Per T. Anjaneyulu : This matter has been referred to the Larger Bench for resolving the conflicting views as held in the case of M/s. Goodluck Industries vs. Commissioner of Customs, Calcutta [1999 (108) ELT 818 (Tribunal)] and in the case of Commissioner of Customs vs. M/s. Special Steels Ltd. [2004 (60) RLT 213 (CESTAT- Mum.)=2004 (163) ELT 242 (Tri. - Mumbai) respectively by the two Division Benches of this Tribunal, over the same issue.

2. The issue, over which the controversy has arisen, is as follows:

(a) Whether the benefit of legal maxim LEX NON COGIT AD IMPOSSIBILIA would be available to a valid recognized transferee to avail the benefit of the DEEC exemption Notification? or

(b) Whether the original licencee is to satisfy the condition of the Notification or the transferee of the licence?

3. The facts involved in the appeal in a nutshell may be stated as follows.

(a) The appellants are a partnership firm, inter alia, engaged in the business of trading and import of various items, including Poly Propylene wide spec. They have acquired and/or purchased transferable Value Based Advance Licences (hereinafter referred to as "VBAL"), including Licence No.PK 2049579 dated 19.01.1993, which was originally issued in the name of M/s. Amar Tara Exports, New Delhi, and which was, inter alia, valid for import of Poly Propylene wide spec. The said Licence was purchased by the appellants vide transfer letter dated 20.04.1994. Accordingly, the appellants have imported a consignment of Polypropylene wide spec vide Bill of Entry No. 881 dated 30.03.1994 against the said Licence and the same was allowed duty free clearance in terms of Notification No. 203/92-Cus., dated 19.05.1992.

(b) By a Show Cause Notice dated 04.03.1999, the appellants were, inter alia, called upon to show cause why an amount of Rs.16,74,702/- should not be demanded and recovered from them in terms of proviso to Section 28(1) of the Customs Act, 1962 on the ground that the appellants had allegedly contravened condition (v)(a) of the said Notification. Further, the Notice proposed to impose a penalty under Sections 112 and 114 of the said Act.

(c) By a letter dated 20.10.2000, the appellants submitted their reply to the Show Cause Notice, denying the allegations contained therein and submitted that they had not contravened the conditions of the said Notification. They have also submitted a copy of the Bill of Entry and debit note dated 20.04.1994 during the course of enquiry.

(d) The Commissioner of Customs (Import), by an Order dated 01.05.2002, however, confirmed the demand of duty of Rs.16,74,702/- along with interest @ 24% and further imposed penalty of Rs.1,00,000/-. The amount of duty along with interest is directed to be paid jointly and severally by original licence holder and the transferee of the licence, who imported the goods. However, it is held that the imported goods were liable to confiscation under Section 111(o) of the Customs Act, 1962 for non-compliance of the condition (v) of the Notification No. 203/92. As the goods were not available for confiscation, both the licencee and the transferee were further penalized at Rs.3.00 lakhs and Rs.1.00 lakh respectively under Section 112(a) of the Customs Act, 1962.

(e) Aggrieved by the impugned order, the appellants have preferred the appeal to this Tribunal.

4. Since there exists divergence views of two Division Benches and as the issue involved is highly contentious in respect of fulfillment of conditions of DEEC Notification, the matter has been referred for resolution by the Larger Bench. Hence this reference.

5. The relevant Notification is hereby extracted for the purpose of discussion, better understanding and just decision of the case.

"(1) Notification No.203/92-Cus reproduced below:

In exercise of the power conferred by sub-section (1) of section 2 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials