TaxTMI 
TaxTMI 
2017 (8) TMI 1046
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....or the intended purpose namely for manufacture of coin blanks for supply to Indian Government Mint. Hence appellants were issued a notice proposing demand of customs duty forgone along with interest thereon and imposition of penalty under various provisions of law. After due process of adjudication, original authority considered the fact of 457.113 MTs HRSS coils having been used for specified periods and demanded differential duty liability with respect to 1542.887 MTs, hence confirmed demand of Rs. 2,03,85,115/- with interest liability thereon. Original authority also appropriated the amount of Rs. 2,03,85,115/- and Rs. 12,45,805/- paid by the appellant during investigation towards duty and interest liability respectively, however, refrained from imposing penalty. Both the appellant as well as the department filed appeals with the Commissioner (Appeals) who vide his impugned order dt. 31.3.2008 rejected the appeal of the appellant, however accepted the prayer of department for imposition of penalty under Section 117 of the Customs Act, 1962 and imposed penalty of Rs. 10,000/- on appellant under that section. Aggrieved, appellant, M/s. Steel Authority of India Ltd., Salem Steel Pl....
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.... So long as the HRSS coils were used in the manufacture of CRSS Strips supplied to the India Government Mint, which in turn had converted the CRSS Strips into coin blanks, the exemption should be available as the purpose/objective behind this exemption is to prevent increase in cost of coin blanks from which the Re.1 and Rs. 2 coins are being minted for use by the public in the country. The narrow interpretation placed by the department does not promote the objective behind this exemption. This is more so when there is no dispute that the quantity of 1,178.570 MTs on HRSS was used in the manufacture of CRSS Strips supplied to the Mint. The duty on this quantity is Rs. 1,55,71,013. (vi) Out of the total demand of Rs. 2,03,85,115 confirmed at page 242 of the impugned order, Rs. 1,55,71,013 cannot be sustained. The balance duty demand, if at all, may only be Rs. 48,14,112. (vii) Since the balance quantity was used in the manufacture of other items cleared on payment of ED, Cenvat credit of the CVD and SAD is available as credit to the appellant. (viii) On merits, thus the demand can only be to the extent of Rs. 48,14,112 with CENVAT of CVD and SAD (Rs.24,38,215) being available. ....
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....rom them. 5.3 On the contention of jurisdiction, Ld. A.Rs point out that in the Molex (I) Ltd. case the Hon'ble Apex court had dismissed the SLP filed by department holding that notice was issued prior to 2005. However, in this case notice has been issued on 29.11.2005. 5.4 Further, retrospective amendment has been indicated in Section 28 of the Customs Act by insertion of sub-section (11) w.e.f. 16.9.2011 which have empowered inter alia Asst. / Deputy Commissioner of Central Excise appointed as officers of customs to be proper officer of the purposes of that section. Ld. A.R points out that the above amendment has been upheld in the case of Miraj Marketing Vs CC - 2015 (327) ELT 663 (Tri.-Chennai). 5.5 On merits, Ld. A.Rs further submit that exemption under Notification No.21/2002- Sl.No.196 is available only if the imported HRSS coils are used in the manufacture of the specified final product namely Coin Blanks, in the importer's factory. Exemption would apply only when HR coils imported as Coin Blanks in the importer's factory to be supplied. 5.6 Importers had also executed a bond to use the imported material in their factory at Salem for use in the manufacture of St....
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.... the event, the contention of appellant on jurisdiction is misconceived and hence will not succeed. 7.2 In respect of the issue framed at para 6 (b) above, we find that 2000.00 MTs HRSS coils were imported by the appellant without payment of duty in terms of Sl.No.196 of Notification No.21/2002-Cus.. The relevant portion of the said Notification is reproduced below for better understanding : Effective rates of basic and additional duty for specified goods falling under chapters 1 to 99 In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No.17/2001-Customs, dated the 1st March, 2001 [G.S.R. 116(E), dated the 1st March, 2001], the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below or column (3) of the said Table read with the relevant List appended hereto, as the case may be, and falling within the Chapter, heading or sub-heading of the First Schedule to the Customs Tariff Act, 1975 (51....
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....int. Sufficient proof has also been adduced, which has not been disputed, to confirm that CRSS strips thereupon were used in the manufacture of coin blanks by the Govt of India Mint. The only controversy in respect of this quantity is whether the words "for use" in the manufacture of coin blanks requires the appellant to manufacture and supply only coin blanks to the Govt of India Mint. 7.6 The scope of phrase "for use" was gone into by the Hon'ble Supreme Court in the case of State of Haryana Vs Dalmia Dadri Cement Ltd. - 1988 (14) ECR 292. The issue therein related to a dispute concerning cement supplied to Electricity Board on the basis of certificates issued by the latter that such cement was required for use in the generation or distribution of electrical energy which would attract exemption granted under Punjab General Sales Tax. The Hon'ble Apex Court held that the expression "for use" must mean "intended for use". The relevant portion of the judgment is reproduced herein below : "We are unable to accept the submission of Mr. Bana that, in order to get the exemption it must be shown that the goods in question namely, the cement supplied by the assessee in this case....
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....s since they are not engaged in the leather industry but are stockists for sale." A perusal of the above decision goes to show that the burden of actual use is not a condition attached to the exemption, as otherwise the notification would have provided for executing a bond and obliging the importer to produce proof of actual use. In any event in the case of the goods falling under Heading A, there was no such condition attached and the conditions attached were only in the case of the goods described under Heading B of the notification. In view of the above, we are not able to agree with the contention of the learned SDR. At this stage, the learned Counsel for the appellants drew our attention to the Collectors conference where this issue was taken and he also produced a copy of the minutes of the Collectors conference which is reproduced below : CONFERENCE CONCLUSION : After discussing the issue, the Conference recommended that since question raised by Bangalore Custom House is about the goods which can be used for general purpose also. T.R.U. should re-examine the issue whether the items of general use can be shifted to list `B'. The conference observed that items figuring a....
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....there is no allegation or dispute about their not having been used in the manufacture and supply of coin blanks supplied to the Mint. Hence no differential duty liability against the said quantity can be demanded. 7.11 Appeal C/234/2008 is therefore partly allowed as aforesaid with consequential relief, if any, as per law. 8.1 Appeal No.E/440/2005 This matter is intrinsically connected with the appeal C/234/2008. The jurisdictional Range officer of the appellant booked an offence case on 30.09.2002, on the grounds that appellant had used imported duty free HRSS coils for purposes other than mandated in exemption Notification No.21/2002-Cus., In response, by 10.10.2002, the appellant had paid up duty liability amounting to Rs. 2,16,30,320/- out of which the component of additional duty of customs (CVD) was Rs. 80,25,636/-, which amount was availed by them as cenvat credit on 11.3.2003. The department took the view that the credit taken was irregular for the following reasons :- (i) Credit has been taken on T.R. 6 challans which are not prescribed as registered document under Rule 7 of Cenvat Credit Rules. (ii) The amount has been paid on goods already imported and involved in ....