TaxTMI 
TaxTMI 
2020 (7) TMI 146
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....ant, company auditors had recorded details of shortage of imported materials and non-movable items; DRI has undertaken investigation and found shortage of 29,145.65 Meters of silk; after investigation, DRI issued Show Cause Notice dated 27.08.2008; the allegations were mostly based on audit reports except the allegation of shortage of 36409 Mtr/1609 pcs of silk fabrics reimported. The demands raised in the Show Cause Notice were confirmed by Commissioner of Customs, Bangalore, Commissioner of Customs, Bangalore, vide impugned Order 02/2010 dated 24.03.2010; Learned Commissioner confirmed the duty demand of Rs. 1,19,08,353 along with interest and penalty while confiscating the goods imported duty free. Hence the appeal, C/1139/2020; the appellants deposited an amount of Rs. 75, 60,000 during investigation. 2. Learned Counsel for the appellants, Shri N. Rajagopalan submits that the impugned order has been passed assuming that the shortages have been accepted by the Managing Director and Manager Imports-Exports; a perusal of their statements would clearly establish that the appellant has given due explanation; in their letters dated 18.03.2006 to SBI and letter dated 13.06.2006 to ....
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....very do not fall under any of the serial numbers of the Annexure-I to the said notification, is again beyond the allegation in the SCN.; tabulation in paragraph 6301 the order would dearly establishes that the re-imported goods were re-processed and re-exported; there was no mis-declaration at the time of re-import; • Since the shortages were duly explained, without admitting the same, there was no question of retraction from the statements. Commissioner is wrong in concluding that the shortages were admitted and the statements were not retracted. • in respect of the goods under Sl. No.1, and 2, the alleged shortage was due to work-in-process goods; as this very name suggests, these goods were under process and hence allegation of not being used in export productions fails; in respect of Sl. No.5 and 6, shortages are not established; re-processing, re-importing and export are continuous process; hence, it is not correct to say they were not used in in connection with exports. • in respect of Sl. Nos. 3, 4 and 7 of the table, its alleged that duty has not been paid on them; in respect of Sl. No. 3, duty is of export and hence, confirmation of d....
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....rk for export of goods or services..." The goods even if not exported but used in connection with the export of goods are eligible for the exemption. The words, 'used in connection with' have wide amplitude and hence a liberal interpretation is called for. The Hon'ble Apex Court has in paragraph 7 of the judgment in Moser Baer India Ltd Vs CC, Noida 2015 (325) ELT 236 (SC) interpreted the scope of the exemption notification 53/97-Cus. The Apex Court has ruled that it is not necessary that the material which is imported into India has to be used in the manufacture of articles which are to be exported out of India. Even if the said material is used "for the purpose of manufacture of articles" or "for being used in connection with the production or packaging or for job work", the same shall still be covered by the aforesaid notification and thus would not attract any customs duty. The judgment of the CESTAT in CCE, Hyderabad Vs Dr. Reddy Lab Ltd., 2010 (253) ELT 316 (Tri-Bang.) is also to the same effect; in any case, the appellant has submitted copies of a few shipping bills to the adjudicating authority; he has not appreciated the evidence in proper perspective. Out of 1....
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.... not be undertaken. 8. Learned Counsel also submits that the adjudicating authority has charged the appellant of mis-declaration at the time of re-import; in that case the demand ought to have been raised within the period permitted under section 28; the extended period cannot be invoked as proper declaration was made in the bills of entry; in terms of judgment of the Apex Court in Moser Baer India Ltd (supra) the demand is time barred; assessment orders were not reviewed; as the appellant has shown that duty itself is not payable, interest is also not attracted; Board have vested the Chief Commissioners with powers to waive interest vide their circular No.10/2006-Cus dated 14.02.06; accordingly, the adjudicating authority ought to have desisted from charging interest. Learned Counsel also submits that as there was no mis-declaration, confiscation tinder section 111(m) is not tenable; as the goods are used in export production or in connection with export production, confiscation under section 111(o) is also not tenable; as the goods are not seized, no confiscation can be ordered. Learned Counsel further submits that penalty under section 114A is not attracted as the duty has no....
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....facts and figures have been taken in to cognizance and discussed in detail; quantity of fabric failing short and duty free fabrics not used in the manufacture of export goods; re-imported goods lying in stock beyond warehousing period without seeking extension was also considered; as per Notifications 53/97-Cus dated 3.6.97 and 52/03-Cus dated 31.3.2003, exemption is available only when the goods imported duty free are used in manufacture of the export goods; appellant accepted the shortages of imported goods and the fact that goods re-imported were not re-exportable; contention that duty cannot be demanded before expiry or the bond period is incorrect; appellant has failed to provide satisfactory explanation to the investigating authorities with regard to the irregularities in the stock verification; the contention of the appellant that there is no allegation of clandestine removal is incorrect. 12. Tracing the chronology of events, Learned Authorised Representative submits that DRI visited appellants on 1.6.2006; statements of Shri K Sheshadri Manager (Exports) were recorded on 11.10.2007, 18.10.2007, 21.11.2007 and 23.11.2007; statement of Shri Deepak Jagany Chief General Man....
