TMI Blog2016 (11) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... Industries Ltd. and three others, viz. Shri Vijay Soni, Joint Managing Director, Shri Rajiv L. Soni, Chairman Managing Director and Shri Mohan Jaykar, Director. M/s. Metalman Industries Ltd. were holding a licence for import of tin plate waste and in terms of the said licence, they were entitled to import under Notification No. 31/97 dated 1.4.1997. The appellant imported certain material duty free under the said licence. At the material time, DGFT Notification No. 34(RE-98) dated 10.12.1998 prescribed that seconds and defective tin plates were permitted for free imports only when the CIF value was US$ 540 per MT or above. Since the appellant imported under advance licence, they were free from the restriction imposed vide DGFT Notification No.34(RE-98) (supra). The appellant vide letter dated 12.6.1999 informed the DGFT that 514.580 MT of the material imported against the advance licence had gone bad due to defect and hence could not be utilized in the manufacture of export products. The other material was also not used for purpose of manufacture of export products. Since the appellant also could not utilize the material imported against the advance licence towards manufacture o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned as Som International Pte Ltd. and it also specified that export has to happen before December 1999. The document attached with the application was the letter of confirmation from Som International Pte Ltd., dated 16.4.1999. Accordingly, an advance licence was issued to the appellant. The declaration/undertaking in the application before the Joint DGFT was signed by Shri Vijay Soni, Joint Managing Director. Subsequently, imports were made by the appellant and value of US$ 288 per MT was declared, but the same was enhanced to US$ 300 while assessment, though no duty was paid as the imports were under an advance licence. 2. Learned counsel for the appellant argued that the imported goods are not liable for confiscation under Section 111(d) of the Customs Act on the grounds that the same have been imported below the floor price notified by DGFT vide Notification dated 10.12.1998 and 11.12.1998. He argued that the goods have been imported against valid advance licence dated 20.5.1999 covering the imported goods. The said licence has not been cancelled or suspended either at the time of importation or thereafter. He argued that the policy relating to advance licence scheme p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce there is no misstatement of facts by the appellant. He argued that at the time of import itself, the Revenue was aware of the DGFT floor price of US$ 545 and nothing prevented the Revenue from assessing the goods at US$ 545 at the time of import. He further argued that the price mentioned in the Notification issued by the DGFT is for the purpose of restricting the imports and does not represent the price of goods in the international trade. For this purpose, he relied on the decision of the Tribunal in the case of Adani Exports Ltd. vs. CC reported in 2000 (116) ELT 715, which was affirmed by the Hon ble Apex Court as reported in 2002 (146) ELT A213 (SC). He argued that the Notification issued to FTDR cannot be treated as tariff value notification under Section 14 of the Customs Act. In these circumstances, he argued that the declared value cannot be rejected. 2.4 He further argued that the notice and the impugned order are silent on the role played by the three noticees on whom penalty has been imposed. He argued that none of these noticees dealt with the goods or in any way signed any of the documents (i.e. application for advance licence, bill of entry or bond etc.). 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose. In the present case, the appellant had obtained an order for export of material of thickness 0.19 to 0.36 mm. It is obvious that to manufacture material of 0.19 to 0.36 mm, the raw material imported should have been of the identical thickness. In the instant case, the appellant had obtained the advance licence on the strength of the order of export of material of thickness 0.19 to 0.36 mm. The appellant imported material of 0.45 mm thickness, which could not have possibly been used for the manufacture of the export items. This sequence of events needs to be appreciated in the situation where there was a floor price restriction on the import of the said material. Import of the said goods was restricted unless the same was imported at a CIF value of US$ 545 per MT or above. From the above sequence of events, it is obvious that the appellant needed material of 0.45 mm thickness, however, to bypass the restrictions imposed by the ITC Policy, the appellant used the advance licence obtained for the export of different items. The dates and events mentioned above cannot be ignored. Notification 31/97 prescribes the condition that (vi) that exempt materials shall not be di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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