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2008 (3) TMI 566

Issues: Valuation method for transfer of goods between units

Analysis:
The judgment revolves around the valuation method to be applied for the transfer of goods between units of the same entity during the impugned period. The key issue is whether the transfer of goods should be considered a sale-transaction and how the valuation should be determined in such cases.

Valuation Methodology:
The Tribunal notes that under both the earlier and present laws of valuation, the transfer of goods cannot be equated to a sale-transaction. In the present case, only a part of the goods was transferred between units, while independent sales to buyers also occurred. Therefore, the Tribunal opines that the valuation of such transfers should be based on the prices at which the goods were sold to independent buyers at arm's length price. The Tribunal emphasizes that any additional duty paid by the entity would be available as credit for the receiving unit.

Decision and Remand:
The Tribunal decides to remand the matter to the Original Authority for re-determination of the duty amount, considering the dispute over the appropriate valuation method. Consequently, the penalty imposed in the original order is set aside. The Lower Appellate Authority's order is also overturned, and the department's appeal is allowed based on the terms outlined in the judgment.

This comprehensive analysis of the judgment highlights the Tribunal's reasoning behind the valuation method for inter-unit transfers and the subsequent decision to remand the case for re-determination of duty amount based on the prices charged to independent buyers.
2008 (3) TMI 565

Issues:
1. Valuation of neem active toothpaste in a combination package.
2. Interpretation of Section 4A of the Central Excise Act, 1944.
3. Applicability of Standards of Weights and Measures (Package Commodities) Rules, 1977.
4. Impact of the definition of "combination package" under Rule 2(c) of SWM Rules.

Issue 1: Valuation of neem active toothpaste in a combination package
The appellant challenged an order holding that the value of neem active toothpaste in a combi pack with two Margo soaps should be included in the MRP declared on the package. The authority relied on the definition of "multi Piece package" under SWM Rules, 1977. The appellant argued that Section 4A(2) of the Central Excise Act, 1944 governs the valuation of packaged commodities, and the neem toothpaste value should not be added to the MRP.

Issue 2: Interpretation of Section 4A of the Central Excise Act, 1944
The appellant contended that Section 4A prescribes the valuation method for package commodities and overrides the nature of sale. The appellant cited the Apex Court judgment in Jayanti Food Processing (P) Ltd. v. Commissioner of Central Excise, Rajasthan, emphasizing that the valuation should be based on the retail sale price declared on the packages. The appellant argued that any addition to the MRP declared on the package is contrary to the law.

Issue 3: Applicability of Standards of Weights and Measures (Package Commodities) Rules, 1977
The JDR for Revenue argued that the neem toothpaste given free in the package should be taxed by adding its value to the other packed goods. However, the Tribunal's decision in Vinayaka Mosquito Coil Manufacturing Co. v. C.C.E., Bangalore was cited by the appellant to support that even free items in a package should not affect the valuation method under Section 4A(2) of the Central Excise Act, 1944.

Issue 4: Impact of the definition of "combination package" under Rule 2(c) of SWM Rules
The Tribunal found that the goods in question were governed by Section 4A(1) of the Central Excise Act, 1944, and attracted Section 4A(2) for valuation purposes. The MRP declared on the package was deemed the value for excisability of the contents in the package, as per the overriding provision of Section 4A(2). The definition of "combination package" under Rule 2(c) of SWM Rules was crucial in determining that the MRP declared on the package is the sole value for excisability, leading to the appellant's success in the appeal.

This detailed analysis of the judgment highlights the key legal arguments, interpretations, and precedents considered by the Appellate Tribunal in deciding the issues related to the valuation of neem active toothpaste in a combination package under the relevant legal provisions.
2008 (3) TMI 564

Interpretation of statute - Appellate Tribunal's order - The appellant’s contention is that earlier order having been set aside by the Tribunal without any direction to re-adjudicate the matter, the Commissioner having no jurisdiction to pass the impugned order in de novo proceedings, cannot confirm duty and penalty - Held that: - Once the impugned order is set aside unconditionally, the Commissioner, in my view, was not right in re-opening the proceedings to re-decide the matter afresh in the absence of any direction to the contrary - the impugned order having been passed without jurisdiction, appeals are allowed.
2008 (3) TMI 563

Issues:
1. Restoration of appeal
2. Payment of duty and penalty
3. Reduction in penalty amount
4. Interpretation of Section 11AB and Section 11AC

Restoration of Appeal:
The Appellate Tribunal, after considering the reasons for restoration, recalled its earlier order and restored the appeal to its original number. With the consent of both parties, the appeal was taken up for hearing and disposal on the same day.

