Case: M/S. Afloat Textiles (India) Limited &amp; Another Vs. The Union of India &amp; Others

4. In the year 1993, the petitioners were granted three Quantity Based Advance Licenses under the Duty Exemption Scheme contained in Chapter VII of thePolicy for April, 1992 to March, 1997. The said licences carried an obligation to export Stainless Steel Flanges with permission to import duty free stainless steel plates as per value addition prescribed under the input output norms. Under the policy, it was open to the petitioners to first import raw materials and manufacture and then export or make prior exports and then import the raw materials without payment of duty. However, duty free imports were subject to the conditions laid down in the Notificationdated 19th May, 1992.5. Petitioners had opted for the second option and had effected prior exports as permissible under the Scheme. On 26.11.1994 the factory premises of the petitioners were searched by the officers of the Central Excise/customs and certain documents and goods were seized. During the course of investigation, statements of various parties, including Mr. K.L. Dingra, petitioner in Writ Petition No.3064 of 2003 were recorded. In those statements, it was admitted by Mr. Dingra as well as several other parties that the raw materials imported by the petitioners were sold before the export obligations under the licences were fulfilled. By a show cause notice dated 9/5/1995, petitioners were called upon to show cause as to why the benefit of Notification No.204/95Cus. Dated 19/5/1992 should not be denied to them and Customs duty amounting to Rs.1,17,83,881/should not be recovered from them. The petitioners were also called upon to show cause as to why the goods seized under the panchanama should not be confiscated and penal action should not be taken against them under the provisions of the Customs Act.6. By an order in original dated 4/6/1996 the Commissioner of Customs (Import) confirmed the demand of duty of Rs.1,17,83,881/by holding that the conditions set out in Notificationdated 19/2/92 have been violated by the petitioners. It was held that the duty free goods were sold without fulfilling the export obligation and even the export proceeds have not been realized and, therefore, the entire seized goods are liable for confiscation. The petitioners were given an option to redeem the goods on payment of redemption fine and penalty of Rs.1 crore against the Company and Rs.10,00,000/on Mr. K.L. Dingra, Vice President of the Company were also levied. Challenging the aforesaid order, petitioners, filed appeals before CEGAT, Mumbai and by the impugned order dated 22/4/2003 the Tribunal upheld the order in original dated 4/6/1996 passed by the Commissioner of Customs. Challenging the above orders, these petitions have been filed.

Court's reasoning:
10. Whether the certificate issued by the Licensing authority in the year 2001 to the effect that the export obligation has been fulfilled by the petitioners would have bearing on the findings given by the Commissioner to the effect that conditions set out in Notification No.204/92 was an issue raised in the appeal and the same was required to be answered by the Tribunal. The petitioners in the memo of appeal as well as in the written submissions have submitted that in view of the reversal of MODVAT credit, there is no violation of condition No. VI of Notification No.204/92 and in view of the findings given by the licensing authorities there is no violation of condition No. VII of Notification No.204/92. However, there is no clear finding recorded by the Tribunal on these issues. In these circumstances, the grievance of the petitioners that the belated judgment delivered by the Tribunal after four months from the date of hearing without considering the material facts on record has led to the miscarriage of justice seems to be justified.11. The Apex Court in the case of Standard Radiation Pvt. Ltd. V/s. Commissioner of Central Excise [143 E.L.T. 24 (S.C.)], has held that the Tribunal being the last fact finding authority is expected to discuss the facts in detail and not cursorily and come to briefly stated conclusions on that basis. In the present case specific plea is raised and canvassed before the Tribunal by adducing material and additional ground has been raised in that behalf. However, there is no clear finding recorded by the Tribunal on these issues at all. In these circumstances, we are of the opinion that the impugned order passed by the Tribunal is liable to be quashed and set aside. Accordingly, we quash the impugned order dated 22/4/2003 passed by CEGAT, Mumbai. The matter is remitted back to the CEGAT, Mumbai with directions to rehear the matter and dispose of the same on merits within three months from the date of receipt of Writ of this Court. All rival contentions are kept open.