9911796707
TMI Blog2003 (1) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 2-2-1993 and 403253, dt. 19-1-1993 showing the consignee as SSK Controller of Procurement, Naval Dockyard, Bombay and claiming exemption under Section 90 of the Customs Act, 1962. On the basis of information received by DRI that the goods cleared have in fact, been diverted to local market the case was investigated by DRI, Mumbai. Show cause notice dt. 19-12-1997 was issued by CC/ACC demanding duty of Rs. 83,18,742/-. SCN proposes for confiscation of goods valued at Rs. 71,12,305/-. Shri Kirit Kamdar and Shri Hemant Sheth, Partners were arrested on 26-11-97 and released on bail of Rs. 30,000/- each by Addl. CMM. 4. M/s. Hi-Tech Engineers and its partners Shri Kirit Kamdar and Shri Hemant Sheth filed the applications under Section 127B of the Customs Act, 1962 for settlement of their case before this Bench of the Settlement Commission. 5. The application was allowed to be proceeded with vide Interim Order No. 7/2001-Cus., dt. 27-4-2001. The applicant had admitted the duty liability of Rs. 9,22,280/-. The same was ordered to be adjusted from amount of Rs. 59,35,455/- already deposited with the DRI during the course of investigation. At the time of hearing the Revenue submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate issued for Customs duty Exemption or whether they are Ship Stores. (6) The letter dt. 23-12-1998 from Deputy Inspector General, CGR, addressed to M/s. Hi-Tech Engineer s clarifies - (i) that goods are meant for Coast Guard/for on board use. (ii) Place of delivery :- at Coast Guard Depot. (7) The applicant has admitted lesser duty amount i.e. Rs. 9,22,280/- against the duty of Rs. 83,18,742/- assessed and demanded in SCN. (8) The applicant's claim of admitting lesser amount i.e. Rs. 9,22,280/- is not correct for the following reasons: (i) The Supply Order was from Coast Guard. (ii) The goods were delivered to SSK Controller of Procurement Naval Dock Yard, Lion Gate Bombay. (iii) The S/Bills were processed under Section 90 of Customs Act, 1962. (iv) No Duty Exemption Certificates have been produced for the goods imported under Bills of Entry No. 6096, dt. 18-12-92 and 7582, dt. 28-1-1993. (v) The goods imported were Dracon Barges classifiable under CTH 89.07:90 i.e. other floating structures, hence they will not fall under the definition of Ship Stores (vi) As per the definition given in the HSN Explanatory Notes. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard will enjoy exemption under Notification No. 291/84-Cus., dt. 28-12-1984. (14) From the said notification it is clear that the goods imported i.e. Dracon Barges will not be covered since barges are not a machinery, equipment, components or raw materials which alone are exempted. (15) Hence from the above it will be clear that the Dracon Barges cannot be treated as stores. (16) The chart showing the total duty liability is as below :- Sr. No. Bill of Entry No. Assessable Value (Rs.) Tariff rate of duty Duty assessed in Bond B/E Description of goods S/Bills No. Findings of Inv./ Total duty payable 1. 6096 18-12-92 31,29,248 40% + 45% + 15% + 15% 36,58,466 DRACON BARGES E TYPE 402968 24-12-92 36,58,466 2. 7582 28-1-93 31,97,260 40% + 45% + 15% + 15% 37,37,996/- 7396462/- DRACON BARGES E TYPE 407892 2-2-97 37,37,996 3. 10988 31-12-92 7,75,615 10,182/- 40% + 45% + 15% + 15% 60% + 45% + 20% + 15% 9,06,790/- 15,490/- 9,22,280/- Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is nowhere connected with Coast Guard. Hence the said purchase/supply order needs to be rejected as a price of evidence. On importation of the goods, the applicant (in the name of his company M/s. Hi-Tech Engineers) filed bond Bs/E claiming that the goods are ship stores. Thereafter the applicant prepared Shipping Bills and obtained signature of one Mr. P.R. Sheshadri, in charge of Naval Stores at Lion Gate, Mumbai on the face of shipping bills declaring the goods covered under Shipping Bill to be ship stores for Indian Navy. Thereafter, applicant claimed the goods as ship stores for Indian Navy on the basis of the above endorsement and the shipping bills were assessed under Section 90 of the Customs Act, 1962. (iii) that since the basic conditions of Section 90 have been violated in case of these imports the benefit of Section 90 cannot be granted to the goods. Once the goods left the Lion Gate at Mumbai and were in absolute custody of the applicant it cannot be ascertained or certified that the same goods were supplied to Indian Coast Guard. The possibility of the applicant selling the imported goods into local market and supplying other goods to Indian Coast Guard cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es a specific mention of a ships of the Coast Guard. Hence the exemption under the said notification cannot be made applicable to Barge imported by the applicant and the same needs to be rejected. (x) that the applicant is relying on the purchase/supply Order No. CGHQ/PC. Equip/422/92-93, dated 10-7-1992 issued by Commander, Jt. Dir. (Logistics), Coast Guard. As per Sr. No. 15 of the said Supply order, the consignee is shown as the officer-in-charge, Coast Guard, Store Depot, Mankhurd, Bombay-400088, whereas the applicants have obtained the acknowledgement of a Storekeeper of Indian Navy, who is nowhere connected with Coast Guard. Hence the said purchase/supply