2010 (10) TMI 996 - AT - Central Excise

Issues Involved:
1. Mis-declaration of value and description of imported goods.
2. Liability of confiscation and penalty.
3. Cancellation of private bonded warehouse license.
4. Quantification and confirmation of duty demand.
5. Compliance with remand order directions.

Issue-Wise Detailed Analysis:

1. Mis-declaration of Value and Description of Imported Goods:
The Tribunal's remand order required the adjudicating authority to first decide on the issue of mis-declaration of value and description of the imported metal scrap. This included providing the appellants with all relied-upon documents supporting the allegations of under-invoicing and mis-declaration, and allowing cross-examination of officers if requested. The adjudicating authority found that the appellants had engaged in a "pre-planned and deliberate concealment of Brass Scrap in the guise of cheap metal scrap," leading to duty evasion amounting to Rs. 4,92,09,002.

2. Liability of Confiscation and Penalty:
The adjudicating authority was also tasked with determining the liability of confiscation under Section 111(d) and (m) of the Customs Act and the liability of penalty under Section 112(a). The authority ordered the confiscation of 1338.507 MT of imported goods and other specified quantities, imposing a redemption fine of Rs. 4,20,00,000 in lieu of confiscation. Additionally, penalties of Rs. 1,47,00,000 on the noticee company and Rs. 50,00,000 and Rs. 25,00,000 on two individuals were imposed under Section 112(a)/114A.

3. Cancellation of Private Bonded Warehouse License:
The remand order directed that if mis-declaration was established, the adjudicating authority should forward a copy of the order to the Development Commissioner for the calculation of cumulative Net Foreign Exchange (NFE) and directions for de-bonding. The adjudicating authority noted that the issue of cancellation of the warehousing license could be taken up by the proper officer upon receiving the Development Commissioner's findings.

4. Quantification and Confirmation of Duty Demand:
The Tribunal's remand order specified that quantification and confirmation of the duty demand should be adjudicated in light of the Development Commissioner's findings on NFE and de-bonding. However, the adjudicating authority proceeded to quantify and confirm the duty liability amounting to Rs. 4,92,09,002 and penalties before obtaining the Development Commissioner's report, which was a deviation from the remand order.

5. Compliance with Remand Order Directions:
The Tribunal observed that the adjudicating authority had not complied with the remand order's directions, which required the adjudicating authority to first decide on the mis-declaration issue, then forward the order to the Development Commissioner, and only thereafter quantify and confirm the duty and penalties. The Delhi High Court had also upheld the Tribunal's remand order, emphasizing that the adjudicating authority must follow the specified sequence of actions.

Conclusion:
The Tribunal found that the adjudicating authority erred by quantifying and confirming the duty and penalties before obtaining the Development Commissioner's report, as mandated by the remand order. Consequently, the Tribunal stayed the impugned order concerning the confirmation of duty demand and penalties until the disposal of the appeals, without insisting on pre-deposit. The findings were deemed prima facie, and the applications were allowed in relation to the demand made under the impugned order.

← Previous Next →