9911796707
TMI Blog2008 (10) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the goods imported with an option to redeem the same on payment of redemption fine, imposed penalties on the appellant company and three officers of the company. 2. The necessary facts those arise for consideration are: Appellants filed B/E No. 779529 779739, on 18-5-2006, for provisional clearance of their consignment of Blister Copper which had arrived from Salvodor BA. The said goods were covered vide B/L No. MSCUSD 137879 dated 8-4-2006 MSCUSD 138901 dated 14-4-2006. The said goods had earlier arrived per Vessel MSC ALPANA-657R and CVERONIQUE-074R. The clearance of the said goods was sought through their CHA Sri RadhaKrishna Shipping Pvt. Ltd., CHA No. 11/4689 under Advance License No. 0310359987. For clearance of the said goods provisionally, appellants furnished a xerox copy of sales contract dated 15-3-2006 (for 1000 mts. of Blister Copper) between them and the supplier, CARAIBA METAlS S/A, VIA, DO COBRE, 3700, AREA INDUSTRIAL OESTE, COPEC DIEAS D'AVILA, BAHIA, BRAZIL. Appellant through their CHA 11/468 had also submitted copies of provisional Commercial invoice No. 135-06 and 1356-06-A dated 13-03-06 and 18-04-2006 respectively, Bills of Lading and a copy of Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MSCUSD 138901 dated 14-4-2006 and declared value of Rs. 21,74,82,202/- in the B'S/E, were taken over and seized under a Panchnama on 13-6-2006 under Section 110 of the Customs Act, 1962 on reasonable belief that these were misdeclared as Blister Copper and, in fact, were found to be Copper Plates of refined copper and therefore, liable for confiscation under the provisions of Customs Act, 1962. 5. A seizure memo was issued to the custodian of the goods i.e. Balmer Lawrie CFS in terms of Section 110(a) of the Customs Act, 1962 directing the custodian not to part with, remove or deal with the goods under seizure. 6. The lower authorities recorded statements of various persons, including the employees of the appellant company. On completion of the investigation a show cause notice dated 12-7-2006 was issued to the appellants herein directing them to show cause as to why:- A. the above said goods, totally valued at Rs. 27,72,68,266/- imported as Refined copper in the guise of Blister copper by them in violation of Advance License No. 0310359987 dated 19-12-2005 seized by officer of Customs under Panchnama dated 13-6-2006 should not be held liable to confiscate under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be done according to the prices prevalent at the LME, the advance license produced by the appellant company being after the consignment has been seized is not acceptable, passed the following order:- ORDER (i) The impugned goods valued at Rs. 27,72,68,266/- imported in the guise of Blister copper in violation of advance license No. 03103359987 dated 19-12-2005 are held liable for confiscation under Section 111 (d) and (m) of the Customs Act, 1962 and the same are accordingly confiscated. A redemption fine of Rs. 7,00,00,000/- (Rupees Seven Crores only) is imposed on the goods in lieu of confiscation under Section 125 of the Customs Act, 1962 and as the goods had already been released on Bank guarantee and PD Bond, M/s. Sterlite Industries (I) Ltd. is ordered to pay the redemption fine of Rs. 7,00,00,000/- (Rupees Seven Crores only) in lieu of confiscation forthwith. (ii) The value of the impugned goods declared by the importer as US $ 47,48,156, equivalent to as Rs. 21,74,82,202/- is rejected under Rule 4 of Customs Valuation (Determination of price of imported goods) Rules, 1988. the value is redetermined in terms of Rule 6 of the Customs Valuation (Determination of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, which has copper content of approximately 30%. For manufacturing refined copper the copper concentrate is first smelted in an ISA Furnace. In this process copper matte and slag is generated, in a liquid form, the copper content in the copper matte is about 60%. This mixture of copper matte and slag is further processed in rotary holding furnace, where the slag in the copper matter is separated from the slag. The copper matte thereafter obtained has copper content of 60 to 65% purity. The same is put in a converter and is further processed to obtain blister copper (liquid form) which has 98.5% to 99.5% copper content. The blister copper is processed in an anode furnace by preliminary fire refining and preliminary refined blister copper (liquid form) having copper content of 99.5 to 99.7% is obtained. The same is then cast in as a blister copper anode, which contains 99.5 to 99.7% copper. These anodes are thereafter electrolytically refined and a refined copper cathode which has purity of 99.99% is obtained. In the process of electrolytic refining not all the blister copper anode is refined and some portion of the said blister