Principal Commissioner of Customs Vs Lucky Exports (Karnataka High Court)
Karnataka High Court held that customs duty under the exemption Notification No.1/95-CE dated 04.01.1995 on imported items not granted since condition of value addition at the minimum rate of 33% made before the exports not satisfied. In fact, the value addition was only upto 5.18%.
Facts- The 1st respondent herein was a Partnership Firm engaged in Export of Medicines, Engineering Goods, Medical Equipments and Agro Products. It was a government recognized Export House and they used to execute their export orders mainly to Russia. The Ministry of Defence of the Government of Russia entered into a contract with the first respondent for the supply of 255 numbers of Complete Electronic Ventilation System to be used as life-saving devices in the Hospitals in Russia. To fulfil this export obligation to Russia, the first respondent entered into contract with M/s. NOVO LLC USA for supply of equipment relating to the ventilator and also placed Purchase Orders with the 5th respondent-Mr. Ashok Murthy, a Partner of M/s. Erkadi International, Bangalore.
Pursuant to the same, an application was made to the Directorate General of Foreign Trade for grant of advance licences for import of certain components, a licence was issued by the DGFT with the condition that the technical specification of the components imported should conform to those utilised in the manufacture of resultant product and should be reflected in the export documents. The first consignment was imported and was exported in December 2000. When the second consignment of imports arrived, the same were not allowed by the Directorate of Revenue Intelligence and they were seized to conduct certain enquiries.
