TaxTMI 
TaxTMI 
2016 (11) TMI 303
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.... 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 of export goods, they paid the duty forgone along with interest and surrendered the special licence. Since the import of tin plate waste was not free, except when the same was imported at a CIF value of US$ 545 MT and above, the Revenue issued a notice seeking to invoke Section 111(d) of the Customs Act, 1962 for confiscation and for penalty under Section 112. The appellant had declared the value of the said goods at US$ 288 per MT, which was enhanced by Customs to US$ 300 per MT before clearance. A show cause notice was issued to the appellant seeking to (i) confiscate the goods under Section 111(d) of the Customs Act, (ii) impose pena....
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....ed 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 permits import of restricted goods against the advance licence without any other licence from DGFT. He cited Policy Circular dated 30.7.1999 in this regard. In view of the above, he argued that confiscation under Section 111(d) is not sustainable in law. 2.1 The learned counsel further argued that the Notifications putting restrictions are in the nature of temporary statute and expired on 31.3.1997 with the expiry of policy as the same was issued for five years period from 1992 to 1997. In this regard, he relied on the decision of the Tribunal in the case of Ajay Industrial Corporation reported in 2006 (201) ELT 410. 2.2 He further argued....
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....). 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. Learned AR argued that the appellant had entered into an agreement with M/s. Som International Pte Ltd. for supply of tin plate blanks. In the said agreement, from the communication between the appellant and M/s. Som International Pte Ltd., it can be seen that the thickness of the product which was required by the buyer was 0.19 to 0.36 mm and the appellant had imported material of 0.45 mm thickness. He argued that while applying for the licence also, the appellant had submitted the agreement with M/s. Som International Pte Ltd. as one of the supporting documents and the imports had taken place with the clear intention to avoid the restriction imposed by the ....
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.... 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 disposed of or utilized in any manner, except for utilization in discharge of export obligation, before the export obligation under the said licence has been discharged in full: Provided that Acetic Anhydride, Ephedrine and Pseudophedrine in respect of which the benefit of this notification is claimed shall be utilized by the importer in his own factory or in the factory of any other manufacturer indicated in the said certificate even after discharge of export obligation." In the current sequence of events, it is obvious that the appellant had no intention of fulfilling this condition in respect of these exports. In fact, it can be said that the said imports were not intended....