J.H. Joglekar, Member (T) - (1.) THESE two appeals relate to the same appellants and involve the same facts. They are, therefore, being decided by this common order.
(2.) WE have heard Shri V.S. Nankani, Advocate for the appellants and Shri K.L. Ramteke, JDR for the revenue. The appellants were holders of value based advance licences which were made transferable by the issuing authorities on the satisfaction that the burden of exporting goods had already been discharged by the original allottees of the licence. In the proceedings culminating in appeal No. C. 256/R/98, the appellants had received such a licence from the original holders viz. M/s. K.H. Shoes of Madras. The licence permitted import of synthetic lining material. The goods imported were Polyester fabrics with nylon (polyamide) flocks on one side. In the proceedings leading to appeal No. C/1000 -R/98 -Bom similar licences had been secured by the appellants from five different original licence holders, on transfer basis. In the case of each licence the eligibility for importation of synthetic lining fabric was granted in the list enclosed with the licence.
(3.) AGAINST these licences, the present appellants imported lining material/flocking velvets. The jurisdictional customs authority permitted import, duty free, of such goods on the basis of these licences. These goods after clearance were stored in a godown at Delhi. The officers of Delhi Customs seized these goods. Pursuant to the seizure and the investigations Show Cause Notices were issued alleging that the goods imported were not of the same type as the inputs actually used in the manufacture of the product already exported. Reliance was placed on a letter by the original holders of the licence M/s K.V. Shoes Ltd in which it was claimed that the material seized was not the same type as the inputs used in the already exported products. The Show Cause Notice alleged that the onus to prove the nexus between the export products and the goods imported rested on the importers and in the absence of the nexus the goods were unauthorisedly imported. Confiscation of the seized goods was allegedunder provisions of Section 111(d), 111(m) and 111(o) of the Act. Under the two SCNs duty totally amounting to Rs. 23,40,776 was demanded. It was alleged that importers were liable to penalty. The Commissioner of Customs after hearing the importers passed order dated 8.9.1997 confirming the demand made in the SCN dated 21.6.1995 confirming the duty amounting to Rs. 12,19,801. He imposed a penalty of Rs. 50,000 on the importers and he confiscated the goods but allowed their redemption on payment of fine and also on payment of duty. He adopted the logic of this judgment, in the later order dated 8.9.1998 arising out of a similar Show Cause Notice dated 24.4.1996 and similar order confiscated the goods and allowed their redemption on payment of fine and imposed penalty. The present appeals are arising out of the two orders.;