MOTOROLA INDIA LTD. Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) APPELLANTS are engaged in the manufacture and export of Pagers to all over Asia. In the course of their business activities they obtained Advance Licences under DEEC Scheme, to import duty free components, raw material, for manufacture and export of this final product. For this purpose, they executed a Bond with the Customs Authorities, Bangalore, undertaking to export to required quantity of final products for which the Advance Licences were obtained and exports made in respect of 19 such licences to the tune of Foreign Exchange equivalent of Rs. 520 Crores. However for a solitary licence, from the score or so, such licences obtained i.e. Licence No. 07001273, dated 14 -10 -1997, for an obligation to export 70,000 Nos. of Pagers, for which they imported the material, duty free, they could meet the export obligation only in respect of 39,502 Nos. of pagers, due to international Business situation (Asian Currency Melt Down) cancelling export orders. They requested the Customs Authorities permission to Re -export the parts left back, which was refused. By letters dated 17 -11 -1999 and 23 -11 -1999, they sought from the Customs details of their liability to pay duty and interest on their non -fulfilment of the export obligation. However, a summon was issued on 1 -12 -1999 to them, regarding the facts about the import under the said licence which was replied to vide letter dated 1 -12 -1999.

(2.) A show cause notice was issued by the Assistant Commissioner of Customs, Bangalore dated 5 -2 -2000 demanding duty on the full licence value amounting to Rs. 4,07,44,992/ - which was replied on 21 -2 -2000, pointing out the facts that the demand made was not correct, since an amount of Rs. 57,25,647/ - and interest thereon, in respect of unutilised imported components has been paid, which was accepted by the said Assistant Commissioner, as intimated to him vide appellants letter dated 30 -12 -1999. This also intimated the final closure of export obligation as per para 7.28 of EXIM POLICY 1997 -2000 and the related DEEC book which was duly endorsed. Meanwhile, the licence issuing authority, Joint Director General of Foreign Trade Bangalore had issued a certificate dated 2 -2 -2000 discharging export obligation against the said licence and the Bond executed with the Customs was duly cancelled and discharged by the Assistant Commissioner of Customs and returned to the appellants on 26 -2 -2000. No order was received from the Assistant Commissioner of Customs pursuant to show cause notice dated 5 -2 -2000 and the reply sent.

(3.) HOWEVER , the Commissioner, pursuant to an intelligence gathered by HQrs Preventive, indicating that the appellants had not fulfilled the export obligation and enquiries conducted by them, issued a show cause notice dt. 8 -3 -2000, demanding duty on unutilised duty free parts imported vide the same licence, proposing its confiscation, appropriating the equivalent amounts, being demanded and already paid against the demands along with interest under Section 28AB read with proviso to (iii) of clause (ii) of Notification No. 30/97, dated 1 -3 -1997 and proposing the appropriate the interest already paid and liability for penalty under Section 112 of the Act.