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TMI Blog2013 (8) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the Commissioner of Customs (Import), Mumbai. Common issue is involved and therefore both the appeals are taken up together for disposal. 2. Briefly stated facts of the case are that based on information that the appellants were claiming the benefit of Notification No.21/2002 Sr.No.190 C wrongly on their import of steel coils by mis-declaring the same as non-alloy steel, S.I.I.B (Import), New Customs House, Mumbai undertook investigation and took over 11 live Bills of Entry and carried out detailed scrutiny. The percentage content of other metals shown in the Mill test certificates were compared with chapter note (f) of Chapter 72, where the other Alloy steel is defined. In all the 11 Bills of Entry, the percentage of Manganese was found to be more than 1.65%, and the Titanium was more than 0.05% and on the examination of Mill test Certificates of these Bills of Entry also confirmed that goods imported vide the above Bill of Entry were alloy steel and the benefit claimed under notification No.21/2002 Sr. No. 190C thus was not correct. Notification No.21/2002 Customs was amended vide Customs Notification No.56/2008 Cus. Dated 29.04.2008. (Prior to issuance of this noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants suppressed, the fact that the consignment imported by them were alloy steel, with intent to evade payment of customs duty by wrongly availing the benefit of Notification and that proposal for confiscation of the goods and proposal for penal action against the appellants and CHA. 2.3 The Ld. Commissioner adjudicated the case and ordered as under:- (a) I deny the benefit of Notification No.021/2002 Sr. No.190C on CR/H.R. Coils imported vide the Bills of Entry mentioned at Annexure A and B of the Show Cause Notice. (b) I confirm the demand and recovery of differential duty of Rs.3,82,16,162/- (Rupees Three Crore Eighty Two Lakh Sixteen Thousand One Hundred and Sixty Two Only) from Tata Motors Ltd under proviso to Section 28(1) of the Customs Act, 1962 along with applicable interest under Section 28AB ibid. (c) I confiscate the goods valued at Rs.13,10,71,798/- (Assessable value) involving differential duty of Rs.80,32,473/- (Rs. Eighty lakhs thirty two thousand four hundred and seventy three only) as per Annexure A' of the Show Cause Notice under provision of Section 111(o) and 111(m) of Customs Act 1962. However, I give an option to the importer to redeem th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the above interpretation of the ld. Commissioner is not correct. The phrase One or more employed in the Chapter Note 1 (f) is ignored by the Commissioner. The expression one or more' means that if one of the listed elements is present in the imported coil and if that element is equal to or exceeds the limit mentioned in Note 1(f), the Note 1(f) is satisfied and the imported coil will be treated as other alloy steels'. On the other hand, if the coil contains more than one element listed in the Note 1(f), then all the elements present in the imported coil should be equal or more than what is prescribed in the Chapter Note 1(f). If note, such coil will not be treated as other alloy steel'. The imported coil cannot be said to be satisfying Note 1(f), if more than one element is present in the imported coil and only one element satisfies the criteria mentioned in Note 1(f). If the department is accepted the definition of stainless steel' given in Note 1(e) relied upon by the learned Departmental Representative, actually supports the submission of the appellants. Note 1(e) defines stainless steel' as alloy steel containing by weight, 1.2% or less of carbon and 10.5% or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MTC is not factually correct. The contention is that they have always submitted the MTC to the Customs department at the time of assessment and before the goods are given out of charge. The contention is that as an ACP client, the appellants have made all true declarations. The contentions is that the statement that the appellants being an ACP client, the claiming of classification under a particular heading will amount to mis-declaration is not correct and will be contrary to the decision of the Supreme Court in various decisions on the point that claiming of classification will not amount to mis-declaration. The contention is that even in respect of an ACP client, the MTC was insisted upon by the customs department. This can be seen from the information obtained from ICE Gate, referred to in para D.5. 