Phoenix Intl violated Exim policy '92-97: SC

The Supreme Court (SC) has held shoe manufacturers, M/s Phoenix International Ltd (PIL), guilty of violating Exim policy, 1992-97, and set aside the ruling of the CEGAT in its favour in a Customs case.

PIL and its parent company Phoenix Industries Ltd imported parts of synthetic shoes in semi knocked down (SKD) condition from the same supplier in Bangkok.

Shoes carrying brand name Reebok were assembled from these under an arrangement with Reebok International Ltd. The Customs issued show cause notices to the companies stating that consumer items were placed in the negative list and required specific import licence.

They denied exemptions claimed by the company and insisted that it had to pay 50 per cent Customs duty with other charges ad valorem. In the ensuing dispute, the tribunal ruled in the company's favour.

The SC stated that the device of importing the vital parts in SKD condition in the names of two different companies was intended to bypass the rules.

"It is clear that the device of importation of one item by PIL and three items by the other company was a subterfuge/fictitious arrangement intended to deceive the department and a fraud on para 156(a) of the policy," the judgment said.