ORDER
Jyoti Balasundaram, Member (J)
1. The appellants are aggrieved by the order passed by the Additional Collector of Customs, New Delhi by which he has confiscated 56 rolls of PVC leather cloth valued at Rs. 37,936/- CIF and imposed a penalty of Rs. 5 lakhs each on the appellant as well its sole proprietor Shri Inder Jeet Singh. The learned counsel submits that action has been taken in resect of goods exported against advance licence No. 3049838 for alleged fabrication of documents under which goods were exported to fulfil export obligations against two other export licences No. 3084143 and 3148836. He submits that, notwithstanding his contention that for alleged forgery or fabrication of documents covering export of goods against different advance licences the present action in respect of a different licence is not valid, there is no basis for holding that documents had been fabricated or forged and the export obligation had been certified by the licensing authorities to have been fulfilled. He draws our attention to relevant portion of DEEC Books against licence No. 3084143 and 3148836 which contained these endorsements. He also points out that DEEC Book had also been audited by the Customs authorities and there is no case made out for confiscation and imposition of penalty. He submits that there cannot a penalty both on sole proprietary concern as well as its sole proprietor as they are not two separate entities. He further submits that the consignment in question had already been cleared by the Customs authorities at Calcutta and therefore, the adjudicating authority at Delhi had no jurisdiction to deal with this consignment. He, therefore, prays that the impugned order may be set aside and the appeals allowed.
2. Learned DR. Shri D.S. Malik draws our attention to the finding in the impugned order that as against the other two licences the Department had. noticed that airway bills revealed that only 800 Kgs. ladies hand bags had been air lifted against those licences and according to the Department the weight of the hand bags namely 40,000 pieces should have been 25,000 kgs. and this has led the Department to conclude that the appellant had filed forged and fabricated documents before the JCCI for showing fulfilment of export obligations and for getting goods free of duty fraudulently against the said licence. He reiterates the findings of the Additional Collector.
4. We have carefully considered the rival submissions. We agree with the learned counsel for the appellant that action could not have been taken against the consignment in question which were to be exported against Advance Licence No. 3049838 for alleged fabrication of documents covering goods exported to fulfil obligations against two different licences. We are satisfied with reference to the documents in question, namely, DEEC Books that the licensing authority who is the appropriate authority in such cases had satisfied himself about the fulfilment of exports obligations. It has been held by the Honourable Madras High Court in its order dated 9-9-1988 in Writ Appeal No. 1043/88 and others that “when the obligations of the licences are under the immediate, direct and effectively control of the Controller of Imports and Exports and the liability to pay Customs duty would be dependent upon the nature of performance by the importer relating to the export obligations in respect of goods which have been imported under the said Scheme, till the contingency arises for payment of duty as provided in the advance licence, the Customs Authorities will have no jurisdiction to demand payment of Customs duty. When import had been made based on a licence issued by a Coordinate Authority constituted under another enactment, unless and until he takes a decision as to whether Customs duty had become payable or not, the Customs Authorities cannot entrench upon the powers of the Controller”. The High Court has further held that “confiscation would arise only after the Controller takes a decision that the goods which had already been permitted to be imported under licence because of the subsequent conduct of the licensee had invited collection of duty which may arise under various circumstances and circumstances would certainly arise in cases where the authorities of Customs Department may come across certain goods which are covered by the said scheme and find irregularities or evasion of Customs duty and in such of these instances what they will have to do is to forward the particulars which have come to their notice to the Controller of Imports and Exports, who will have to take the follow-up actions and determine whether any Customs duty would become payable as stipulated in the scheme”.
5. In this case in all the three licences there is an endorsement from the appropriate licensing authority that the export obligation have been met by the appellants. We, therefore, hold that confiscation of the PVC leather cloth is not warranted and set aside the same. We also set aside the penalties imposed on the proprietary concern and its proprietor. Impugned order is thus set aside and appeals allowed.