TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 632
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....ry in 2014 in which it paid duty using Duty Free Import Authorization [DFIA] licences. Receiving specific intelligence that the importer had fraudulently imported epoxy resin under the DFIA licenses issued to certain Kanpur based leather exporters, the Directorate General of Revenue Intelligence [DRI] initiated investigation. It found that the DFIA licenses were issued to leather exporters in lieu of export of 'Finished Leather from Hide of Buffalo/Cow' After fulfilling the export obligation, the exporters sold the licenses to the importer herein who used them to import epoxy resin. DRI came to the conclusion that the DFIA licenses permitted import of impregnating resin and that the importer had mis-declared epoxy resin as impregnating resin to fraudulently claim exemption under the DFIA licenses. It was, therefore, proposed in the SCN to demand differential duty under section 28 (1) of the Customs Act, 1962 [the Act]. Penalties were proposed on the importer under section 114A and 114AA of the Act and penalty was proposed under section 112 on Shri Jain. It was also proposed to hold the imported goods valued at Rs. 1,28,77,505/- liable to confiscation under section 111 (o) and ....
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....962 in terms of fifth proviso to section 114A of the customs Act, 1962. (vi) I impose penalty of Rs. 12,00,000/- (Rupees Twelve Lakh only) on M/s Lasco Chemie Pvt. Ltd. under section 114AA of the Customs Act, 1962. (vii) I impose penalty of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand only) on Shri Amit Jain under section 112 of the Customs Act, 1962. Since penalty under section 112 is being imposed, I do not impose any penalty under section 117 of the Customs Act, 1962". 5. Aggrieved, appellant filed this appeal with the prayer to set aside the impugned order upholding the order of the Joint Commissioner. Submissions of the appellant 6. Learned counsel for the appellant made the following submissions :- (i) The importer had filed five Bills of Entry in January 2014 under freely transferred DFIA licenses procured from leather exporters and cleared goods ; (ii) The SCN dated 29.01.2015 was issued alleging that the goods imported by the appellant were not covered under the DFIA licenses on the ground that what was imported was epoxy resin which is not an impregnating resin and that it finds limited use in film forming systems in leather ....
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....zed representative for the Revenue made the following submissions :- (i) It has been clearly established that the appellant imported of Epoxy Resin under the DFIA licenses in direct violation of the licence issued. (ii) The classification of the Epoxy Resin as Impregnating Resin has not been disputed by the appellant. (iii) The importer's claim that the Epoxy Resin was used in leather processing and hence DFIA licenses were issued is not correct. The report of the CLRI and the statements of the leather exporters confirmed that the Epoxy Resin was not used in leather finishing. Thus, the import was not only unauthorized but unrelated to the export product. (iv) The importer fraudulently misused DFIA licenses by importing high value Epoxy Resin in the guise of low value impregnating resin. (v) The report of the CLRI is a binding technical report by a Government authorized body and it cannot be brushed aside. (vi) The appellant is consequently liable to pay the differential customs duty. The imported goods were liable for confiscation under section 111 (m) mis-declaration and 111 (o) of the Act. (vii) Consequently, th....
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....em and at Serial No. 1 - 38099390 - Impregnating Agent - Lambinder CTR is mentioned. Description of import not tallying with the input mentioned in the license and the input actually used by the exporter/ DFIA license holder. 0610026934 dated 08.05.12 2. 4905521 dated 14.03.14 0610028915 dt. 12.09.12 M/s Model Tanners (India) Pvt. Ltd., Kanpur Epoxy Resin (Impregnating Resin) - 39073010 Impregnating Resin - CTH - 39070000 M/s Model Tanners (I) Pvt. Ltd., Kanpur in their letter dated 10.01.2015 (RUD - 12) submitted BE No. 00583 dated 06.12.2012 for import of impregnating resin used by them and at Serial No. 1 - 38099390 - Impregnating Agent is mentioned Description of import not tallying with the input mentioned in the license and the input actually used by the exporter/ DFIA license holder. 0610028915 dt. 12.09.12 Do Impregnating Resin - CTH - 39070000 M/s Model Tanners (I) Pvt. Ltd., Kanpur in their letter dated 10.01.2015 (RUD - 12) submitted BE No. 00583 dated 06.12.2012 for import of impregnating resin used by them and at Serial No. 1 - 38099390 - Impregnating Agent is mentioned. Description of import not tallying....
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.... 4763013 dated 27.02.14 0610024457 dated 08.11.11 M/s Model Tanners (India) Pvt. Ltd., Kanpur Epoxy Resin (Impregnating Resin) - 39073010 Impregnating Resin - CTH - 39070000 M/s Model Tanners (I) Pvt. Ltd., Kanpur in their letter dated 10.01.2015 (RUD - 12) submitted BE No. 00533 dated 06.12.2012 for import of impregnating resin used by them and at Serial No. 1 - 38099390 - Impregnating Agent is mentioned. Description of import not tallying with the input mentioned in the license and the input actually used by the exporter/ DFIA license holder. 14. The case of the Revenue is based on 20 Relied Upon Documents listed in Annexure -A to the SCN. This includes 8 statements of various persons recorded under section 108 of the Act, one panchnama, two letters from the importer and Shri Jain, letters from various exporters who had exported the leather, obtained the DFIA licences and sold them to the appellant importer and a letter dated 5.11.2014 from the Central Leather Research Institute, Chennai. 15. In the letter of CLRI signed by Chief Scientist and Head of Tannery Division, Dr. C. Muralidharan, written to the Senior Intelligence Officer, DRI in response....
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.... be specifically mentioned and since epoxy resin is not mentioned and only impregnating resin is mentioned, epoxy resin cannot be imported; iii) The appellant had not contested that epoxy resin is a synthetic resin; iv) CLRI also clarified that epoxy resin is not an impregnating resin; 18. The Commissioner (Appeals) upheld the above findings of the Joint Commissioner. 19. Of the various relied upon documents, the statements of various exporters recorded under section 108 of the Act would have been relevant as per section 135B of the Act to prove the truth of their contents had the adjudicating authority admitted them as evidence after examining the persons who made the statements as witnesses. Since this has not been done, the statements are not relevant to prove the department's case. 20. Heavy reliance placed by both the Joint Commissioner and the Commissioner (Appeals) on Wikipedia is highly misplaced. Wikipedia is an open source information available online and anyone can write about the topic and anyone else can edit it. Thereafter, somebody else can further edit it. It is not the opinion of any one expert but is only crowd sourced information. ....