3.1.7 Even prior to the Appellants being an ACP client and filing the bills of entry through the Risk Management System (RMS), the Appellants have been classifying the items of import as non-alloy steel falling under the heading 72.09. The said classification was never objected to by the department. Therefore to say that the Appellants have suppressed facts by not submitting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proportion shown, the use of words- one or more clearly indicates that even if one of the elements shown therein exceeds the prescribed percentage, the steel would be considered as alloy steel. So far as the contention of the appellants that if two elements are present, both should exceed the percentage prescribed is no borne out of the language of the statute, therefore it is wrong to contend that if two alloying element s are present, both should exceed the prescribed limit, such as interpretation would lead to absurdity and would render the provisions redundant, the contention of the Ld. A.R. is that it is settled law that the legal provisions should be read as it is and there is no room for intendment. The expression one or more used in Chapter Note 1(f) clearly indicated that presence of either of the alloying element in the steel would make it allow steel. The contention is that once it is established that the goods are alloy steel, they are precluded from being classified under heading 7208 (hot rolled non-alloy steel) or 7209 (cold rolled non-alloy steel) and they would be appropriately classifiable under heading 7225/7226 of the customs Tariff Act, 1975 depending on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the goods are liable for confiscation under Sec 111(m) of the Act and are rightly confiscated and penalty under Sec 114A of the Act has correctly been imposed on the appellants. The contention is that the Bills of Entry were facilitated under R.M.S. (Risk Management System) which was implemented vide Board's Circular Bo. 42/2004-Cus and 43/2005-Cus both dated 24.11.2005 and under the R.M.S. the practice of routine assessment, concurrent audit and examination of almost all the Bs/E has been done away with. The Board has placed 324 ACP clients on the website known as Accredited Clients Programme- Promoting Voluntary Compliance which envisages the obligations/requirements. The contention is that the appellants failed to perform their obligations and requirements or declaring complete description and specifications whether the goods were alloy steel or non-alloy steel. So far as the contention of the appellants that they have paid the differential duty prior to the issuance of show-cause notice and therefore, the goods are not liable to confiscation, is not correct. In support of this contention, the Revenue placed reliance on the decision of the Madras High Court, in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in terms of completeness, accuracy and validity by the importers. In the instant case, the appellants failed to fulfill the said obligation and requirements of declaring complete description and specification whether the goods were alloy steel or non-alloy steel. The appellants did not declare the correct description of the goods. Shri V.G.Chari, Senior Manager, Materials, Shri R.R.Suvarna, Shri A.M.Khopkar, Asstt. General Managers, Materials of the appellants are responsible office bearers of the appellants and in their statements recorded under Section 108 of the Customs Act, 1962 have admitted and confirmed that by looking into the Mill test certificates they could identify that the percentage of alloying elements are higher and that the goods should have been classified as Alloy CR Coils. The alleged mis-declaration and suppression on the part of importer resulted in a duty evasion to the tune of Rs.3.82 crores since alloy steel attracted basic customs duty @5% coupled with the fact that the appellants paid the differential duty. These facts establish mis-declaration on the part of the appellants. Therefore, the goods have been rightly held liable for confiscation under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y steels . If the coil contains more than one element listed in the Note 1(f) above, then all the elements present in the imported coil should be equal or more than what is prescribed in the Chapter Note 1(f) above. If not, such coil will not be treated as other alloy steel . For example, if the goods contain only manganese apart from steel and if manganese is 1.675% or more, then it will qualify as other alloy steel. But if out of 16 elements mentioned in Chapter Note 1(f) of Chapter 72 and all the elements are to be in the proportion shown in Chapter Note 1(f) of Chapter 72 or more, then it will qualify as other alloy steel. For example, if the imported coils are having 2 elements viz. manganese and titanium and if both are more than the prescribed proportion as mentioned in Chapter Note 1(f) of Chapter 72 i.e. 1.65% or more of manganese and 0.05% or more of titanium them it will be called as other alloy steel. If element of manganese is 1.65% or more but titanium is less than 0.05% then it will not qualify as other alloy steel and vis- -vis i.e. if titanium is more than 0.05% and manganese is less than 1.65% then also it will not qualify as other alloy steel. Therefore, the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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