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2016 (8) TMI 1283 - AT - CustomsLevy of penalty - violation of import conditions - import of "Non Alloy Steel melting scrap" from Singapore during the period 1999 to 2001 - the allegation is that such scraps were not used in the manufacture, but were diverted elsewhere - According to appellants the allegation made as above was merely on the basis of certain statements recorded without any evidence - main argument which has repeatedly been adduced by the learned Advocate is that the end use certificate issued by the Deputy Commissioner, Srimati Parvathi Kailasam proves the receipt of the imported scrap in the factory of the appellant and its use in the manufacturer. Held that: - in the Central Excise Act and Customs Act, the adjudications are done under distinct provisions of different statutes under different premises of law in order to effectuate provisions of that Act only. Besides, the standard of burden of proof is different in the case of cenvat credit and in the case of availing exemption notification. It is settled law that the conditions for availing the exemption notification have to be strictly interpreted, Further, acceptance of certificate given by Deputy Commissioner Smt. Kailasam in the import of pipes cannot validate the end-use certificate for other imports. The circumstances of the issuance of this certificate being abnormal and contrary to established procedures with no physical examination of goods raises serious question about its admissibility. In view of these facts, the argument that the certificate should be accepted is not tenable, particularly given dubious methodology of issuance of certificate writ large on the circumstances - the certificate of the Deputy Commissioner Mrs. Parvathi Kailasam is not an admissible piece of evidence. The main basis of examination was whether there was mens rea in her action or not. Any finding on that fact cannot take away from the entire set of evidences in the present proceedings, which point to issuance of a dubious end use certificate. The appellant failed to produce production records before the search party for verification of any clearance. No proof was shown that the imported scrap was received in the factory and used in the manufacture. As a matter of fact, no document of import was available in the said premises and the investigating team were told that the documents were with the CHA. When the CHA was examined, he denied the possession of the said documents. Thus, the appellant not only could not produce the documents, they also tried to mislead the investigating team. This show that the statement of Shri A.V. Subba Reddy, MD of the appellant company was false and misleading. The appellants have argued that there was presumption by the Customs Commissioner that the goods without being transported to the factory of the appellant were diverted from the premises of Kothari Group of Companies or elsewhere. The plea of the appellant is that the goods were transported through alternate routes, which were economic for them. We find that the appellant have failed to substantiate transport of the imported scrap from godown of Kothari Group of Companies. While the bills of entry had destination as Cuddapah in Andhra Pradesh, imported scrap after clearance appears to have been unloaded in godown at Thondiarpet and M/s. Kamachi Steels in Chennai, which belonged to Kothari group of Companies. Transport from those premises to the factory of the appellant has not been proved or documented by them. Since it was a question of availment of exemption notification, burden of proof was squarely on the appellant, which was not discharged. As for cross examination of the Commercial tax officer, no prejudice has been caused to the appellants as their own claim is that they transported entire 15,000 tons via alternate routes. The appellant have also argued that there has been no enquiry for transport of the goods from Kothari godown to the factory nor source of replenishment was investigated. In this regard, we find that the present case is about availment of duty exemption for the basic customs duty. In the case of availment of exemption the burden is on the importer to improve that the goods have actually been received in the factory and used for manufacture. We find that the appellants have failed to discharge that burden. he impugned goods never reached the factory of the appellant and were not used in the factory for intended manufacture. As a result, the appellant failed to fulfill the condition of the notifications mentioned in the show cause notice rendering the goods liable to confiscation. Commissioner has therefore rightly confirmed the demand of duty from appellant no1 and imposed penalty on appellant no 1 - he role of Shri A.V. Subba Reddy and Sh. D. Ramana Reddy in diversion of the impugned goods and rendering them liable to confiscation has been correctly analysed by the Ld. Commissioner in para 20 and 21 of the impugned order. Penalties imposed against both of them are also upheld. Appeal dismissed - decided against appellant.
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