TaxTMI 
TaxTMI 
2015 (7) TMI 787
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....and took over 11 live Bills of Entry and carried out detailed scrutiny. The percentage content of other metals shown in the Mill test certificates were compared with Chapter Note (f) of Chapter 72, where the other Alloy steel is defined. In all the 11 Bills of Entry, the percentage of Manganese was found to be more than 1.65%, and the Titanium was more than 0.05% and on the examination of Mill test Certificates of these Bills of Entry also confirmed that goods imported vide the above Bill of Entry were alloy steel and the benefit claimed under Notification No. 21/2002 Sr. No. 190C thus was not correct. Notification No. 21/2002 Customs was amended vide Customs Notification No. 56/2008 Cus., dated 29-4-2008. (Prior to issuance of this notification, Steel Coils (non-alloy) were being cleared as per Notification No. 21/2002 Sr. No. 190B and after issuance of Notification No. 56/2008, dated 29-4-2008) and a new Sr. No. 190C was inserted and by virtue of this addition the rate of duty (Basic Custom Duty) on non-alloy steel was made @ 0% (Basic Customs Duty). 2.1 All the 150 Bills of Entry filed and cleared earlier were also subjected to scrutiny wherein the appellants have availed ....
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....21/2002 Sr. No. 190C on CR/H.R. Coils imported vide the Bills of Entry mentioned at Annexures A and B of the show cause notice. (b) I confirm the demand and recovery of differential duty of Rs. 3,82,16,162/- (Rupees Three Crore Eighty Two Lakh Sixteen Thousand One Hundred and Sixty Two Only) from Tata Motors Ltd. under proviso to Section 28(1) of the Customs Act, 1962 along with applicable interest under Section 28AB ibid. (c) I confiscate the goods valued at Rs. 13,10,71,798/- (Assessable value) involving differential duty of Rs. 80,32,473/- (Rupees Eighty lakhs thirty two thousand four hundred and seventy three only) as per Annexure 'A' of the show cause notice under provision of Sections 111(o) and 111(m) of Customs Act, 1962. However, I give an option to the importer to redeem the same on payment of redemption fine of Rs. 65,00,000/- (Rupees Sixty Five Lakhs Only) under Section 125 of the Customs Act, 1962. (d) I confiscate the goods valued at Rs. 49,25,29,561/- involving differential duty of Rs. 3,01,83,689/- (Rupees Three crore one lakh eighty three thousand six hundred eighty nine only) as per the Annexure ....
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.... in the imported coil and if that element is equal to or exceeds the limit mentioned in Note 1(f), the Note 1(f) is satisfied and the imported coil will be treated as 'other alloy steels'. On the other hand, if the coil contains more than one element listed in the Note 1(f), then all the elements present in the imported coil should be equal or more than what is prescribed in the Chapter Note 1(f). If note, such coil will not be treated as 'other alloy steel'. The imported coil cannot be said to be satisfying Note 1(f), if more than one element is present in the imported coil and only one element satisfies the criteria mentioned in Note 1(f). If the department is accepted the definition of 'stainless steel' given in Note 1(e) relied upon by the learned Departmental Representative, actually supports the submission of the appellants. Note 1(e) defines 'stainless steel' as 'alloy steel' containing by weight, 1.2% or less of carbon and 10.5% or more of chromium, with or without other elements. If the department's interpretation of Note 1(f) is to be accepted as correct, then the Note 1(f) would, somewhat, read as under : "Steels not complying with the definition of stainless steel an....
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....pellants have made all true declarations. The contentions is that the statement that the appellants being an ACP client, the claiming of classification under a particular heading will amount to mis-declaration is not correct and will be contrary to the decision of the Supreme Court in various decisions on the point that claiming of classification will not amount to mis-declaration. The contention is that even in respect of an ACP client, the MTC was insisted upon by the Customs department. This can be seen from the information obtained from ICE Gate, referred to in para D.5. 3.1.7 Even prior to the Appellants being an ACP client and filing the bills of entry through the Risk Management System (RMS), the Appellants have been classifying the items of import as non-alloy steel falling under the Heading 72.09. The said classification was never objected to by the department. Therefore, to say that the Appellants have suppressed facts by not submitting the MTC or that the goods have not been subject to examination would be incorrect. It is submitted that the ACP status has not influenced the classification adopted by the appellants. Prior to the period in question also, the Appella....