copper anode cannot be electrolytic refined due to te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ister copper was taken to appellant's Silvassa factory and used in the manufacture of copper cathode. It was submitted that appellant's produced a valid Advance license for the consignment of blister copper, but noticing that the revenue is disputing the said consignments as being of refined copper, the appellant produced another advance license (issued by DGFT) for refined copper. It is the submission that it is undisputed that appellant was exporting copper cathodes manufactured out of imported consignment of blister copper. It is the submission that the adjudicating authority has not accepted the second advance license on the ground that the said license was procured after the consignment was seized. He would assail these findings on the ground that the EXIM policy and the Handbook thereto clearly envisage for procurement of the advance licenses for the consignment under clearance. He would draws our attention to the said provisions. He would also point out that the report of National Metallurgical Laboratory analysed the sample in scientific manner and the results would indicate that the copper content of imported consignment is 99.7% and not 99.9% as claimed by the revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the goods that has arrived and were seized. He would submit that there is mis-declaration as there is difference in value. It is the submission that valuation as is done by the adjudicating authority is correct and is based on the LME price range during the relevant period. 10. In rejoinder learned counsel would submit that there is no mis-declaration, the appellant has declared the goods as blister copper which is what is the finding of the adjudicating authority i.e. the goods imported are spent copper anodes. He would submit that chapter heading no. 74.03 would not cover anodes as the said heading is clearly for cathodes. He would submit that chapter heading no. 74.02 specifically covers anodes. II is the submission that chapter heading no. 74.03 will only cover cathodes those are obtained after electrolysis and copper anodes will not be covered under the said chapter heading. It was submitted that clearances were sought provisionally on the basis of proforma-invoice raised by the supplier and the final payment of consignment was done after completion of the analysis and the value paid by the appellant to the supplier is far more than the value as is arrived by the adjudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for Electrolytic refining --- Blister copper................. --- Other.............................. Kg. Kg. 12.5% 12.5% 7403 7403 11 00 7403 12 00 7403 13 00 7403 19 00 7403 21 00 7403 22 7403 22 10 7403 22 90 7403 23 7403 23 10 7403 23 20 7403 29 00 Refined copper and copper alloys, unwrought Refined copper: --- Cathodes and sections of cathodes................... --- Wire-bars....................... --- Billets............................. --- Other............................. Copper Alloys: --- Copper-zinc base alloys (brass).................. --- Copper-tin-base alloys (bronze): --- Phosphor bronze............. --- Other.............................. --- Copper-nickel base alloys (cupro-nickel) or Copper-nickel-zinc base alloys (nickel silver): --- Copper-nickel base alloys (cupro-nickel)............... --- Copper-nickel-zinc base alloys (nickel silver).......... --- Other copper alloys other than master Alloys of heading 7405................ Kg. Kg. Kg. Kg. Kg. Kg. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining can be only done by electrolysis. It also further states that blister copper is also in the form of blocks and is called anodes. We find in the case before us, the adjudicating authority after relying on) various explanatory notes and definitions held that "Blister copper is an intermediate product arrived at before extraction the refined copper and the two are entirely different products of copper obtained during the refining process. Physically, Blister copper is generally in lumps or crude mass characterized by blisters on their surface formed by escape of gases." It can be seen that these findings of the adjudicating authority are incorrect, as the description given in the paper produced by the learned Jt. CDR indicates that the Blister copper can have 99% is copper content, can be in the form of blocks which are generally called as anodes. It is admitted and undisputed in this case that consignments in dispute, in the words of adjudicating authority (at internal Page 22 of the impugned order) "From the description given in the SCN, the impugned goods appear to be spent anodes obtained from electrolytic refining of Copper." This would mean that the goods imported were in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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