9911796707
TMI Blog2019 (7) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ties. Export Obligation was fulfilled; Remittances received; DGFT redeemed all 9 Licenses and Customs cancelled the Bonds executed. Revenue issued an SCN dated 30.9.2003 for Rs. 1.22 Cr, alleging that the appellants misrepresented before DFGT in obtaining SION; imported excess 980.275 MTs PCE and diverted goods for job work to sister concern. Appellant paid Rs. 54.16 Lakhs during investigation. 2.1. As the SCN was not adjudicated till 2009, Appellant approached the Hon'ble High Court with a Writ Petition No.2511/ 2009. Hon'ble High Court, vide Order dated 25.1.2010, disposed of the Petition, as Revenue gave undertaking to decide the SCN in a time bound period. Commissioner Export adjudicated SCN; though he did not uphold allegation of excess of import, held that condition of notification Custom Notification 30/97 was violated on ground that job work was without permission and as such goods are to be treated as diverted. He confirmed the demand of Rs. 1, 22, 84,534 and equal penalty under Section 114A and penalty of Rs. 6 Lakh on M/s. SCF. Hence, these Appeals (C/890/2010 and C/891/2010). Revenue filed an appeal (C/974/2010) for enhancing Penalty to include Interest amount i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and not out of 980.275 MTs PCE. Further, as far as 264.841 MTs sale to SCF is concerned, two traders stated that it was paper transaction out of fear. Department did not Charge these persons for aiding abetting. Some of them could not be traced. 6. He further submits that Exim Policy permits job work. A minor quantity of goods manufactured through job worker as per Para 3.5 of EXIM policy as Actual User. Thus it is not violation of Custom Notification Custom Notification 30/97. Taking permission for sending Replenishment Import goods for job work (though Assistant Commissioner permitted) is not a mandatory, essential and substantial condition. At the best, it is procedural, directory or technical condition. Therefore there is no breach of condition of notification. Disallowing exemption benefit by misconstruing and on technical ground is defeating and frustrating the purpose, object and spirit of beneficial notification. He relies on and submits that export obligation can be completed on the job work basis; there is no mandate that job work cannot be carried out without permission or intimation. (i) CC (Prev) Amritsar Vs Malwa Industries Ltd. 2009 (235) ELT 214 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f excess import, is the Adjudicating Authority is correct in confirming the demand on technical ground, while he dropped demand on the main allegation. (vi). Whether the Adjudicating Authority disregarded higher judicial fora in not following the ratio of cases cited by them? 7. Learned AR per contra, reiterates the findings of the OIO as far as confirmation of duty and penalty is concerned. Further submits that penalty needs to be inclusive of duty plus interest as appealed by department. He submits, vide written submissions dated 18-3-2019 that the case was made on the basis of information received; searches were conducted at the office and factory premises of SCI and their sister concern, M/s. Scottish Chemical & Fluxes; evidence was gathered and statements of the concerned persons were recorded. Shri Kamal Khandelwal Partner of SCI, in his statement on 06.08.2003, inter alia, admitted to the illegal diversion; ratio of imported PCE to the finished goods was one kg of PCE for one kg of Hexa exported i.e. Hexa till June, 2000; there after it was 900 gm. / 1 kg; thus, excess quantity of 980.275 MT was arrived at; SCI were also sending the imported PCE to their sister concern (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntelligence was that the Appellants have imported excess quantity of HCE by misrepresenting to the DGFT authorities, the Show Cause Notice has also raised the issue of transferability of the license/goods at para No.30 and 31 specifically. It has been categorically stated that the 9 Advance licenses were issued in terms of para 7.4 of the Exim Policy and are nontransferable. The condition sheet attached to each of the above license also stipulates as under: (a) The exempted goods imported against the license shall only be utilized in accordance with the provisions of the Export Import EXIM Policy 1997-2002 and the concerned Customs Notification, as amended from time to time. (b) The license holder shall maintain a true and proper account of consumption and utilization of imported goods in the proforma given in Appendix-21 of the Hand Book of Procedures 1997-2002. Therefore, the condition of the Appellant that the adjudication order traversed beyond the scope of the Show Cause Notice is not acceptable. 12. The Appellants further contended that they have sent a part of the imported goods to their sister concern M/s. SCF on job work basis; they had intimated the authorities in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the plea that the goods were not transferred but were sent on job work basis or not acceptable. We find that Appellant have not mentioned the name of the job workers while obtaining the licenses. Therefore, the plea on the basis of intimation to the authorities is not acceptable. We find that the investigation has successfully demonstrated that the goods even if they were supposed to have been sent to M/s. SCF on job work basis have never back to the Appellants for further use and export in their factory. In the result one has to hold that such goods have been diverted in to the local market in contravention of the Exim Policy and the Customs Notification. We find that the Learned Commissioner has correctly relied upon a number of judgments in this matter. 13. We find that the Learned Commissioner has logically concluded that the reliance of the Appellants in the case of M/s. Ashok Enterprises (supra) is not correct. The Learned Commissioner has clearly elaborately distinguished different cases cited by them. We find that ratio of the cases can be applied only when the facts are identical. Further, we find that Hon'ble Supreme Court of India, in the case of CCE, Bangalore v. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at their end or by M/s. SCF, to substantiate their claim, makes the arguments of the Appellants fall flat. Therefore, such arguments are devoid of any merit and are not acceptable. Appellants have taken the plea that no permission is required to be taken for job work. As discussed above, we find that the appellants have obtained licenses under actual user condition. They did not mention their sister concern as a supporting manufacturer. They have not maintained any records which could corroborate their claims. On the contrary, as discussed above, the investigation has established that the goods which were claimed to have sent on job work to M/s SCF have not retuned back and the claim of sale by M/s SCF out of their domestic procurement/import has fallen flat as all the transactions have been proved to be bogus or with non-existing parties. We find that the appellants have tried to argue on the basis that they have fulfilled export obligation and as substantial compliance has been made, other minor infractions should not come in the way of their availing the benefit. We find that the conditions of Notification have to be read very strictly. We find that in spite of the claim of fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty under Section 114A was rightly imposed. 16. Coming to the penalty imposed on M/s SCF (C/891/2010), we find that the goods were imported by the appellants and the appellants are liable to pay duty in case of any violation. The appellants have diverted the imported goods to M/s SCF which were further sold in domestic market. We find that partner of the appellants is also the authorised signatory of M/s SCF. Equal Penalty under Section 114A has been imposed on the appellants and we have upheld the same. Under the circumstances, penalty imposed on M/s SCF appears to be higher side. Therefore, we are inclined to reduce the penalty on M/s SCF to Rs. 0ne Lakh only from Rs Six Lakhs. 17. We find that there is an appeal filed by the department for inclusion of the amount of interest in the penalty under Section 114A. We find that this issue is no longer Res Integra. We find that the interest payable on the duty demanded does not require to be taken into consideration for arriving at the amount of penalty payable under Section 114A. 18. In view of the above, Appeal C/890/2010 filed by M/s Scottish Chemical industries and C/974/2010 filed by Revenue are dismissed. Appeal No C/89 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
