then, the provision in Section 114 enabling the Collector to levy penalty in the case of goods exported under claim for drawback is also not applicable to the present case. What appears to have happened (though we do not wish to pronounce any verdic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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