Judgment:
1. Revenue is in Appeal, dissatisfied with Order-in-Original No.SKS/CC/ICD/TKD/44/2000, dated 13-7-2000 passed by the Commissioner of Customs (ICD), TKD, New Delhi.
2. The issue that arose for consideration in the adjudication proceedings leading to the passing of the impugned order was whether the respondent had discharged his export obligation under Notification No. 203/92-Cus. The respondent had imported stainless steel billets/ingots and rolls duty free under the DEEC scheme (License No.2051168, dated 7-6-93). He produced proof of export of 850 MTs of alloy steel bar Sections during January 1994 to Dubai in fulfilment of the export obligation before the Directorate General of Foreign Trade and that authority cancelled the bond upon being satisfied that export obligation had been fulfilled. The particulars of the Shipping Bills were as under :- 3. Later on, the Customs Authorities proceeded against the appellant by issue of Show Cause Notice No. C. VIII(ICD)6/Import/Adj. (Commr.) /142/97/7857 to 7859, dated 31-12-98 demanding customs duty in respect of the goods imported under DEEC Scheme on the allegation that the appellant had disposed of the imported materials before the export obliga- tion was fulfilled and that the consignments claimed to have been exported to Dubai had not been cleared at Dubai. The respondent contested the allegation regarding non-export and produced Bills of Entries by way of proof that the goods had actually been cleared at Dubai. They contested the allegation of disposal of imported goods and submitted that the imported goods had been processed by them. They produced proof of paying Rs. 5.92 lakhs to Mr. Harish Tanej'a towards conversion of the imported steel. The adjudicating authority accepted the defence of the appellant and dropped the proceedings The present appeal is directed against these findings.
4. The points raised in the present appeal are that the Commissioner who adjudicated the case overlooked the charge that the goods had been disposed of before the export obligation was fulfilled and that no clear finding has been recorded on this point in the impugned order. It is also mentioned that the appellant's version that he had paid a conversion charge of Rs. 5.92 lakhs in cash to Mr. Harish Taneja was on verification by the investigation authority found to be not reliable inasmuch as Shri Taneja was not traceable. The appeal submits that "M/s. Sinclair Exports Ltd. have completely failed in this case to prove that they have not disposed of the imported material before fulfilment of export obligation but utilized in the manufacture of goods exported by them." 5. The present appeal also repeats the allegation that the quantities mentioned in the shipping bills had not actually been exported. The submissions in the appeal on this point are as under :- '"Finally, without giving any specific findings on the arguments for or against the department's case the adjudicating authority observed that the fact remains that the goods were examined at the time of export and were found in order by the examining staff. The department has not alleged connivance on the part of shed staff. He thus, therefore, no alternative but to accept the examination report as correct. According to adjudicating authority, the examination report confirms at least the number of bundles with test check of few bundles. Therefore, the adjudicating authority held that the balance of convenience was in favour of M/s. Sinclair Exports. With reference to this rinding of the adjudicating authority, it may be mentioned that the examination is never 100%. Clearance is allowed basically on the basis of declaration made by the party. Only a very small percentage of goods are examined. It is possible to certify the accuracy of party's declaration only after 100% examination.
This 2% to 5% examination is done for the prima fade satisfaction of the department without delaying the consignment for 100% check and not to certify party's declaration. It is only a test check. Mere clearance does not automatically confirm the accuracy of party's declaration. So, when evidences are produced to question the correctness of declaration, that evidence has to be considered on merit and a view, has to be taken. In this case, the department has produced reasonable evidences to question the declaration. The adjudicating authority ought to have considered and passed the order on the evidence adduced by the department to question the genuineness of the export, rather than presuming the exporter's bona fide merely on the basis of the fact that goods were allowed to be exported by the department and also cleared by the importer on the other end. No finding on the merit of Department's case has been given in a categorical manner." 6. During the hearing of the case, learned SDK pointed out that in terms of Clause (iv) of Notification No. 203/92-Cus., an importer cannot dis- pose of or in any other manner deal with goods imported under DEEC Scheme until export obligation is met and export proceeds are realized. It was pointed out that in the instant case export earnings were realized only in February, 1994 while the unproved cash payment of conversion cost to Mr. Harish Taneja was on 31st January, 1994. Therefore, if the disposal of the goods is taken as on 31-1-1994 or prior to that date, it would be clear that the appellant has violated the notification by disposing of the goods before the export earnings was realized, inviting upon himself the consequences for violation, of notification.
