M.R. & Co Vs Commissioner of Customs (CESTAT Chennai)
CESTAT Chennai held the denial of import exemption customs authority not justifiable since import was made under DGFT licence which was valid at the time of import and was cancelled by DGFT much later. Accordingly, order set aside and appeal allowed.
Facts- On specific intelligence and investigation by DRI, it was found that Duty Free Replenishment Scheme (DRFC) and Duty Free Imports Authorisation Scheme (DFIAS) were misused by over-invoicing of export goods by Shree Kuberappa & Sons, Bangalore. Certain material documents were also seized during the search operations. Based on the proceedings initiated by DRI, DGFT cancelled all the 9 DFIA licenses and 44 advance authorisations and DFRCs issued to M/s. Shree Kuberappa & Sons.
During the course of investigation, it was seen that M/s. M.R. & Co. the appellant herein had imported a total of 13940 kilograms of raw silk yarn totally valued at Rs.1,64,31,703/- duty free against DFRC licenses procured by him from M/s. Shee Kuberappa & Sons through Telegraphic Release Advise (TRA).
Based on the cancellation of licenses by DGFT, the appellant was issued a Show Cause Notice proposing to deny the benefit of the license and to demand duty, interest etc. After due process of law, Commissioner denied the benefit of duty exemption availed for import of a total of 13940 kgs of raw silk yarn and demanded duty of Rs.50,39,604/- along with interest and imposed equal penalty u/s. 114A of the Customs Act, 1962. The goods were also held to be liable for confiscation. Aggrieved by the said order, the appellant has preferred this appeal.
