1995 (12) TMI 324 - AT - Customs

Collector's Decision Upheld on Unauthorized Import: Penalties Reduced for Fulfilling Export Obligations

EASTERN SILK INDUSTRIES LTD. Versus COLLECTOR OF CUSTOMS, BANGALORE

The Tribunal upheld the Collector's decision on the unauthorized import of goods, violation of Import Policy conditions, and misuse of duty-free imports. ... EXIM Policy - DEPB Scheme - Intermediate manufacturer Issues:1. Unauthorized import of goods without proper documentation and endorsement.2. Violation of Import Policy conditions and misuse of duty-free import material.3. Interpretation of conditions for exemption under the Import Policy and imposition of penalties.Analysis:1. The appeal was against the order passed by the Collector of Customs, Bangalore, regarding the detention of 157 bales of mulberry raw-silk yarn of foreign origin found at the premises of M/s. Universal Overseas. The officers detained the goods as no licit import documents were produced. The endorsement regarding the intermediate manufacturer was made after the detention date, leading to the seizure of goods for violating Import Policy paras. The company's claims of processing goods at a non-existent factory raised suspicions. The subsequent investigations revealed discrepancies in the information provided by various parties involved.2. The Respondent contended that the necessary endorsement for the intermediate manufacturer was missing on the Pass Book at the time of the officer's visit, contrary to Import Policy requirements. The duty-free import was deemed unauthorized as the goods were not used in the importer's or declared intermediate manufacturer's factory. The absence of a factory at the provided address and misuse of duty-free imports justified penalties imposed on the appellant.3. The Tribunal considered the conditions of the Import Policy, emphasizing the requirement for endorsements and proper utilization of duty-free imports. The Pass Book holder must ensure the material is used in designated factories for export products. The failure to have the required endorsements at the material time constituted a violation of exemption conditions. Despite subsequent fulfillment of export obligations, the initial non-compliance warranted penalties. However, considering mitigating circumstances, the Tribunal reduced the redemption fine and penalty imposed on the appellants, acknowledging the subsequent fulfillment of export obligations as a mitigating factor.In conclusion, the Tribunal upheld the Collector's decision regarding the violation of conditions for exemption and endorsement requirements. While penalties were justified, the subsequent fulfillment of export obligations led to a reduction in the fines imposed on the appellants.