Platinum Exports vs Union of India (UOI)

Heard the learned Counsel appearing for the petitioners and the learned Counsel appearing for the respondents. Perused petition.

This petition is directed against the order dated 13th, January, 2003 passed by the Settlement Commissioner, Additional Bench (Customs and Central Excise), Mumbai [2003 (160) E.L.T. 779 (Sett. Comm.)]. The learned Counsel appearing for the petitioners has taken exception to the order to the extent it determines duty liability of petitioners to the extent of Rs. 33,72,641/- and after giving credits of the deposit made by the petitioners from time to time directs the petitioners to deposit the balance amount of Rs. 8,72,641/- within a period of 30 days from the receipt of the impugned order.

The learned Counsel appearing for the petitioners submits that the impugned order relates to 3 shipping bills whereunder the goods were sought to be exported, details of which are as under:

(i) 9800 video Cassettes exported under Shipping bill No. 759127, dated 16-5-1997 valued at Rs. 10,64,923.00

(ii) 12600 video cassettes exported under Shipping bill No. 763520, dated 27-5-1997 valued at Rs. 13,74,278.00 FOB

(iii) 276000 video cassettes exported under shipping bill No. 101259, dated 7-2-1998 valued at Rs. 32,73,330.00 FOB

The learned Counsel appearing for the petitioners submits that so far as the goods covered in the first consignment vide shipping bill No. 759127, dated 16th May, 1997 is concerned, they were already exported before the SUB started their investigation. No representative samples apparently were drawn from the said consignment as such it was not correct on the part of the Settlement Commissioner to hold that the goods exported under the said shipping bill were not manufactured in the factory of the petitioners from and out of the imported raw materials/goods.

Learned Counsel for the petitioners further submits that so far as the third consignment covered under the shipping bill No. 101259, dated 7th February, 1998 relating to video cassettes numbering 276000 is concerned the same was not the subject matter of the show cause notice as such it could not have been considered by the Settlement Commissioner. The learned Counsel did not raise any objection as far as second shipping bill No. 763520, dated 27th May, 1997 is concerned.

Mr. Jetly appearing for Revenue countered the submissions made by the petitioners. The submissions made by the petitioners are misplaced in view of the fact that the Settlement Commissioner has categorically mentioned in its order that the petitioners were directed to produce the documentary evidence with regard to the user of the inputs/goods imported under the licence for manufacture of the goods exported or sought to be export by them. The petitioners could not produce any material so as to show that the goods which were exported were manufactured in their factory from and out of goods imported by them. During the course of visit by SSIB Officers of Mumbai Customs, after getting intelligence report, investigation revealed that the petitioners were exporting only blank cassettes. They did not use the imported input for manufacturing of the goods. That material was diverted to the open market. The Settlement Commissioner has taken into account all the facts and circumstances of the case together with the evidence produced and went on to record the findings as under:

5.5 The Commission gave one more opportunity to the applicant to produce evidence regarding transport of imported raw materials to the place of manufacture, manufacture thereof in the factory, dispatch of manufactured goods for exports etc. Both the Revenue and the applicants were directed to produce documentary evidence to the above fact within ten days of this order.

5.6 The Revenue was also directed to check up with the concerned Central Excise field formation in Ludhiana whether the applicant manufacturing unit is registered/declarant with them and whether the concerned export consignments have emanated from the said factory premises under cover of relevant records of the manufacturer-exporter.

7.4 The Commission notices that the applicants are not in a position to produce statutory/documentary evidence regarding (i) transport of imported raw materials to the place of manufacture (ii) manufactured thereof in the factory (iii) dispatch of manufactured good for export. The documents produced during the time of hearing like lorry receipts from Shakti Highway Carriers (Regd.) Delhi, application form dated 28-8-1995 for permanent registration as SSI with endorsement dated 29-8-1995 of the Registering Authority and Inter Office Invoice dated 12-3-1997 concerning transfer of raw material to Ludhiana Office could not be treated as documentary proof to establish the place of manufacture, to arrive at the quantum of manufacture in the factory and regarding the quantum of manufactured goods for exports. However, on behalf of the applicant, the Ld. Advocate had willingly accepted to abide by the decision given by the Commission in the case to show the real spirit of settlement. In view of his difficulties here and in spirit of settlement, the Commission orders that the terms of settlement under Sub-section (7) of Section 127 of the Customs Act, 1962 shall be as follows:....

From the above, it is clear that the petitioners did not have factory, no manufacturing process was carried out to manufacture the goods much less from the imported inputs or goods. The petitioners voluntarily approached the Settlement Commissioner and disclosed above facts and admitted that no goods were manufactured by them. In this backdrop, we have examined the above findings recorded by the Settlement Commissioner. We are of the considered view that the view taken by the Commissioner is reasonable and possible view. No case is made out to interfere with the impugned order. The petitioners would be free to comply with the impugned order within 30 days from today, if advised, failing which legal consequences to follow.

In the result, petition is dismissed. Rule is discharged. No order as to costs.