Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Chennai vs M/S. Sharada Industries on 3 November, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. C/213/2005
(Arising out of Order-in-Appeal C. Cus. No.699/2004 dated 30.9.2004 passed by the Commissioner of Customs (Appeals), Chennai)
Commissioner of Customs, Chennai Appellant
Vs.
M/s. Sharada Industries Respondent
Appearance Ms. Indira Sisupal, AC (AR) for the Appellant None for the Respondent CORAM Honble Shri D.N. Panda, Judicial Member Date of Hearing / Decision: 03.11.2015 Final Order No. 41492 / 2015 The respondent has not at all responded to the notice of the Tribunal. Notices have gone as per direction on 12.8.2015 and 25.9.2015. Neither there is any representation nor any adjournment sought by the respondent.
2. Revenue is in appeal against the order passed by learned Commissioner (Appeals) holding that Department has not made allegation that the goods were not in stock as on the date of discharge of export obligation. It is further held that once the export obligation is discharged the conditions of customs Notification No. 48/99 are no more relevant.
3.1 Further grievance of Revenue is that advance authorizations was given to the respondent to import raw material duty-free for use in manufacture and export the manufactured goods to earn foreign exchange. That was the main object of para 7.3 of the EXIM Policy 1997 2002. The respondent imported the goods in terms of advance authorization condition under Bill of Entry No. 19591 dated 5.7.2000 and cleared the same on 11.7.2000 duty free. End use bond was also executed by the respondent.
3.2 Investigation found that there was diversion of material which could be detected from the stock found in a private warehouse. The marking in the goods differed when enquiry was made with overseas exporter. Mere discharge of the export obligation and production of certificate in that regard shall not ipso facto establish that the imported raw materials were used in manufacture by the respondent and such manufactured goods exported.
3.3 It was submitted by Revenue that in absence of inextricable link between the import till export of finished goods, it is concludible that there was violation of conditions of Notification and fraud is committed against customs. Therefore, the order passed by learned Commissioner (Appeals) is unsustainable.
4.1 Heard Revenue and also perused the order of learned Commissioner (Appeals). There is a condition in the EXIM Policy that the imported goods should be utilized for the purpose of manufacture of goods and the goods so manufactured should be exported to earn foreign exchange. But mere earning of the foreign exchange shall not ipso facto establish a case of compliance to the condition of EXIM Policy when export of the goods manufactured using imported raw material is not established. It may so happen that hawala money may come through questionable exports. Therefore, it is necessity of law that the raw materials which were imported duty free should only result in export of finished goods manufacture out of such raw materials making value addition to the imported goods. This is absent in the present case.
4.2 Investigation found the goods were diverted to market. There was no pleading of the respondent to defend such allegation before the appellate authority below. Its bonafide was questioned when the stainless steel coil bearing the mark 304 DDQ 0.7000x1250xcoil was discovered by investigation not agreeing with the specification appeared in Invoice No. 2839@USD 1930 PMT/CIF reading as under:-
STEMCOR/E3L 00521/SI/Chennai/India Order No. LB005507 Specification FA 18288 Customer Order No. FIONA Type 304DDQ finish 2B Size 0.700 x 1250 mm Net wt. 1528 Kgs. Cross Wt. 1554 Kgs.
4.3 The above discrepancy establishes a case of violation of import condition for which the respondent was not entitled to any relief before learned Commissioner (Appeals). Therefore, the adjudication order is restored and the appellate order is set aside allowing the Revenues appeal.
(Dictated and pronounced in open court) (D.N. Panda) Judicial Member Rex 4