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TMI Blog2017 (8) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant to manufacture and supply only coin blanks to the Govt of India Mint. The scope of phrase "for use" was gone into by the Hon'ble Supreme Court in the case of State of Haryana Vs Dalmia Dadri Cement Ltd. [1987 (11) TMI 94 - SUPREME COURT OF INDIA]. The issue therein related to a dispute concerning cement supplied to Electricity Board on the basis of certificates issued by the latter that such cement was required for use in the generation or distribution of electrical energy which would attract exemption granted under Punjab General Sales Tax. The Hon'ble Apex Court held that the expression "for use" must mean "intended for use". In respect of 1178.570 MTs imported HRSS coils which have been converted to Cold Rolled Stainless (CRSS) strips by the appellant and entire quantity thereof supplied to the Government Mint, who in turn, have certified and confirmed that they have been used in the manufacture of coin blanks, the imported goods have satisfied the post-importation condition of Notification No.21/2002-Cus., The imported goods have been converted into CRSS coils which are intended for use for manufacture of coin blanks by the Government of India Mint, the factum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of law. After due process of adjudication, original authority considered the fact of 457.113 MTs HRSS coils having been used for specified periods and demanded differential duty liability with respect to 1542.887 MTs, hence confirmed demand of ₹ 2,03,85,115/- with interest liability thereon. Original authority also appropriated the amount of ₹ 2,03,85,115/- and ₹ 12,45,805/- paid by the appellant during investigation towards duty and interest liability respectively, however, refrained from imposing penalty. Both the appellant as well as the department filed appeals with the Commissioner (Appeals) who vide his impugned order dt. 31.3.2008 rejected the appeal of the appellant, however accepted the prayer of department for imposition of penalty under Section 117 of the Customs Act, 1962 and imposed penalty of ₹ 10,000/- on appellant under that section. Aggrieved, appellant, M/s. Steel Authority of India Ltd., Salem Steel Plant have filed appeal before this forum and hence Appeal No.C/234/2008. 3. Subsequent to appellants having made the payment of ₹ 2,03,85,115/- towards differential duty liability paid in respect of the two Bills of Entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HRSS coils were used in the manufacture of CRSS Strips supplied to the India Government Mint, which in turn had converted the CRSS Strips into coin blanks, the exemption should be available as the purpose/objective behind this exemption is to prevent increase in cost of coin blanks from which the Re.1 and ₹ 2 coins are being minted for use by the public in the country. The narrow interpretation placed by the department does not promote the objective behind this exemption. This is more so when there is no dispute that the quantity of 1,178.570 MTs on HRSS was used in the manufacture of CRSS Strips supplied to the Mint. The duty on this quantity is ₹ 1,55,71,013. (vi) Out of the total demand of ₹ 2,03,85,115 confirmed at page 242 of the impugned order, ₹ 1,55,71,013 cannot be sustained. The balance duty demand, if at all, may only be ₹ 48,14,112. (vii) Since the balance quantity was used in the manufacture of other items cleared on payment of ED, Cenvat credit of the CVD and SAD is available as credit to the appellant. (viii) On merits, thus the demand can only be to the extent of ₹ 48,14,112 with CENVAT of CVD and SAD (Rs.24,38,215 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complied with. Hence duty forgone will have to be recovered from them. 5.3 On the contention of jurisdiction, Ld. A.Rs point out that in the Molex (I) Ltd. case the Hon ble Apex court had dismissed the SLP filed by department holding that notice was issued prior to 2005. However, in this case notice has been issued on 29.11.2005. 5.4 Further, retrospective amendment has been indicated in Section 28 of the Customs Act by insertion of sub-section (11) w.e.f. 16.9.2011 which have empowered inter alia Asst. / Deputy Commissioner of Central Excise appointed as officers of customs to be proper officer of the purposes of that section. Ld. A.R points out that the above amendment has been upheld in the case of Miraj Marketing Vs CC - 2015 (327) ELT 663 (Tri.-Chennai). 5.5 On merits, Ld. A.Rs further submit that exemption under Notification No.21/2002- Sl.No.196 is available only if the imported HRSS coils are used in the manufacture of the specified final product namely Coin Blanks, in the importer's factory. Exemption would apply only when HR coils imported as Coin Blanks in the importer's factory to be supplied. 5.6 Importers had also executed a bond to use the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain officers of Central Excise as proper officers of customs for the purposes of that section. In the event, the contention of appellant on jurisdiction is misconceived and hence will not succeed. 