TMI Blog2019 (7) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... F by the Appellants have not returned back. The Appellants have taken the plea that M/s. SCF have themselves imported / locally procured PCE and sold to others and therefore the allegation that the sale of PCE, imported by the Appellants, by M/s. SCF is not proved. The investigation has successfully demonstrated that the goods even if they were supposed to have been sent to M/s. SCF on job work basis have never back to the Appellants for further use and export in their factory. In the result one has to hold that such goods have been diverted in to the local market in contravention of the Exim Policy and the Customs Notification. Violation of conditions of the notification or not? - HELD THAT:- The conditions of Notification have to be read very strictly. It is found that in spite of the claim of fulfilling the export obligation and discharge of bond by DGFT and Customs authorities, the liability of the appellants to pay duty in the event of violation of Customs Notification lies with him as held by the commissioner and the case law cited by him supports this contention - Condition No (vii) to the Notification No 30/97 dated 01-04-1997 stipulates that Exempt materials shall no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Appellant, imported 5179,374 MTS PC under 9 Licenses; used 4199.099 MT (82%) in own factory for manufacturing Hexa and used 980.275 MT (18%) in sister concern M/s. SCF, which is also in Taloja; goods were moved to M/s. SCF, in terms of Rule 57F (4) and Notification No.214/86, using 249 Job Work Challans issued under stamp and seal of jurisdictional authorities. Export Obligation was fulfilled; Remittances received; DGFT redeemed all 9 Licenses and Customs cancelled the Bonds executed. Revenue issued an SCN dated 30.9.2003 for ₹ 1.22 Cr, alleging that the appellants misrepresented before DFGT in obtaining SION; imported excess 980.275 MTs PCE and diverted goods for job work to sister concern. Appellant paid ₹ 54.16 Lakhs during investigation. 2.1. As the SCN was not adjudicated till 2009, Appellant approached the Hon ble High Court with a Writ Petition No.2511/ 2009. Hon ble High Court, vide Order dated 25.1.2010, disposed of the Petition, as Revenue gave undertaking to decide the SCN in a time bound period. Commissioner Export adjudicated SCN; though he did not uphold allegation of excess of import, held that condition of notification Custom Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 82% was used by them and a mere 18% used in Sister Concern M/s. SCF. Shri Kamal Khandelwal has categorically stated that 980 MT PCE was sent on job work to SCF (Para 6 (xvi) of SCN).He further submits that Department itself has shown SCF purchased 1266.211 MT of PCE locally during 1997 to 2002 and have also imported 40.504 MT on 5.11.98. Therefore, M/s. SCF sold 156.278 MT PCE, out of this 1306.715 MTs and not out of 980.275 MTs PCE. Further, as far as 264.841 MTs sale to SCF is concerned, two traders stated that it was paper transaction out of fear. Department did not Charge these persons for aiding abetting. Some of them could not be traced. 6. He further submits that Exim Policy permits job work. A minor quantity of goods manufactured through job worker as per Para 3.5 of EXIM policy as Actual User. Thus it is not violation of Custom Notification Custom Notification 30/97. Taking permission for sending Replenishment Import goods for job work (though Assistant Commissioner permitted) is not a mandatory, essential and substantial condition. At the best, it is procedural, directory or technical condition. Therefore there is no breach of condition of notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in DEEC Scheme for fulfilling export obligation? (iii). Does sending goods for job work amount to transfer of ownership/ title of goods amounting to breach of Custom Notification 30/97? How would the same be permissible if the exporter is a merchant Exporter who endorses the name of manufacturer? (iv). Whether the demand is hit by limitation period when Department had complete knowledge of job work; permitted the same and duly signed, stamped and audited the job work register? (v). While the SCN proceeds to demand duty on the allegation of excess import, is the Adjudicating Authority is correct in confirming the demand on technical ground, while he dropped demand on the main allegation. (vi). Whether the Adjudicating Authority disregarded higher judicial fora in not following the ratio of cases cited by them? 7. Learned AR per contra, reiterates the findings of the OIO as far as confirmation of duty and penalty is concerned. Further submits that penalty needs to be inclusive of duty plus interest as appealed by department. He submits, vide written submissions dated 18-3-2019 that the case was made on the basis of information r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iolated the condition of the notification, cited above, in as much as they have transferred / diverted part of the imported HCE to the local market by way of clearance to their sister concern M/s. SCF. The Appellants contend that clearances to M/s. SCF are for the sake of job work and the goods after due processing have been returned to the Appellants by M/s. SCF and have been exported. 