2012 (12) TMI 440 - AT - Customs

Cutting and slitting of coils into sheets - Violation of conditions of Notification no. 43/2002 dated 19.04.2002 - Demand of duty,interest and Penalty - Held that - Activity undertaken by the appellant amounted to manufacture and it was not cleared as such by the appellant importer. Once this condition has been satisfied by the appellant from the records maintained by them, the Commissioner should not have gone into other issues which have already been decided by the Tribunal holding that at the relevant time the process undertaken by the appellant amounted to manufacture and the appellant had cleared the same on payment of appropriate excise duty. What the Commissioner has done is to re-consider an issue which has already been settled in favour of the appellant in the previous proceedings by this Tribunal which is not permissible as the Commissioner is subordinate to this Tribunal in judicial matters. Therefore, the impugned order is not sustainable in law.

Summary

Issues:
- Duty demand confirmation under Section 28 of the Customs Act, 1962
- Imposition of penalty under section 114A of the Customs Act
- Violation of conditions of Notification no. 43/2002 dated 19.04.2002
- Remand order by the Tribunal for fresh consideration by the adjudicating authority
- Verification of goods imported under advance licenses and clearances after processing

Analysis:

The judgment pertains to an appeal and stay application against an Order-in-Original passed by the Commissioner of Customs (EP), Mumbai. The adjudicating authority confirmed a duty demand under Section 28 of the Customs Act, 1962, along with interest and imposed a penalty under section 114A of the Act. The duty demand was based on the appellant's alleged failure to fulfill the terms of advance licenses, resulting in the removal of imported goods 'as such,' contrary to the conditions of Notification no. 43/2002. The Tribunal had previously remanded the matter to the adjudicating authority for fresh consideration, emphasizing the need to examine the documents proving the correct utilization of imported materials under the advance licensing scheme. The appellant argued that they had complied with the manufacturing process requirements as clarified by the Board in a Circular, and the Commissioner had not adequately considered their detailed records.

The Tribunal highlighted that the appellant's activity constituted manufacturing, and goods were not cleared 'as such.' The adjudicating authority, in the remand proceedings, acknowledged the appellant's submission that certain goods were not covered under the show-cause notice as they were imported under different schemes. Once the appellant demonstrated compliance with the manufacturing process, the Commissioner should not have revisited settled issues decided in favor of the appellant by the Tribunal. The Commissioner's reconsideration of resolved matters was deemed impermissible as the Tribunal's decisions hold precedence over those of the Commissioner in judicial matters. Consequently, the impugned order was deemed legally unsustainable.

The Tribunal allowed the appeal with any consequential relief and disposed of the stay application. The judgment underscored the importance of adherence to the terms of advance licenses and the correct utilization of imported materials to avoid duty demand confirmations and penalties under the Customs Act. The remand for fresh consideration emphasized the necessity of thorough verification and compliance with the applicable regulations to ensure lawful import practices.