MADAN ENTERPRISES Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appeal is filed by the above appellant praying for setting aside the Order -in -Original No. 41/2000/CAC/KPS dated 1.2.2000 and quashing penalty; and redemption fine, and for extending the benefit of Notification No. 23/98 to the goods with consequential relief.

(2.) THE facts of the case are that the appellant had sought clearance of NYLON TRICOT FLOCKING FABRICS, valued at Rs. 11,03,465.00 on 14.10.98 declaring as INSOLE SHEET, claiming benefit of CN 23/98 SI. No. 108, List 3A, SI. No. 3 at concessional rate of duty; at 20% basic customs duty as against merit rate of 40%. Under these heading goods such as Insole, Midsole and parts thereof for leather industry; are eligible for concessional rate of basic custom duty at 20% as against 40%. Subject; item Nylon Tricot Flock fabric is a product having multiple use. Whether it can be used as insole, midsole, in leather; industry; has been debatable issue for years. The practice being followed this customs house like other custom house was to extent (extend) the benefit of Notification No. 23/98 whenever Nylon Tricot fabrics are being declared as sheet for making sole. However board vide their circular 74/98 dated 6.10.98 has directed that in case of Nylon Tricot Fabrics, the end use condition should be stipulated, whenever Importer declare the goods as Insole sheet and claimed the notification benefit CN/23/ 98, which exempts the Insole or Midsole and sheets therefore for used in leather industry.

(3.) PERUSED the show cause notice, reply, statement under Section 108 of Customs Act of Proprietor of the appellant, and the opinion of Central Leather Research Institute, Adyar, Chennai, dated 4.12.97 and the technical opinion dated 29.1.96 of Indian Institute of Leather Products, Madras and Appellant's letter to Assistant Collector, declaring that with reference to Bill of Lading dated 15.9.98 that Insole sheet (Nylon Tricot Flocking) imported under the above bill of lading will be sold for use as Insole sheet for leather industry, and appellant's letter to Senior Intelligence Officer DRI - - Zonal Unit, Mumbai, in response to summons dated 29.10.98 stating that Nylon Tricot Flock Fabric is a regular item being allowed clearance by Mumbai Customs, and there is no irregularity in to present Import, and Bill of Entry for home consumption dated 15.10.98 for Insole sheet (Nylon Tricot Flocking) of 15007 Metres in Sixty cartons, and invoice for the same dated 10.9.98 and the Notification No. 23/98 -Cus. Dated 2.6.98 at Serial No. 108 that "the following goods for use in leather industries, namely (1) parts, consumables, and other items specified in List 3A - -(item No. 3 - - Insoles or Midsoles and sheet thereafter), (2) Other parts, consumables and items specified in List 3(B), falling under Chapter 64 or any other chapter with standard rate 20% each for bother (both) categories. Condition No. 14 is for 23rd item only. At said No. 14 it is stated that "If at the time of Importation, the importer (1) in all cases [Excluding the case of goods at Item No. 9 of list (B)] produces a valid registration -cum -membership certificate issued by the council for leather exports sponsored by the Govt. of India in the Ministry of Licence, and (2) furnished an undertaking to the Assistant Commissioner of Customs to the effect that (a) The imported goods shall be used in leather industry of (or) as the case may be, for the manufacture of leather chemicals to be used in leather industries, (b) He shall maintain an account of imported goods received and consumed in the place of manufacture for the above purpose in the manner specified by the said Assistant Commissioner, (c) He shall within three months or such extended period as the said Assistant Commissioner, may allow produce the extract of the aforesaid account, duly certified by the Assistant Commissioner of Central Excise having jurisdiction over the factory manufacturing the goods to the effect that the said goods have been used for the above -said purpose, and (d) He shall pay, in the event of his failure to comply with the condition above, an amount equal to the difference between the duty leviable on the imported goods but for exemption under the notification and that already paid at the time of Importation list 3A (Section 108 of the table) contains parts, consumables and other items, under No. 3 Insoles or Midsoles sheets therefore is mentioned. Board Circular No. 74/98 -Cus. dated 6.10.98 is also perused. in Collector of Customs, Bombay v. Handicraft Exports, Notification No. 29/79 -Cus. Dated 10.2.79 for Buckles and other embellishment for footwear used in leather industry is considered. in the case of Collector of Customs, Bombay v. Pecific Exports Notification No. 224/85 -Cus. dated 9.7.95 for the goods imported Sodium Lauryl Sulphate having used in leather Industry and could also be used as emulsifier in synthetic fat liquoring compositions importer only a trader - - He should adduce evidence to show that the goods imported were meant for use in leather industry, is considered. Also perused the appeal memorandum. Heard Sri Anil Balani, learned Counsel for appellant and learned Departmental Representative for Respondent. The only question involved is the benefit of the notification and applicability of Board Circular, which is seriously challenged by the appellant, and value of the technical opinion furnished, about the usage of the product in question, as contended in appeal memorandum. They are considered below.