ZEEKO SHOE FACTORY Vs. COLLECTOR OF CUSTOMS
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
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N.K. Bajpai, Member (T) -
(1.) BRIEFLY stated, the facts are that the appellants had obtained an Advance Licence under the duty entitlement exemption scheme for import, inter alia, of the following goods in respect of which a dispute has arisen : -
"PU Foam Laminated with 26,153R/Mtrs. Rs. 6,00,000/ - Nylon Tricot/Velvet/Sandwitched (width upto 150 cms)".
(2.) IT was found on examination by the Chemical Examiner that the width of the goods was 154.5 cms. as against the width upto 150 cms. for which the import licence was issued. The Deputy Collector of Customs held that the goods were not covered by Notification No. 117/78 -Cus. (as amended) as the specifications of the goods imported were not in conformity with those given in the DEEC No. 007/57 dated 4 -6 -1985. He did not allow the exemption to duty and demanded a duty of Rs. 2,42,802/ - on the goods. Since the goods had been cleared under a bond, the conditions of the bond were enforced for recovery of the duty. The appeal to the Collector of Customs (Appeals), Bombay was rejected on the ground that the goods were not covered by the DEEC in respect of description, quantity and value etc. He also recorded the following finding in his order : -
"As the ascertained width is more than the declared width, obviously quantity i.e., Sq. Mtrs. will be more and value of the imported material will also stand enhanced than the declared value."
(3.) IN the appeal before us, amongst the grounds taken are that the goods and their dimensions are likely to increase by application of slightest pressure. It has also been stated that there was no reason for the appellants to get material of greater width than that mentioned in the licence and DEEC. As against 26,153 running Metres of PU Foam, the appellants had imported a total quantity of 14,987.90 running Metres valued at Rs. 3,27,618/ - against the said Advance Licence and DEEC, thus leaving a balance of approximately Rs. 11,165 running metres and a substantial balance in value. The appellants have submitted in the appeal that if they had mala fide intention they could have imported material in excess length (rather than in excess width), since the licence as well as the DEEC permitted a larger quantity under the Duty Exemption Scheme. It is also stated that if they had known that the width of the material was likely to exceed 150 cms. by a few cms. at the time of measurement, they could have, right from the beginning, applied for and got the licence and DEEC indicating higher width of PU foam. This would not have affected the issue of the licence, particularly because the difference in width (viz. 4.5 cms.) is negligible. The excess width did not give any added advantage to the appellants since they were to manufacture only shoe uppers and this excess width did not give them the advantage of having any extra shoe uppers made out of the goods imported. The appellants have also stated that the goods imported have, in fact, been utilised for fulfilment of the export obligation.
Shri N.C. Sogani, the learned Consultant for the appellants, invited our attention to Serial No. 16 to the I Schedule to Notification No. 117/78 -Cus., dated 9th June, 1978, which granted exemption to "artificial resins and plastic materials, cellulose esters and ethers; articles thereof and stated that it is under this entry that they had obtained an Advance Licence under the DEEC Scheme. Although this notification was subsequently superseded by another notification dated 5th April, 1982, the entry at Serial No. 25 remains exactly worded as before. Besides arguing on the ground taken in the appeal, he strenuously emphasized that if the appellants had asked for the material of 154.5 cms. width, there would have been no objection in issuing of the Advance Licence and consequently, the DEEC for goods of 154.5 Cms. width, since they are covered by Sl. No. 25 of the Schedule to the amended notification. Although number of other pleas were taken about the principles of measurement of width etc., and reliance was placed on a publication entitled "Principle of Textile Testing" by J.E. Booth, it is not necessary for us, for deciding this appeal, to go into those questions. The only dispute in this appeal is that goods of higher width were imported than those mentioned in the Advance Licence and the said DEEC. Exemption to duty has been denied on this ground alone.;
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