TaxTMI 
TaxTMI 
TaxTMI 
2022 (3) TMI 703
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....t clear. We allow the miscellaneous applications and the prayer in both the appeals stand modified accordingly. 2. Appeal no. C/725/2008 has been filed by M/s. Jhoola Refineries Ltd [Jhoola] ., the importer, assailing the impugned order confiscating the imported crude palmolein oil under Section 111(o), imposing a redemption fine under section 125 of the Customs Act, demanding duty under section 28 along with interest under section 28AB and imposing penalties. Appeal No. C/790/2008 has been filed by Shri M K Jhunjhunwala [Jhunjhunwala], Director of the importer assailing the penalty imposed upon him by the impugned order. 3. We have heard learned counsel for the appellants and learned authorised representative of the department and perused the records. During the period 01/01/2005 to 31/07/2005, Jhoola imported 1,974.713 MT of Crude Palmolein Oil (industrial grade) under various bills of entry by claiming exemption of Notification No 21/2002-Cus dated 01/03/2002 (S.No. 30) as amended by Notification No. 20/2004- Cus dated 16.1.2004 and paid basic customs duty of 20%. This exemption was available to all oils which were of "other than edible grade to be used in manufacture of....
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....ry in column (2) of the said Table, when imported into India,- (a) from so much of the duty of customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table; (b) from so much of the additional duty leviable thereon under sub-section (1) of section 3 of the said Customs Tariff Act, as is in excess of the rate specified in the corresponding entry in column (5) of the said Table, subject to any of the conditions, specified in the Annexure to this notification, the condition No. of which is mentioned in the corresponding entry in column (6) of the said Table : Provided that nothing contained in this notification shall apply to - (a) the goods specified against serial Nos. 239, 240, 241 and 242 of the said Table on or after the 1st day of April, 2003; (b) the goods specified against serial Nos. 250, 251 , 252 and 415 of the said Table on or after the 1st day of March, 2005. Explanation. - For the purposes of this notification, the rate specified in column (4) or column (5) is ad valorem rate, unless otherwise specified. Table S.No Chapter or Heading No. o....
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....ss was carried out in the factory premises and raw material essential to manufacture Industrial grade Soap were in the premises. DRI officers were not satisfied even with the report of the Chartered Engineer whom they hired. So, the Joint Director, DRI Gandhidham, Gujarat had sought opinion of Prof D.N Bhowmick, Head Division of Oils, Oleochemicals & Surfactants Mumbai University, Institute of Chemical Technology, Mumbai regarding production of Industrial Grade Soap without the aid of Power. Professor Bhowmick reported that "without power, handling of such a large quantity of material manually seems to be very difficult". Based on its investigations, it appeared to DRI that Jhoola has no facility to manufacture soap and that it had wrongly availed the benefit of exemption notification on the imported palmolein oil and issued the SCN which culminated in the impugned order. The relevant paragraphs of the SCN are as follows: "29. From the above discussion it is proved that (i) M/s JRL have obtained central excise registration under the Customs (Import) of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. They have imported 1974.713 MT of C P O (I.....
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....uary 2005 for manufacture of vanaspati and soap. He had made false applications under Customs (import of goods a concessional rate of duty for manufacture of excisable goods) Rules, 1996 to the Assistant Commissioner of Central Excise, Division Varanasi in the month of December, 2004 and got registration certificate on the basis of false declarations. He was responsible for import and clearance of crude palm oil (industrial grade) by M/s JRL at concessional rate of 20% for availing the benefit of notification No. 21/2002-Cus dated 1.3.2002 as amended. He had arranged to install bhattis in their factory only to show that they have facilities for manufacture of soap, whereas actually they neither an intention nor total facilities required for the same. In additional to CPO (industrial grade), he claimed to have procured Caustic Soda from indigenous sources for manufacture of soap. He had claimed that they had added 12% of caustic soda to CPO (industrial grade) and that they were procuring Caustic soda indingenously. He had also falsely claimed that they had procured caustic soda from indigenous sources for manufacture of soap, for which they have failed to produce any evidences of pu....
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....ds liable for confiscation under Section 111(o) of the Customs Act, 1962. He had also knowingly concerned himself in a fraudulent evasion of Customs duty by way of preparing false documents, producing false declaration in his applications for availing concessional rate of duty under the Customs (import of goods at concessional rate of duty for manufacture of excisable goods) rules, 1996. By doing so he has actively caused aided and abetted the duty evasion of Rs. 17173426.30 by M/s JRL. He has, therefore, rendered himself liable for penalty under Section 112 of Customs Act, 1962. (ii) Shri Mahesh Kumar Jhunjhunwala Director of M/s JRL was arrested by DRI on 25-1-2006 under Section 104 of the Customs Act, 1962 and was produced before the Magistrate and was remanded to Judicial Custody till 3-2-06 and was deposited at Special Jail, Bhuj. His bail plea was rejected by the Hon‟ble CJM Court Gandhidham on 03-01-06 and was released on condontinal bail by Hon‟ble Additional Sessions Court, Gandhidham on 3-2-06." 31. Now, therefore, M/s Jhoola Refineries Ltd., Hiramanpur, Sarnath, Varanasi are hereby, called upon to show cause to the Assistant Commissioner of Central Ex....
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....1996. (iv) Why penalty should not be imposed on them under Section 112/114A of Customs Act, 1962. 32. Shri Mahesh Kumar Jhunjhunwala, Director of M/s JRL, 14/96A, Jhoola kunj, Saranath, Varanasi-221007 is hereby called upon to show cause to the Assistant Commissioner of Central Excise, Varanasi having their office at Central Excise Division,9, Maqbool Alam Road, Near Zila Kutchery, Varanasi -221 002 within thirty days of receipt of this notice as to why (i) penalty should not be imposed on him under Section 112 of the Customs Act, 1962." 6. Learned counsel for the appellant contests the impugned order firstly, on the ground that DRI officers are not "proper officers‟ to issue an SCN under Section 28 of the Customs Act, 1962 as per the judgment of the Supreme Court in the case of Canon India [2021 (3) TMI 384- Supreme Court]. He also contests it on merits that the proper officer of customs has given them the benefit of the exemption notification on being satisfied that they meet the conditions of the notification. This satisfaction was based on the fact that they were registered duly with the central excise officers. The Chartered Engineer hired by it Shri Ahuja confirm....