Legal principle

Law is well settled that the substantial right of an exporter cannot be denied on procedural non-compliances, and an ISO certificate is not a condition for Advance Authorisation but only a procedural relaxation for sampling and testing.

Court decision

The Tribunal set aside the impugned orders, holding the duty demand, confiscation of goods and all penalties (including on the co-noticees) unsustainable, and allowed all four appeals with consequential relief in accordance with law.

Facts

Midas Treads (India) Pvt Ltd, a manufacturer-exporter of pre-cured tread rubber and rubber compound sheets, availed benefits under three DFIA licences (2007-09, Rs. 36,32,331 in replenishment mode) and eleven Advance Authorisation licences (2012-15, Rs. 6,16,28,577, exports under 400 shipping bills). The DRI alleged that for 2006-2009 the appellant used a forged ISO certificate (effective date shown as 2006 though actually issued in 2009, by an agency allegedly not authorised per Circular No. 57/97) and manipulated test reports, having no in-house lab, to claim DFIA/DEPB/AA benefits contrary to SION norms. After investigation and recorded statements, a Show Cause Notice dated 15.03.2018 was issued. The Adjudicating Authority (Commissioner of Customs, Cochin) confirmed the demand of customs duty and interest and imposed penalties on the appellant and co-noticees. The appellant and three co-noticees (Paulose Vargughese, Manoj Mathews, Jayaprakash K) appealed to the CESTAT Bangalore Regional Bench.

Key provisions

• Section 117, Customs Act, 1962 — Penalties for contravention etc not expressly mentioned