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....T 1546 (SC) (iv). Surjeet Singh Chrabra Vs Union of India (1997(89) ELT 646 (SC) (v). CCE Madras Vs Systems & Components Pvt. Ltd 2004(165) ELT. 136 (SC) (vi). S.M. Steel Ropes Vs CCE (ADJ.) Mumbai 2014 (304) ELT 591 (Tri - Mumbai) (vii). 1997(90) ELT 241 (SC); 1998(98) ELT 50 (Mad); 2013 (289) ELT 3 (SC) followed in 2011 (270) ELT 643 (SC) (viii). Mysore Chipboards Ltd Vs CCE, Mysore 2012 (282) ELT 112 (Tri-Bang.) (ix). Hazari Singh Vs Union of India 1999 (110) ELT 406 (SC) (x). Kollatra Abbas Ram Vs GOI & Others 1984 (15) ELT 129 (Ker) (xi). CCE, Mumbai Vs Kalvert Foods India Pvt Ltd. 2011 (270) ELT 643 (SC) (xii). Ahmednagar Rolling Mills Pvt Ltd Vs CCE Aurangabad 2014 (300) ELT 119 (Tri. Mumbai) (xiii). CCE, Delhi- IV, Faridabad Venus Ill pea Paramount Pvt Ltd 2006 (204j ELT 22 (P & H) (xiv). CC, Mangalore Vs Jindal Vijayanagar Steel Ltd 2017 (346) ELT 378 (KAR.) 15. Heard both sides and perused the records of the case. The main allegations in the SCN are about the shortage of the imported material at the appellant's premises which were certified by their internal auditors and ....
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....t is a continuous process. The goods so re-imported were present in the work in progress which was not considered. Also, the fact that the some of the re-processed goods were exported by four shipping bills was also not considered by the adjudicating authority. They also submitted that the adjudicating authority himself has made a categorical observation that this is not a case of clandestine removal and therefore, they duty cannot be demanded. The appellants, moreover, pleaded that the demand cannot be made in terms of the warehousing provisions as the Bond period is not over. They also contested that demand cannot be under Section 28 as the goods were imported after duly filing the Bills of Entry and after due examination by the officers. They also submitted that penalty cannot be imposed under Section 114A of Customs Act,1962 and the goods cannot be confiscated. 17. Revenue contends that audit of annual accounts of a company is compulsory and is indispensable part of business; all companies registered under Company's Act 1956 are required to maintain proper books of accounts in terms of provisions of Sections 209, 224 & 224(1) of the Company's Act 1956. Revenue argues that in....
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....he requirement of Customs and Central Excise Acts. In such case the records were always open to the officers for examination and verification. Under such circumstances, it's not open to invoke the extended period. Moreover, the appellants have claimed that they have informed the bankers on their own; they have written letters i.e. Letter dated 18.03.2006 to SBI and Letter dated 13.06.2006 to Canara Bank; letter written to SBI is before the officers visited the premises of the appellant. The contents of the letter, reply by Bankers etc. have not been verified and discussed in detail. Other contentions of the appellants regarding the non-accounting of stock of work in progress; physical impossibility of counting the stock within 2 days; shortage being within permissible limits; eligibility to retain samples in terms of FTP etc have not been investigation and answered. Officers have not taken physical stock. Therefore, we find that this extent, we hold that demand of duty in respect of SI No. 1 to 5 & 7 of the table given at Para 59.2 of the OIO are not sustainable. 19. Regarding the shortage of 36049 Mtr/1609 Pcs in respect of re-imported export goods, we find that the appellants ....
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....Serial No. 6 of the table referred above, we find that the Department has correctly confirmed duty of Rs. 72,79,538/- in respect of these goods. 20. The appellants have argued that as the warehousing period is not over, the demand is premature. Whereas, we find that Learned Commissioner has confirmed the demand in terms of the Notification No. 53/97 dated 03.06.1997 and 52/03 dated 31.03.2003 as the goods were neither utilized within the prescribed period nor any extension was sought. We find that among other conditions, Notification No. 52/2003 requires the appellants "to maintain proper account of the receipt, storage and utilization of the goods." The investigation conducted by the Revenue shows that the so-called re-imported goods were not found in the factory premises and no proper accounts of the same has also been done. We find that the appellants have taken the plea that import, export, re-processing and re-export is a continuous exercise and that the re-imported goods were in the work in progress. We find that this argument is not acceptable. It is not the case of the appellants they have maintained records showing the receipt, utilization and disposal of re-imported go....