JAYANTILAL BHOGILAL, Vs. COMMISSIONER OF CUSTOMS, MUMBAI

JUDGEMENT

(1.) THIS group of appeals has been filed by advance licence holder as well as letter of authority holder and others in respect of free import of aromatic chemicals, paper board and LAB.

(2.) The question involved in this group of appeals is whether the importer has violated the provisions of Customs notification 159/90 and whether reversal of modvat credit by the importer would absolve him from the rigors of the conditions mentioned in the said notification.

(3.) THE case of the department was, who issued three show cause notices, that the two supporting manufacturers who had imported the goods, have sold the imported goods in the open market; the said manufacturers had availed modvat facilities on the inputs purchased by them from the indigenous market which were used in the manufacture of the detergent power exported. This, the department alleges, was a violation of notification 159/90 and further the notice charged the supporting manufacturers that they have sold the imported material in violation of the Policy. The show cause notices also alleged that the permission of the licensing authority was not obtained for sale of LAB and which was violated by the appellant Usha Intercontinental. It is further stated in the show cause notice that paper board and aromatic chemicals falling under Appendix 13F of the Policy. Therefore in terms of paragraph 250(3) of the Policy transfer is permitted only subject to actual user condition. Transfer to somebody else is permitted only with the permission of the licensing authority and that too subject to the actual user condition and subject to the further condition that modvat should not have been availed. According to the department, there was violation of the provisions of Section 111(m) and (o) of the Customs Act. Therefore duty was sought to be claimed from Usha Intercontinental, Jayantilal Bhogilal and others. It was specifically stated in the notices that duty should be recovered from Usha Intercontinental on the above imported goods in case Jayantilal & Bhogilal and Mili Detergent fail to pay the duties. Penalties were also sought to be levied on each of the appellants.