TMI Blog2008 (10) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... red as - Mixed Copper Cable Scrap and Mixed Copper Lead Cable Scrap from the declared value of Rs. 16,91,53,105/- to Rs. 57,99,49,944/-; (b) denied the benefit of Notification No. 53/97-Cus., dated 3-6-97 (in force upto 31-3-03) and 52/03-Cus., dated 31-3-03 (in force w.e.f. 1-4-03) available in respect of duty free inputs - Mixed Copper Cable Scrap , Mixed Copper Lead Cable Scrap and Mixed Aluminium Cable Scrap and confirmed customs duty demand of Rs. 27,10,90,863/- against NI under Section 28(1) of the Customs Act, 1982, along with interest on this duty at the applicable rate under Section 28AB of the Customs Act; (c) held 8458.462 MT of Mixed Copper Cable Scrap (Druid) and 4256.29 MT of mixed copper lead cable scrap (Relays) imported by NI as liable for confiscation under Section 111(d), (m) (o) of the Customs Act but since these goods are not available for confiscation, has imposed a fine of Rs. 30 crores under Section 125 of the Customs Act; (d) imposed penalty of Rs. 27,10,90,863/- on NI under Section 114A of the Customs Act; (e) confirmed Central Excise Duty demand of Rs. 25,95,08,555/- leviable on 5005-452 MTs of Copper manufactured and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es scrap is allowed without license subject to registration with Ministry of Environment Forests (MOEF), Government of India. Para 6.2(b) of the 2002-2007 of EXIM Policy permits import of all the items except prohibited items, by a 100% EOU and as per para 6.6(a) 6.6(b) of the policy, LOP issued to an EOU by the Development Commissioner would be construed as a license for all purposes including procurement of raw materials, and consumables. Copper cable scrap of Druid code is not a prohibited item. Therefore the Appellant company - NI, as a 100% EOU, could import this scrap without registration with MOEF. It is only w.e.f. September, 2004 that the policy was amended to make registration with MOEF compulsory for import of Copper Cable scrap - Druid for all the importers, including EOUs. But this amendment cannot be applied retrospectively. All the imports in this case took place during 2001 - August, 2004 period. (3) There is no ground for finding in para 4.22 of the impugned order that NI have not achieved the required value addition and export performance and that they have failed to fulfill the conditions laid down in the Notification No. 53/97-Cus. and 52/03-Cus. (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification is violated the exemption has to be denied. (3) As discussed in para 9 of the adjudication order, there is concrete evidence on record showing that NI have grossly misdeclared the description and value of the goods. Therefore the goods are liable for confiscation under Section 111(d) and (m) of the Customs Act and M/s. NI, their partners and other noticees would be liable for penalty under Section 112 or 114A of the Customs Act. (4) The EOU was importing high copper content scrap covered by ISRI code Berry by misdeclaring the same as mixed metal scrap and the copper recovery was being declared as 20% while actual copper recovery was more than 60% and the balance quantity of copper recovered was being clandestinely cleared to DTA without payment of duty. Shri Vinay Jain in his statement dated 9-11-04 has clearly admitted that unaccounted copper scrap was sold to buyers in DTA without payment of duty and he also gave the names and telephone number of the buyers. The buyers on inquiry with them have admitted purchase of copper scrap received pre-copper cable scrap/copper lead cable scrap from NI. (5) Shri Vinay Jain in his statement dated 9-11-04 has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Al Badawai General Trading, Dubai; M/s. Jacob Metals Ltd., London ; M/s. Stena Metal Int., Sweden; M/s. Kawamin Pacific Pvt. Ltd., Singapore and M/s. Hawali Metal Trading Co., Sarjah, mentioning the declared price and the price paid through illegal channels to the suppliers and also the copper content which ranged from 75 to 82% in case of cable scrap imported from M/s. Al Badawai General Trading, Dubai; Jacob Metals Ltd., London and M/s. Hawali Metal Trading Co. and 35% in respect of cable scrap imported from M/s Stena Metal Inc., Sweden. (2) Reports of overseas inquiries conducted by the DRI in respect of scrap imports by NI - reports in respect of imports from M/s. Stena Metals, Sweden ; M/s. PWT Australasia, Australia ; M/s. Technogerma Gmbh, Germany ; M/s. HJ Hansen, Denmark ; M/s. SMS Trading Corporation and M/s. Gold Arrow Metal Ltd. - which showed that the actual price paid for the consignments of scrap was much higher than that declared in the bills of entry and the balance amount was remitted to suppliers through illegal channels. In some cases a particular import was split up into two invoices and NI produced only one invoice before the Customs authorities in Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p worth about Rs. 1.52 crores in cash during period from January, 2004 to June, 2004 from Shri Vinay Jain and Shri Hetram Sharma confirmed buying copper scrap worth Rs. 15,81,170/- from Shri Vinay Jain. (7) (a) Names and addresses of the persons claimed by NI to be the buyers of low value scrap like paper scrap, rubber scrap, PVC scrap and other low value scrap (which is claimed to be about 80%) being fictitious. (b) Statement dated 2-11-04 of Shri Mukesh Sharma of Kisan Truck Union, Statement dated 2-12-04 of Shri Ram Ratan, Member Kisan Truck Transport Service and Statement dated 2-12-04 of Shri Dharam Vir Singh, President of Tempo Union, Noida wherein they have stated that they have neither issued any lorry receipts to NI nor have provided any truck or any other vehicle for NI for transport of paper scrap, plastic scrap, rubber scrap or iron scrap. 4. While the adequacy of the above evidence for proving the allegations against the Appellants can be considered only at the time of regular hearing, at this stage, in view of the evidence mentioned in para 3.1 above we are of the view that the Revenue has a strong prima facie case against NI of - (a) under i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titlement, as determined by the Development Commissioner, should have exported the entire production of copper scrap. However, as discussed above, from the evidence on record, it prima facie appears that substantial quantity of copper scrap recovered from imported copper cable scrap and copper lead cable scrap has been cleared clandestinely to DTA without payment of duty and without permission of the Development Commissioner. Therefore, the imported copper cable scrap and copper lead cable scrap, the copper scrap recovered from which was illicitly sold to buyers in DTA, would not be eligible for customs duty exemption under Notification No. 53/97-Cus. and 52/03-Cus. Besides this, there is a prima facie case of misdeclaration of value, description and grade of the imported copper cable scrap/copper lead cable scrap. 5. In view of the above discussion, notwithstanding the Appellant s plea of financial hardship, this is not a case for unconditional waiver. The Central Excise duty demand on 5005.452 MTs of copper scrap alleged to have been illicitly cleared to DTA is Rs. 25,95,208,555/- and the customs duty chargeable on the imported cable scrap, in respect of which the benefit of No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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