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TMI Blog2011 (6) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... d against them. For the above proposition, they have relied upon the Hon’ble Supreme Court decision in the case of Hyderabad Industries (1999 (5) TMI 29 - SUPREME COURT OF INDIA) Having clarified that it is ratio of the law declared by Hon’ble Supreme Court in the case of Hyderabad Industries, which would be applicable, we deem it fit to remand the matter to Commissioner for examining the nature of brass scrap/zinc scrap imported by the appellant and the consequential duty liability of CVD. X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of further investigation, it was noticed that the appellant have many trading units, either in his name, or in the names of his relation, or under the ownership of M/s. Ilesh Exports, which were trading in brass scrap. The duty free procured goods in the name of Ilesh Exports were being cleared by them to independent parties by raising invoices in the names of such trading firms. The statements of various other persons recorded during the course of investigation also accepted the above modus operandi adopted by Ilesh Exports for diversion of duty free goods into local market. We are not going into the details of such statements and other evidences to reflect the above activity of M/s. Ilesh Exports, inasmuch as it stand accepted before us that the said appellant was indulging in to the above activities. As such, confirmation of demand of Customs duty and Education Cess etc. in respect of diversion of duty free material, is not being disputed before us. 4. Sr. Advocate Shri R. Chandrasekharan, appearing before us have raised only legal proposition that no countervailing duty was required to be paid in respect of such clearances, in view of the fact that the brass scrap imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reunder would have been of some relevance. It is also a fact that the Bills of Entry were assessed provisionally and allowed to be cleared on execution of bond. The ld. Commissioner has, however, also examined the issue of legality of the levy of CVD on merits and preferred to rely on certain observations of the Hon'ble Supreme Court in the Khandelwal Metal & Engineering Works decision which, according to the ld. Sr. Advocate, are clearly inapplicable to the facts of the present case. Further, the applicability of the Khandelwal Metal & Engineering Works decision to facts similar to the present case, have already been considered by Tribunal in the case of IM Kemex India Ltd. (referred supra) and held to be inapplicable, even before the decision of Hon'ble Supreme Court in Hyderabad Industries Ltd. case, wherein it was held that the observation in Khandelwal Metal & Engineering Works case, which seems to suggest that even if no process of manufacture or production has taken place, the imported articles can still be subjected to the levy of additional duty, does not appear to be correct inasmuch as the measure for levy of additional duty is the quantum of Excise duty leviable on a si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import of the articles, in the case of Khandelwal Metal & Engineering Works, stand overruled. As regards the objection of ld. SDR that it is not clear as to whether the scrap imported by the appellant was of old and damaged pieces of various articles or the same was brass scrap emerged as a result of manufacture, he submits that the very description of the scrap being "mix brass scrap" or "mix zinc scrap", itself leads to inevitable conclusion that the same was not the scrap originated as a result of manufacture, but was a mix scrap of various worn out and obsolete articles. 10. After having considered the submissions made by both sides, we find that the appellants have not disputed the fact of clandestine clearance of duty free imported brass scrap/zinc scrap in DTA without payment of duty. As a consequence, confirmation of Customs duty and Education Cess against them does not stand challenged by them. The only challenge is to the imposition of CVD on the ground that the mix brass scrap/mix zinc scrap imported by the appellant was not the brass scrap arising out of manufacturing activity and as such, the same was not leviable to any Excise duty in India. If that be so, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the quantum of Excise duty leviable on a similar article under the Excise Act. It is only after observing that the Hon'ble Court has held that they are not overruling the Khandelwal Metal & Engineering Works decision in its entirety because the Hon'ble Court in that case has held that the brass scrap was in any case an item which was manufactured and therefore the Excise duty was leviable. As such, the observation of adjudicating authority that Khandelwal Metal & Engineering Works decision does not stand overruled in Hyderabad Industries judgment, is not correct, inasmuch as the question of law framed in Khandelwal Metal & Engineering Works stand specifically overruled in subsequent decision of Hyderabad Industries. The Hon'ble Court only observed that inasmuch as in the case of Khandelwal Metal & Engineering Works, old brass scrap was held to be a manufactured item, the said decision is not being overruled. 12. As such, in view of the above discussion, the only question which remains to be decided is as to whether the brass scrap imported by the appellant was a brass scrap emerged as a result of any manufacturing activity or the same was mix brass scrap, consisting of old ..... X X X X Extracts X X X X X X X X Extracts X X X X
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