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TMI Blog2000 (12) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... ropped the duty demand of Rs. 7,07,01,428/- raised on M/s. M.M.T.C. Ltd. and has dropped penal action proposed against M/s. MMTC. 2. The brief facts of the case are that M/s. MMTC is a Public Sector Undertaking of the Government of India. Under the Export and Import Policy of the Government, as framed from time to time, Schemes were formulated whereby jewellery manufacturing units were permitted to import primary gold of 0.995 fineness for the purpose of manufacture and export of gold jewellery, subject to certain value addition norms. Such units were permitted to set up manufacturing facilities within the specified Export Processing Zones or in Special Export Oriented Complexes subject to these units being 100% EOUs. Para 88 of the EXIM Policy 1992-97 deals with the schemes for export of gold/silver jewellery and articles. Para 88 is divided into clauses A to G and each clause governs a different Scheme. The Broad outlines of the Scheme are as under : "A. Scheme for export of gold/silver jewellery and articles against gold/silver supplied by the foreign buyer. B. Scheme for export of gold/silver jewellery and articles sale at approved exhibitions. C. Gol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 51/98 Nil 8 kgs. M/s. Goldex Rs. 29,61,750/- 3. C/A 52/98 16-1-1995 9.986 kgs. M/s. Zevrat Overseas Rs. 36,74,598.35 P 4. C/A 53/98 15-10-1996 read with corr. dated 26-8-1997 10 kgs. M/s. Unique Jewellers Rs. 29,00,000/- 4. The Noticees were adjudicated vide four separate Adjudication orders and the Commissioner confirmed duty demands and imposed penalties as set out in the opening paragraph of this order. Hence four appeals have been filed by M/s. MMTC Ltd. Sh Manoj Kumar has filed appeal against imposition of penalty vide adjudication order dated 4-11-1997. 5. The subject matter of Appeal No. C/478/98 filed by the Revenue is the dropping of proceedings against M/s. MMTC Ltd. in respect of import of 180 kgs. of gold bars against 22 bills of entry filed from 5-1-1991 to 23-6-1994 claiming exemption from duty under Customs Notification No. 3/88, dated 14-1-1988 and supplied to Export Oriented Units set up in Special Export Oriented Complexes at Jhandewalan for the purpose of use in the manufacture of jewellery for export out of India, initiated for non-utilisation of the gold for the above purpose. 6. We have heard Shri M. Chandrasekharan, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said goods and of the exports made by him and shall submit such account periodically to the Assistant Commissioner of Customs; (6) the importer satisfies the Development Commissioner of the Zone that the goods so imported have been used for the purposes specified in the notification or for any other purposes specified in Export-Import Policy; (7) the Assistant Commissioner of Customs, may subject to such conditions and limitations as may be imposed by him and subject to the provisions of Export-Import Policy - (i) permit the said goods or goods manufactured or packaged in the unit to be transferred or supplied to another unit in the same Zone; (ii) permit re-export of dead-stock or broken stones upto 5% of the value of import of such stones; (8) gem and jewellery, including the rejects, manufactured in the said Zone, shall not be brought to any other place in India (that is to say the Domestic Tariff Area) for whatever purpose : Provided that scrap, dust or sweepings of gold arising in the manufacturing process may be forwarded to the Government Mint by the importer for conversion into standard gold bars and return to the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export under this notification shall be allowed - (i) by air freight through the airports specified in Annexure-II to this notification; and (ii) through post parcels, in accordance with such procedure as may be specified by the Commissioner of Customs; (12) gem and jewellery manufactured in the said Zone may be supplied to the retail outlets or show rooms set up in the departure lounge at international airports at Delhi and Bombay in accordance with the Import and Export Policy for sale to a tourist as defined in the Baggage Rules, 1994, leaving India in accordance with the procedure specified by the Commissioner of Customs. Explanation. - For the purposes of this notification, "Export-Import Policy" means the Export and Import Policy, 1st April, 1992 - 31st March, 1997, published under the Ministry of Commerce Public Notice No. 1-ITC (PN)/92-97, dated the 31st March, 1992, as amended from time to time. (13) gem and jewellery manufactured in the said Zone and sold to a foreign bound passenger may be transferred in accordance with the Import and Export Policy to the retail outlets or showrooms set up in the departure lounge or customs warehou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d diversification. 10. Drawings, blue prints and charts. 11. Goods re-imported within one year of the date of exportation for re-export after repairs or remaking. 12. Goods re-imported within one year from the date of exportation from the Zone due to the failure of the foreign buyer to take delivery. ANNEXURE-II Name of the Zone Exports through Airports at 1. Santacruz Electronics Export Processing Zone Sahar 2. Cochin Export Processing Zone Trivandrum/Calicut/Cochin 3. Noida Export Processing Zone Delhi 4. Falta Export Process Zone Calcutta 5. Madras Export Processing Zone Madras 6. Surat Export Processing Zone Sahar Note: The Zone shall comprise of places bearing survey numbers and enclosed by boundaries as may be specified by the jurisdictional Commissioner of Customs in a Public/Trade Notice, issued in this behalf. ANNEXURE-III Notification No. 196/87-Cus., dated 5-5-1987 Notification No. 256/87-Cus., dated 2-7-1987 Notification No. 258/87-Cus., dated 2-7-1987 Notification No. 260/87-Cus., dated 2-7-1987 Notification No. 262/87-Cus., dated 2-7-1987 (Notification No. 177/94-Cus., dated 21-10-1994 as amended by Notification No. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t M/s. MMTC is the importer of the gold in question. The Scheme under which M/s. MMTC was operating yokes M/s. MMTC with the Gem and Jewellery units and fulfillment of condition of manufacture and export of jewellery/articles by the said units is necessary in order that M/s. MMTC may avail of the benefit of duty free import of gold. Under the Scheme, dual role has been assigned to M/s. MMTC namely that of importer-cum-supplier. Further, as per the provisions of Rep. Circular No. 22/98, M/s. MMTC has responsibility/continuing obligation to monitor the activities of the exporting units and to ensure export of gold/jewellery within a stipulated period of time following which M/s. MMTC has to inform the Customs authorities and to levy penalty on the unit for extension of period on expiry. M/s. MMTC was charging commission of approximately 0.88% for their services. We also notice that M/s. MMTC supplied gold on loan basis only on the strength of 'issue applications' filed by the respective units and such applications are not the documents prescribed under the Scheme for the purpose of release of fixed quantities of gold to the units. It is also significant to note that the bill of entry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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