Payment of Duty and Penalty:
The impugned order-in-original was passed on a specific date and received by the appellants on another date. The duty was paid in full on a particular date, but part of the penalty, approximately 25%, was paid at a later time. The interest on the duty was paid later, although the exact date of payment was not available.

Reduction in Penalty Amount:
The Lower Appellate Authority did not allow the reduction in penalty amount as per the first proviso to Section 11AC, leading to the appeal against this decision. The appellants believed that no interest was payable since the duty was paid within 30 days, based on their interpretation of the proviso to Section 11AB.

Interpretation of Section 11AB and Section 11AC:
The Tribunal analyzed the application of the proviso to Section 11AB, which is applicable when duty becomes payable following an order from the Board. The appellants were required to pay both interest and duty within 30 days, as per Section 37B and the first proviso to Section 11AC. The appellants failed to meet these requirements, leading to the conclusion that the benefit of reduced penalty under the first proviso to Section 11AC was not available to them. Consequently, the appeal was rejected by the Tribunal.

This detailed analysis of the judgment covers the issues related to the restoration of the appeal, payment of duty and penalty, the reduction in penalty amount, and the interpretation of Section 11AB and Section 11AC as addressed by the Appellate Tribunal.
2008 (3) TMI 562

Issues involved: Interpretation of Notification No. 67/95 u/s Rules 57AB and 57AD regarding admissibility of Cenvat credit on inputs used in manufacture of exempted capital goods.

Issue 1: Interpretation of Notification No. 67/95

The appellants were engaged in manufacturing excisable goods and availed Cenvat credit on inputs used in the manufacture of capital goods exempted from duty u/s Notification No. 67/95. The lower authorities held the credit inadmissible. The appellant contended that since the capital goods were exempted, duty should be paid on the inputs. However, the Tribunal found that the Notification only applies to goods used captively and does not address the admissibility of credit on inputs used in manufacturing exempted final products. Rule 57AD prohibits credit on inputs used in manufacturing exempt final products, and since the capital goods were exempt and captively used, no credit on inputs used in their manufacture is permissible. The capital goods were for machinery repairs, not for manufacturing dutiable products.

In the case at hand, the Tribunal clarified the interpretation of Notification No. 67/95 in relation to the admissibility of Cenvat credit on inputs used in the manufacture of exempted capital goods. The appellant's argument that duty should be paid on inputs used in manufacturing exempt capital goods was dismissed. The Tribunal emphasized that the Notification only pertains to goods used captively and does not address the admissibility of credit on inputs used in manufacturing exempted final products. Rule 57AD prohibits credit on inputs used in manufacturing exempt final products, and since the capital goods were exempt and captively used, no credit on inputs used in their manufacture is permissible. Additionally, the capital goods were designated for machinery repairs, not for the production of dutiable finished products.

The Tribunal's decision reaffirmed that the provisions of Notification No. 67/95 are specific to goods used captively and do not extend to the admissibility of credit on inputs used in the manufacture of exempted final products. Rule 57AD explicitly prohibits the availing of credit on inputs used in the production of exempt final products. As the capital goods in question were exempt from duty and intended for machinery repairs, not for manufacturing dutiable finished products, the denial of credit on inputs used in their manufacture was upheld. The Tribunal found no merit in the appeal and consequently rejected it.
2008 (3) TMI 561

Issues:
Appeal against demand confirmation and penalties imposition due to denial of credit for paper used in manufacturing corrugated boxes before the facility was operational.

Analysis:
The appellants contested the demand confirmation and penalties imposition based on the denial of credit for paper used in their manufacturing process before the corrugated box facility became operational. They argued that they were previously engaged in manufacturing glass items and had been procuring corrugated boxes from the market, along with paper used for wrapping glass products during packing. The appellants maintained that the paper in question was not cleared separately but was integrated into the final products' assessable value for excise duty payment purposes.

