2000 (8) TMI 553 - AT - Central Excise

Issues Involved:

1. Expeditious hearing of appeals.
2. Confiscation of imported HSM scrap under Section 111(d) and 111(m) of the Customs Act, 1962.
3. Validity of show cause notice issued by DRI under Section 124 read with Section 28 of the Customs Act, 1962.
4. Bar of limitation for issuing show cause notice.
5. Entitlement to concessional rate of duty under Customs Notification No. 23/98.
6. Legality of penalties imposed under Section 112(a) of the Customs Act, 1962.

Detailed Analysis:

1. Expeditious Hearing of Appeals:
The Tribunal allowed the miscellaneous application for expeditious hearing of the appeals due to goods lying uncleared and proceeded with the hearing.

2. Confiscation of Imported HSM Scrap:
The Commissioner of Customs, Kochi, had ordered the confiscation of 655.43 MT of HSM scrap under Section 111(d) and 111(m) of the Customs Act, 1962, with an option of redemption on payment of a fine of Rs. 7,50,000 and imposed penalties of Rs. 5 lakhs on the appellants-importers and Rs. 1 lakh on another individual under Section 112(a) of the Customs Act, 1962. The Tribunal found that the goods were freely importable under OGL and should be reassessed by the proper officer of the Kochi Customs House, considering the eligibility for the benefit of Notification No. 23/98-Cus. The confiscation under Section 111(d) and (m) was not upheld as the goods were not restricted for import.

3. Validity of Show Cause Notice Issued by DRI:
The Tribunal found that the demands of duty under Section 28 of the Customs Act, 1962, should be made by the proper officer and not by the DRI officers. The jurisdiction of the DRI to issue the show cause notice was not upheld, as the proper officer of the Kochi Customs had already taken cognizance of the matter. The Tribunal set aside the show cause notice and the order of confiscation of goods covered by the four BEs pending assessment.

4. Bar of Limitation for Issuing Show Cause Notice:
The Tribunal noted that there was no allegation of intent to evade payment of duty by fraud or collusion, and thus the bar of limitation for issuing the show cause notice could be invoked. The Tribunal relied on previous decisions to support this finding.

5. Entitlement to Concessional Rate of Duty:
The Tribunal found that the appellants-importers, being actual users, were entitled to the benefit of the concessional rate of duty under Notification No. 23/98-Cus. The Commissioner had not adequately considered the material evidence on record regarding the importers being actual users. The Tribunal directed that the BEs be reassessed by the proper officer of the Kochi Customs House, considering the eligibility for the concessional rate of duty.

6. Legality of Penalties Imposed:
The Tribunal found that the penalties imposed under Section 112(a) of the Customs Act, 1962, were not sustainable due to the improper handling of the assessment and seizure process by the DRI officers. The Tribunal set aside the penalties and remanded the matter for de novo adjudication by the Commissioner of Customs, Kochi.

Conclusion:
The Tribunal allowed the appeals, set aside the confiscation and penalties, and remanded the matter for reassessment and re-adjudication by the proper officer of the Kochi Customs House. The Tribunal emphasized the need for proper assessment and consideration of the eligibility for concessional duty rates under Notification No. 23/98-Cus.

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