TMI Blog2005 (4) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... the material it is found - (a) (i) the case of the department is that - M/s. TPIL had imported 275 MTS of Nucrel 3990 valued at Rs. 2,34,46,000/- free of customs duty under duty exemption Notification Nos. 30/97-Cus., 51/2000-Cus. 43/2002-Cus., and under the DEEC Scheme vide Advance Licences as detailed in the Annexure 'A' to the show cause notice by mis-representing the facts while clearing the same through Customs at the time of its original importation with an intention to evade customs duty amounting to Rs. 1,39,98,148/- (Rupees one crore-thirty nine lakhs ninety-eight thousand one hundred forty-eight only). TPIL had declared and obtained 22 advance licences but the DEES Scheme for import of Ethylene Acrylic Acid Co-polymer by describing and claiming the same under Generic terms and knowing fully well the specific brand product Nucrel 3990, for use of which they did not possess blow moulding facility in their factory of production, imported the same and sold the same to M/s. Ecoplast, another company in India, and thus contravention of notification as found by Commissioner and violation of section 111(c) of the Customs Act, 1962 was attracted and bonds executed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was being imported by M/s. ECOPLAST the supply of the same up to March 2001 of K-film is on principal to principal basis between M/s. ECOPLAST TPIL. Somewhere in March 2001, TIPL having realised cheaper sources for import of 'Nucrel 3990', they decided to import the same under DEEC Scheme. Nucrel 3990 is a Branded Product manufactured by M/s. DUPONT and the product literature describe the same as Ethylene Acrylic Acid Polymer Resin available for use in conventional extrusion coating, extrusion laminating equipment designed to process polyethylene resins. Therefore there is no case to suspect the bona fides of TIPL, in having declared Ethylene Acrylic Acid Resin in generic terms and imported Nuerel 3990 as is being made out by the department. This Nuerel 3990 was admittedly sold on cost basis to M/s. ECOPLAST. M/s. ECOPLAST in turn have sold back the K-film made by them, out of this resins have charged on basis of their cost of other material and labour basis. Shri Kumar Iyer's statement dated 3-7-2003 brings out clearly the mechanism of the movement of imported resin from TIPL and receipt back of K-film and corroborated by answers to Q. 2, 4, 5, 6, 7 in the statement of Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. (k) Advance Licence No. 3110001063 dated 20-4-2000, one of the licences in question, issued by the DGFT against the aforementioned application, together with DEEC Books. (l) Application dated 23-2-2003 made to DGFT for issuance of advance licence. (m) Advance licence No. 3110010040 dated 3-3-2003 issued by DGFT. (n) Details of sale of asceptic packaging material within India as well as outside India for the period from 1997 till November, 2003. (o) Statement showing the export obligation status in respect of 22 licences in question. From this statement it is evident that in respect of 22 licences in question, the export obligation have been completed by Tetra Pak. (p) Letters dated 19-3-2004 of Tetra Pak addressed to Shri A.D. Joshi, Chartered Engineer. (q) Statement showing the export obligation status in respect of 58 licences. From this statement it is evident that in respect of 58 licences, the export obligations have been completed by Tetra Pak. (e) The terms 'sold or transformed' used in the notification numbers 30/97, 51/2000, 43/2002, issued, have been used to convey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... free Licences Subject to Actual User Condition 120. The licence granted under this scheme shall be subject to Actual User condition till redemption of BG/LUT. The Advance Licence holder may, however, transfer the duty free imported materials to his supporting manufacture whose names are entered in the DEEC for the purpose of export production. Letter of Authority 121. The duty free licence holder may issue a letter of authority to his supporting manufacturer, whose name is endorsed in the DEEC to open letters of credit, make remittances for importing the goods, arrange movements and to clear the imported goods through Customs according to the Customs Act, 1962 or any other matter connected with the operation of the licence. In case of violation of any of the conditions of the licence, the responsibility shall be that of the licence holder". Para 120 of the Handbook stipulated that the licence is subject to actual user condition. While laying down such a stipulation. It is however, stated that the licence holder might transfer the duty free material to a supporting manufacturer whose name appears in the DEEC for the purpose of carrying out processes for export production. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant desires to have the name of any manufacturer or jobber added to the licence, he may apply for such endorsement. Upon such endorsement made by the licensing authority, they shall both be regarded as co-licenses and the obligation of the licence holder shall become the joint and several obligation of the co-licences. Anyone of the co-licences may import the goods in his name or in the joint names. The BG/LUT shall also be furnished in their joint names." The second portion of Para 120 of the Handbook is crucial. This provides that the name of the supporting manufacturer or job worker would be endorsed/added to the licence at the request o the licence holder. It is therefore apparent that the licence holder is free to get the material processed though any other manufacturer including through a job worker. However, export obligation is entirely of the licence holder only. Thus, it is not obligatory, for a licence holder, to set aside the supporting manufacturers name or to not get the goods partially/fully processed outside his own factory premises. Out sourcing cannot be objected to and be insisted to be conducted only on challans and such sale movements as in this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... history of EXIM Policy Orient at Experts decisions was not before that bench of the Tribunal. We find substance in this submission to hold that Sehgal Knitwears decision cannot apply in the facts herein. The Customs Notifications have to be interpreted to advance the Policy Directions of EXIM Policy. The Commissioners finding in para 6 of the impugned order page 20 thereof that History of notification Policy are irrelevant when the language of the notification is Plain the existing notification has to be read misses the point of interpreting the reason for granting the manufacturing/processing. Out Sourcing condition relaxed as evident from the History. History is a good teacher and those who ignore the same do so at their own risk. We cannot ignore the lessons from the History in this case. The ld. Advocate has demonstrated how History in this case is relevant to advance the interpretation being arrived and ignoring the same would defeat the Export Incentive Policy, which is to be understood in its totality and not in a manner isolated with blinkers on to interpret any the Customs Notifications. (j) In view of the findings, no findings are being arrived at on the oth ..... 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