order needs to be rejected as an evidence. (xi) that the applicant have also relied upon the enclosure to CGR(W) letter OP/35/lnt., dated 6-7-1998 in token of having received the impugned goods. In absence of procurement certificate and in absence of proper endorsement on the averse of the impugned shipping bills by the officer-in-charge, Coast Guard, Store Depot, Mankhurd, Bombay 400 088, it cannot be conclusively established whether the same goods have been sent to Coast Guard or otherwise. The possibility of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 280) is the duty foregone on the import of Dracone Barges. The applicant have imported these barges and had claimed the benefit of Section 90 of Customs Act, 1962 showing the Barges as ship stores to be supplied to Indian Navy. However, it is an admitted fact that the impugned Barges were not supplied to the Indian Navy and the same were supplied to Indian Coast Guard. The ld. Consultant prayed that the applicant should be given the benefit of Notfn. No. 291/84-Cus., dated 28-12-1984. The pleas of the ld. Consultant are that the Barges were imported by the applicant on the strength of an order placed on them by Indian Coast Guard. The Barges so imported were equipments to be fitted on the ships for pollution control activity. This being the case the applicant was entitled for the benefit of Notfn. No. 291/84, dt. 28-12-84. 14. The Commission informed the ld. Consultant that the arguments advanced and the documents relied upon were not sufficiently convincing to grant the benefit of Notfn. No. 291/84 to the applicant. The Commission also extended a chance to the applicant to consider the amount of duty to be admitted by the applicant to settle the case. 15. Revenue, i.e., Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds imported vide Bill of Entry No. 6096, dt. 18-12-92 and 7582, dated 28-1-1993 have been supplied to the Coast Guard against the purchase order. In view of this the submission is that they are not liable for any duty in relation to these two Bills of Entry. However, in relation to Bill of Entry No. 10988, dt. 3-12-92 they disposed off the goods in the market and as such they are liable to pay duty of Customs as demanded in the show cause notice. 19. In the course of investigation, statements of S/Shri K. Kamdar, H. Seth, P.R. Sheshadri and S.T. Motiwala had been obtained. These statements had been referred to detail in the show cause notice issued to the applicant. Each of the aforesaid person has admitted the role played by him in evasion of duty of Customs. The modus operandi adopted was to import the goods as ship stores under Section 90 of the Customs Act without payment of duty and thereafter file the Shipping Bill showing the name of the consignee as a Naval Agency, while the goods were disposed of in the open market. 20. In the Show Cause Notice dated 19-12-1997 in Para 24 the Revenue has alleged as follows: 24. Now, therefore, M/s. Hi-Tech Engineers, S/Shri Kir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the said section can take place without payment of duty for consumption on board a ship of Indian Navy. Stores have been defined as stores for the use of a ship of the Indian Navy and stores supplied free by the Government for the use of the crew of a ship of the Indian Navy in accordance with their conditions of service. Section 2(38) of the Customs Act defines stores as goods for use in a vessel or aircraft including fuel and spare parts and other articles or equipments, whether or not for immediate fitting. From above it is apparent that the definition in Section 2(38) is slightly at variance with the description in the clause (a) of sub-section (3) of Section 90 of the Customs Act. Section 90 uses the term ship whereas Section 2 use the term vessel . Such stores have also to be supplied free by the Government for use of the crew of a ship of the Indian Navy in accordance with their conditions of service. In view of this it cannot be said that the applicant has fulfilled the conditions of the duty free import. 23. In the course of the hearing the applicant has contended that they are entitled for exemption under Notification No. 291/84-Cus., dated 28-12-1984 as the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue s contention that Indian Coast Guard had purchased the Dracone Barge locally and no procurement certificate was issued by the Indian Coast Guard for duty exemption on the said item, has considerable force and cannot be ignored. 25. The applicant has relied upon the case of Collector of C. Ex. v. H.M.M. Limited reported in 1995 (76) E.L.T. 497 (S.C). The facts of the said case are not in all fours with the present one. The Hon ble Supreme Court decided whether extended period of limitation can be invoked where the show cause notice has not referred to such extended period. The Court has held that - If the Department proposes to invoke the proviso to Section 11A(1), the show cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. 26. The ratio in the said case is not at all applicable to this case. 27. It may be mentioned that the proceeding before this Commission is in relation to full and true disclosure so of ones duty liability as to gain immunities provided under the Act. The applicant has also placed reliance on the case of L.M.L Limited v. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