The Revenue's position was that the appellants did not maintain records of paper and corrugated boxes consumed internally before the manufacturing facility for boxes was established. They alleged that the appellants wrongfully claimed credit for paper used in manufacturing corrugated boxes before the facility's operational date.

The Tribunal acknowledged the appellants' manufacturing process involving fragile glass items and accepted their explanation that the paper was indeed used for wrapping glass products before placing them in corrugated boxes. This assertion was made in response to the show cause notice and was documented in the adjudicating order. The Tribunal noted the absence of evidence showing that the appellants had received and cleared the paper separately without paying duty. Additionally, the Tribunal highlighted that the appellants included the paper's value in the final product's assessable value for duty payment. Consequently, the Tribunal found merit in the appellants' contentions and allowed the appeals, ruling in their favor.

Therefore, the Tribunal concluded that the denial of credit for the paper used in manufacturing corrugated boxes before the facility's operational commencement was unfounded, as the appellants had adequately demonstrated the integration of paper into their manufacturing process and excise duty payment calculations.
2008 (3) TMI 560

Issues: Alleged export of excisable goods without proper documentation and duty payment below exemption limit.

In this case, the appellant was accused of exporting excisable goods without executing necessary documents like LUT/Bond and ARE-1s, and without providing proof of export signed by Customs authorities. The appellant, being an SSI unit, cleared the goods without duty payment as the total value was below Rs. 100 lakhs under a specific notification. The Tribunal referred to a previous case and a circular to establish that SSI units within the exemption limit are not required to follow certain procedures. The appellant provided evidence, including invoices, packing lists, shipping bills, and bank certificates, to prove proper export. Both lower authorities did not dispute this evidence. The duty demand was based on the lack of LUT/Bond and ARE-1, but as per rules, SSI units exporting goods are not mandated to follow the ARE-1 procedure. Consequently, the demand for duty on the exported goods was deemed unsustainable, leading to the setting aside of the impugned order and allowing the appeal with consequential relief.
2008 (3) TMI 559

Issues:
Waiver of pre-deposit of duty, Eligibility for S.S.I. exemption, Brand name ownership dispute, Compliance with trademark registration, Prima facie case for total waiver determination.

Waiver of Pre-Deposit of Duty:
The case involved an application for the waiver of pre-deposit of duty amounting to Rs. 60,25,468 confirmed against M/s. DAV Electronics & Electricals Pvt. Ltd. (DEEPL) along with penalties on its Director and Executive Director. The duty demand arose due to the denial of the S.S.I. exemption claimed by DEEPL for the period from October 2001 to May 2006. The Tribunal found that DEEPL did not establish a strong prima facie case for total waiver and directed a pre-deposit of Rs. 20.00 lakhs towards duty within eight weeks, with the balance of duty and penalties dispensed with upon such deposit, subject to compliance within the specified timeline to avoid vacation of stay and dismissal of appeals.

Eligibility for S.S.I. Exemption:
The issue of eligibility for the S.S.I. exemption revolved around DEEPL's claim that they were entitled to the exemption for supplying control panel accessories to OE manufacturers. However, the Tribunal noted that this argument was not raised during the show cause notice or before the Commissioner, thus precluding a finding on this aspect. Consequently, the plea for exemption based on supplying to OE manufacturers could not be considered at that stage of the proceedings.

Brand Name Ownership Dispute:
The dispute over brand name ownership centered on the use of the 'DAV' logo by DEEPL, which was registered in the name of DAV Industries in 2004. DEEPL contended that their application for registration was pending and that the logos were different. However, the Tribunal found that the logos were identical or deceptively similar, leading to a prima facie determination that the brand name exclusively belonged to DAV Industries. The registration application by Shri A.K. Agrawal, not DEEPL, further weakened DEEPL's claim regarding the brand name ownership.

Compliance with Trademark Registration:
DEEPL's argument that the registration application for the 'DAV' logo was pending did not hold as the registration was in DAV Industries' name. The Tribunal found that DEEPL's use of a logo similar to the registered one constituted a prima facie case against them. The distinction between the logos used by DEEPL and DAV Industries was not considered tenable, strengthening the case for brand name ownership by DAV Industries.

