9911796707
TMI Blog2007 (4) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... The consignment was classified under CTH No. 8419.06. The appellants had cleared the goods under the cover of four Bills of Entry leaving nine packages comprising parts of ASP and design documents. Duty due on the uncleared goods had been paid and on 29-8-2003 after the warehousing period including the extension allowed was over. One ex-bond Bill of Entry was filed to cover clearance of remaining parts of ASP and another Bill of Entry exclusively for clearing design documents. The Bill of Entry covering machinery parts was declared to be of value Rs. 31,93,893/- and duty Rs. 16,22,498/- and the interest on duty on the equipment was only Rs. 21,84,491/- . In the Bill of Entry covering documents, they were declared to be of value of Rs. 5,73,69,010/-. The duty pay able was shown as "Nil". The details relevant for assessment were not furnished. However, the assessee had filed a letter dated 17-1-04 claiming that the value of the documents covered by the Bill of Entry was Rs. 5,73,69,053/- and that the goods were classifiable under heading No. 49.06 of the Customs Tariff and exempt under Notification No. 21/02-Cus., dt. 1-3-2002. It was also stated in the said letter that they had paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up to 31-3-02, the Chief Commissioner had declined further extension and there remained in the warehouse 11 packages (actually 9) of value Rs. 6,05,62,883/-. She observed that the work on the project was completed and the plant commissioned in the year 2000. Since the plant had been installed and functioned since 2000, the goods remaining uncleared in the warehouse were of no consequence and the assessee had attributed a major part of the value of these items at Rs. 6.05 crores and claimed that out of this, Rs. 5.75 crores was on account of designs and drawing for which they claimed exemption. In para 25 of the order, the Assistant Commissioner found as follows : "If the goods lying in CBW are really worth of the order of Rs. 6.05 crores as claimed by M/s. SISCOL, then definitely they should have been used in the project execution because the value of the goods uncleared as attributed constitutes nearly 1/4th or 25% of the total project cost. Such valued goods could not have been insignificant in the project and would have played a critical role in the project execution necessitating their removal. If the goods were not cleared even after eight years and after more than five year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en filed validly. "Section 72 deals with goods improperly removed from a warehouse. Goods are improperly removed from a warehouse under the terms of sub-section (1) if they are removed without clearance under Section 71 [clause (a)]; if they are taken as samples but without payment of duty [clause (c)]; if a warehousing bond has been executed in respect of the goods under Section 59 but they are not satisfactorily accounted for [clause (d)]; and if they have not been removed from the warehouse on the expiration of the permitted period or its permitted extension [clause (b)]. In all such cases the Customs Officer is empowered to demand, and the importer shall pay, the full amount of duty chargeable on the goods and interest, penalties, rent and other charges thereon. If payment as demanded is not made, it is recoverable by sale of other goods of the importer in the warehouse. Goods which are not removed from a warehouse within the permissible period are treated as goods improperly removed from the warehouse. Such improper removal takes place when the goods remain in the warehouse beyond the permitted period or its permitted extension. The importer of the goods may be called upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter Heading 49 and upheld the order of the original authority. He found that the appellants had not denied their liability to pay interest demanded under Section 72 of the Act in the original order. He found that the Assistant Commissioner had rightly relied in Kesoram Rayon v. Collector (supra) and had passed the order-in-original in accordance with law. He concurred with the findings of the original authority and found that the demand was sustainable. He referred para 13 of the order-in-original wherein the original authority had extracted the reply to the Show Cause Notice by appellants wherein it is, inter alia, stated by them as under: 13(d) Contract price "The total contract price for the Equipment and Documentation to be supplied by M/s. China Iron Steel Industry and Trade Group Corporation, a Government of China Organisation (CSGC) was US$ 6320000. As per the agreement entered into by M/s. SISCOL with the supplier, the aforesaid price shall be the price of the equipment and documentation supplied by the supplier within its scope and supply as mentioned in appendix 2 (equipment) and appendix 5 (documentation). The contract value is thus inclusive of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the warehouse." This provision permits revaluation only of tariff related goods and determines the rate of duty as applicable on the date of physical removal or deemed removal in case of expiry of warehouse period, in all cases the original classification of the goods as determined and classified, when placed in the Bond on assessment of the into-bond Bill of Entry is required to remain undisturbed except mis-declaration. The provision cannot be expanded to encompass re-determination of classification, when there is no change in the nature of the goods or the tariff by amendments thereof. This aspect has been accepted by the Central Board as the Appraising Manual Para 7, page 94, Vol. III, Chapter 6 on Warehousing which incorporates this interpretation in the following terms "Amendments of Warehousing Bill of Entry. …..Change in Classification - after Warehousing - in respect of warehoused article, which was at the time of assessment classifiable at a later date, owing to change in the wordings of Customs Tariff Act, 1975, under a different heading which carried a different rate of duty, re-assessment of duty under such different headings of the tariff would be in order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 16,22,498/- and interest Rs. 21,84,491 /-. In another Bill of Entry Sl. No. 2/2003-04 the appellants described the goods to be cleared as "partial clearance of 1 x 150 T/D Air Separation Equipment and design documents" (1 package) declaring the value as Rs. 5,73,69,010/- attracting 'nil' rate of duty. They had filed a letter dated 17-1-04 stating that Bill of Entry No. 2/2003-04 had been filed exclusively' for documents and the value of the documents was Rs. 5,73,69,053/-. They claimed the documents to be classifiable under Chapter Heading 49.06 of the Customs Tariff and eligible for exemption under Notification No. 21/02-Cus., dated 1-3-02. 