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Issues:
1. Differential duty payment on imported raw material. 2. Misdeclaration of cullet source. 3. Imposition of penalty. Analysis: 1. The appellant imported raw material at a concessional rate of duty for manufacturing glass shells for TV picture tubes. However, during scrutiny, it was found that some raw material was used in manufacturing glass shells for computer monitors, for which concessional duty was not applicable. The appellant paid differential duty, CVD, and interest on the inputs used for computer monitors but did not pay for cullet used in the glass shells, claiming it was bought locally. Investigations revealed that the cullet was actually generated within the factory from imported raw materials. A show cause notice was issued for recovery of duty and penalty. The Additional Commissioner confirmed a duty demand of Rs. 15,81,589, imposed a penalty, and ordered interest recovery. 2. The appellant argued that the cullets used for computer monitors were different from those used for TV picture tubes and were bought locally. The respondent contended that the cullets got mixed up during manufacturing, justifying the duty demand. The Tribunal observed that the concessional duty was only for raw material used in glass shells for color picture tubes. As part of the cullet was used for computer monitor shells, duty on such inputs was upheld. The imposition of interest was also deemed valid. 3. Regarding the penalty, the appellant's counsel argued that the penalty was excessive as the cullets for computer monitors were sourced locally. The respondent maintained that the duty demand was justified due to the mixing of cullets. The Tribunal found the penalty excessive considering the majority of raw material was used for color picture tube shells. The penalty on the company was reduced to Rs. 1,50,000, and the penalty on an individual was set aside. The appeals were disposed of accordingly.
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