CREATEX INDUSTRIES Vs. COMMISSIONER OF CUSTOMS (PREVENTIVE), MUMBAI

JUDGEMENT

(1.) THE appellants herein who are manufacturers/exporters of woollen carpets were issued an Import -Export Passbook No. 0000142 dated 22.02.89 for duty free import of certain dyes and chemicals used in the manufacture of woollen carpets under the Passbook Scheme. They commenced export under the above mentioned passbook from 15.11.88 and fulfilled the export obligation by 22.7.90. The imported 21 consignments under the passbook. The case of the department as stated n the show cause notice is that these consignments were not actually used in further manufacture of ex port goods but sold to other than actual users. Thus this resulted in a breach of paragraph 221 of Import Export Policy 1988 -91 read with Notification No.117/88 dated 30.3.1988 as amended. The notice proposed recovery of duty of Rs. 75,75,017/ - invoking the extended period of limitation on the ground of suppression of facts. Penal action was as proposed in the notice. the adjudicating authority accepted that out of the 21 consignments, six consignments were consumed in the factory of the appellants. In respect of 15 other consignments, he has held that the sale of 9 out o f these 15 consignments was to actual users which was permissible under paragraph 244(ii) of the Import Export Hand Book provided intimation was given to he Licencing/Customs authority within 15 days of the transfer of the goods, and has held that non intimation within the period stipulated was only a technical breach, not resulting in the denial of the benefit of the Notification to the appellants. However, in respect of six consignments sold to M/s. Ajanta Printers, M/s. Amar Dyes and printers and M/s. Vinay Dye Chem Corporation, he has held that duty is leviable there on since these 3 buyers were found to be not in existence. He has thus confirmed duty demand of Rs. 24,11,206/ - on six consignments sold to the above 3 parties. Hence, this appeal.

(2.) IT is the contention of the appellants that the six consignments in dispute were sold in good faith through their agent Shri M.D. Pallaria through whom they had sold 9 other consignments to actual users. The further submission is that he extended period of limitation is not applicable to the facts of the present case the consignments in question were cleared by the Customs authorities under Section 47 of the Customs Act on proper scrutiny and after satisfaction that the appellants were entitled to exemption from payment of duty under Notfn.No. 117/88. They further submit that the charge of suppression is not brought out in the show cause notice and that the Commissioner's order does not record any finding on the aspect of time Bar. They, therefore, submit that the demand is barred by limitation. The appellants also made submissions on the merits of the matter, contending that the demand is not sustainable on merits in view of the fact that paragraph 221 of the Import Export Policy which has been relied on in the show cause notice is not attracted in this case.

(3.) THE prayer for setting aside the order is opposed by the Ld. departmental representative who reiterates the findings of the adjudicating authority.