11. The Appellants contended that whereas the Show Cause Notice was on the issue of excess import, the adjudication order proceeded on the premise that the condition of notification are violated. Ongoing through the Show Cause Notice it appears that though the intelligence was that the Appellants have imported excess quantity of HCE by misrepresenting to the DGFT authorities, the Show Cause Notice has also raised the issue of transferability of the license/goods at para No.30 and 31 specifically. It has been categorically stated that the 9 Advance licenses were issued in terms of para 7.4 of the Exim Policy and are nontransferable. The condition sheet attached to each of the above license also stipulates as under: (a) The exempted goods imported against the license shall only be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by SCI under B/E No.000327 dated 07.05.2002. c) Sales of PCE in factory sealed drums of INEOS CHLOR (i.e. the goods which were imported free of duty by SCI under their advance license) as deposed by Shri Hemant H. Kothari, partner of M/s. Paresh Chemical Corporation, Shri Mahendra Shah, Partner of M/s. R. Mahendra Kumar Co. Shri Kishore Kulchandani, Partner of M/s. Usha Chemical Company, Shri P. Subramaniam Raja, Proprietor of M/s. Spark Enterprises, Dr. Ashok Manghani, Partner in M/s. BOPP Agencies M/s. Soofi Traders. d) No record of utilization and consumption of exempt material as required under para 7.30 of he EXIM Policy, maintained by SCI. In view of the above, we find that the Appellants contention on the plea that the goods were not transferred but were sent on job work basis or not acceptable. We find that Appellant have not mentioned the name of the job workers while obtaining the licenses. Therefore, the plea on the basis of intimation to the authorities is not acceptable. We find that the investigation has successfully demonstrated that the goods even if they were supposed to have been sent to M/s. SCF on job work basis have never ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r found to be bogus or found to have been traded only in papers without dealing in the actual goods. The Appellants have put forth the reasoning that the persons have given statements out of fear cannot be accepted as the circumstances of such fear have not been established and have not been retracted. Therefore we find that the statements have evidentiary value as they are also supported by other evidence. In the circumstances the statements given are to be considered to be voluntary statements given under section 108 of the Customs Act, 1962. It has been held by the Apex Court in no uncertain terms that the statements given before the customs authorities have evidentiary value more so the statements have been committal. Moreover, the non-maintenance of records by the Appellants at their end or by M/s. SCF, to substantiate their claim, makes the arguments of the Appellants fall flat. Therefore, such arguments are devoid of any merit and are not acceptable. Appellants have taken the plea that no permission is required to be taken for job work. As discussed above, we find that the appellants have obtained licenses under actual user condition. They did not mention their sister concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be liable to pay the duty so exempted in case of value to fulfill these conditions. We find that he has rightly relied upon the following cases. (i). CC (Import) Vs. Jagdish, Cancer Research Centre 2001 (132) ELT 257 (S.C.) (ii). Mediwell Hospital and Health Care Pvt. Ltd Vs Union of India 1997 (89) ELT 425 (SC) (iii). M/s. Bombay Hospital Trust Vs CC, ACC (2006 (201) ELT 555 (High Court, Bombay). It is not the case of the appellants that the fact of diversion, of goods imported duty free under Advance License, was in the knowledge of the department. Revenue was not made aware of the acts of omission and commission of the Appellants. Therefore, we find that Learned Commissioner has correctly found that the SCN is not hit by limitation and that duty has been correctly demanded and penalty under Section 114A was rightly imposed. 16. Coming to the penalty imposed on M/s SCF (C/891/2010), we find that the goods were imported by the appellants and the appellants are liable to pay duty in case of any violation. The appellants have diverted the imported goods to M/s SCF which were further sold in domestic market. We find that p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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