TaxTMI 
TaxTMI 
1996 (9) TMI 326
X X X X Extracts X X X X
X X X X Extracts X X X X
....30-3-1990. During the course of the investigation with respect to licensing angle and the valuation angle, it was found out that a commercial quantity of 50,088.18 was imported by the abovesaid firm. It is this quantity which was confiscated in the impugned order and the confiscability of the same quantity is not seriously contested before us. Only the quantum of redemption fine of Rs. 2.00 lacs and the penalty of Rs. 20 lacs is challenged before us. The appellant who is a supporting manufacturer has sought the benefit of Notification No. 159/90 as well as Notification No. 204/92, dated 19-5-1992. The lower authorities have treated the appellant as the importer. 3. The learned authorised representative contended before us that the licence was accepted by the adjudicating officer and he held that the import is covered by the licence which is granted in this case. He also pointed out that the declared value of the goods in question was also accepted by the lower authority. He further pointed out that M/s. PTL and M/s. K.K. Harjani & Co. (KKH) against whom also show cause notice was issued was exonerated. He pointed out that in this case the adjudicating authority has dealt wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....greed that woollen fabrics were being used as dress materials in the western countries. The only witness who was produced for cross-examination has clearly admitted that these are all used for the manufacture of ladies dresses at abroad. In this view of the matter, he pointed out that there is no ground to hold that the appellants are not entitled for the benefit of the Notification No. 159/90. Alternatively, he contended that the appellant is also entitled for the benefit of Notification No. 204/92. In this connection, he relied on Chapter 1 of the EXIM Policy 1992-97 wherein at Para 4 with respect to transitional arrangements it is mentioned as follows : "Any notification made or Public Notice issued or anything done under the previous Export-Import policies, and in force immediately before the commencement of this Policy shall, in so far as they are not inconsistent with the provisions of this Policy, continue to be in force and shall be deemed to have been made, issued or done under this Policy. Licences issued before the commencement of this Policy shall continue to be valid for import/export of the items permitted therein." Relying on the above said para, he pointed out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rade panelists which is mentioned in the panchanama dated 18-11-1992 wherein they have clearly stated that they examined the samples and gave their opinion in regard to the quantity of yarn of the fabrics. They have stated that they examined the yarn used in this case and found the fabrics made of 100% polyester filament yarn and the width of the sample fabrics is of 58". He also pointed out that they are of the view that these fabrics were meant for use in gents dresses popularly known as suitings. Therefore, it is proved beyond doubt that the fabrics in question are nothing but 100% polyester suitings. They cannot be used in the garments of the ladies. He drew our attention to Para 38.7 of the impugned order and stated that the said trade panel had also examined the samples of the gowns exported on the above-mentioned date and opined that the same were made of 100% polyester filament yarn and the fabric used was found to be thin. He pointed out that the appellants are not entitled for the benefit of the notification. In this regard, he drew our attention to the decision of the Tribunal reported in 1995 (75) E.L.T. 865 in the case of M/s. Zenith Tin Works Ltd. v. CC. Replenishment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....992 wherein the trade panelist had made an observation that the above samples of fabrics are meant for use in the making of gents dresses. It is on this evidence the learned SDR contended before us that if these goods cannot be used in the garments of ladies which was actually exported then the appellants are not entitled for the benefit of this notification. Therefore, he relied on the decision reported in 1995 (75) E.L.T. 865. In this case, it is seen that the appellants have sought for the cross-examination of the persons who have signed the panchanama. In order to make the opinion of the expert admissible in evidence, it must be first shown that the persons who signed the same are experts in view of their qualification etc. In order to test this veracity, the appellants have sought for the cross-examination of these persons. The department had allowed the cross-examination of one person Sri Venkateswara Rao. In Para 38.7.2, the adjudicating officer has mentioned the deposition of these witnesses in the cross-examination. He has stated that Venkateswara Rao in his cross-examination had stated that 100% polyester fabrics were being used in the manufacturing of coats, skirts and l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt wants to deny the benefit on the ground that Hyderabad is not a place which is mentioned in the abovesaid notification. In this connection, the learned representative had relied on the decision of the Hon'ble Calcutta High Court in the case of M/s. Kalindi Woollen Mills (P) Ltd. v. UOI reported in 1994 (74) E.L.T. 827 (Cal.). It was held in that decision that the said condition is arbitrary and discriminatory and without jurisdiction and is violative of Articles 14, 19, 18 & 34 of the Constitution of India as well as ultra vires of Section 3 of the Imports & Exports (Control) Act, 1947. This same view was taken by the Hon'ble Madras High Court in WP No. 2167 of 1990 and decided on 25-4-1990 [reported in 1991 (33) E.C.R. 419 (Mad.)] in the case of B.L. Tandon v. UOI. This decision of the Hon'ble Madras High Court is binding on this Tribunal. 8. Reliance was placed by the learned representative on the decision of the Tribunal reported in 1996 (63) ECR 111 in the case of M/s. Nitco Marble and Granite Pvt. Ltd. & Anr. v. CC wherein at Para 4, the Hon'ble President of the Tribunal delivering the judgment on behalf of the Bench observed as follows : "4. When an exporter inv....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the performance of the statutory functions at the earlier stages are discovered. Irrespective of whether further examination or formation of opinion is permissible in the ordinary course, the importer cannot be required to prove once again the eligibility for duty free import of the permitted goods." A perusal of this decision clearly go to show that if the licensing authority is satisfied that no advance licence can be granted under the DEEC scheme in regard to the obligation which is said to have been performed, it is open to the authority to decline to grant advance licence. It was also held in that decision that at the third stage in relation to chain, namely, the stage of import, neither the exporter nor the transferee of the licence would be required to be called upon to satisfy the customs authorities once again that the duty free import entitlement was legitimate. It was, therefore, held in that decision that irrespective of whether further examination or formation of opinion is permissible in the ordinary course, the importer cannot be required to prove once again the eligibility for duty free import of the permitted goods. This is what exactly the department is now as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....led and there is nothing to say that the appellants were aware of the excess. There is nothing on record to show that they have made any such correspondence with the supplier that it is in excess. In any transfer, the moment it is found that these goods weighing 50,088.18 mtrs. are in excess of the licence granted to the appellants and also the declared invoiced quantity, they are confiscable. The only question to be decided is whether the redemption fine of Rs. 2.00 lacs is required to be reduced. 10. The learned representative stated that these goods are lying for more than 5½ years, as the import was made in the year January 1992. The goods according to him have diminished in their value and these circumstances are also relevant for the purpose. 11. We have considered the submissions. In the fact and circumstance of the case, we reduce the redemption fine to a sum of Rs. 1.50 lacs. The appellants are also liable to pay the appropriate duty in accordance with law at the time of clearance of these goods after payment of the redemption fine. 12. The next question is whether penalty can be imposed on the appellants. It is now seen that penalty imposed ....