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....of the appellants that if two elements are present, both should exceed the percentage prescribed, is not borne out of the language of the statute , therefore, it is wrong to contend that if two alloying elements are present, both should exceed the prescribed limit, such as interpretation would lead to absurdity and would render the provisions redundant, the contention of the ld. AR is that it is settled law that the legal provisions should be read as it is and there is no room for intendment. The expression "one or more" used in Chapter Note 1(f) clearly indicated that presence of either of the alloying element in the steel would make it allow steel. The contention is that once it is established that the goods are alloy steel, they are precluded from being classified under Heading 7208 (hot rolled non-alloy steel) or 7209 (cold rolled non-alloy steel) and they would be appropriately classifiable under Heading 7225/7226 of the Customs Tariff Act, 1975 depending on the fact whether the steel sheets are hot rolled or cold rolled. Accordingly, the goods being alloy steel sheets are not covered under entry No. 190C of Notification No. 21/2002, and therefore, chargeable to 5% basic Custo....
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....e Bills of Entry were facilitated under R.M.S. (Risk Management System) which was implemented vide Board's Circular No. 42/2005-Cus. and 43/2005-Cus., both dated 24-11-2005 and under the R.M.S. the practice of routine assessment, concurrent audit and examination of almost all the Bs/E has been done away with. The Board has placed 324 ACP clients on the website and the appellants are reflected at entry No. 285 of the list. The Board has also published a document available on website known as "Accredited Clients Programme - Promoting Voluntary Compliance" which envisages the obligations/requirements. The contention is that the appellants failed to perform their obligations and requirements of declaring complete description and specifications whether the goods were alloy steel or non-alloy steel. So far as the contention of the appellants that they have paid the differential duty prior to the issuance of show cause notice and therefore, the goods are not liable to confiscation, is not correct. In support of this contention, the Revenue placed reliance on the decision of the Madras High Court in the case of M/s. Venus Enterprises reported in 2006 (199) E.L.T. 405 (Mad.) So far as the p....
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....n para 3 of the impugned order, the percentage of manganese was found to be more than 1.65% and the Titanium was more than 0.05% which is as per the proportion prescribed under in the Chapter Note 1(f) of Chapter 72. Therefore, the impugned goods would rightly fall under the category of other alloy steel and not eligible for the benefit of Notification. 5.1.3 Undisputedly, the appellants were working under Risk Management System/Accredited Plan Programme (ACP). The ACP envisages certain minimum level of quality in terms of completeness, accuracy and validity by the importers. In the instant case, the appellants failed to fulfill the said obligation and requirements of declaring complete description and specification whether the goods were alloy steel or non-alloy steel. The appellants did not declare the correct description of the goods. Shri V.G. Chari, Senior Manager, Materials, Shri R.R. Suvarna, Shri A.M. Khopkar, Asstt. General Managers, Materials of the appellants are responsible office bearers of the appellants and in their statements recorded under Section 108 of the Customs Act, 1962 have admitted and confirmed that by looking into the Mill test certificates they cou....
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....taken a stand that the impugned goods are not "other alloy steels" as defined in Chapter Note 1(f) of Chapter 72. Chapter Note 1(f) of Chapter 72 defines "other alloy steel" which states that steels not complying with the definition of stainless steel and containing by weight one or more of the following elements in the proportion shown. From the above, the expression "one or more" means that if one of the listed elements is present in the imported coil and if that element is equal to or exceeds the limit mentioned in Note 1(f) above, then Note 1(f) above is satisfied and the imported coil will be treated as "other alloy steels". If the coil contains more than one element listed in the Note 1(f) above, then all the elements present in the imported coil should be equal or more than what is prescribed in the Chapter Note 1(f) above. If not, such coil will not be treated as "other alloy steel". For example, if the goods contain only manganese apart from steel and if manganese is 1.675% or more, then it will qualify as other alloy steel. But if out of 16 elements mentioned in Chapter Note 1(f) of Chapter 72 and all the elements are to be in the proportion shown in Chapter Note 1(f) of ....
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....R ORDER ON DIFFERENCE OF OPINION 10. [Per : P.R. Chandrasekharan, Member (T)]. - The difference of opinion referred to me for consideration reads as follows : 1. Whether to qualify as 'other alloy steel' minimum one element in the proportion prescribed in Chapter Note 1(f) of Chapter 72, (in addition to steel), is essential as held by Member (Technical) in para 5.1.2 of the order. or 2. Whether to qualify as 'other alloy steel' not only one element is essential, in proportion prescribed but if there are more than one element (in addition to steel) all should be in proportion prescribed in Chapter Note 1(f) of Chapter 72, are essential, as held by the Member (Judicial). 11. The short issue for consideration is interpretation of Note 1(f) to Chapter 72 of the Customs Tariff Act, 1962. The said note provides that "steel not complying with the definition of stainless steel and containing by weight one or more of the following elements in the proportion shown therein shall be classified as other alloy steel". The question is, if the alloy steel contains more than one element specified in the note, whether each of....