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TMI Blog2004 (12) TMI 535X X X X Extracts X X X X X X X X Extracts X X X X ..... hing of the said plant after the same was dismantled the Appellants engaged M/s. Decotrans. Initially M/s. Decotrans included the cost of containers also in the contract. This has been as clarified by M/s. Decotrans vide letter (Fax) dated 24-5-1994. 2. The appellants were granted Licence to import the said plant bearing No. P/CG/2043827, dated 17-6-1988. The said license was, inter alia, valid for import of refurbishing material, replacement parts etc. The said licence was issued for a CIF value of DM 46.75 million equivalent to Rs. 36,73,87,000/- and subsequently enhanced to DM 53.65 million equivalent to Rs. 42,16,11,000/-. 3. (a) On 14-11-1988 the appellants applied for an amendment, of the licence for endorsement to allow partial packing in used containers. The same was amended and endorsed by the Licensing authority on 22-12-1988 as under : - Valid for partially packed in used containers subject to the tradition that the used containers will not be disposed off without prior permission of the Licensing Authority. The value of the said licence was, however, not enhanced and value of the said containers was covered by the overall CIF of the said licence. (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f verification/audit of the documents connected with the import of the said plant, the Appellants realised that the value of the said plates was not included in the consignment covered by the said Bill of Entry dated 2-2-1989. Accordingly, after having submitted the project Reconciliation Statement under cover of letter of 15-5-1992 as referred for finalisation under the Regulation, the Appellants enclosed a cheque for Rs. 35,58,215/- towards payment of Customs Duty on the said plates vide letter dated 17-7-1993. As the said cheque dated 17-7-1993 was not presented to the Bank for clearance and since more than six months elapsed, the Appellants annexed, a fresh cheque dated 14-4-1994 vide letter dated 26-4-1994 of the same amount with a request to send to the Appellants the receipted copy of the Challan for the same. By a letter dated 6-5-1994, the Superintendent of Customs, Surat, informed the Appellants that the matter was under investigation and therefore, the cheque for Rs. 35,58,204/- could not be accepted and hence they returned the same to the Appellants. (c) The Appellants admit that the said plates were used by, them to fabricate the 3 devices, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; whether the import of such plates was covered by the Licence which has been specifically endorsed to include refurbishing material? (ii) Whether the calculation of duty liability on incoloy steel plates at Rs. 56,38,880/- is correct or not? (B) As regards 40 Containers used as packing material for the second-hand plant : (i) Whether there was any mis-declaration of value with regard to the containers so as to justify their confiscation under section 111(m)? (ii) Whether duty of Rs. 17,40,000/- could be demanded. (b) On the issue, whether the import of such plates was covered by the Licence which has been specifically endorsed to include "refurbishing material"? it is found- (i) The licence was issued for an import of a second hand plant. The said licence was specifically amended to include the cost for dismantling, refurbishing, replacement of parts and equipments, packing and loading in respect of the second hand plant. (ii) Commissioner has taken an unduly narrow meaning of the expression Refurbishing ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistance and that these easy flow devices were in their sponge iron plant and the same were not present at EMDEN. On being asked that whether the installation of easy flow device is additional installation of plant set up at Hazira. He inter alia stated that this installation is the replacement of the existing easy flow device in the sponge iron plant at EMDEN taking case of change in the design of system involved in the manufacturing process. He further deposed that replacement of easy flow, device did not amount to refurbishment as refurbishment amounts to overhauling of the old existing equipments. and or failure to prove that the devices were not part of the original plant. (iii) It is significant that the licence permitted not only refurbishing but also replacement; this would imply that the expression 'refurbishing' was used therein to include acts which were more than mere replacement. (iv) The judgment of Bombay High Court in the case of National Machinery Manufacturers Ltd. v. Union of India - 1980 (6) E.L.T. 717 (Bom.) cited in support on the proposition that in case of doubt, as to the scope of a licence, the benefit of doubt should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is a relied upon document which was seized by the Department. It is therefore, clear that the actual amount paid by the appellant for the Incoloy Plate was DM 4,56,217 and not DM 4,65,528 as alleged. The Commissioner refused to take cognizance of the telex, referred to above, on the ground that was an internal document of the appellant. This finding is not upheld as it is overlooking the fact that the Department itself had relied upon the said document recovered by them, in the Show-Cause Notice at Sr. No. (xx) of Annexure 'B' to the notice. (c) The rate of duty as applied, by the Commissioner in the order, is 70% Basic + 45% Auxiliary + Rs. 715 pmt CVD even though in the show-cause notice, the rate of duty applied was 50% basic + 15% CVD. The re-calculation effected by the Commissioner's goes beyond the show-cause notice. The same therefore cannot be upheld. The Commissioner ought to have re-calculated the value, based on the correct FOB price (after deducting 2%), ought not to have included 20% of FOB value towards freight and insurance; and ought to have applied the duty rate applicable to project imports and not more than as proposed in the Notice. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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