9911796707
TMI Blog2001 (5) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... s framed thereunder. Aggrieved by imposition of duty and penalties these appeals have been preferred. 2. M/s. Jindal Vijayanagar Steel Ltd. (hereinafter referred to as the company) obtained a EPCG licence No. P/CG/2156090/C/XX/38/D/95, dated 14-11-1995 to import capital goods in terms of Notification Nos. 111/95-Cus., dated 5-6-1995. Licence permitted import of capital goods free of duty. Pursuant to the licence the company entered into contracts with M/s. Voest Alpine Industrieanlagenbau, GmbH in Austria. The contracts so concluded between the parties were placed before the licensing authority for getting licence under EPCG scheme. The authority competent to issue licence, after verifying all the documents and contracts entered into betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice Contract, totalling to 396 million ATS was concealed from the Customs authorities. This amount of 396 million ATS should be added to the value of the goods cleared by the Bills of Entry. When so added, the value of the goods far exceeded the value mentioned in the licence. In this view, the amount of duty short levied was fixed at Rs. 59,46,36,185/-. Interest on that in terms of Section 28AB was levied. Goods imported under Bills of Entry, valued at Rs. 314,02,09,774/- was found liable to confiscation under Section 111(m) of the Customs Act. Since the goods were cleared the importer company and its two Directors were found liable to pay penalties under Section 112(a) of the Customs Act at Rs. 5 crores and Rs. 2 crores each respectively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to the Customs authorities and export obligations to be discharged by the importer are not relevant for this case. "Capital goods" have been explained in the notification as plant, machinery, equipment and accessories required for manufacture or production of other goods including packaging machinery and equipments etc. and those used in manufacturing, mining, agriculture, aquaculture, animal husbandry etc. The Commissioner who passed the impugned order has no case that goods imported under 19 Bills of Entry were not goods covered by the notification. Nor has he got a case that the various items imported were not those enumerated in the licence obtained by the company. 5. As per Notification 111/95 items of capital goods mentioned in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act - evidencing payment of 236 million ATS to the foreign supplier, and, (c) Service Contract for various erection related services for a consideration of 118 million ATS, The amounts covered by these three contracts were taken by the Customs authorities as payments made by the importer to foreign supplier over and above the value of the goods mentioned in the Bills of Entry. Consequently they took it that the value of the goods covered by the Bills of Entry must be loaded with the amounts covered by the abovementioned three contracts. The amounts covered by the three contracts came to 396 million ATS. When that amount is added to the value of the goods imported, authorities took the view that terms of the licence was violated. Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported were covered by valid licence and whether the terms of Notification 111/95, dated 5-6-1995 are satisfied. In an import covered by licence issued under EPCG scheme the Customs authorities are to verify whether the goods imported are specifically mentioned in the licence. If so mentioned, those goods are to be allowed to be cleared free of duty in terms of Notification 111/95. They are not to value those goods mentioned in the licence under Section 14 of the Customs Act to see whether the import exceeds the total value of the goods mentioned in the licence. Identical question came up for consideration before a bench of this Tribunal in the case of, CC, Bombay v. Reliance Industries Ltd. 1996 (62) ECR 62. In that decision, this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods imported were not capital goods covered by the Schedule attached to the licence granted under EPCG scheme. The goods so imported are treated duty free imports by the Government of India as per Notification 111/95, dated 5-6-1995. The goods so imported are not to be valued in terms of Section 14 of the Customs Act. Consequently the value of the goods imported cannot be loaded by adding the consideration paid by the importer under three other contracts. In case, authorities which are implementing EPCG scheme find that the importer spent more for getting the capital goods, he can be saddled with more export obligations. Customs authorities cannot impose duty on the ground that considerations under other three contracts have also to be rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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