TaxTMI 
TaxTMI 
2011 (6) TMI 587
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....noticee in terms of Section 112 of Customs Act, 1962. Penalty of Rs. 5 lakhs (Rupees Five Lakhs Only) stand imposed upon Shri Amrutlal Veljibhai Chandaria under Rule 26 of Central Excise Rules, 2002. The Commissioner has also confiscated the imported mix brass scrap valued at Rs. 3,58,44,873/- and valued at Rs. 2,18,29,770/- with an option to redeem the same on payment of redemption fine of Rs. 40 lakhs (Rupees Forty Lakhs only) and Rs. 22 lakhs (Rupees Twenty Two Lakhs only) respectively. As per facts on record, M/s. Ilesh Exports is a 100% EOU, engaged in manufacture of various brass articles falling under Chapter 74 of Schedule to Central Excise Tariff Act, 1985. They were importing brass scrap etc. without payment of Customs duty under 100% EOU scheme, for the purpose of utilizing the same for manufacture of brass ingots, brass rods, brass granules etc. in their said 100% EOU. 2. The appellant's factory was visited by the Central Excise officers on 27-7-05, who conducted various checks and verifications. As a result, certain shortages of brass scrap imported by the appellant were detected. It was also found that HDPE or jute sacks showing the brass scrap in them were stac....
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....Supreme Court's judgment in the case of Hyderabad Industries v. UOI - 1999 (108) E.L.T. 321 (S.C.). 5. In the said judgment, the Hon'ble Supreme Court had rejected the observations made in the earlier decision in the case of M/s. Khandelwal Metal & Engineering Works Ltd. v. UOI - 1985 (20) E.L.T. 222 (S.C.). The decision in the case of Hyderabad Industries was followed by Tribunal in the case of Karnataka Chemical Industries Corporation Ltd. v. CC, Cochin - 2005 (183) E.L.T. 207 (Tri.-Bang.). Reliance of the appellant placed on the decision of the Tribunal in the case of CC, Cochin v. IM Kemex India Ltd. - 1996 (86) E.L.T. 95 (Tri.-Del.), laying down that brass waste/scrap being mere collection of used, worn out, obsolete and scrap items, cannot be held as goods manufactured as a result of transformation stands rejected by the Commissioner by placing reliance on Hon'ble Supreme Court judgment in the case of M/s. Khandelwal Metal & Engineering Works. According to the ld. Sr. Advocate, such reliance was not appropriate in view of the subsequent law declared by the Hon'ble Supreme Court in the case of Hyderabad Industries. 6. He further submits that the Commissioner reject....
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....thority and submits that the imported mix brass scrap/mix zinc scrap was cleared by the appellant by filing a Bill of Entry claiming exemption in terms of Notification No. 53/1997-Cus., dated 30-6-97 and Notification No. 62/2003-Cus., dated 31-3-03. In the said Bills of Entry, the additional duty of Customs stand levied and the appellants never disputed the levy of the same. As the appellants have not challenged the said assessed Bills of Entry for levy of additional Customs duty on the imported goods at the time of import, it is not open to them to challenge the levy of CVD at this stage. In any case, submits the ld. SDR that reliance by Commissioner on the decision in the case of Khandelwal Metal & Engineering Works is appropriate, inasmuch as the said judgment of Hon'ble Supreme Court was never overruled by subsequent decision of Hon'ble Supreme Court in the case of Hyderabad Industries case, as is clear from Para 17 of their decision. Inasmuch as the identical goods i.e. brass scrap was the subject matter of dispute before Hon'ble Supreme Court in the case of Khandelwal Metal & Engineering Works, the findings arrived at by Hon'ble Supreme Court in the said case that if the art....
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....e said decision has not overruled the earlier decision of Hon'ble Supreme Court in the case of Khandelwal Metal & Engineering Works. He has also rejected the above contention on the ground that the appellants have not challenged the Bills of Entry and as such, they are precluded from raising above ground now. We do not find any favour with the reasoning adopted by the Commissioner. Admittedly, the Bills of Entry were filed at the time of import of the goods, for taking the goods to 100% EOU, which has the status of warehouse. It is only when the goods leave the premises of warehouse, the duty liability in respect of the same is required to be adjudged. We have to keep in mind that this is not a case of refund of duty being claimed by the importer so as to apply the ratio of Hon'ble Supreme Court in the case of Flocks (India) Ltd. [2004 (120) E.L.T. 285 (S.C.)] or Priya Blue Industries [2004 (172) E.L.T. 145 (S.C.)]. The duty liability of the importer has to be adjudged at the time of clearance of the goods from 100% EOU. As such, we are of the view that when duty is now being demanded from the appellant in respect of clearance of duty free imported material into DTA, the same is r....