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TMI Blog2002 (1) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... were recovered. The investigation revealed that the applicant had imported multiple consignments of engineering cargo as Ship Spares and availed benefit of import duty under exemption Notification No. 211/83-Cus., dated 23-7-83 as amended. Two SCNs dated 29-12-97 and 17-6-98 were issued to the applicant demanding Customs duty of Rs. 3,12,030/- and Rs. 65,66,076/- respectively (totalling Rs. 68,78,106/-). The applicant had deposited Rs. 15 lakhs with the Department during investigation. Both the above SCNs were adjudicated by the Commissioner of Customs (Preventive), Mumbai vide order dated 26-2-99 confirming the demand of Customs duty of Rs. 68,78,106/-. The applicant then filed an appeal with the CEGAT, WRB, Mumbai against the above order of the Commissioner of Customs (Preventive), Mumbai. The applicant again filed an application with the CEGAT, WRB, Mumbai for withdrawal of their appeal on the ground that they propose to settle the matter under Section 127MA of the Customs Act, 1962 with the Settlement Commission. The CEGAT, WRB, Mumbai vide order dated 19-9-2000 allowed the applicant to withdraw the appeal filed with them. 3. The applicant filed an application on 17-10-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 211/83. All the end use bonds have been finalised. The Commission asked the applicant whether he has sold the material to M/s. Elektronik Lab. The applicant submitted that he has not sold the goods to M/s. Elektronik Lab. He is the importer and he installed the equipment on the vessel with the assistance of M/s. Elektronik Lab. M/s. Elektronik Lab is the authorised agent in India of the foreign supplier M/s. Kelvin Hughes from whom the applicant imported the goods. He argued that the Notification does not say that the importer cannot get the assistance from a third party. The Commission asked him about his argument on the statement of Shri K.D. Motta, Manager of M/s. Sanghvi Reconditioners that the signature of representatives of M/s. Shipping Corpn. of India were forged by him. The applicant submitted that he is admitting it and he is guilty of that. The Commission further asked him on not admitting the duty of Rs. 47,79,320/-. The applicant submitted that the ship spares were imported and fitted in the ocean going vessels directly by him with the assistance of M/s. Elektronik Lab and therefore, he fulfilled the conditions of Notification No. 211/83. The Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails of the mode of payment received and submit all the relevant documents before 18th of October along with the comment on the report of the Revenue. 11. The Revenue vide their report dated 27-9-2001 submitted that the applicant imported navigational equipments such as Radar System, SART, NATEX and EPIRB in pursuance of the Purchase Orders of M/s. Elektronik Lab on the applicant and delivered the cargo on board the ships of M/s. Dredging Corporation, M/s. Chowgule Steamships Ltd. and M/s. Essar Coastal Ltd. The purchaser M/s. Elektronik Lab, subsequently carried out installation of said equipment on board the ships owned by the above three shipping companies. Out of the said imports, the part cargo EPIRB Service Receiver sold to M/s. Elektronik Lab was retained by the latter, hence did not find any use in repairing on board the ship. The applicant admitted duty liability of Rs. 84,673/- on the said import and paid the same. Notification No. 211/83-Cus., dated 23-7-83 as amended exempts capital goods, spares, raw materials, material handling equipment and consumables when imported into India for repairs of ocean going vessels by a ship repair unit registered with Directorate Gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd usage of cargo in repairing of ships had been complied with. In view of this, the import documents in respect of these imports were assessed and the Bonds given by the importer (applicant) were discharged by Customs after ensuring the delivery of the goods at the declared destinations in the Shipping Bills. This clearly show suppression of facts on the part of the importer (applicant) so as to avail the benefit of duty exemption fraudulently. From the foregoing, it is very clear that the sale of ship spares/navigational equipments by the applicant to M/s. Elektronik Lab was distinct from the subsequent sale by the latter to the ship owners. As the first sale was in the nature of home consumption, the provisions of the said notification are not applicable. Hence the demand for duty of Rs. 47,79,320/- in respect of 8 items made by the applicant which were sold to M/s. Elektronik Lab is sustainable. 14. The applicant vide his reply dated 9-10-2001 submitted that the allegations contained in the Department s brief dated 27-9-2001 are a mere repetition of the allegations in the Show Cause Notice. The allegations have been repeated solely to prejudice the mind of the Hon ble Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions of Notification 211/83. On the basis of evidence produced by the Revenue in form of sales invoices it is clear that M/s. Sanghvi Reconditioners have sold the goods to M/s. Elektronik Lab. These goods have been further sold by M/s. Elektronik Lab to the ship owners like M/s. Dredging Corpn., M/s. Chowgule Steamships Ltd. and M/s. Essar Coastal Ltd. There has been a value addition in these sales. The applicant has argued that the value addition is nominal and therefore should not come in the way of his getting covered by Notification No. 211/83. 18. The Commission after considering all the facts arrive at the following conclusions : (a) The Revenue has been able to produce documentary evidence regarding sale of goods imported by M/s. Sanghvi Reconditioners to M/s. Elektronik Lab, who in turn have sold the same goods to ship owners. No doubt, the goods imported have been installed on the ships by M/s. Elektronik Lab. but that has been after purchasing the goods from M/s. Sanghvi Reconditioners and selling them to the ship owners. M/s. Elektronik Lab. are not registered as Ship Repair Unit with D.G. Shipping and therefore are not eligible to avail the benefit of Notfn. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he customs duty totalling to Rs. 68,78,106/- along with penalties, interest charges were proposed to be demanded and recovered from the applicant under proviso to Section 28(1) of the Customs Act, 1962. It is also seen that the Order-in-Original No. VIII(b)10(9)/Cus./ 98/1567, dt. 26-2-1999 ordered payment of interest at the appropriate rate on the import duty evaded, under provisions of Section 28(AB) of the Customs Act, 1962. The Commission finds that there is no provision for recovery of penalty or interest charges under Section 28 of the Customs Act, 1962. The relevant section for providing for levy of interest on delayed payment of duty in special cases is contained in Section 28(AB) ibid which section was inserted by Section 62 of the Finance Act, 1996 (33 of 1996). Sub-section (2) of Section 28(AB) reads as follows : For the removal of doubts, it is hereby declared that the provisions of sub-section (1) shall not apply to cases where the duty became payable before the date on which the Finance (No. 2) Bill, 1996 receives the assent of the President. The Commission finds that the duties demanded under the aforesaid Show Cause Notices related to periods prior to Apri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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