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TMI Blog2013 (10) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and being used in the premises of M/s. KJS Ahluwalia and used in the processing of the products of M/s. KJS Ahluwalia. It appeared that there has been a violation of the conditions of Notification No. 97/2004-Cus and EPCG licence NO. 0230003010 dated 14/02/208 and 0230002380 dated 30/05/2007. Therefore, the said machines totally valued at Rs. 5,89,29,208/- were seized under Section 110 of the Customs Act and were handed over to Shri J.N. Giri, Mines Manager of the appellant under a supradnama dated 19/06/2008. 2.1 Investigation conducted revealed that the appellant had declared the registered address which is actually a residence of one Shri Gautam Das, who was assistant to the consultant of the appellant Shri S.K. Mall. Shri Gautam, Das resided at the said address with his wife and no office of the appellant functioned from the given address. Statement recorded from Shri Gautam Das revealed that he worked as per the directions of Shri S.K. Mall and looked after the work at DGFT, Kolkata. He allowed his residence address to be used for mailing purpose and that no office of the appellant was run from the said address which is exclusively used for residential purposes. Shri S.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to certain conditions and condition No.5 read as follows: "That the capital goods imported, assembled or manufactured are installed in the importer's factory or premises and a certificate from the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, is produced confirming installation and use of capital goods in the importer's factory or premises, within six months from the date of completion of imports or within such extended period as the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow" 2.4 The Notification also provided that if the importer is a service provider, he may produce said certificate of installation and usage issued by an independent chartered engineer. The Notification also provides that in case of manufacturer-exporter and merchant-exporter having supporting manufacturers or vendors, the capital goods maybe installed in the factory or premises of such other person whose name and address are endorsed on the licence. 2.5 On completion of the investigation, the following picture emerged. (i) M/s. Sushant Trading did not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods on payment of a fine of Rs. 1 crore under Section 125 of the Customs Act, 1962. He also imposed a penalty of Rs. 10 lakhs on Shri Biduyadhar Palei, proprietor of Sushant Trading under Section112(a) of the Act. He also confirmed the duty demand of Rs. 1,52,39,903/- by denying the benefit of Notification No. 97/2004-Cus dated 17/09/2004. Aggrieved of the said order the appellant is before us. 3. The learned counsel for the appellant made the following submissions:- 3.1. As per para 5.1 of the Foreign Trade Policy, capital goods required for pre-production and post-production of the product intended for export are permitted under the EPCG scheme ad under para 9.37 mining is covered under the definition of 'manufacture' and as per para 5.2 a manufacturer-exporter is eligible for EPCG and no other qualification/criteria is required to be satisfied. As per para 9.38 'manufacturer-exporter' has been defined as a person who exported the goods manufactured by him or intended to export such goods. Thus, the only condition for availing the EPCG benefit under para 9.27 of the Foreign trade Policy is that the importer is required to satisfy actual user condition. Vide para 9.4 to 9.6 ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise, Tuticorin 2006 (198) ELT 539 in support of their conditions. 4. The learned Commissioner (AR) appearing for the Revenue, on the other hand submits that in the instant case, the appellant had not installed the imported machinery at the appellant's own premises and they had obtained EPCG licence fraudulently thereby violating the terms and conditions of the licences and also the terms and conditions of the Notification NO. 97/2004-Cus. He also submits that the Zonal Joint Director General of Foreign Trade, vide order dated 21/07/2010 had imposed a penalty of Rs. 25 lakhs on the appellant for violation of the EXIM Policy relating to EPCG scheme. He also relies on the decision of the Tribunal in the case of Surya Samudra Holiday Resorts (P) Ltd. vs. Commissioner of Customs (Export), Mumbai 2010 (156) ELT 433. 5. We have carefully considered the submissions made by both the sides. 5.1 As per Notification No. 97/2004-Cus dated 17/09/2004, in order to avail the benefit of the said Notification, one of the conditions required to be satisfied is condition NO. 5 which is reproduced below: "(5) that the capital goods imported, assembled or manufactured are inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported goods for his own use in (i) any commercial establishment carrying on any business, trade or profession; (ii) any laboratory, scientific or research and development institution, university or other education institution or hospital; (iii) any service industry. As per para 9.37, 'manufacture' means, to make, produce, fabricate, assemble, etc. and for the purpose of Foreign Trade Policy it shall also include 'mining'. From the above definitions, it is evident that 'mining' amounts to 'manufacture' under the Foreign Trade Policy and therefore, the appellant comes under the category of 'actual user (industrial)'. In view of the same the appellant has to utilize the imported goods for manufacture in its own industrial unit or for manufacturing for won use in another unit including a jobbing unit and jobbing means processing or working around a raw material or semi-finished goods supplied to job worker so as to complete a part of process resulting in manufacture or finishing of an article or any operation which is essential for aforesaid process as specified in para 9.33. 5.3 In the instant case, the appellant has not used the machinery as a manufacturer-exporter but he has used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and satisfied. As already discussed, this is not a case where the appellant used the imported machinery to somebody else for their use and therefore, the reliance placed on the above judgment is of no assistance to the appellant. 5.6 In the case of Surya Samudra Holiday Resorts (P) Ltd relied upon by the Revenue, this Tribunal held as follows: "33. The entire paragraph refers to obligation in respect of export of goods. The first option is that the obligation could be fulfilled by export of goods capable of being manufactured by the use of capital goods imported under EPCG scheme. The second option was to fulfill the obligation by export of same goods manufactured in different manufacturing units of the licence holder/specified supporting manufacturer. As an alternative to this, export obligation may also be fulfilled by export of other goods manufactured or service provided by the same firm/company or group company which has the EPCG Licence. The alternative given in the last leg of the Para is an alternative for first and second options. Both first and second option talk of obligation in respect of export of goods. Therefore, the alternative is also only for fulfil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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