Wadhwani Commodities Trading Vs Commissioner of Customs (CESTAT Kolkata)
CESTAT Kolkata held that activity undertaken by the appellant as calibration tests and upgradation/configuration of the appliances according to the requirements/specifications of the customers, does not amount to manufacture as no new product came into existence. Hence, demand unsustained.
Facts- Intelligence was gathered to the effect that one exporter, namely Maa Jawala Enterprises was in the process of shipping four export consignments to Malaysia under Duty Free Import Authorization scheme (DFIA) through Haldia dock by resorting to mis-declaration of description, quantity and value of goods. Intelligence further suggested that Shri Alok Kedia, son of Shri Ram Narayan Kedia was the key person involved in the fraudulent export activities.
Post detailed investigation, it revealed that M/s Maa Jawala Enterprises has obtained 18 licenses under DFIA against fraudulent exports of betel nut powder, out of which, 13 were made transferable and sold to the appellants/importers. Against those DFIA License, the appellants had imported betel nut split claiming exemption from payment of duty for some cases on execution of bond and bank guarantee. Therefore, it was alleged against the appellant that they are not entitled to claim the exemption of payment of Customs duty against the above said 13 DFIA License, which has been obtained by M/s Maa Jawala Enterprises against the fraudulent exports of betel nut power. Therefore, the duty has forgone.
Conclusion- At the time of importation, the DFIA license against which the appellants have affected the duty free import of betel nut (split) were valid and made transferrable by DGFT, therefore, relying on the decision in the case of M/s Neev Trading Company, we found that the subsequent suspension cannot affect the duty free import made by the appellants as on the date of import license was valid and made transferable by DGFT.
Held that although the license obtained by fraud is, but is good till voided in the manner prescribed in law and at the time of import, the license is valid.
In that circumstances, we hold that as the licenses in question were valid against which, the appellant has imported duty free goods, the duty cannot be demanded from the appellants being bonafide purchasers of DFIA licenses.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The issue in all the appeal is common and are against a common order. Therefore, all are decided by a common order.
2. The facts of the case are as under :
2.1 Intelligence was gathered to the effect that one exporter, namely Maa Jawala Enterprises having IEC No. 0208012231 in the name of Shri Ram Narayan Kedia with office at Room No. 727, Marshall House, 7th Floor, 33/1, N S Road, Kolkata-700001 was in the process of shipping four export consignments to Malaysia under Duty Free Import Authorization scheme (DFIA) through Haldia dock by resorting to mis-declaration of description, quantity and value of goods. Intelligence further suggested that Shri Alok Kedia, son of Shri Ram Narayan Kedia was the key person involved in the fraudulent export activities.
2.2 Acting on the aforesaid intelligence, discreet surveillance was maintained in and around haldia dock and on 30th December, 2010, four consignments in 20 containers attempted to be exported to Malaysia by Maa jawala Enterprises under the cover of shipping bill nos. E-189, E191 & E-192, all dated 27th December, 2010 were identified at Haldia dock complex. Description of the goods declared in the shipping bills was “Processed Betel Nut (Supari) Powder and declared quantity was collectively 400MT in 8000 bags. The overseas buyer was Ned Marine Logistic, NBR 1 Jalanzamrud, Taman Gembira-41200, Kalang, Selkngore, D.E. Malaysia and declared FOB value was collectively Rs. 2,06,79,250/-. The aforesaid shipping bills had been assessed provisionally by the concerned officers of customs and had been allowed for shipments after drawing samples.
2.3 The impugned export consignments were detained on 30th December, 2010 and the relevant documents were resumed from the customs authority at Haldia dock complex. On 31st December, 2010, all the 20 containers were examined observing necessary formalities. On physical examination only 188 MT of goods in 3760 HDPE woven sacks were found collectively in the containers instead of 400 MT in 8000 bags as was declared in the four shipping bills and the goods were found to be dust/waste of gutkha and panmasala factory having no commercial value Representative samples were drawn. The said goods covered under the aforesaid 4 shipping bills were seized on 31st December, 2010 under Section 110 of the Customs Act, 1962. The goods attempted to be exported were covered under 4 DFIA licenses and CIF value for duty free import of betel nuts utilizing the said licenses was collectively Rs.1,75,72,000/-. The Customs duty benefit available on these licenses comes to Rs. 1.90 crores appx. Details of the said 4 export consignments are as under:-