Prima Facie Case for Total Waiver Determination:
In evaluating the totality of facts and circumstances, the Tribunal concluded that DEEPL failed to establish a strong prima facie case for a total waiver of the duty and penalties. Consequently, a partial pre-deposit of Rs. 20.00 lakhs was directed, with the remaining duty and penalties waived upon compliance. Failure to adhere to the directive would lead to the vacation of stay and dismissal of appeals without prior notice, emphasizing the importance of timely compliance. Compliance reporting was scheduled for a specified date to monitor adherence to the Tribunal's order.
2008 (3) TMI 558

Issues:
1. Inclusion of cost of containers in the assessable value of goods cleared.
2. Time-barred demand invoking a larger period.
3. Short payment of duty on clearances of impugned goods.
4. Genuine misunderstanding of the assessee regarding valuation of excisable goods.

Analysis:

1. The appellant cleared spent solvents and used isopropyl alcohol on payment of duty during a specific period. They did not include the cost of drums in the assessable value and invoiced the excisable goods and packing separately. The counsel for the appellants argued that containers in which inputs are received can be cleared without payment of duty as per CBEC clarification. The appellant had filed declarations and invoices with the department, showing the goods as packed in containers. The Tribunal found that the appellant had short paid duty on clearances to the extent of the containers' cost, making the demand sustainable. However, as the relevant information was timely furnished, the demand could only be sustained for the normal period.

2. The appellant contended that the demand invoking a larger period was time-barred. The Tribunal, after considering the case records and submissions, held that the demand could be sustained only for the normal period due to the timely submission of relevant information to the department. Therefore, the demand for the larger period was considered time-barred, and the appellant was not penalized for the short levy due to a genuine misunderstanding.

3. It was established that the appellant had short paid duty on clearances of the impugned goods to the extent of the containers' cost. The Tribunal acknowledged that the short levy occurred due to a genuine misunderstanding of the assessee regarding the valuation of the excisable goods involving containers in which inputs had been received. Consequently, the Tribunal held that the appellant did not deserve to be penalized for the short payment of duty. The case was remanded to requantify the demand for the normal period, ensuring the appellant's right to an effective hearing before a fresh decision.

4. The Tribunal, in its decision, recognized the genuine misunderstanding of the assessee regarding the valuation of excisable goods involving containers. This misunderstanding led to the short payment of duty on clearances of the impugned goods. As a result, the Tribunal decided that the appellant should not be penalized for this error and remanded the case for the demand to be recalculated for the normal period, emphasizing the appellant's right to a fair hearing in the process.
2008 (3) TMI 557

Issues involved: Stay application and early hearing application in connection with the appeal regarding confiscation of goods for improper exportation and imposition of penalty under Sections 113(d) and 114 of the Customs Act, 1962.

Stay Application: The appellant, Vetri Trading & Exports, declared the true description of the export goods and presented the Shipping Bill, unaware of the prohibition to export charcoal. The Tribunal found no need to confiscate the goods or penalize the exporter as the assessing officer should verify if the goods are prohibited before ordering clearance for export.

Legal Precedents: Referring to Sripad Upadhyay v. CC, Chennai and Ramyan Impex v. CC (Exports), Nhava Sheva, the Tribunal established that goods presented for export do not become export goods until an order under Section 51 of the Act is passed. Only export goods attract action for improper exportation. Thus, the Tribunal granted waiver and stay against the penalty imposed on the exporter.

Early Hearing Application: Considering the facts and circumstances, the Tribunal allowed the early hearing application, setting the hearing date for 29-4-08. The decision was pronounced in open court on 24-3-2008.
2008 (3) TMI 556

Issues: Application for waiver of pre-deposit of duty under Rule 6(3)(b) of the Cenvat Credit Rules, 2004.

Analysis:
1. The issue before the Appellate Tribunal was the application for waiver of pre-deposit of duty amounting to Rs. 69,34,186, out of the total duty of Rs. 74,80,050, confirmed under Rule 6(3)(b) of the Cenvat Credit Rules, 2004. The duty was related to the clearance of metalised flexible polyester/CPP film under job work. The applicants sought total waiver on the grounds that the goods cleared by the job worker were exempted goods and that Cenvat credit is eligible to the job worker. They relied on the Tribunal's decision in a previous case and argued that the adjudicating authority erred in distinguishing the Larger Bench's decision. The Tribunal found a strong prima facie case for total waiver based on the submissions made by the applicants regarding the eligibility of Cenvat credit to job workers and the interpretation of relevant legal provisions and precedents.

