TMI Blog2010 (12) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... of customs from the appellant in respect of the goods imported by them and cleared on payment of duty at concessional rate in terms of the relevant Customs Notifications are without jurisdiction. The notices should have been issued under Section 28(1) of the Customs Act by the proper officer of Customs, show-cause notices were issued without jurisdiction, appeals stand allowed - C/13-14 & 158/2004 and C/22/2005 - 205-208/2011 - Dated:- 1-12-2010 - S/Shri P.G. Chacko, B.S.V. Murthy, JJ. REPRESENTED BY : Shri Rajesh C. Kumar, Advocate, for the Appellant. Ms. Sudha Koka, SDR, for the Respondent. [Order per : P.G. Chacko, Member (J)]. The appellant is engaged in the manufacture of excisable goods of Chapter 85 of the Schedule to the Central Excise Tariff Act, 1985. After obtaining the requisite registration from the department under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 [hereinafter referred to as the 1996 Rules or the said Rules ] for import of specified goods at concessional rate of duty for manufacture of electronic connectors and harnesses, they imported various specified goods (inputs) duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported goods) and column No. 4 (description of the finished goods) against the entries (serial numbers) 33, 79 and 112 in column No. 1, respectively, of Notifications 64/95, 13/97 and 25/99 read identically as follows :- 2 3 4 85 Parts of Relays, Switches, Connectors Relays, Switches, Connectors Apart from this, in the first Notification, one of the Chapters of CTA Schedule mentioned in column No. 2 was 85 ; the goods specified in column No. 3 included housings ; and the finished products specified in column No. 4 included connectors - all against serial No. 26 mentioned in column No. 1 under LIST-B. A similar dispensation was there at serial No. 50 of the second Notification and also at serial No. 72 of the third Notification. Parts of connectors were not mentioned anywhere in column No. 4. 4. From the results of investigations, it appeared to the department that the appellant had misused the Notifications by availing the benefit of concessional rate of duty in respect of the imported goods and using these goods in the manufacture of parts of connectors (which were not specified as finished goods in the Notifications) whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry Notes. The appellant also sought to interpret the expression for use so as to mean that the goods claiming concessional rate of duty under the Notifications were those which were intended to be used in the ultimate manufacture of connectors. According to the appellant, the view taken in the SCNs did not meet the object of the Notifications. They also denied the allegation of suppression of facts and submitted that, from the declarations filed by them and the invoices issued by them showing housings and terminals as parts of connectors , the relevant facts were known to the department. Therefore the extended period of limitation was not invocable for recovery of duty from them. Furthermore, it was submitted that a large number of the finished goods had actually been exported and drawback of duty ought to have been allowed in respect of the same and adjusted while quantifying the demand of duty. 7. After hearing the party and considering their submissions, the original authority confirmed the demand of Customs duty against them in adjudication of each SCN and ordered for its recovery under Rule 8 of the 1996 Rules by enforcing the bonds executed by them. The appeals filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and were specified in column No. 3 of each of the three Notifications and the same were cleared at concessional rate of duty for use in the manufacture of connectors (specified in column No. 4) which were to be removed as finished goods from the appellant s factory. Again, it is not in dispute that the imported goods were actually used in the manufacture of housings, terminals etc. which were removed as finished goods from the factory. The evidence on record would support the Revenue s claim that these finished goods were removed as parts of connectors classified under CTH 85.38 and not as connectors classifiable under CTH 85.36. While parts of connectors figured as imported goods in column No. 3, connectors were specified as finished goods in column No. 4 of each Notification. There was no mention generically of parts of connectors or specifically of housings , terminals etc. in column No. 4. Therefore it cannot be gainsaid that the goods imported by the appellant were used in the manufacture of only parts of connectors which were not specified as finished goods in column No. 4 of the Notifications. Concessional rate of duty cannot be claimed where the imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, determines the amount of duty due from the person concerned. This sub-section also requires such person to pay the amount determined by the proper officer. Thus Section 28 of the Customs Act is the only provision for collection, from a person through a process of adjudication, any amount of customs duty which has not been levied or has been short-levied or erroneously refunded. Therefore, for recovery of customs duty from a person without doing violence to Article 265 of the Constitution, the proper officer of Customs has to issue a show-cause notice to that person under sub-section (1) of Section 28 of the Customs Act within the period of limitation prescribed thereunder and, after considering his representation if any, the duty recoverable has to be determined under sub-section (2) of the said Section. The same is the statutory mechanism for collection of interest on customs duty as well. 13. Parliament has not enacted any special provision for collection of duty from any person by way of enforcement of bond executed by that person. A bond executed by an importer at the time of clearance of the imported goods, as a condition for total or partial exemption from payment of cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exported or which are exported and are afterwards re-landed; (g) the publication, subject to such conditions as may be specified therein, of names and other particulars of persons who have been found guilty of contravention of any of the provisions of this Act or the Rules. Before us, it was nobody s claim that the said Rules were made for any of the specific purposes mentioned under sub-section (2) of Section 156 ibid. The submission of the learned SDR was that the Rules were made under sub-section (1) and this submission was not contested by the learned advocate. We also agree. The said Rules were made under sub-section (1) of Section 156. But, as held by the Tribunal in the case of N.B. Footwear (supra), any rules made by the Central Government under Section 156 for carrying out the provisions of the Act should be consistent with the Act itself. If any rule is inconsistent with any provision of the Act, it is redundant and ineffective to the extent of such inconsistency. Therefore, if the SDR s contention that Rule 8 of the 1996 Rules provided a self-contained mechanism for recovery of customs duty is accepted, the same will be tantamount to accepting a situation w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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