7. The defence of the respondent is that he had completed the export obligation and the exported goods had been received at Dubai and, according to his understanding, verifications carried out by the Directorate of Revenue Intelligence authorities at Dubai had confirmed this and that the allegation regarding disposal of the goods prior to export has no basis inasmuch as the Show Cause. Notice has not furnished any material about when, to whom and how the goods were disposed of, particulars which are very vital to prove that imported goods had been disposed of before export obligation was met. It has also been stressed that the entries in his cashbook related to transactions of various kinds and that all assessments, including income tax assessment, had been carried out based on the entries in the register. It was submitted that the inability of the customs investigation to locate Shri Harish Taneja was not a ground for treating the entry in the cashbook as false. The respondents have therefore, submitted that the Revenues' Appeal has no merit in law or on facts and is required to be dismissed.
8. In view of the various contentions on facts raised before us, we obtained the cashbook of the respondent and the investigation file of the Directorate of Revenue Intelligence and perused them.
9. The appeal is on two grounds. One that the appellant disposed of the goods before the export obligation was fulfilled and export earnings repatriated. On this point records of the case show that the imported goods were cleared from the customs around 18th January, 1994. Three of the export shipping bills dated 1-1-94,14-1-94 and 15-1-94 were prior to the release of the imported goods itself. Thus, these exports have taken place (if they were real) prior to the import of the goods itself. The last shipping bill was of 29-1-94. The dispu Vd payment to Mr. Taneja for conversion of the goods was within two weeks of the import of the goods. The repatriation of the foreign exchange also took place in February, 1994. The show cause notice does not indicate any relevant particulars about the time, place or manner of the alleged disposal of the imported goods. Therefore, the allegation regarding disposal of imported material remains unsubstantiated. The allegation also looses its credibility in view of the fact that bulk of the export had taken place before the arrival of the imported materials. And the export proceedings had also been received in the month succeeding the exports. It is also not understood how the payment to Mr. Taneja was relevant to the charge of disposal of goods, since disposal of the goods in the normal course, should occasion receipt of cash in and not payment out. The second allegation of non-export or non-receipt of the exported goods at Dubai is seen to be entirely contrary to ascertained facts on record. The respondents had produced Bills of Entries of Dubai to confirm clearance of the exported goods at destination, in addi- tion to customs examination reports on the shipping Bills at Delhi. We find from the file of the DRI that the claim relating to clearance of the export goods at Dubai had been verified at Dubai by the Indian Embassy there and it had been reported that the appellants' claim was found to be correct. The persistence of the Revenue with the allegation of non-export is quite intriguing on the face of confirmation of export by the Indian Embassy. It is also quite surprising that such an allegation should be made on entirely general grounds like customs authorities do not examine 100% of the goods, the clearance is allowed basically on the basis of the declaration made on export documents, only very small percentage of goods is examined and it is possible to certify the accuracy of party's declaration only after 100% examination. Customs administrations all over the world go by extremely limited physical examination of imported and exported goods. Obviously, a case cannot be built on the limitations of a procedure universally followed by countries. It is not becoming of a Government Authority to take such grounds in an appeal, particularly after verification at Dubai had confirmed receipt and clearance of the goods. These grounds could have been appreciated if verification at the country of import had shown that the goods had not been received or if there was some other compelling piece of evidence. These allegations in the present case have served only to malign the exporter and cast doubts on customs officers who examined the export consignments, without in any way assisting the present appeal. A modicum of care and concern for facts on record would have advised the authorities against venturing on this appeal.
10. In view of what has been stated above, we are constrained to observe that there is no evidence to support the present appeal. It is, accordingly, rejected.