2. The Tribunal noted that the adjudicating authority had erred in distinguishing the Larger Bench's decision based on the context of a specific notification and the timing of certain legal provisions. The Tribunal clarified that the Larger Bench's decision was not rendered on the interpretation of the said notification and that the reference to it was made in a different judgment. Additionally, the Commissioner's error in distinguishing the Larger Bench's decision based on the period covered by it was highlighted. The Tribunal pointed out that the relevant legal provision regarding exemption from duty applied only to goods unconditionally exempted, which was not the case in the present situation where the exemption was subject to specific conditions like filing declarations.

3. In light of the arguments presented and the analysis of the legal provisions and precedents, the Appellate Tribunal decided to waive the pre-deposit of the duty confirmed against the applicants and stayed the recovery pending the appeal. The decision was based on the strong prima facie case made by the applicants regarding the eligibility of Cenvat credit for job workers and the errors identified in the adjudicating authority's and Commissioner's reasoning for not granting the waiver. The Tribunal's decision aimed to ensure fairness and justice in the resolution of the dispute related to the duty pre-deposit under the Cenvat Credit Rules, 2004.
2008 (3) TMI 555

Issues:
1. Applicability of extended period of limitation for demand of duty.
2. Liability to pay interest under Section 11AB of the Central Excise Act.
3. Imposition of penalty under Rule 25 of the Central Excise Rules, 2002.

Analysis:

Issue 1: Applicability of extended period of limitation for demand of duty
The case involved the appellant contesting the order where the demand of duty for the extended period was set aside by the Commissioner (Appeals). The Revenue argued that the extended period of limitation should apply as the appellant had not filed quarterly ER-1 returns on time and had not included the duty paid under protest in the returns, indicating an intent to evade payment. However, the Tribunal found that the appellant had not suppressed any facts with mala fide intent. The Tribunal upheld the decision to set aside the demand for the extended period, as the appellant had filed the necessary declarations and returns, making it unlikely that there was an intent to evade payment.

Issue 2: Liability to pay interest under Section 11AB
The Tribunal noted that the entire duty amount for the disputed period was paid under protest on 17-6-2004, and a show-cause notice was issued on 29-12-2004. The Tribunal determined that the duty payment fell under sub-section (2B) of Section 11A, making it unnecessary for the department to issue a show-cause notice for the normal period. The question of interest under Section 11AB arose after the show-cause notice, but the order was silent on this issue. The Tribunal directed the lower appellate authority to address the interest issue in light of the duty payment made under protest.

Issue 3: Imposition of penalty under Rule 25
The Tribunal found that the penalty under Rule 25 was relevant due to the delayed payment of duty, which contravened the Central Excise Rules. The Commissioner (Appeals) had not examined this aspect properly as the focus was on considerations related to Section 11AC, which was not invoked by the original authority. The Tribunal concluded that the penalty under Rule 25 should be considered, and the case was remanded to the lower appellate authority to decide on the interest and penalty issues after giving the appellant a chance to be heard.

In conclusion, the Tribunal upheld the decision to set aside the demand for the extended period, directed a review of the interest issue, and emphasized the need to consider the penalty under Rule 25. The appeal was allowed by way of remand for further proceedings.
2008 (3) TMI 554

Issues:
1. Clarification on the scope of clearance for pursuing the appeal and restoration of appeals.
2. Interpretation of Notification No. 6/2002 regarding exemption from duty.
3. Classification of plates under Chapter 72 of the Tariff and their eligibility for exemption.

Issue 1:
The judgment addresses the issue of clearance for pursuing the appeal and the restoration of appeals. The Tribunal notes that the clearance from COD was only for Appeal No. 1302/06, but the restoration application resulted in the restoration of two appeals - Appeal No. 1301-1302/06. The Tribunal clarifies that the restoration is to be in respect of Appeal No. E/1302/06 only, as a separate restoration application is pending for Appeal No. E/1301/06.

