2003 (7) TMI 199 - AT - Customs

Issues Involved:
1. Jurisdiction of the Commissioner of Customs, Trichy to adjudicate the case.
2. Misdeclaration and violation of import conditions under the 100% EOU Scheme.
3. Confiscation and penalties imposed on the appellants.

Detailed Analysis:

1. Jurisdiction of the Commissioner of Customs, Trichy:

The appellants contended that the Commissioner of Customs, Trichy, lacked jurisdiction to adjudicate the show cause notices, arguing that the authority to adjudicate lay with the Commissioner of Central Excise within whose jurisdiction the EOUs were situated. The Department countered that the Commissioner of Customs, Trichy, had jurisdiction as the port of import was Tuticorin, which fell under his jurisdiction.

The Tribunal examined the bonds executed by the importers, which served the purposes of Section 65 and Section 59(2) of the Customs Act, and Condition No. 6 of the relevant Customs Notification. The Tribunal noted that the bonds were executed before the Assistant Commissioners of Central Excise having jurisdiction over the EOUs but emphasized that this arrangement was to minimize inconvenience to the EOUs.

The Tribunal referenced Circular No. 72/2000-Cus., which placed EOUs under the administrative control of the jurisdictional Commissioner of Central Excise but did not confer adjudicative power. The Tribunal concluded that the Commissioner of Customs, Trichy, had jurisdiction to adjudicate the cases based on Notification No. 27/97-Cus. (N.T.), which appointed the Commissioner of Customs, Trichy, for the whole of Tamil Nadu, excluding areas under the Commissioner of Customs, Chennai.

2. Misdeclaration and Violation of Import Conditions:

Investigations revealed that the capital goods imported by M/s. ETKSL and M/s. ORJEL were manufactured by M/s. ETK International Ferrites Ltd. (ETKIF) and not of US origin as declared. The goods did not conform to the permission granted by the Development Commissioner and were incapable of producing Electronic Grade Iron Oxide. This misdeclaration and violation of the basic condition of import attracted enforcement of the bonds executed under Section 59 of the Customs Act and Condition No. 6 of the Customs Notification.

Statements recorded under Section 108 of the Customs Act from various individuals, including directors and managers of the involved companies, corroborated the findings of misdeclaration and non-conformity with the import conditions. The goods were found to be incapable of producing the declared product, and the certificates of origin were found to be bogus.

3. Confiscation and Penalties:

Based on the investigative results, the Commissioner of Customs ordered the confiscation of the goods under Section 111(o) of the Customs Act, with the option for redemption on payment of fines (Rs. 20 crores for goods cleared under Bill of Entry No. 109 and Rs. 15 crores for goods cleared under Bill of Entry No. 346). The Commissioner also confirmed demands of duty (over Rs. 18 crores and Rs. 12 crores, respectively) and imposed penalties on the involved entities and individuals under Section 112(a) of the Act.

The Tribunal upheld the orders of the Commissioner of Customs, Trichy, concluding that the orders could not be assailed on the grounds of lack of jurisdiction. The appeals were directed to be heard on merits, with a clear indication that no findings of fact or expressions of views on the merits of the case were made in this order.

Conclusion:

The Tribunal held that the Commissioner of Customs, Trichy, had jurisdiction to adjudicate the cases based on statutory authority conferred by Notification No. 27/97-Cus. (N.T.). The misdeclaration and violation of import conditions under the 100% EOU Scheme were substantiated by the investigations, leading to confiscation and penalties. The appeals were directed to be heard on merits, with no prejudice to the findings or views on the substantive issues of the case.

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