COMMISSIONER OF CUSTOMS, MANGALORE Vs. STERLING FOODS

JUDGEMENT

(1.) The revenue has preferred this appeal challenging the order passed by the Tribunal [2006 (199) E.L.T. 613 (Tri. - Bang.)], which has held that the duty demanded by the revenue under Section 28 of the Customs Act 1962 is without any basis and accordingly, levy of duty has been set aside.

(2.) In cases of exports under claim of All Industry Drawback, GOI have issued instructions that the Customs are not required to verify use of inputs on a case to case basis. The DEPB Scheme was introduced in 1997. Even at that time, the Government of India has clarified the role of the Customs and the DGFT. It is abundantly clear that the power of grant appropriate DEPB credit is with the DGFT. As regards the examination of the goods to be exported, the Customs have all jurisdictions. If the Customs authorities are of the view that the description given in the shipping bill does not conform to what is found during examination, it is for them to inform the DGFT and later it is for the DGFT to take appropriate action. In the instant case, although the Customs have permitted the exports of the impugned products, a doubt arose as to the proper use of preservatives/chemicals as per SION. The DRI conducted investigations and issued show cause notices. The show cause notices were sent to the DGFT authorities for taking appropriate action under Foreign Trade (Development & Regulation) Act. The DGFT, after giving an opportunity of personal hearing to the appellants, have passed orders dropping the cases. In other words, DGFT have decided not to reduce the credit given to the assessee. Once the cases against the assesses are dropped by the Competent Authority, there is no basis for the Customs Authorities to demand any duty under Section 28 of the Customs Act, 1962 and also interpretation of Notification No. 34/1997 of the Customs is involved.

(3.) Therefore, the question that arises for our consideration in this appeal is whether the revenue was justified in demanding the duty. In other words, the disputes relate to rate of duty.