TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 309
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....is that the Directorate of Revenue Intelligence ('DRI') received information that Asian Wire Ropes Limited ('AWRL'), Hyderabad was importing low/high carbon steel wire rods and electrolytes zinc free of duty under the Duty Exemption Entitlement Certificate (DEEC) Scheme by mis-declaring and undervaluing the goods and then disposing of the said imported goods in the local market for profit instead of using them in the manufacture of steel wire ropes for export. 3. Based on the said information, the residential, office and factory premises of AWRL and persons connected with it were searched in Bombay and Thane on 15th February 1989. Searches also took place at the locations of various persons and entities at Hyderabad and Faridabad. As a result of the searches, incriminating documents were seized. It transpired that the goods imported free of duty under the DEEC Scheme by AWRL were unauthorisedly disposed of through M/s. Maldhari Steels by Mr. Kumud J. Dharaya. Documents also showed the payment of the differential value and commission to Mr. Vipin Gupta the brother of Mr. Subhash Gupta, one of the Directors of AWRL. The searches also resulted in recovery of certain q....
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....mported under the B/E worked out to Rs. 77,55,278 as against the declared value of Rs. 63,21,041 and under the IGM/Item No. 661/108 worked out to Rs. 30,04,642 as against the declared value of Rs. 24,28,707. This obviously meant that the goods were mis-declared and hence liable for confiscation under Section 111 (m) of the Act. The first SCN also noted that the differential value had been paid to M/s. Salzgitter, Germany through Mr. Vipin Gupta in respect of 2395.66 MT EN-1A steel wire rods made during the years 1987-88 by AWRL. It was stated that AWL deliberately attempted to make a mockery of the DEEC Scheme by indulging not only in blatant mis-declaration of the correct and real value of the goods but also by "wholesale falsification of the records and accounts to show that the goods after clearance free of duty through the Customs were taken to their factory at Hyderabad." Further Mr. Kumud Dharia had been appointed an Agent of AWRL and he was permitted to sell the duty free material at a premium in the market. The sale proceeds were paid in cash to Mr. Jankiram and Mr. Subhash Gupta by Mr. Dharia and were also adjusted against his payments for the material supplied by him to A....
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....al proceedings initiated in the first SCN against the other noticees were dropped. 9. The second SCN was issued on 11th March 1992. The subject matter mentioned the following B/Es in relation to the import of steel wire rods and import of high grade zinc: "(1) Import of Steel Wire Rods vide Bills of Entry Nos. (i) 610/49 dated 12th March 1987 (570.870 MT Rs. 23,49,638 CIF) (ii) 1049/1 dated 22nd April 1987 (429.7 MT Rs. 17,57,352 CIF) (iii) 2910/57 dated 24th November 1987 (694.63 MT Rs. 32,52,397 CIF) (iv) 155/111 dated 25th January 1988 (200.270 MT Rs. 17,07,206 CIF) (v) 1817/79 dated 13th July 1988 (234.850 MT Rs. 10,97,210 CIF) (vi) 251/102 and 251/108 both dated 2nd February 1988 (70.994 MT Rs. 6,04,436 CIF ) and (vii) 2017/74 dated 8th August 1988 (196.480 MT Rs. 9,25,141 CIF) (2) Import of High Grade Zinc vide Bill of Entry No. (i) 3454/32 dated 25th January 1988 (186.761 MT Rs. 19,65,332 CIF under DEEC Scheme by M/s. Ashish Wire Ropes Ltd., Hyderabad" 10. A reference was made in the second SCN to the fact that during the course of investigation into the unauthorized import of leaded cutting steel under the DEEC Scheme by AWRL, statements of various per....
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....2. Both these adjudication orders were appealed against before the CEGAT. By the impugned order dated 29th October 1997 the CEGAT dismissed the appeals concurring with the findings of the Collector of Customs. 13. This Court has heard the submissions of Mr. Rajesh Rawal, learned counsel for the Petitioners and Mr. Kamal Nijhawan, learned counsel for the Respondents. 14. The first submission made by Mr. Rajesh Rawal, learned counsel for the Petitioners, is that the second SCN was barred by limitation as well as the principles of res judicata. According to him, the entire facts regarding the B/E which is the subject matter of second SCN was already in the knowledge of the Department at the time of issuance of the first SCN. The very same quantity that was the subject matter of the investigation in the first SCN was again sought to be covered in the second SCN. The limitation for the purpose of extending Section 28 of the Act was to begin running from the date of knowledge of the allegation of undervaluation as well as diversion of the imported goods by the Petitioner. Therefore, according to Mr. Rawal, in terms of Explanation (1) to Section 28 of the Act, the relevant date would th....
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....ase, the date of payment of duty or interest. 17. Even prior to the amendment to Section 28 of the Act by the Finance Act, 2011 (8 of 2011), the extended period of limitation of five years was available where duty had been levied or short-levied by reason of collusion or any wilful statement or suppression of facts by the importer. Explanation (1) to Section 28 (1) of the Act is unambiguous that the period of limitation had to be calculated from the 'relevant date'. The relevant date in terms of clause (a) of Explanation 1 had to be calculated with reference to the date of order of clearance of the goods sought to be imported under a B/E. The mis-declaration or under valuation of the goods in the B/E would, therefore, relate back to the date of the clearance of the goods under a particular B/E. 18. In the present case the relevant date for the purpose of limitation would be the clearance of the B/E in question. The earliest of the B/Es forming the subject matter of the second SCN is 12th March 1987 and the second SCN was issued on 11th March 1992 which was within five years from the date of such B/E. The date of clearance of the consignment with reference to that B/E was ....