Issue 2:
Regarding the interpretation of Notification No. 6/2002 for exemption from duty, the applicant filed a stay application in Appeal No. 1302/06 seeking a waiver of pre-deposit of duty and penalty. The demand was confirmed after denying the benefit of the notification, which provides exemption from duty on specified equipment procured for specific projects. The applicant argued that plates, used in the fabrication of steel structures for the traction system equipment, are covered under the notification based on a clarification from the Department of Revenue. The Tribunal, after considering the details of items covered under the notification, finds that the steel items in question are indeed used as part of traction equipment, supporting the applicant's contention. Consequently, the pre-deposit of the duty and penalty is waived, and the stay petition is allowed.

Issue 3:
The judgment also delves into the classification of plates under Chapter 72 of the Tariff and their eligibility for exemption. The Revenue contended that plates do not qualify as items of equipment under the notification and should be classified under Chapter 72. However, the Tribunal, upon examining the usage of the steel items as part of traction equipment, determines that the applicant has a strong case, prima facie. As a result, the pre-deposit of duty and penalty is waived, and the stay petition is granted.

In conclusion, the Tribunal's judgment provides clarity on the scope of clearance for pursuing the appeal, interpretation of the exemption notification, and the classification of steel plates, ultimately leading to the waiver of pre-deposit of duty and penalty for the applicant.
2008 (3) TMI 553

The applicant, a Central Excise officer, filed an early hearing application to list his appeal out of turn. The learned Commissioner (Appeals) set aside the Order-in-Original against him. The Tribunal allowed the early hearing application, stating it is a career matter for Central Excise officers. The appeal was listed for hearing on 28-3-2008.
2008 (3) TMI 552

Issues:
Import of metal furniture from France, declaration of value in Bills of Entry, omission of advance payment in declared value, mis-declaration of value, differential duty demanded, confiscation of goods, penalty imposed under Section 112 of the Act.

Analysis:

Issue 1: Import of Metal Furniture and Declaration of Value
The appellants imported metal furniture from France and cleared three consignments on different dates with declared values. The importer later realized that the advance payment made to the supplier was not included in the declared value of the goods. The total value of the goods was declared based on the invoices accompanying the Bills of Entry, with the advance payment of EURO 66279 omitted from the declared value.

Issue 2: Mis-Declaration of Value and Imposition of Penalties
The Asst. Commissioner did not act upon the importer's application for inclusion of the advance payment in the declared value. Instead, a case of mis-declaration of value was framed against the importer. The Commissioner's order demanded a significant differential duty, confiscated a proportionate quantity of goods, and imposed a penalty of Rs. 1 lakh under Section 112 of the Act.

Issue 3: Judicial Review and Decision
After hearing both sides, the Tribunal noted that the importer acted in good faith and promptly sought to rectify the omission of the advance payment in the declared value. The Tribunal found that the importer should have been allowed to amend one of the Bills of Entry to include the omitted amount and pay the differential duty accordingly. The Tribunal set aside the Commissioner's order and directed the proper officer of Customs to permit the necessary amendment in one of the Bills of Entry.

Conclusion
The Tribunal allowed the appeal, directing the Customs officer to permit the amendment of one Bill of Entry to rectify the omission of the advance payment in the declared value. The Tribunal emphasized that the importer should have been given the opportunity to correct the declared value instead of facing penalties for mis-declaration.
2008 (3) TMI 551

Issues involved: Import of fresh garlic without specific license, misdeclaration of value, confiscation of goods, imposition of penalty.

Summary:
The appellants imported fresh garlic of Chinese origin without a specific import license and misdeclared its value. The Customs authorities proposed to confiscate the goods under Section 111(d) and (m) of the Customs Act and impose a penalty under Section 112(a) of the Act. The Commissioner of Customs passed an order enhancing the value of the goods, ordering duty payment, confiscating the goods with an option for redemption, and imposing a penalty on the importer. The appeal did not challenge the enhancement of value or confiscation. The goods were liable for confiscation under Section 111(d) for being a restricted commodity and under Section 111(m) for misdeclaration of value. The importer was held liable for penalty under Section 112. The Tribunal upheld the confiscation of goods, penalty imposition, and duty recovery but modified the quanta of fine and penalty. The redemption fine was reduced to Rs. 1.50 lakhs, and the penalty was reduced to Rs. 20,000. The order of the Commissioner was modified accordingly.

