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TMI Blog2007 (3) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 22-5-1992 and one dated 5-6-1992 for import of copper wire bars/scrap nickel metal 99% purity and the resultant product was described as Cupro Nickel fittings (Nickel 30% Copper 70%), and the factory was shown at GIDC, Bamanbore, Rajkot (Gujarat). The licencee claimed to be engaged in the export of marine grade engineering goods and the supporting manufacturer claimed to be engaged in manufacture of marine grade goods for supply to the shipping industries at their Rajkot factory. Scrutiny of documents produced by Shri Bhavesh Gandhi, partner of M/s. Metropolitan Group Industries revealed that 4 DEEC licences mentioned herein-above were obtained against advance export of two consignments of Cupro Nickel Fittings viz 180 MTs vide shipping bill dated 31-1-1992 and 515 MTs vide S/B, dated 15-4-1992 from Porbunder to UAE/Sharjah, with Fairlon Industries shown as supporting manufacturer in the export documents. Further scrutiny of the documents revealed that the firms had earlier imported 12 consignments of copper wire bars and 8 consignments of Nickel Cathodes during the period February to October, 1992 in addition to 14 live consignments seized during the course of investigation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el from M/s. Failon Engg. from the local market as the company itself was importer of copper and nickel. Shri Hitesh Shah also stated that he had seen manufacturing of cupro nickel fittings in the factory of M/s. Fairlon Engg. but he had no knowledge of as to the use of imported copper and nickel therein, and also could not produce any documentary evidence to support his claim of manufacture of the goods in question. The fitter, labourer, welder of M/s. Fairlon Engg. categorically denied manufacture of cupro nickel fittings by Fairlon Engg. and export thereof from their premises. Two Directors of Fairlon Engg. viz. Shri Amitabh Ray and S.K. Batra stated that they did not know of any cupro nickel fittings having been manufactured and exported from their factory and Shri A.K. Nagia the other Director also stated that he was not aware whether any copper wire bars/nickel cathodes were imported by his company and whether any exports were made and that he did not see any manufacture of cupro nickel fittings during his visits to the factory. 3. Statement of Shri R.D. Patel, Manager of Fairlon Engg. was recorded on 1-11-1992 and 5-11-1992 wherein he stated inter alia that no consignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o partners of Metropolitan Industries. Shri Amitabh Ray s statement was again recorded on 27-11-1992 in which he stated, inter alia, that they had not made any payment to any supplier of raw materials during the past 15 months as the financial position of the company was such that it could not afford to buy raw material worth Rs. 70 to 80 lakhs from the local market during the last three and half years and that no manufacture of cupro nickel fittings was taken place in the factory. Shri Kirit Shah s statement was recorded on 14-4-93 wherein he inter alia stated that Fairlon Engg. used to manufacture cupro nickel fittings exclusively for export, that the raw materials for the same used to come from Mumbai, that he maintained all the statements as required under the Central Excise Rules and made entries in the Form IVA register (raw material register) and RG. 1 register up to March, 1992, that he used to prepare Gate Passes for finished goods which were manufactured from Nov., 91 to March, 92 and forwarded to the Porbunder Port in the name of Metropolitan Industries through RJT Roadways, Smita Roadways and Avirat Transport of Rajkot. Shri Dhirajlal V. Sakaria, partner of M/s. RJT Tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded, in which he stated that his vessel had capacity of 294 MTs with full capacity of 325 MTs. In his statement dated 22-12-1992, Shri Bhavesh Gandhi stated that the raw materials required for the manufacture of cupro nickel fittings by Fairlon Engg. on whom Metropolitan Industries had placed order, were procured locally while the other partner stated on 4-1-1993 that orders for cupro nickel fittings were received by them from the Sharjah Royal Family Members and orders for manufacture thereof were placed on M/s. Fairlon Engg., that procurement of raw materials and follow up with the supporting manufacturer was looked after by his brother who was the other partner of Metropolitan Industries, that manufacture and export procedures were completed by his brother and Shri Hitesh Shah, and that payments of Rs. 70 to 80 lakhs were made to the local suppliers for the procurement of raw materials locally. 5. Evidence gathered during the course of investigations prima facie indicated that Fairlon Engg. factory at Bamanbore did not have the necessary infrastructure and man power and technical know how for manufacture of cupro nickel fittings, that the consumption of fuel and electricity du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s set aside by the Tribunal vide its Order Nos. 1829-38/95-WRB, dated 19-10-95, and the case remanded to the Commissioner of Customs for fresh consideration of the duty as well as penalties in accordance with law after taking into account the results of the CBI investigation. The CBI report was submitted on 31-7-03 but not relied upon in the present impugned order, by which the duty demand as confirmed earlier was confirmed once again on the imports under the DEEC Scheme against the advance licences and diverted to the local market, together with interest. The Commissioner imposed penalties of Rs. 10 lakhs each on the two partners of Metropolitan Industries and Fairlon Engg. and its Director, Shri Hitesh Shah. The Commissioner upheld penalty of Rs. 50,000/- imposed on CHA and on one Shri P. Patel, employee of M/s. Metropolitan Industries on the ground that these penalties were imposed in the earlier order-in-original of April, 1995, against which no appeal was filed by them before the Tribunal. Hence these appeals. 7. We have heard both sides. The case of the appellant is that they had obtained export orders from M/s. Karimjee International, UAE for supply of 975 M.Ts. cupro nick ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 159/90-Cus. dated 30-3-90 on 133 M.Ts. of copper and of 66 MTs. of Nickel, that the entire duty demand has been wrongily confirmed on Metropolitan Industries who had filed only 2 Bs/E involving duty of approximately Rs. 20 lakhs while the remaining 18 Bs/E were filed by Fairlon Engg. from whom no duty has been demanded and that penalty has been imposed on Fairlon Engg. without issue of show cause notice under Sec. 124, that the show cause notice invoking the proviso to Sec. 28 for the purpose of duty demand has been issued by the Asstt. Commissioner and the notice was made answerable to the Commissioner of Customs (Import) and Commissioner of Customs, Nhava Sheva and adjudicated by the Commissioner of Customs, Mumbai and in spite of invoking the extended period of limitation, no penalty has been imposed on Metropolitan Industries, and in these circumstances the appellants contend that the demand raised by the notice dated 16-6-93 demanding duty for the period 16-4-92 to 10-8-92 is barred by limitation. For the above reasons, they seek setting aside of the duty demand and penalties 8. On the other hand, the ld. SDR, draws the attention of the Bench to the various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medabad Commissionerate at the request of the Collector (P). Mumbai relied upon in the show cause notice confirms that export documents such as Shipping bills etc. are genuine. Foreign exchange equal to Rs. 6,91,60,321 has been received by the appellants against the exports in question and the finding of the adjudicating authority in the impugned order of the possibility of over-invoicing of export value and arrangements of remittance through hawala channels is unsubstantiated and also traverses beyond the scope of show cause notice which did not contain any such allegation. Detailed enquiries carried out with the owners of the country crafts which carried out the goods from Porbunder Port to Sharjah showed that the exports were made and the genuineness of the Bills of lading for shipment of the goods have not been doubted. The reasoning adopted by the adjudicating authority for holding that actual exports could not exceed 180 M.Ts is erroneous - this quantity has been calculated on the basis that, according to the Port register at Porbunder Port, only 20 Lorry receipts had been received, gate passes issued by M/s. Velji P Sons, the maximum loading per lorry is 9 tonnes per lorry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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