7.2 In respect of the issue framed at para 6 (b) above, we find that 2000.00 MTs HRSS coils were imported by the appellant without payment of duty in terms of Sl.No.196 of Notification No.21/2002-Cus.. The relevant portion of the said Notification is reproduced below for better understanding : Effective rates of basic and additional duty for specified goods falling under chapters 1 to 99 In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.17/2001-Customs, dated the 1st March, 2001 [G.S.R. 116(E), dated the 1st March, 2001], the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below or column (3) of the said Table read with the relevant List appended hereto, as the case may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere used in the manufacture of CRSS strips, which were supplied to the Indian Government Mint, which had, in turn, used them for manufacture of coin blanks and finally remaining 364.317 MTs of quantity were not used for any of the above two purposes. 7.4 There is no dispute about the quantity of 457.113 MTs of HRSS coils which have been converted and supplied as coin blanks to the Mint. 7.5 In respect of 1178.570 MTs imported HRSS coils, they have been converted into CRSS strips and supplied to the Mint. Sufficient proof has also been adduced, which has not been disputed, to confirm that CRSS strips thereupon were used in the manufacture of coin blanks by the Govt of India Mint. The only controversy in respect of this quantity is whether the words for use in the manufacture of coin blanks requires the appellant to manufacture and supply only coin blanks to the Govt of India Mint. 7.6 The scope of phrase for use was gone into by the Hon'ble Supreme Court in the case of State of Haryana Vs Dalmia Dadri Cement Ltd. - 1988 (14) ECR 292. The issue therein related to a dispute concerning cement supplied to Electricity Board on the basis of certificates issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notification permits exemption to penetrators imported for use in the leather industry. It has been shown that the substance imported has use in leather industry as a penetrator. Proof of actual use is not a condition attached to the exemption. If it were so, the notification would have provided for execution of a bond obliging the importer to produce proof of actual use as in the case of many other notifications. We, therefore, do not agree with the Revenue's contention that the benefit of exemption would not be available to the appellants since they are not engaged in the leather industry but are stockists for sale. A perusal of the above decision goes to show that the burden of actual use is not a condition attached to the exemption, as otherwise the notification would have provided for executing a bond and obliging the importer to produce proof of actual use. In any event in the case of the goods falling under Heading A, there was no such condition attached and the conditions attached were only in the case of the goods described under Heading B of the notification. In view of the above, we are not able to agree with the contention of the learned SDR. At this stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oms on this quantity. That part of the impugned order demanding duty on this quantity will therefore require to be set aside, which we hereby do. So ordered. 7.9 In respect of the quantity of 364.317 MTs, appellants have themselves conceded that post-importation condition of the Notification No.21/2002 has not been complied with and have paid up the duty forgone thereof. Hence demand of duties of customs on the said quantity of 364.317 MTs HRSS coils, along with interest liability thereon will sustain. So ordered. 7.10 In respect of the remaining quantity of 457.113 MTs, there is no allegation or dispute about their not having been used in the manufacture and supply of coin blanks supplied to the Mint. Hence no differential duty liability against the said quantity can be demanded. 7.11 Appeal C/234/2008 is therefore partly allowed as aforesaid with consequential relief, if any, as per law. 8.1 Appeal No.E/440/2005 This matter is intrinsically connected with the appeal C/234/2008. The jurisdictional Range officer of the appellant booked an offence case on 30.09.2002, on the grounds that appellant had used imported duty free HRSS coils for purposes other than man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the department on the grounds that, except for 457.113 MTs, the remaining quantity (out of 2000 MTs imported), would not be eligible for the notification exemption as post-importation condition has not been fulfilled. However, in respect of 1178.570 MTs converted into CRSS coils and supplied to the Mint, who, in turn, converted them further into blanks, it has been held herein above that the entire exercise has culminated in fulfilment of the condition laid down in the said notification and hence duty demand on that quantity cannot sustain. Only on 364.317 MTs of the imported goods which as per appellant's own concession, have not been put to the intended use, demand of duty thereon has been sustained. In any event, this certainly is not a case attracting provisions of Rule 7(c) of the CCR 2002. The importer is a Public Sector Unit availing a specially focussed exemption to import HRSS coils for use in manufacture of coin blanks for the Mint which is a Government undertaking. The 364.117 MTs where post-importation condition has not been fulfilled constitute just 18% of the total quantity imported. From the facts on record it also emerges that the appellant did not have enou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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