In conclusion, the appeal was disposed of by reducing the redemption fine and penalty to Rs. 1,50,000 and Rs. 20,000, respectively.
2008 (3) TMI 550

Reversal of Cenvat/Modvat credit - Held that: - The requirement of having to reverse credit taken on any inputs when separate accounts are not maintained ceases once the assessee reverses the entire credit availed - the requirement to pay a percentage of the sale price of the exempted goods in terms of Rule 57CC - appeal allowed - decided in favor of appellant.
2008 (3) TMI 549

Redemption fine and penalty - Quantum of Penalty - Composite penalty - Held that: - It is obvious from the facts of the case that the description, quantity and value of the goods were misdeclared by the exporter and, therefore, the confiscation of the goods under Section 113(d) and (i) of the Customs Act is unassailable. The value of the goods has been determined after the requisite market enquiries. The appellant has not shown enough grounds to disturb this valuation. However, they seem to have an irresistible case against the quantum of redemption fine determined by the Commissioner as also against the quantum of penalty imposed by him - appeal allowed by way of remand.
2008 (3) TMI 548

Issues: Misdeclaration of goods description and value, confiscation of goods, penalty imposition, valuation of imported goods

Misdeclaration of Goods Description and Value:
The case involved the import of silk yarn declared as "Handspun Mulberry Native Silk Yarn" but later found to be "Dupion Raw Silk" through testing by the Textile Committee and the Central Silk Board. The authorities proposed to demand differential duty due to the higher grade of the imported goods compared to the declared value. The Commissioner of Customs adjudicated the case, classifying the goods as "Dupion Raw Silk" and determining the value at USD 21 per kg. The appellant contested the misdeclaration, citing previous tribunal decisions, but the Tribunal upheld that misdeclaration under Section 111(m) of the Customs Act was established without the need to prove mens rea. The misdeclaration of value was also confirmed based on contemporaneous import bills, leading to the imposition of a penalty and confiscation of goods.

Confiscation of Goods and Penalty Imposition:
The Tribunal accepted the arguments presented by the department, upholding the misdeclaration of the goods and the consequent confiscation and penalty. The appellant's claim of declaring the goods correctly based on import documents was dismissed, emphasizing the discrepancy between the declared description and the actual nature of the imported goods. The Tribunal referenced previous court decisions to support the decision on confiscation and penalty, emphasizing the importance of accurate declaration without the requirement of proving intent.

Valuation of Imported Goods:
Regarding the valuation of the goods, the consultant argued that the lowest value of contemporaneous imports should have been considered by the adjudicating authority. The Commissioner had chosen a value of USD 21 per kg, but the consultant pointed out a Bill of Entry dated 8-11-2005 declaring a value of USD 19 per kg for similar goods. The Tribunal agreed with the consultant, stating that under Rule 6 of the Valuation Rules, the lowest contemporaneous price should be adopted. The Tribunal directed the re-quantification of duty based on the unit price of USD 19 per kg, reducing the quantum of fine and penalty imposed by the Commissioner.

In conclusion, the Tribunal upheld the misdeclaration of goods description and value, leading to the confiscation of goods and imposition of a penalty. The valuation of the imported goods was revised based on the lowest contemporaneous price, resulting in a modification of the original order to reduce the fine and penalty amounts while directing the re-quantification of duty.
2008 (3) TMI 547

Issues involved: Application for Rectification of Mistake u/s 129B(2) of the Customs Act, 1962 regarding demand of interest in Final Order dated 31-7-2007 by the Appellate Tribunal CESTAT, Bangalore.

The applicant raised the issue that the demand of interest was illegal and untenable as there was no provision under Notification No. 96/93 or the Customs Act for such demand. The Appellate Authority failed to address this contention, causing injustice and hardship to the appellant.

The Tribunal acknowledged the lack of a clear finding on the leviability of interest in the Final Order. It was noted that the notification 96/93 and the Customs Act did not provide for the demand of interest on duty foregone. Consequently, the Tribunal rectified the mistake by setting aside the interest demanded, stating that "As there is no provision for demand of interest under notification 96/93, the interest demanded is set aside." The Rectification of Mistake application was allowed, and the finding on interest was incorporated into the Final Order.

The judgment was pronounced in open court on 11-3-2008 by Member (T) T.K. Jayaraman.