9. In the grounds of appeal it is claimed that in view of the decisions of the Larger Bench of this Tribunal in the following cases the interest demanded and penalty imposed were not sustainable. (a) Al-Falah Exports v. CCE, Surat -I, 2006 (198) E.L.T. 343 (Tribunal-LB) = 2006 (74) R.L.T. 342 (CESTAT-LB); (b) CCE, Delhi III v. Machino Montell (I) Ltd., 2004 (168) E.L.T. 466 (Tribunal-LB) = 2004 (62) R.L.T. 709 (CESTAT-LB). Section 72 and Section 28 of the Customs Act were pan materia and in the above-mentioned decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) E.L.T. 655 (Madras) = 1995 (58) ECR 429 (Madras) the observation that the value of the warehoused goods could not be altered at the time of ex-bonding was incorrect. Therefore, the value declared at the time of warehousing was not sacrosanct and could be amended. As regards classification of drawings and designs, the appellants cited the Apex Court's judgment in the case of Commissioner of Customs (G), New Delhi v. Gujarat Perstorp Electronics Ltd., 2005 (186) E.L.T. 532 (S.C.) in para 54 of which it had been held that "as noted earlier, HSN has dealt with the point and as per the Explanatory Note, it would fall under Chapter Heading 4911.99". It was argued that inasmuch as the principal was not payable, the interest was not also payable. The principal was not payable as the drawings and designs imported were duty free. 10. During hearing ld. Sr. Counsel for the appellants invited our attention to the observation of the original authority that the goods required for plant had been cleared earlier itself at lesser than their actual value resulting in passing in a higher value for balance goods in the warehouse. He submitted that this finding was inconsistent with the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worked out by the original authority and also the interest due of Rs. 4,14,22,762/-. This amount was rightly demanded. The impugned order affirming the above demand could not be assailed on the ground of the Commissioner concurring with the findings of the original authority. The learned Sr. Counsel for SISCOL submitted that the matter may be remanded for de novo adjudication. 12. We have carefully studied the case records and considered the submissions made by both sides. The main issue in dispute is the demand of interest on the duty payable on the warehoused goods that remained uncleared beyond the normal warehousing period and the extension of time allowed by the competent authority up to 31-3-02. We find that as per the contract between the supplier and the appellants, the total contract price for the equipment and documentation supplied was US $ 6320000 (Rs. 22,94,76,040/-). The goods had been declared as Air Separation Plant and design documents of the above value. Under the cover of four ex-bond Bills of Entry all of which had described the goods under clearance as "part clearance of 1 x 150 T/D Air Separation Equipment and design documents", most of the warehoused equi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorities have worked out the interest as prescribed in the Customs Act. We do not find any merit in the plea that the finding of the original authority that the value attributed to the uncleared documents had actually been part of the value of the machinery already cleared and therefore, the demand of interest was not in accordance with the finding. We find that the original authority had made some remarks to the effect that the design documents were not used in setting up the plant or in running the plant. Observations were occasioned by the mis-match between the purpose of these documents as per contract and the use they were put to. The appellants have sought to re-classify part of the warehoused goods, namely the design documents under a different heading viz. 49.06 at the time of clearing them from the warehouse. This is not permissible unless there was a misdeclaration of classification initially or change in the wording of the relevant entry. In this connection we rely on the decision of the Tribunal in the case of VBC Industries Ltd. v. CC, Chennai, 2003 (156) E.L.T. 872 (Tri.-Bang)], wherein it was held that classification of goods on assessment of the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CCE, Delhi -III v. Machino Montell (I) Ltd., 2004 (168) E.L.T. 466 (Tri.-LB) = 2004 (62) R.L.T. 709 (CESTAT-LB) has decided that such immunity is not available for persons deliberately evading tax. Therefore, ratio of the case law cited in this regard is no longer good law. Non-removal of warehoused goods at the expiration of the warehousing period is dealt with as goods removed improperly. Such goods will be assessed to duty as if they were cleared on the date following the expiration of the warehousing period. This was the law laid down in the case of Kesoram Rayons (supra). In the instant case, the warehousing period had expired on 31-3-2002. Therefore, filing of Bill of Entry for such goods on which duty was paid on 29-8-03, is not of any legal consequence. The goods had already been assessed and duty collected as if they had been cleared on 1-4-2002. 16. In brief, the only issue involved in the appeal is the exact amount of interest due from SISCOL on account of delay in clearance of nine package eight covering "ASP Equipment" and one covering the "design documents", - yond the period specified in Section 61(2) of the Act. As per the said sub-section., interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t their lordships had spoken on valuation as the estimate of the duty calculated/assessed on the warehousing Bill of Entry which was only tentative as the same would change with the rate of duty chargeable on the goods at the time of clearance of the goods. In that case, the writ appeal of the importer was not allowed and the importer was asked to pay the enhanced auxiliary duty. The appellants have confused the 'valuation' referred to by the Hon'ble High Court with valuation of the goods warehoused. In view of our above findings, we do not\find any infirmity in the demand of interest made by the lower authorities. We find that the appellants had paid appropriate amount of duty on the goods lay uncleared on 29-8-2003 and there was no excess payment of duty to be refunded. 20. The assessee's declaration of a huge value of Rs. 5.73 crores (25% of the total cost of import for the design documents intended to guide SISCOL in setting up the plant and its maintenance lay uncleared in the warehouse even after the plant was above two years into operation. Viewed in this background, the original authority's observation that these goods of declared value about Rs. six crores was not worth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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