9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2005 (4) TMI 182 - AT - CustomsEXIM - DEEC Scheme - Manufacturer of Asceptic packaging materials - Misdeclaration - Demand duty - Limitation - Confiscation - Penalty - HELD THAT - Considering the plea on limitation, it is found, if ECOPLAST was mentioned as Supporting Manufacturers in the Advance Licences and was included as such and the fact that ECOPLAST was entitled to obtain Advance Licences and import Nucrel duty free, there would therefore be no case or cause for duty demands. The ingredients of 'mens rea' to invoke the larger period for duty demands is therefore missing and wilful suppression or misstatement cannot be established. Once the entire production emanating from Nucrel has been exported, at higher than value enhancement, provided the charge of the duty demands made by invoking larger period should not survive. The liability to confiscation u/s 111(o) cannot be upheld, since the imported item Nucrel has been established, that is not being contested, has been used in the goods exported, the provisions of the DEEC Scheme have been met. Confiscation therefore cannot be upheld. Thus, we do not propose to apply the strict Interpretation of notification ruling relied by the ld. DR. When duty demands, confiscation are not being upheld, and there is no cause or case for a penalty on any appellant herein. Hence, the order is set aside appeals allowed.
Issues Involved:
1. Denial of benefit of duty exemption notifications. 2. Allegation of misrepresentation and evasion of customs duty. 3. Validity of the sale and subsequent repurchase of imported materials. 4. Interpretation of terms in customs notifications and EXIM Policy. 5. Applicability of extended period for duty demand. 6. Liability for confiscation and penalties. Detailed Analysis: 1. Denial of Benefit of Duty Exemption Notifications: The Commissioner denied the benefit of notifications 30/97-Cus., 51/2000-Cus., and 43/2002-Cus. availed by TIPL, confirming a demand of duty amounting to Rs. 1,39,98,148/- and imposing an equivalent penalty under Section 114A of the Customs Act, 1962, along with interest under Section 28AB. 2. Allegation of Misrepresentation and Evasion of Customs Duty: The department alleged that TIPL imported 275 MTS of Nucrel 3990 under duty exemption notifications by misrepresenting facts to evade customs duty. TIPL declared and obtained 22 advance licenses under the DEEC Scheme for importing Ethylene Acrylic Acid Co-polymer but imported Nucrel 3990 instead, which they sold to M/s. Ecoplast. This was seen as a violation of section 111(c) of the Customs Act, 1962. 3. Validity of the Sale and Subsequent Repurchase of Imported Materials: TIPL argued that the transaction between them and Ecoplast was in the nature of 'principal to job worker,' even though there was a sale of imported goods. The materials were processed by Ecoplast and returned as K-film, which was essential for TIPL's export products. The Tribunal found no evidence that any part of Nucrel 3990 was not received back as K-film or used otherwise. 4. Interpretation of Terms in Customs Notifications and EXIM Policy: The Tribunal emphasized the need to interpret the terms 'sold or transferred' in harmony with the Export Import Policy. It was held that giving materials to a supporting manufacturer for processing does not violate the 'actual user' condition. The notifications and the EXIM Policy should be construed together to achieve the object of promoting exports. 5. Applicability of Extended Period for Duty Demand: The Tribunal found no evidence of wilful suppression or misstatement by TIPL. Since the entire production from Nucrel was exported with higher value addition, the charge of duty demands invoking a larger period did not survive. The Tribunal cited the case of Mahindra & Mahindra [2000 (125) E.L.T. 477], stating that technical omissions cannot justify invoking the extended period for duty demand. 6. Liability for Confiscation and Penalties: The Tribunal concluded that confiscation under Section 111(o) could not be upheld since the imported Nucrel was used in exported goods, meeting the provisions of the DEEC Scheme. Consequently, there was no cause for penalties on any appellant. The reliance on Maruti Udyog Ltd. [2001 (132) E.L.T. 340] was deemed well-founded. Conclusion: The Tribunal set aside the order of the Commissioner, allowing the appeals and ruling that the duty demands, confiscation, and penalties were not justified. The interpretation of customs notifications should align with the objectives of the EXIM Policy, and there was no evidence of intentional evasion or misuse by TIPL.
|
