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TMI Blog2019 (1) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... o have its economic activity divided into various subsidiary companies. In the present case it is not in dispute that Glencore after mining of copper concentrate is getting the same refined and smeltered at PASAR which is its own subsidiary. Only for the reason that both the concerns are working under different set up, it does not take away the fact that PASAR is part of Glencore. Therefore there is no difference or distinction between the mining company and the producer company. The condition 34 (b) of the notification states that the goods are to imported in accordance with the packing list issued by the mining company by whom they were produced. Further the condition 34 (c) states that the importer has to produce before the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, an assay certificate issued by the mining company or the laboratory attached to it, giving detailed precious metal content in the dore bar. The assay certificate was issued by Glencore who is itself a mining company. The assay certificate cannot be denied on the ground that it is a provisional certificate. Also, the conditions of the notifications should be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for confiscation under the provisions of Section 111 (d) and 111 (m) of the Customs Act, 1962; and to charge interest u/s 28AA and to impose penalty u/s 112 (a) of the Act. 2. The proposals made in the show cause notice were confirmed by the adjudicating authority holding that the gold bar have not been produced by the Glencore which is a mining company. It has been produced by PASAR which is not a mining company. Therefore the packing list issued by PASAR has no relevance and thus the condition (b) is not fulfilled. As regard assay certificate the adjudicating authority held that Glencore has issued only provisional certificate and not final. The assaying of the gold dore bar has been done by the metallurgical division of PASAR which is not mining company. It is also not established that metallurgical laboratory division of PASAR was a laboratory attached to the mining company namely Glencore. Therefore neither the assay certificate issued by the mining company can be accepted as it is provisional nor the final assay certificate has been issued by a laboratory attached to the mining company. Hence the condition 34 (c) is also not fulfilled. He also held that Glencore is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the condition 34 (b) as Pasar is controlled asset of Glencore. If the entities were different, then the production of PASAR would not have been counted as of Glencore. The Books of accounts/ financial statements of Glencore on record support their contention. The supplier has the ability to govern and regulate the production of PASAR which is why the production of PASAR is treated as production of Glencore. Therefore there is no distinction between the mining company and the producer company. He submits that the Accounting standards (AS) 21 by the ICAI deals with the consolidated financial statements and states that the resource of parent company and subsidiary can be treated as single economic activity. The international financial standard also views the same. 4. The contention of the Ld. Commissioner that both are separate entities is not correct. According to the adjudicating authority the mining company and supplier should be same. He submits that the above manner of reading of notification would lead to unintended denial of exemption notification from mined ore, from smelters which are not part of mining company. The content of the imported goods is verified and certifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial No. 318 of the Notification No. 12/2012 Cus dated 17.03.2012 was not followed by the Appellant and hence not eligible for exemption. We find from the case papers that the undisputed fact is that the PASAR is controlled entity of Glencore which is involved in mining. The copper concentrate is sourced by PASAR from Glencore and used in its refining and smelter plant. It also has sulphuric acid plant and a dore plant which produced alloy of gold and silver. M/s Glencore holds 78.2% of the shareholding of PASAR and the production of PASAR is counted as production of Glencore. It is common for an entity to have its economic activity divided into various subsidiary companies. In the present case it is not in dispute that Glencore after mining of copper concentrate is getting the same refined and smeltered at PASAR which is its own subsidiary. Only for the reason that both the concerns are working under different set up, it does not take away the fact that PASAR is part of Glencore. Therefore there is no difference or distinction between the mining company and the producer company. The condition 34 (b) of the notification states that the goods are to imported in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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