TaxTMI 
TaxTMI 
1993 (5) TMI 89
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....the appellants. The brief facts of the case are that the appellants have an approved manufacturing unit for the manufacture of ready-made garments situated at Noida. They filed a bill of entry for import of 192.8 kgs. of man-made filament yarn described as 'Lycra Elastane Yarn Type 239 B 44 DTEX Bright'. They declared on the bill of entry that the goods conform in every respect to the description, value and other conditions contained in the letter of approval dated 19-12-1988 issued in their favour by the Ministry of Commerce read with approved project report and claimed exemption from payment of customs duty under Notification 339/85-Cus., dated 21-11-1985. The goods were brought to the Noida Export Processing Zone (NEPZ) and on examinatio....
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....ted permission for import of lycra yarn with facility of availing of services of sub-contractors; that the raw material imported was permissible under General Exemption No. 132; import of lycra yarn might amount to breach of one of the conditions of the import licence but infringement of the licence condition does not tantamount to contravention of any provision of the Customs Act. The adjudicating authority held that import of lycra yarn was unauthorised as not being covered by necessary import licence in terms of OGL No. 20/90 read with project report and letter of approval and accordingly confiscated the imported yarn. The benefit of exemption under Notification 339/85-Cus. was also held inadmissible for non-fulfilment of condition (ii) ....
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....oods shall be deemed to be prohibited if it is found that the goods imported do not conform to the description as contained in the licence and such prohibition shall be deemed to be a prohibition under Section 11 of the Customs Act, 1962 and all provisions of the Customs Act, 1962 shall have effect accordingly as provided under Section 3(2) of the Imports and Exports (Control) Act, 1947. In the instant case admittedly the goods imported find no mention in the project report based on which the Letter of Approval was granted. Relevant portion of the Letter of Approval is reproduced below for a proper understanding of the issue: "Letter No. 8/30/83-NEPZ Government of India, Min. of Commerce, Dept. of Commerce dated 19-12-1988 addressed to S....
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.... made of cotton knitted yarn with 8% lycra yarn (imported raw material) to the tune of 50,000 pieces per month on regular basis. The detail of consumption/valuation is as under: (i) 1 kg. Cotton knitted fabric requires 80 gms. Lycra Yarn (ii) The cost of one kg. Cotton knitted fabric is Rs. 110.00 (iii) Cost of 80 gms. Lycra Yarn is Rs. 74.00 184.00 (iv) Total cost of knitted fabric + lycra yarn is comes to (v) One kg. Cotton knitted fabric + 80 gms. Lycra Yarn will produce 5 pcs. of Leggings (vi) Cost of one legging is Rs.... 36.80 CMD Rs. 6.00 Total cost Rs. 42.80 (vii) Sales (Export) price of 1 legging is Rs. 60.00 (viii) The price of imported r....
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....report and Letter of Approval. We do not see any force in the submission of the appellants that the import of raw material is permissible under General Exemption No. 132 in view of our finding that the import is governed by OGL 20/90. Further, according to condition No. (v)(a) of the notification the exemption is available if the importer agrees to use the goods within the Zone for the production of goods for export, etc. In this case, the importers do not have the necessary machinery to use the goods in their Unit inside the Zone and for this reason also the benefit of the exemption is not available to them. In view of our finding that the import is unauthorised and that the goods are not eligible for the benefit of Notification 339/85, we....