SABRI EXIM PVT. LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) This appeal filed by the appellants viz. Sabari Exim Pvt. Ltd. is directed against the Order -in -Appeal No. C.CUS. 812/2001 dated 18 -12 -2001 passed by the Commissioner of Customs (Appeals), Chennai whereby he has rejected the appeal filed by the appellants against the Order -in -Original No. 970/2001 -GR -7, dated 24 -10 -2001 passed by the Deputy Commissioner of Customs (GR -7), Chennai.

(2.) The brief facts of the case are that two value based advance licence against F. No. 3392662, dated 7 -12 -1993 and F, No. 3390170, dated 27 -5 -93 were originally issued in favour of TATA Iron and Steel Company Ltd., Calcutta during the policy period 1992 -97 and the same were transferred in favour of the appellants herein for some consideration. The appellants have imported a quantity of 107 MTs of Non -Alloy Melting scrap for the value of Rs. 5,89,614/ - and they have filed Bill of Entry No. 027835, dated 19 -9 -2002. Import of Non -Alloy Steel Melting Scrap is figuring in Group -1 in the said licence. But the licence restricts Group -1 value to US 96,142.44. In the said group -1, there are two Sensitive List -III items (items for which licence shall be issued with individual quantity and value limits) namely Low Silica Lime Stone (1c) and Cooking Coal (with ash content less than 1%) or Low Ash Metallurgical Coal with ash content below 15% (1d). Item No. (1c) namely Low Silica Lime stone is issued with quantity of 595.06 MTs with the individual value cap of US 8925.99 and item No. (1d) with quantity limit of 959.78 MT with individual value cap of 62,385.95 US . In the said licence, item Melting Scrap has already been imported for a value of US 39,509.50 vide Bill of Entry No. 013570, dated 22 -6 -2001. Condition No. 3 of the said licence and the Head Note to Sensitive List -III items at the relevant time placed a restriction that the individual CIF value earmarked for Sensitive List -III items shall not be utilized for import of other items permitted in the licence. In view of this specific condition with regard to restriction imposed, the value earmarked for Sensitive List -III items totaling to US 71391.94 (8925.99 + 62385.95) cannot be used for importing other items in Group -1 including the item Non Alloy Steel Melting Scrap, according to the department. In terms of Condition No. 3 of the said licence, the interchangeability of value between Groups of imports shall not be allowed and hence the item Non -Alloy Steel Melting Scrap figuring in Group -1 can only be imported within the Group -1 value after deducting the value earmarked for Sensitive List -III items. As per the condition of the licence and the policy provisions, the item Non -Alloy Steel Melting scrap can be imported for total value of US 24,831/ - (96,143.44 -71391.94). Since in the said licence, the item Non -Alloy Steel Melting Scrap has already been imported for a value of US 39,509.50 vide BE No. 013570, dated 22 -6 -2001, there was no balance CIF value left for importing the said item. Therefore, according to the department, the appellants were not eligible for importing the item under DEEC scheme. Accordingly, show cause notice was issued to the appellants and after consideration of the reply furnished by the appellants and after affording opportunity of personal hearing to their Advocate on 22 -10 -2001, the case was adjudicated by the original authority viz. The Deputy Commissioner of Customs by which he has denied the duty free benefit under Notification No. 203/92 for 100 MTs of Non -Alloy. Melting Scrap imported by the appellants by holding that the said quantity should be assessed on merits with rates of duty as applicable. Against the order of the original authority, party filed appeal before the Commissioner (Appeals), who upheld the order -in -original and rejected the appeal. Aggrieved by the said order of the Commissioner (Appeals), the appellants have come in appeal before us on the following grounds :

(3.) Shri G.L. Rawal, learned Sr. Counsel for the appellants vehemently argued that both the lower authorities have not appreciated the case in the right perspective. He has pleaded that the appellants are operating under the DEEC scheme. In the Group -1 category there are items which are termed as sensitive and non -sensitive. In terms of the licence issued by the Licensing Authority, value of sensitive items can be exchanged for the value of non -sensitive items and the only condition is that there cannot be any interchange of items between one group and another group. In this case there is no such interchange of items between two groups inasmuch as flexibility within the group is permissible. He has invited our attention to page 34 of the paper book wherein they have replied to the show cause notice dated 21 -9 -2001 and more particularly to para 14 of the reply to the show cause notice wherein they have stated that the licence produced by the appellants itself contains a specific provision that flexibility will be available for import of one or more items within the value of a particular group. He has also invited our attention to the finding portion of the order in original as also the finding portion of the order -in -appeal. He has pleaded that condition No. 3 specifically states that flexibility will be available for import of one or more items within the value of a particular group and interchangeability of value between groups of import items will not be allowed. He has also invited our attention to ALC Circular No. 20/95, dated 4 -10 -95. He has also referred us to the judgment rendered by the Hon'ble High Court of Delhi in the case of C.L. Jain Woollen Mills v. UOI reported in 1995 (79) E.L.T. 197 wherein it was held that Customs is not competent to go behind the licence, impinge upon jurisdiction of licensing authority and proceed against the goods and the importer. He has also referred to para 6 to 8 thereto. He has also relied upon the decision of the West Zonal Bench of the Tribunal in the case of CC, Mumbai v. A. Kumar and Company reported in 2001 (132) E.L.T. 655 wherein it was held that absence of any specific quantity restriction in the licence for the fabric did not render the licence invalid and that benefit of doubt, if any, must go to the importer and since the goods were entitled to be imported under the licence the assessees are entitled to the benefit of Notification No. 203/92 -Cus. While concluding his arguments he submitted that the impugned order is completely bad as it is against the licence and the clarification issued by the competent authority which are binding on the Customs.