Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Customs (Gen.) vs Akm Trading Corporation on 12 September, 2006
ORDER
Jyoti Balasundaram, Vice-President
1. The brief facts of the case are that the respondents herein (hereinafter referred to as importer) imported 41,958 Mtrs of goods declared as "Processed Cotton Fabrics" and filed Bill of Entry dated 3-3-2001 for clearance, claiming exemption from payment of Customs duty under the DFRC scheme and produced DFRC dated 12-10-2000, which described duty free import items as processed cotton fabrics and export item as "Cotton Processed made-ups other than the grey". During the course of assessment of the Bill of Entry there was a doubt as to whether the goods allowed for import should be 100% cotton fabrics or processed fabrics containing more than 50% cotton content and remaining either polyester or nylon, etc. and, therefore, the matter was referred to the DGFT, New Delhi under cover of letter dated 7-3-2001. In response thereto vide letter dated 23-5-2001 of DGFT, the Foreign Trade Development Officer informed that - "it had been decided not to allow import of the material under question through the DFRC", Accordingly, a less charge demand for Rs. 4,57,852/- was issued to the importer. The Deputy Commissioner of Customs finalized the Bill of Entry on import without extending the benefit of DFRC and confirmed the demand raised in the notice. The lower appellate authority set aside the adjudication order and allowed the appeal of the importer. Hence, this appeal of the assessee.
2. We have heard both sides.
3. We find that as per Para 2.3 of the Exim Policy, if any question or doubt arises regarding interpretation of any provisions in the policy or regarding the handbook (which includes the SION norms), the decision of the DGFT shall be final and binding. As per the requirement of Notification No. 48/2000-Cus., dated 25-4-2000 providing for duty free import of material for manufacture of resultant export products, the imported goods should contain technical characteristics and other quality parameters of the goods, which are exported. Since the DFRC described the export items as Cotton Processed made-ups, while the imported goods consisted of 55% cotton and 45% polyester, the requirement of above-mentioned Notification has not been fulfilled. The decision of the DGFT on interpretation of the policy is final and binding, in the light of the Apex Court decision in the case of Tarachand Gupta & Brothers, 1983 (13) E.L.T. 1456 (SC) and therefore, the Commissioner (Appeals), should not have brushed aside the DGFT clarifications. Public Notice No.4 dated 1-4-2002 issued by DGFT, which has been relied upon by the Deputy Commissioner being clarificatory, has retrospective effect and, therefore, the Commissioner (Appeals) has erred in holding that it only operates prospectively. In the result, we set aside the impugned order and allow the appeal.
(Pronounced in Court)