FAL INDUSTRIES LTD. Vs. CC

JUDGEMENT

(1.) This appeal is preferred by M/s FAL Industries Ltd. against the order in original No. 10/2000 -CAU dated 23.2.2000 passed by the Commissioner of Customs, Madras whereby he has ordered confiscation of goods valued at Rs. 57,91,496 under Section 111 (o) of the Customs Act, 1962 (the act for short) with an option to redeem the same on payment of fine of Rs. 11,58,000 apart from demand of duty of Rs. 44,31,006 besides imposition of penalty of Rs. 1,16,000 under Section 112(a) of the Act. He has also demanded interest @ 24% per annum from the date of import of the consignment till the date of the payment of the duty demanded.

(2.) The brief facts of the case are that the appellants herein had obtained licence bearing No. P/CG/2100700/C/XX/25/11/EPCG dated 27.8.1992 for a CIF value of Rs. 64,27,044 under the EPCG scheme from the Chief Controller of Imports and Exports, New Delhi and had imported capital goods at a concessional rate of Customs duty of 15% in terms of Customs Notification No. 160/92 dated 20.4.92 as amended subject to the conditions envisaged therein. The appellants were to export Air Purifiers for a total FOB value of four times the CIF value of the imports under the said Licence within five years from the date of issue of the import licence in terms of para 38 of the EXIM policy 1992 -97. On gathering information that the appellants had not fulfilled the export obligation, the DRI, Chennai visited their premises and recorded statement from Shri Dhruvan, Dy. General Manager on 16.8.99 under Section 108 of the Act. He stated that they could export only a negligible quantity of only 1 % of the export obligation and that the licence has been submitted to the DGFT, New Delhi seeking extension of time to fulfil the export obligation as provided for under Public Notice No. 5(RE -99)/1997 -2002 dated 6.5.1999 alongwith Bank guarantee covering the liabilities. Some of the imported goods were found in the premises of the appellants' sub -contractor which has been explained by the appellants. Since it appeared that the appellants had not fulfilled the export obligation, show cause notice was issued to them proposing to demand differential duty, demand of interest and also confiscation of the goods apart from imposition of penalty. On consideration of the reply furnished by the appellants and after granting personal hearing to the appellants, the adjudicating authority passed the impugned order which is challenged before us on the following grounds:

(3.) Shri S. Murugappan, learned Counsel for the appellants argued the matter on the above lines and sought for setting aside the impugned order and allowing their appeal.