Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Customs vs Matriaco (I) Ltd. on 12 March, 1999
Equivalent citations: 1999(114)ELT99(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The respondent imported a consignment of cotton denim fabric for shirt. It produced for their clearance an import licence which has been issued to M/s. Hindustan Lever Ltd. The licence was an advance licence permitting import of cotton fabrics. The export obligation subject to which the licence was so granted was for export of gents shirts. This was objected to on the ground mat the imported goods had no nexus with the exported goods. Notice was issued proposing to deny the benefit of exemption under Notification 203/93. The Assistant Collector confirms the proposal in the notice.
2. On appeal from this order, Collector (Appeals) held that the licence was for import of cotton fabrics and the relevant import policy for cotton fabrics. It did not distinguish between different types of cotton fabrics. He found that denim can be used for making gents shirt and also that contention on behalf of the appellant before him that quality of denim imported by it could not be used for making trousers. On these findings he allowed the appeal. Hence this appeal by the Commissioner.
3. The ground in the appeal, which the Departmental Representative reiterates, is that transferee of a licence cannot have greater rights than the original licensee and that the imported goods do not match in terms of specifications and technical characteristics the material used in the manufacture of the export product. Hence the imported goods are not eligible for duty exemption.
4. Let us consider the second ground first. The exported goods were gents cotton shirts, and the imported fabrics denim made of cotton. Now the term cotton fabrics would include in its scope denim made of cotton. There is nothing to show that the shirts which were exported were not made of denim, or that denim was not used in their fabrication. It was open to the licensing authority to specify the kind or grade of cotton fabrics from which the shirts were to be exported were to be made and, equally, specify that kind or grade of fabrics for import. This requirement has not been insisted upon, either for export or for import. The premise upon which the department's case is based that the imported goods do not tally in technical characteristic of the export goods therefore is not entertainable. On this basis alone, the conclusion of the Collector (Appeals) will have to be confirmed. We do not consider it necessary to go into the other point. Therefore, even assuming (which we must not be understood as saying) that there was a justification for the department to consider whether the goods imported against an advance licence must tally in technical characteristic with the export goods, that requirement is satisfied. In addition, it is now settled law that it is not required for an importer under a transferred advance licence to establish the nexus with the exported goods.
5. Appeal dismissed.