ANJANI INTERNATIONAL Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) PURSUANT to specific information that exporters of bed linen items, etc., made out of 100% cotton were misusing the Pass Book Scheme by mis -declaration by opting for a generic norm (instead of specific name) for availing higher credit the officers of Directorate of Revenue Intelligence (DRI), Mumbai initiated investigations into such exports made by various exporters as stated above. During the course of investigations, further intelligence was also received inter alia indicating that the exporters had also mi -declared the input items used as 'processed cotton fabrics' even though they had acquired grey cotton fabrics as inputs and manufactured export products there from. Consequently the statements of the exporters were recorded under Section 108 of the Customs Act, 1962 in which they stated that they had applied for and obtained Pass Books. They also submitted documents pertaining to purchase of grey cotton fabrics, job working of such grey cotton fabrics into processed fabrics, conversion of the job worked fabrics into export products, invoices/shipping bills/bill books etc., for the input items as well as export products.

(2.) THE Government of India introduced the Pass Book Scheme with effect from 01/04/1995. The relevant provisions were made in para 54 of the EXIM Policy 1992 -97 and corresponding procedural provisions were incorporated in para 114 of the Hand Book of procedures Vol.I. The goods imported by a Passbook holder against the credit available in the Pass Book were exempted from payment of Customs duty in terms of Notification No. 104/95 -Cus dated 30/05/1995. The guidelines for use of Pass Book and credit/debit in such Pass Books were contained in the Advanced Licensing Committee (ALC) circular No. 15/95 dated 28/07/1995 issued by the DGFT. Further clarifications were issued by DGFF vide ALC Circular No. 4/96 dated 14/05/1996. In view of the above provisions and clarifications, it appeared that the credit was allowed to an exporter against the export of a particular product based on following guidelines. i. The export product should be covered by the SION as contained in Hand Book of Procedures, Vol.II. ii. The applicability of the SION was to be decided as in case of QBAL; iii. The exporter was required to declare the input(s) actually utilised by him for manufacture of export products and the applicable SION should have covered such inputs. Further general condition (2), incorporated in Hand Book of Procedures, lays down that whenever specific norm has been provided, the same would prevail over the general norms laid down, if any.

(3.) AS per Hand Book of Procedures, Vo.II (as amended up to 25/03/1996, the Sr. No. 109 and 133 of the SIONs for textile products read as follows: