TaxTMI 
TaxTMI 
2014 (5) TMI 789
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.... C/S/11298/2013 C/11458/2013 C/S/11299/2013 C/11459/2013 C. K. Goel Ashok Punj P. S. Mann KDL/COMMR/62/2012-13, dated 28/2/2013 2 C/S/12305/2013 C/12633/2013 C/S/12306/2013 C/12634/2013 C/S/12307/2013 C/12635/2013 C/S/12308/2013 C/12636/2013 Ratnamani Metals & Tubes Ltd. P. M. Sanghi R. Ravichandran Manoj Sanghvi KDL/COMMR/15/2013-14, dated 30/4/2013 3. C/10991/2013 C/11322/2013 C/11323/2013 C/11324/2013 C/11325/2013 C/11326/2013 C/12406/2013 Welspun Corp. Ltd Arunav Baruah Kirti Sachin Kambli Suresh Darak L. T. Hotwani B. K. Goenka Tata Steel International Limited KDL/COMMR/10/2013-14, dated 19/4/2013 4. C/11460/2013 C/11461/2013 C/11462/2013 C/11463/2013 Man Industries India Limited N. Nagrajan R.C. Mansukhani Abhilesh Ojha KDL/COMMR/64/2013-14, dated 28/2/2013 2. All the four importer appellants M/s. PSL Ltd, M/s Ratnamani Metals & Tubes Ltd, M/s Welspum Corporation Limited and M/s. Man Industries India Limited imported API 5L PSL 2 x 70 and x80 grades of Hot Rolled Steel coils/plates which were used for ma....
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....x80 grades of steel were classified as other alloy steel under CTH 7225 by Commissioner Kandla under separate orders-in-original confirming demands with respect to goods cleared from Mundra, Kandla & Mumbai Ports by invoking extended period. Penalties under Section 112 (a), Section 114 AA & 114 A of the CA 1962 were also imposed upon the importer appellants & other individuals for which appeals have been filed as detailed in Para-1 above. All the stay applications, Misc. applications, and appeals were fixed for hearing on 20.03.2014 & 21.03.2014. After completion of the hearing all the appellants were directed to file written submissions within two weeks but the same could be filed only by 17.04.2014. 4. Sh. P. Sridharan (Senior Advocate), Sh. Laxmi Menon (Adv) and Sh. Manish Jain (Advocate) appeared for the appellants in Appeal No. C/11456/2013, C/11457/2013, C/11458/2013, C/114591/2013 and the related Stay/ Misc applications and appeals E/11460-64/2013. Sh. Sridharan made the bench go through 'Extracts from the reply of the Finance Minister to the debate in the Lok Sabha on the Finance Bill 2008', as per Press Information Bureau release, to drive home the point that before the c....
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....d to the appellants is also without jurisdiction in view of the Apex Court's judgment in the case of CC Vs Sayed Ali & Another [2011 (265) EL5 17 (SC)] wherein it was held that Commissioner of Customs (Prev) was not competent to issue demand show cause notice under section 28 of the Customs Act 1962. That the ratio laid down by Supreme Court in the above case is applicable to the show cause notice issued by DRI. That further insertion of sub-section (11) to section 28, under the Customs (Amendment & Validation) Act 2011 w.e.f. 16.09.2011 also does not give any legality to the show cause notices issued by DRI before 16.09.2011 as the words 'this section' means only with respect to amended new Section -28(11). 4.2. That rate of customs duty on Alloy steel and Non-alloy steel has always remained same except for the period 29.04.2008 to 18.11.2008. During this period effective basic customs duty on Non-alloy steel of CTH 7225 was 5% whereas CTH 7208 attracted Nil rate of duty. That the CVD rate remained the same throughout. 4.3 That for being considered as other alloy steel all the elements present in steel should be in the percentage ranges as specified in chapter note 1 (f) of Chap....
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....eel goods of API grade PSL 2 x 70 will never make the same grade permissible for import. That accordingly applying the interpretation of chapter note 1 (f) of CTA to the API grades will render at least a portion of SION C-593 redundant as it permits to export pipes of any API grade but will not permit import of the some grades. 4.10 That extended period of limitation is not invokable as PSL Ltd. has provided all the MTCs at the time of importation, as is clear from the examination reports. That with respect to B/E No.221283 dt 13.12.2007 MTC was specifically called for where Molybdenum content was 0.08% which accordingly to chapter note 1 (f) will take it to the category of 'other alloy steel' of CTH 7225. That despite this fact known to the Revenue this consignment was still assessed under CTH 7208 as Non-alloy steel. 4.11 That for determining the goods being prime or seconds/defective invariably MTCs are required to be seen as per procedures under Trade Notices prescribed by the Revenue. 4.12 That classification of imported steel under CTH 7208 was solely claimed on the basis of past assessments made by proper officers with respect to the past imports made by the appellants an....
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.... the purpose of demanding duty in respect of the imports made under advance authorizations. (ii) That the customs bonds will be invokable only in those cases where case for short levy is non-fulfillment of post-importation conditions and not other-wise. Where the exemption is being denied for non-fulfillment of threshold condition itself, duty demand cannot be made by invoking the bonds but has to be in terms of Section 28 only. (iii) That in the present case, the case of the revenue is that the raw material imported by the Appellant is not covered by the Advance Authorisations in question. This is therefore clearly a case where the benefit of the Notification is being denied at the threshold itself. It is not a case where in the appellants have violated post importation conditions of the Notification. In such a case, Section 28 alone is applicable. (iv) That in Indian Metals & Ferro Alloys Ltd. Vs. Superintendent, C. Ex & Cus. 2000 (123) ELT 337 (Ori.) affirmed by the Supreme Court in 2002(144) ELT A105 (S.C.) assessee was an EOU. The imported consignments of electrode paste were assessed to nil rate under Notification No.13/81-Cus and goods were warehoused. Exemption was exten....
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....nbsp; (i) Aditya Birla Ltd. Vs. CC Bangalore [2010 (249) ELT 273 (Tri.- Bang.)] (ii) Hindustan Lever Ltd. Vs. CC (EP) Mumbai [2012 (281) ELT 209 (Tri- Mumbai)] Further, in view of Bombay High Court order in the case of CC (EP) Vs Hindustan Unilever Ltd. [2012 (285) ELT 500 (Bombay)] customs authorities are not justified in raising objection after the fulfillment of export obligations to the satisfaction of the licensing authorities. It was thus emphasized by the appellant that with respect to Advance Authorizations where export obligations have been fulfilled and licenses redeemed, no action can be taken where there is no fraud, willful misstatement or suppression. 4.19 That as per Customs Appraising Manual a classification given in the bills of entry cannot be considered as willful misstatement as deciding the classification of imported goods is the sole responsibility of the customs assessing officers when the description has been correctly given along with the required import documents. For this purpose learned Sr. Advocate relied upon the following case laws to emphasize that no confis....
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.... (iv) Whether the Company is entitled for exemption in terms of Notification No. 93/ 2004-Cus dated 10.09.2004 and Notification No. 94/ 2004-Cus dated 10.09.2004 in respect of the said goods imported under the 52 advance licences/ authorizations? (v) Whether duty can be demanded by invoking the extended period of limitation in terms of the proviso to Section 28(1) of the Customs Act, 1962. (vi) Whether duty can be demanded from the appellants under the said Notifications? (vii) Whether the said goods are liable for confiscation under Section 111 (m), and Section 111 (o) of the said Act on account of mis-declaration? (viii) Whether the appellants are liable for penalty under Section 114A and 112 of the Customs Act, 1962? (2) That as per the stand taken by the Revenue the imported consignments contain Niobium, Manganese and Molybdenum more than the percentages specified in chapter Note 1 (f) of chapter 72 of the CTA, whether individually or coll....
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....a 4.1.3 of FTP provides that Advance Authorizations are issued to allow duty-free imports of inputs which are physically incorporated in the export products. That it is an admitted fact that 'HR Coils API Grade 5L PSL2 x70' is not only required for export production but also is physically incorporated in the manufacture of welded pipes duly exported by the appellants and foreign exchange against the said exports made has been realized. (8) That at this stage, it is relevant and important to examine the eligibility of the appellant to import any type of steel - alloy or non-alloy - under Advance Authorization. There are two methods by which Advance Authorizations can be applied for and granted. Para 4.4 of the Handbook of Procedure 2004-09 provides that where Standard Input-Output Norms (SION) have been published, an application in the prescribed form along with documents mentioned therein shall be submitted to the concerned Regional Authority for grant of Advance Authorizations. Para 4.4.2 of the Handbook further provides that where the norms have not been published, an application in the prescribed form along with documents mentioned therein shall be furnished to the concerned No....
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.... Commissioner Vs. Rupa & Company [2004 (170) ELT 129] That without prejudice to the above, the use of alternate inputs is permissible under Duty Exemption/Remission Schemes covered by Chapter 4 of FTP. Advance Authorizations is part of Chapter 4 of FTP. Appellant placed reliance on Policy Circular No. 30 (RE-05)/2004-2009 dated 10.10.2005 and Policy Circular No. 72 (RE-08)/2004-2009 dated 24.03.2009 in both of which, the DGFT has clarified that alternative inputs are permissible for import. It was argued that assuming whilst denying that the said goods imported by the company are alloy steel, the fact that the Licenses/Advance Authorizations bear the description 'non-alloy steel' does not prevent the Company from importing alloy steel as alternate inputs so long as what was imported by the appellant was capable of being used in the export products. As a matter of fact, the said goods imported by the Company have actually been used in the manufacture of export products. On this ground also, the appellant is eligible to import duty-free goods under the 52 Advance Authorizations under the Customs exemption notifications. (9) That present appellant M/s Welspun approached Norms Commit....
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....the Honorable Bombay High Court has also in the Order dated 20.11.2013 put the issue beyond doubt that reference to the word 'grade' (which word is appearing in SION as well as the decision of the NC) does not refer to alloy or non-alloy. Obviously, the word 'Grade' referred to in decision of Norms Committee means 'API or ASTM Grade' since the relevant entries C-593 in the SION talks about API or ASTM Grade. The appellant has also declared the Grade in the Bills of Entry and Shipping Bills as API grade. Pursuant to the Order dated 20.11.2013 of the Honorable Bombay High Court, by letter dated 27.02.2014, the office of the Joint DGFT, Vadodara has confirmed that the Company has exported goods of the same grade as imported by it under the Advance Authorizations. A copy of the said letter dated 27.02.2014 was also tendered at the time of hearing. (11) That the Commissioner has referred to the affidavit filed by the Deputy DGFT, Mumbai (wrongly recorded as DGFT in the impugned Order) in Writ Petition (Lodging No. 2031 of 2012) filed by the Company in the Honorable Bombay High Court to conclude that it is th....
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..... 7837 dated 05.02.2004 issued by Commissioner of Customs (Imports) Ballard Estate, Mumbai. Similar standing orders/public notices have been issued by other Custom Houses as well. The Proper Officer in the present case did not call for MTCs. That apart from that it is a matter of record that contemporary imports of other importers, where the MTCs were available before the assessing officers, the steel was still assessed and classified under CTH 7208. That this is a matter of record and is evident in the case records of M/s Ratnamani Metals, M/s PSL Limited and M/s Man Industries which were heard together. The examination orders and the examination reports in the case of contemporary imports show that despite verifying the MTCs Proper Officer did assess the imported steel of these grades under CTH 7208 as non-alloy steel. That there are a number of instances where this importer and the other three importer appellants imported the same grade from the same supplier and received in the same ship, which were assessed under CTH 7208. It was thus argued that non-production of MTCs by this importer did not mean any willful misstatement/ suppression of material information with intention to....
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....ur, to the Government That as all the export obligations for the majority of the advance authorizations have been fulfilled and in majority of the cases, bonds have also been cancelled, therefore, no recovery can be made by enforcing the customs bonds executed by the importers at the time of clearance of goods availing exemption notifications. (17) That as per Bombay High Court's order in the case of Repro India Ltd Vs. UOI [2009 (235) ELT 614] export goods cannot be burdened with taxes as the intention of the government during the relevant time was to contain inflation in steel products and also to have 'zero-rated exports'. (18) On the issue of imposition of penalties on the individuals and confiscation of imported goods it was argued that a reference has been made to the statement dated 13.05.2010 of Mr. B.K. Goenka, Chairman of the appellant that he admitted that the appellant has made a 'blunder'. Similar reference has been made to the Statements of other Officers of the Company that the said goods imported by the company by the Company was alloy steel. These Officers were shown Chapter Note 1(f) to Chapter 72 and MTCs, and in response thereto, stated that the said goods we....
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....without intent to evade payment of customs duty or violated the provisions of the said Act or conditions of the Advance Authorizations. The work of the Company is divided into departments, such as marketing and sales which looks for exports, supply and procurement of raw materials and customs clearance and delivery up to the factory. The departments concerned with the export orders and supply chain, which applies to persons like Lal Hotwani, Arunav Barua and Kirti Kamble do not deal with the customs clearances and have not made any declaration which have been alleged to have rendered the goods liable for confiscation under Section 111(m) of the said Act. So also the customs clearance department which involves persons like Suresh Darak had no knowledge of the MTCs which were not forwarded to them. The chart prepared by Mr. Suresh Darak mentioning a duty liability of Rs 42 crores was made by him after the investigations were started with respect to other appellants to understand for himself the potential duty liability. No adverse inference can be drawn on the basis of this chart. In any case, no case can be made upon the appellant in the absence of MTCs since it has been shown from ....
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....p; (5) That in spite of the MTCs produced by the appellants before the Assessing Officer, the classification of the imported steel was still made under CTH 7208. (6) That in the event of conflict between the documentary evidence (in the form of examination reports) and statement dated 16.03.2012 of CHA, the former shall prevail as per the following case laws: (a) R.P.Industries vs. Collector [1996 (82) ELT 129 (Tribunal)] (b) Philip Fernandes vs. Commissioner [2002 (146) ELT 180 (Tri.Mum.)] (7) That as aforesaid no penalty on individuals is warranted as none of them got any undue or illegal financial gain in his personal capacity. That none of the individuals did anything or ommitted to do any act which rendered the imported goods liable to confiscation and accordingly no penalty is imposable on the individuals under Section 112 (a) and/or Section 114AA of the Customs Act 1962. 7. Shri Asho....
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....lty is attracted as Shri Tamal Gupta has not signed any document furnished before the Customs Authorities. 9. Shri A. Sheerazi (Advocate) and Shri Shri Anay Banhatti (Advocate) appearing on behalf of the Tata Steel Industries Limited (Appeal No. C/12406/2013) made the following arguments during the course of hearing as well as through written submissions:- (a) That appellant was only required to co-ordinate between appellant Welspun Corporation Limited and the local office of Corus entity in the country in which the manufacturing mill or trader was located. (b) That when a request for a certificate of imported goods being 'Non-Alloy Steel' was received, the same was forwarded to Corus China office. When such certificates were obtained and forwarded by the manufacturer the same were forwarded to the appellant and the appellant was forwarding the same to Welspun Corporation Limited. (c) That the discussion whether or not the certification requested by Welspun Corporation Limited should be given was left entirely....
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.... and one case of M/s. Man Industries India Limited. That only during investigation MTC's were obtained from the importer appellants and on examination of MTCs, it was found that Steels imported had the characteristics of Alloy Steel as per Chapter Note 1 (f) of Chapter 72 of the Customs Tariff Act as 'niobium and molybdenum' percentages were within the specified ranges of Chapter note 1(f). That argument of Welspun Corporation Limited with respect to sub-heading note 1(f) of Chapter Note 72 of the Customs Tariff Act is misplaced in as much as the proportion of lead as 0.1% or more when read with Chapter note 1(f) will mean that for non-alloy steel the lead percentage will be from 0.1% to 0.4% only and thereafter, the steel will become an Alloy Steel. (c) That it is also contended that even before amendment of SION C-593 by Public Notice No. 51 (Re-2010) 2009-14 dated 02.06.2011, appellants were eligible for import of 'alloy steel' under Advance Authorisation in terms of Para 4.7 of the Hand Book of Procedure, 2009-2014. In this connection, Advance Authorisation No. 3410026017 dated 31.12.2009 was cited by the learned Counsel for Welspun.....
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....ated that the imported API grade steel coils/plates were alloy steels only because the same were needed for manufacture of API grade pipes for gas and petroleum industry. During recording of his statement, he was shown certain certificates claimed to have been issued by M/s. TISCO, China and obtained through M/s. Corus International certifying that the said API 5L PSL2 X 70 grade of steel was non-alloy steel. On being asked as to why these false certificates were submitted to Customs when the goods imported were actually alloy steel, he stated that the same had been done in order to fulfill the Advance License obligations and admitted that a blunder had been committed by his Company. In this connection, Shri Balkrishna's letter dated 18.5.2010 addressed to the DRI, New Delhi is also very noteworthy. In Para 10 of the said letter, Shri Balkrishna has stated The API grade X-70 as per the chemical composition is always an Alloy Steel, though we have been declaring this grade on the Bill of Entry it was always classified under ITC 7208 which is for Non-Alloy Steel. (iv) In his statement dated 21.05.2010, Shri Arunav Baruah, the then Asstt. ....
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.... Customs department as he did not receive the same from the importer. He clarified that WCL used to forward a certificate supposedly issued by the manufacturer of the imported steel certifying that the goods were nothing but 'Non-Alloy' steels and that the said certificates were given to him by Shri Deepak Thokle of WCL. When he was shown the Country of Origin Certificates in respect of certain Bills of Entry wherein the HAS Code was mentioned as 72253000, he stated that they never thought of classifying the goods under CTH 72253000 as per Country of Origin Certificate as the importer had asked them to present the Bills of Entry as per previous Bills of Entry only. Statement of Official of Ratnamani Metals (viii) Shri Ravinchandran, the then Asstt. Genral Manager in his statement dated 06.10.2010 had, inter-alia, stated that as per the conditions of the Advance License, his Company was allowed to import only the Non-Alloy Steel, but they imported Alloy Steel and hence import of Alloy Steel against the Advance License allowing import of Non-Alloy Steel was not proper. In his further statement dated 09.3.2012, Shri Ravichandran state....
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.... the goods imported vide bills of entry number 125570 dated 27.6.2008, 126772 dated 05.08.2009 and 124259 dated 16.05.2008 were 'Alloy Steel' and there was mistake to take exemption which was available only to 'Non-Alloy Steel'. Though he was not with the company during the period 29.04.2008 to 18.11.2008, he was with the company before and after the said period when the planned duty evasion took place. He was well aware that under the SION norms C-593, only 'Non-Alloy Steel' was permitted to be imported, despite that he used the Advance license for import of Alloy Steel. (xii) Shri Abhilesh Ojha, the then General Manager (Accounts & Taxation) in his statement dated 04.3.2010 had, inter-alia, stated that as per Chapter Note 1(f) of Chapter 72 of the Customs Tariff Act, 1972, any one of the elements found in proportion to or more than that would render the product as alloy steel. (xiii) Shri Ramesh Mansukhani, the chairman of the Company in his statements dated 10.08.2011 and 07.05.2012 had, inter-alia, stated that after going through the Mill Test Certificates as well as the relevant Chapter Note of the Customs T....
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....and presence of percentage of elements in the MTCs, the H R Coils merited to be classified as Alloy steel only and admitted that his Exim Department failed to notice that exemption of the Notification No. 21/2002 (Sr. No. 190C) was not available on these bills of entries. (xvii) Shri Ashok Punj, Managing Director of PSL Limited in his statement dated 11.08.2010 had, inter-alia, stated that his company had executed the VAJAIPUR DADRI BAWANA PIPELINE project of GAIL (India) Limited for which they imported API X70 PSL2 5L grade steel coils/ plates. He was shown the import documents along with MTC and Chapter Note 1(f) of Chapter 72 of the Customs Tariff and asked whether the coils supplied by Corus International qualify to be 'Alloy Steel' or not he stated that he was not a metallurgically competent person and hence could not comment on the issue. However, he stated that from the reading of the Chapter note and Mill Test Certificate, it appeared to be 'other alloy steel' only. With regard to manipulation of MTCs, he stated that both the Mill Test Certificates of the same Certificate number could have originated from the manufacturer. ....
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....p; 2.3. The decision of DGFT shall be final and binding on all the matters relating to interpretation of Policy or Provisions in HBP v1, HBP v2 are classification of any import/ export policy in the ITC (HAS). (i) That norms committee has not dwelt upon the aspect of mis-declaration and misrepresentation on the part of the appellant at the time of import and that observation of Norms Committee, which is subordinate to the DGFT, will have no consequence. It was also his case that as per affidavit of Shri Daya Shankar, Dy DGFT on behalf of DGFT, filed before the Apex Court, the stand of the DGFT has been clearly brought out. (j) That it was the common submission of the appellants that they have utilized the imported material in the manufacture of the resultant export product and by exporting the same they have fulfilled their export obligations. The DGFT authorities have issued EODCs and the Advance Licenses/ Authorisations have also been re-deemed. Therefore, the customs authorities have no jurisdiction to deny the benefit of exemptions. This submission deserves to be rejected for the following reasons:- (i) Except in the case of Welspun,....
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....f limitation under Section 28 of the Customs Act, 1962 is not available to the department. This contention cannot be accepted for reasons more than one. It is established on record that they had imported 'Alloy Steel' in the guise of 'Non-Alloy Steel'. These are two different products even as per the DGFT. By giving wrong description of the goods, they have availed the benefit of exemption under the relevant notifications viz. Notification Nos. 93/2004-Cus and 94/2004-Cus both dated 10.09.2004. Except in one case of PSL Limited and one case of Man Industries, the appellant had not submitted MTCs in order to evade detection of the real nature of the goods. (i) That at the time of clearance of the goods, the appellant had executed bonds binding themselves to pay on demand an amount equal to the duty leviable but for the exemption contained therein on the imported materials in respect of which the conditions specified in the notification have not been complied with together with interest at the rate of 15% p.a. from the date of clearance of the goods. The first condition of the notification is that the description, value and quantity of the material imported are covered by the Licens....
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....of fact. (iv) That in this connection, attention may be drawn to the statement submitted by the learned Counsel of Welspun at the time of hearing showing the chemical composition of API specification. Though the source of the said statement had not been mentioned, the maximum weight in percentage terms of each element has been prescribed. The percentage of Molybdenum has been shown as 0.5% (Maximum). The word 'maximum' clarifies that the presence of the said element could be up to 0.5%. The customs Tariff prescribes that percentage of the said element equal to or more than 0.08% to qualify the product as alloy steel. It means the presence of the said element, as per API specifications submitted by the learned Counsel, could be below the proportion as shown in the Customs Tariff Note 1(f) of Chapter 72, it would be alloy steel and if the proportion is below that, it would be non-alloy steel. Hence without the knowledge of actual percentage of the elements available in the particular steel, merely on the basis of API specification, it cannot be confirmed whether the said steel is alloy steel or non-alloy steel. The actual percentage of the elements can only be ascertained from the M....
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....ned Advance Authorisation from the DGFT. Though they knew that exemption will not be available to Alloy Steel, they deliberately indicated classification under Chapter Heading 7208 meant for Non-Alloy Steel. In some of the Country of Origin Certificates, the classification of the goods was shown as 72253000, but they ignored the same and classified the goods under Heading 7208. It was a case of deliberate attempt to conceal the fact. Had it not been so, they would not have suppressed the Mill Test Certificates which are essential to ascertain the exact nature of the goods. This is certainly a case of mis-declaration of the goods to get undue benefit of exemption under the notifications. Therefore, the Commissioner has rightly ordered confiscation of the impugned goods under Section 111(m) & (o) of the Customs Act, 1962. Penalties : (n) That from the facts of the case as elaborated herein before, there cannot be any manner of doubt that the appellants were guilty of suppression of facts as regards the Mill Test Certificates which were crucial for ascertaining the exact nature of the goods. The appellant- Companies including their officials were aware that the goods imported were A....
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....0310435447 2. 0310439802 3. 3410014623 28. 3410019074 3. 0810067839 3. 0310435548 3. 0310439800 4. 3410016019 30. 3410019124 4. 0810068758 4. 0310436872 4. 0310441546 5. 3410016020 31. 3410019159 5. 081007387 5. 0310447253 5. 0310443820 6. 0310387110 32. 3410019160 6. 0810070762 6. 03104453941 6. 0310541220 7. 3410016353 33. 0310450398 7. 081006548 7. 0310453939 8. 3410016638 34. 3410021447 8. 0810072433 8. 0310456810 9. 3410016675 35. 0310450080 9. 0810071203 9. 0310488412 10. 3410016998 36. 0310450240 10. 0810048127 10. 0310489400 11. 3410017005 37. 0310451560 11. 0810057198 11. 0310533865 12. 0310408777 38. 0310451141 12. 0810083159 12. 0310491550 13. 3410017544 39. 3410019907 13. 0810083160 14. 3410017940 40. 0310450245 14. 0810068759 15. 3410017939 41. 0310450565 15. 0810076642 16. 3410018043 42. 0310451187 16. 0810067632 17. 3410018272 43. 0310451408 17. 0810072408 18. 3410018270 44. 3410020100 18. 0810073871 19. 3410018682 45. 3410020220 20. 3....
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....oms Tariff Act reproduced below: 1. In this Chapter and, in the case of Notes (d), (e) and (f) throughout this Schedule, the following expressions have the meanings hereby assigned to them: (a) ............. (b) ............. (e) Stainless steel: Alloy steels containing, by weight, 1.2% or less of carbon and 10.5% or more of chromium, with or without other elements. (f) Other alloy steel Steel not complying with the definition of stainless steel and containing by weight one or more of the following elements in the proportion shown: - 0.3% or more of aluminium - 0.0008% or more of boron - 0.3% or more of chromium - 0.3% or more of cobalt - 0.4% or more of copper - 0.4% or more of lead - 1.65% or more of manganese - 0.08% or more of molybdenum - 0.3% or more of nickel - 0.06 or more of niobium - 0.6% or more of silicon - 0.05% or more of titanium - 0.3% or more of tungsten (wolfram) - 0.1% or more of vanadium - 0.05% or more of zirconium - 0.1% or more of other elements (except sulphur, phosphorus, carbon and nitrogen), taken separately. 13.1 The stand of the Revenue th....
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.... grades were required to be classified under Customs Tariff Head 7225, as even opined by importer appellants when these facts were confronted to them by the investigating agency. 14. The next point for consideration is whether the Advance Authorizations produced before the Customs Authorities covered the grades imported by the importer appellants. In this regard it is relevant to see the export items permitted to be exported by SION C-593. The description of Export Item under this SION, inter alia, reads as follows: Carbon Steel Submerged Arc Welded Pipes as per API Grade/ ASTM Grade or equivalent The above description of Export item does not use the expression 'Other alloy steel' or 'Non alloy steel' whereas the corresponding Import Item under SION C-593 does talk of 'Non alloy steel' 14.1 As per API (American Petroleum Institute) Specifications for Line Pipe [given in Table-5 (Welded Pipe) of API Specification 5L/ISO 3183], PSL2x70 & x80 quality could have the following chemical composition when compared with other alloy composition and the same percentages are also reflected in the procurement specifications of the importer appellants: S. No. Name of elemen....
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....effect from 02.06.2011, is a clarificatory amendment having retrospective effect or will have only a prospective effect. As a matter of fact one of DGFTs subordinate office of the Joint Director General of Foreign Trade, Ahmedabad, in Order-in-Original F. No. 08/ F-3/ 03/ AM 13/ ECA dated 18/07/2013 in the case of M/s Ratnamani Metal & Tube Ltd. (Para16) has taken a view that Public Notice No. 51/ (RE 2010) 2009-2014 date 02/06/2011, modifying SION C-593, is clarificatory in nature. Joint DGFT has accordingly amended all Advance Authorizations and dropped the proceedings against M/s Ratnamani Metals & Tubes Ltd., which also include the Advance Authorizations for which present proceedings are in progress. On similar set of facts Additional Director General of Foreign Trade, Mumbai has held the imports improper and has canceled the Redemption Certificates and Advance Authorizations issued to M/s Man Industries (India) Ltd. and PSL Ltd. with respect to cases falling in her jurisdiction. However Advance Authorization with respect to M/s Welspun Corp Limited have not been cancelled ab-initio. M/s Welspun Corpo. Limited went in appeal to the Hon'ble Mumbai High Court against Order ECA F....
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....f the conflicting views expressed by the authorities under DGFT & due to the fact that the matter is subjudice before the Mumbai High Court but the defects in Advance Authorisations seem rectifiable. 15. Next issue for consideration before us is whether appellants have made a willful mis-declaration on the Bills of Entry in order to evade payment of customs duty or to take any undue financial benefits. In this regard it is the case of the Revenue that the act of all the importers by declaring CTH 7208 in the Bills of Entry amounts to wilfull mis-declaration with intention to evade duty. It was also the case of the Revenue that some of the Certificates of Origin were indicating the CTH as 7225 which was thus known to the importer appellants. Further with respect to imports made by M/s Welspun Corporation Limited it was strongly argued by the Learned Special Counsel appearing on behalf of the Revenue that this importer gave certificates of the imported steel from manufacturer indicating the same as 'Non alloy steel' and also that appellant did not enclose Mill Test Certificates at the time of examination of the goods. To counter this claim the Advocate appearing on behalf of M/s Wel....
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....ll of Entry to proper Group/ Appraiser and to expedite its processing. In case the Customs Tariff Heading or Central Excise Tariff Heading under which the party feels his goods will be covered are not finally accepted by the Deptt. appropriate classification under the Customs & Central Excise Tariff would be made in the Appraising Group without any action against the Importer. The Board considers that section 29 S.C.A. (Now Section 17 and 46 of C.A.62) are not a sufficient authority for requiring importers to furnish the Tariff classification although there is no obligation in asking them how their previous imports were classified and ascertaining from them the details regarding the use and composition of the articles imported. (F. No. 70 (12)-Cus.I/53. C.B.R.. New Delhi. Dt. 22.8.53) 15.1 It is evident from the above Para of the Appraising Manual that a classification head can be given by the importer so that it is helpful to send the import documents to the concerned Appraising Group. Such a classification declared in Bills of Entry can only be considered as a claim of classification by the importers, as held in Para 22 & 23 by the Apex Court in the case of Northern Plastic ....
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.... with intention to evade customs duty, in the absence of any other corroborative evidence. In the present proceedings, as brought out during the course of hearings based on examination reports, the Mill Test Certificates for the imported grades, during the relevant time, were available with the assessing officers on which the composition of various elements were clearly reflected. Secondly, as per the website downloaded literature of suppliers of API 5L x 70 PSL2, relied upon by the appellants, these grades of steel were being indicated as Non alloy steel. Further, as per the tax invoices of Steel Authority of India Limited (SAIL) API 5L PSL 2 x 70 grade of steel manufactured by SAIL in India is also being classified under CETH 7208, when as per Mill Test of this grade manufactured by SAIL percentage of Molybdenum (within the limits prescribed under Chapter Note 1(f) of Chapter 72 of CTA) is 0.144. Adjudicating authority has also dropped demands where MTCs were produced during the assessments which convey that production/non-production of MTCs was not relevant for the classification of imported grades of steel during the relevant assessment period and the impugned grades were consi....
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....ds under the Customs Exemption Notifications which can be invoked for realizing customs duty along with appropriate interest specified in the notifications, when goods are found to be not properly imported as per the Advance Authorizations and the conditions specified in the exemption notifications. In spite of the above observation made by the adjudicating authority he went ahead to confirm the duty under section 28 of the Customs Act, 1962 invoking extended period and did not enforce the bonds executed by the importer appellants at the time of clearance of imported goods under Advance Authorizations. In the background of Paras 15, 15.1 and 15.2 there is no intention on the part of other importer appellants to willfully mis-declare the classification of imported steel under CTH 7208. This view is further fortified by the fact that the entire imported materials were used in the manufacture of resultant export produce duly exported and also due to the fact that all those dealing with API 5L PSL2 x70 & x80 grades globally (including SAIL) also consider these grades to be classifiable under CTH/ CETH 7208. All the appellant importers have been importing these grades of HR Coils from 2....
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....mittees as under:- Sl. No Description Committee (i) Fixation/ modification of product norms under all schemes Norms Committee (ii) Nexus with Capital Goods (CG) and benefits under EPCG Schemes EPCG Committee (iii) All other issues Policy Relaxation Committee (PRC) 4.1.3 Advance Authorisation An advance Authorisation is issued to allow duty free import of inputs, which are physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, energy, catalyst which are consumed/ utilised to obtain export product, may also be allowed. DGFT, by means of Public Notice, may exclude any product(s) from purview of Advance Authorisation. Duty free import of mandatory spares up to 10% of CIF value of Authorisation which are required to be exported/ supplied with resultant product are allowed under Advance Authorisation. Advance Authorisations are issued for inputs and export items given under SION. These can also be issued on the basis of Adhoc norms or self declared norms as para 4.7 of HBP v1. 4.1.4 Advance Authorisations are exempted from payment of basic customs duty, additi....
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.... duty. All the above duty exemption schemes are, therefore, put in to practice for 'Zero Tax Exports'. There are a number of provisions/ procedures available under the Foreign Trade Policy to achieve Zero Tax Exports and the background for such exports incentive schemes cannot be to burden the export products for a particular period with additional burden of customs duties due to procedural latches, as attempted by the Revenue, when there was a practice and reasonable understanding globally that the grades imported by the appellants could be Non alloy steel. However, this aspect whether amendment carried out in SION C-593 was clarificatory/ retrospective and whether the Advance Authorizations can be amended retrospectively by the authorities working under Foreign Trade Policy; as done by Joint DGFT Ahmedabad in his Order F. No. 80/ F-3/ 03/ AM 13/ ECA dated 18.07.2013 or not as done by Order F. No. 03/ 02/ 001/ 00169/ AM 10/ Enf. Wing/ 214 dated 11/09/2013 passed by Additional DGFT, Mumbai; is the subject matter of litigation before various Appellate Authorities under the Foreign Trade Policy. Orders passed by Additional DGFT Mumbai in the case of M/s Welspun Corpn Limited has been....
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.... (ii) CC Hyderabad Vs. Goel Enterprises [2005 (179) ELT 509 (Tri. Bang.)] (iii)CC Hyderabad Vs. Sanghi Spinners (P) Ltd. [2007 (209) ELT 43 (Tri. Bang.)] (iv) Hindustan Lever Limited vs. CC(EP), Mumbai [2012 (281) ELT 241 (Tri. Mumbai] In this regard it is relevant to reproduce Para 6.3 of the case law of Hindustan Lever Limited vs. CC (EP), Mumbai (supra) suggesting where appellant has violated any terms and conditions of the licenses, Revenue should have referred the matter to the Licensing Authority for appropriate action rather than taking action suo-motu; 6.3 The next issue for consideration is whether once the licensing authority certified that export obligation has been fulfilled whether such certification is final and binding on the Customs authorities? This issue came before this Tribunal in the case of Navjyothi International v. Commissioner of Customs, Chennai, cited supra. In that case the Revenue sought to ....
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....rt in the case of Titan Medical Systems Pvt. Ltd. (supra). The Hon'ble Supreme Court held that once an advance licence was issued and not questioned by the licensing authority, the Custom authorities cannot refuse exemption on an allegation that there was any misrepresentation. If there was any misrepresentation, it was for the licensing authority to take steps in that behalf. The ratio decidendi laid down in the above judgments applies to the facts of the present case. In the instant case also, the licensing authority has accepted the fulfilment of export obligation and have issued export obligation discharge certificates and have discharged the appellants from any further obligation. That being the position, the Customs authorities cannot deny the benefit of Customs duty exemption under the notifications governing the advance licensing scheme. If at all they felt that the appellant had violated any of the terms and conditions of the licences, they should have referred the matter to the licensing authority for appropriate action rather than taking action suo motu 18. From the above observation made by us there are sufficient indications that an Advance Authorization issued for a....