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The Collector, accordingly, issued a show cause notice dated 30.8.89 charging the appellant with misdeclaration of goods in order to avail of the exemption benefits and evade payment of customs duty to the tune of Rs. 81,80,698. The basis of the notice was an allegation that the import was unauthorized as the appellants did not have an industrial licence issued under the Industries (Development and Regulation) Act, 1951 and thus it was not an actual user (industrial) entitled to import the said goods under OGL. It was also alleged that the goods imported by the appellant were "jumbo rolls" and not 'Cinematographic Colour Films (Unexposed) Positive' and that the said misdeclaration was made with an intention to wrongly avail of concessional rates of duty even though the goods imported were not entitled to such concessional rates of duty. The basis of this charge was that the goods were not ready for use on a projector or a camera and were required to undergo the process of slitting/cutting and perforation along the length of the film and, therefore, could not be considered as Cinematographic Colour Films. On the basis of these allegations the appellant was called upon to show cause why the imported goods be not confiscated under the provision of Section 111 (d) and 11 1 (m) of the Customs Act, 1962 and why personal penalty should not be levied under Section 112(a)(i) of the Customs Act. The Collector possibly was inclined to agree with the submissions of the appellant, but held that in view of the finding recorded by CEGAT that ''in so far as the identity of the goods is concerned, it is quite clear that what has been imported are jumbo rolls and not cinematographic colour films......" he had no option but to hold that the act of describing the imported goods as "Cinematographic Films"

amounted to misdeclaration. The Collector also held that in view of the finding recorded by CEGAT that the appellant did not possess a valid industrial licence under the IDR Act and was thus not an actual user (industrial), he was required to hold that the appellant was not eligible to import the said goods under OGL. In view of the findings recorded by CEGAT, the Collector had no other option and he also expressed his helplessness by observing that "these findings and conclusions of Hon'ble CEGAT forecloses any arguments pleas of the importer against requirement of an industrial licence under IDR Act and hence the charge of uanuthorized importation in the absence of such a licence." He then held that the charges of misdeclaration and unauthorized importation were established, rendering the goods liable to confiscation under Sections 111(d) and 111m) of the Customs Act and rendering the appellant liable to penalty under Section 111 (a) of the Customs Act. He ordered confiscation of the 59 rolls, imposed a redemption fine of Rs. 5 lacs and also imposed a personal penalty of Rs. 10 lacs on the appellant.
The appellant feeling aggrieved by the order of the Collector appealed to CEGAT. It was not permitted to challenge the findings regarding misdeclaration and illegality of import as the bench hearing the appeal was of the view that it being a bench of coordinate jurisdiction could not sit in appeal over the findings recorded by the earlier bench. Even though on the earlier occasion, the matter was remanded to the Collector for re- adjudication, all the questions were considered by CEGAT in detail and findings were recorded categorically. On the question of entitlement to the benefits of the said exemption notifications CEGAT held that as the appellant had not filed any appeal against that part of the order of the Collector whereby its claim for exemption was denied and the writ petition filed before the Gujarat High Court was withdrawn, it was not open to the appellant to agitate that question again, particularly when such" an issue did not arise out of the Collector's second order passed after remand. The appellant's contention that Additional licences acquired by it covered the import was rejected by CEGAT on the ground that only unattested photo copies of the additional licences were produced and moreover the question of acceptance or otherwise of additional licences could have arisen only if the appellant was held actual user (industrial).