MEIRS PHARMA (INDIA) PVT. LTD. Vs. CC

JUDGEMENT

(1.) This appeal filed by M/s Meirs Pharma (I) Pvt Ltd, hereinafter referred to as the appellants herein is directed against the order in Original No. 98/2000 CAU dated 26.9.2000 passed by the Commissioner of Customs, Chennai by which the Commissioner has denied the benefit of Customs Notification No. 169/90 dated 3.4.90 on the goods imported against EPCG licence No. P/CG/125697 dated 14.9.89 and confirmed the duty of Rs 62,79,249/ - and confiscated the goods valued at Rs 48,82,000/ - under Section 110(O) of the Customs Act, 1962 with option to redeem the same on payment of a fire of Rs 6,30,000/ -. He has also demanded interest @ 24% per annum on the duty foregone from the date of clearance of the goods. He has also ordered enforcement of Bank Guarantee of Rs 63,00,000/ - executed with D.G.F.T. and appropriation of the same towards the above dues, apart from imposing penalty of Rs 63,000/ - on the appellants under Section 112(a) of the Act.

(2.) The brief facts of the case are that the appellants herein are manufacturers of Musical strings etc. Intelligence was gathered that the appellants had imported capital goods worth Rs 68,12,540/ - in terms of the above noted licence, but had not fulfilled the export obligation within the prescribed period as stipulated in the licence. On scrutiny of the documents, it was noticed that the appellants (importers) had imported machinery and equipments valued at Rs 68,12,540/ - for production of Musical Strings etc. through Chennai Port and claimed benefits of Customs Notification No. 169/90 dated 3.4.90 and paid the concessional rate of duty at the rate of 25& ad valorem. As per the EPCG licence the appellant were permitted to import Capital goods worth DM 5,27,212.00 with a condition that they have to fulfil the export obligation with a period of five years from the date of first import as mentioned in the EPCG licence. Accordingly, the importer had executed bonds with Bank Guarantee for Rs 63,00,000/ - for the duty amount foregone, with DGFT and undertaking with concerned Assistant Commissioner binding themselves to pay the differential duty on demand in the case of non -fulfilment of the Export obligation. Officers of the DRI after visit to the appellants factory on a reasonable belief that the appellants had not fulfilled the export obligation detained the imported plants and machinery valued at Rs 48.82 lakhs under Mahazar dated 24.5.99 and the machinery was deposited with the appellants after obtaining an undertaking from them that they will not part with the goods. It was in these circumstances that show cause notice was issued which culminated in the order of adjudication passed by the Commissioner as noted above, against which the present appeal has been filed. In the grounds of appeal, it is inter alia stated as under:

(3.) The learned Counsel submitted that the appellants had taken all out efforts to get extension of the period for fulfilling the export obligations. However, their request was not granted and the adjudicating authority proceeded to pass the impugned order. He has also invited our attention to the copy of the communication dated 17.8.2000 addressed to the appellants by the REgional Office of the WHO, New Delhi and also their letter dated 26.9.2000 addressed to the Secretary to Gvot. of India Ministry of Agriculture, in which they have expressed their inability to meet the export obligation for want of certification from the "OIE". The learned Counsel also invited our attention to the following case laws: