TMI Blog2015 (7) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... erence of opinion - Majority order - Held that:- if any one of the element is present in the proportion specified that would satisfy the requirement of Chapter Note 1(f) even if the other elements are not present in the proportion specified - The expression used in Chapter Note 1(f) is “one or more of the following elements”. This would imply that, if one of the element is present in the proportion specified, it would constitute ‘other alloy steel’. If more than one element is present it is not necessary that each of the elements should be present in the proportion. Duty demand is confirmed along with penalty. However, as the goods are not physically available and not cleared on any bond or bank guarantee, therefore, Redemption Fine is not imposable. - Decided partly in favour of appellant. - C/1222 & 1280/2009-Mum - Final Order Nos. A/1648-1649/2014-WZB/C-I(CSTB - Dated:- 26-9-2014 - Shri Ashok Jindal, Member (J) and S.K. Gaule, Member (T) Third Member on Reference : Shri P.R. Chandrasekharan, Member (T) Majority Order : S/Shri P.S. Pruthi, Member (T) and Ashok Jindal, Member (J) Shri V. Sridharan, Sr. Advocate with T. Vishwanathan, Advocate, for the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Notification was claimed wrongly. Accordingly, goods totally valued at ₹ 13,10,71,798/- were seized. The goods covered under 11 Bills of Entry were provisionally released. 2.2 Further, the Statement of Shri V.G. Chary, Senior Manager, Materials of the appellants was recorded under Section 108 of Customs Act, 1962 wherein he has admitted that CR coils of the above Bills of Entry should have been classified as alloy CR coils and Customs duty should have been paid at the rate of 5%. The statement of R.R. Suvarna, Asstt. General Manager Materials of the appellants was recorded under Section 108 of the Customs Act, wherein he confirmed the statement of Shri V.G. Chary. Statement of Shri A.M. Khopkar, Asstt. General Manager, Materials of the appellants was recorded under Section 108 of Customs Act, 1962 wherein he stated that he ordered for non-alloy steel coils as per S.S. 4011. However, he missed out to check Mill test certificate where percentage of certain elements e.g. Manganese, Titanium, etc. were on higher side. He also admitted that Mr. V.G. Chary was aware about this and accordingly instructed CHA for re-assessment. The Statements of partner of CHA Shri Rajkamal Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibid. (f) I order for appropriation duty deposit of ₹ 3,01,83,689/- (Rupees Three crore one lakh eighty three thousand six hundred eighty nine only) deposited with Customs for CR Coils as per Annexure B of the show cause notice towards the payment of differential duty along with applicable interest under Section 28AB ibid. (g) I impose a penalty of ₹ 3,82,16,162/- (Rupees Three Crore Eighty Two Lakh Sixteen Thousand One Hundred and Sixty Two Only) on M/s. Tata Motors Ltd. under Section 114A of Customs Act, 1962. If the duty and interest as demanded above is paid within 30 days of communication of this order the amount of penalty imposed would be 25% of ₹ 3,82,16,162/- as per first proviso to Section 114A ibid. (h) I impose a penalty of ₹ 5,00,000/- (Rupees Five Lakh Only) on M/s. Mangalam (India) under Section 112(a) of the Customs Act, 1962. 2.4 Aggrieved, the appellants filed these appeals. 3.1.1 The contention of the ld. Counsel of the appellants is that the imported CR/HR are not other alloy steels as defined in Chapter Note 1(f) of Chapter 72. Note 1(f) is satisfied only if all the elements present in the imported coil sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 72.25 was same, the appellants classified the goods under Heading 72.08 or 72.09 as the case may be. See for e.g. Bills of Entry dated 2-2-2008 and 11-3-2008 (available at pages 4 to 11 Vol. III). See also the bills of entry filed in Jan. 2008, enclosed as Annexure-1 to this synopsis. A perusal of the MTC pertaining to the said bills of entries shows the percentage of Titanium as 0.5% or .06%. Thus the Titanium percentage in the consignment is either equal to or more than the prescribed percentage of .05% as per Chapter Note 1(f). Irrespective of this, the CR COIL imported was still classified under the Heading 72.09 as Non-Alloy Steel and cleared. This affirms that the interpretation of the Chapter Note 1(f) adopted by the department as well as the appellants at that time itself was that all the elements (and not just one element) contained in the steel should satisfy, i.e. should be equal to or more than the percentage prescribed in the chapter note. 3.1.5 In other words, it is on this basis that Coils of the very grade, imported by the Appellants were classified under Heading 72.09, as Non-Alloy steel, even prior to April 2008 and assessed to duty. Therefore, the present c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er - Irrespective of the duty structure, the appellants have always been classifying the CR Coil under the Heading 72.09 as Non-Alloy Steel. It is not that the appellants only classified the CR Coil imported as non-alloy steel under the Heading 72.09 to avail the benefit of the Notification No. 21/2002-Cus., (Sl. No. 190C) during the period in question. 3.2.1 The contention of the CHA is that they have made the declaration on the basis of the documents submitted by the importer. In these circumstances, they cannot be held accountable and cannot be accused of a mis-statement. They placed reliance on the decision of the Tribunal in the case of Escorts Ltd. v. CC, New Delhi reported in 2000 (122) E.L.T. 576. They also placed reliance on the decision of the Tribunal in the case of Transocean Discoverer 534 LLC v. CC, Visakhapatnam-II reported in 2009 (236) E.L.T. 56 (Tri.) and on the decision of the Tribunal in the case of P.D. Manjrekar v. CC, Mumbai reported in 2007 (213) E.L.T. 405. The contention is that they had no knowledge of mis-declaration by the appellants. 4. So far as the contention of the appellants that the both manganese and titanium should exceed the prescribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the appellants. Had the appellants declared the description of goods as alloy steel coils, it would not have escaped correct classification and rate of duty as well as correct entry under notification. In support of this contention, he placed reliance on the decision of the Tribunal in the case of Nirav International v. CC, Madras reported in 1995 (80) E.L.T. 173 (Tri.). The contention is that Shri V.G. Chari, Senior Manager (Materials), Shri R.R. Suvarna, Shri A.M. Khopkar, Asstt. General Managers (Materials) of the appellants, Shri Raj Kamal Maroo, Partner of CHA and Shri D. Gopimath Gohre, Docks clerk of CHA in their statements recorded under Section 108 have admitted and confirmed that by looking into the Mill Test Certificates they could identify that the percentage of alloying elements are higher and that the goods should have been classified as alloy CR Coils. The alleged mis-declaration and suppression on the part of the appellants and CHA resulted in a duty evasion to the tune of ₹ 3.82 crores. So far as the contention of the appellants that claiming of exemption notification or a particular heading for classification does not amount to mis-declaration, the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel not complying with the definition of Stainless Steel and containing by weight one or more of the following elements in the proportion shown - 0.3% or more of Aluminum - 0.0008% or more of Boron - 0.3% or more of Chromium - 0.3% or more of Cobalt - 0.4% or more of Copper - 0.4% or more of Lead - 1.65% or more of Manganese - 0.08% or more of Molybdenum - 0.3% or more of Nickel - 0.06% or more of Niobium - 0.06% or more of Silicon - 0.05% or more of Titanium - 0.3% or more of Tungsten - 0.1% or more of Vanadium - 0.05% or more of Zirconium - 0.01% or more of other elements (except Sulphur, Phosphorus, Carbon and Nitrogen), taken separately. 5.1.2 In order to fall under the category of alloy steel one or more elements is needed in the proportion prescribed vide Chapter Note 1(f) of Chapter 72, in addition to steel which is not complying with definition of steel. Admittedly, one of the elements in the impugned goods is steel and it is not complying with definition of stainless steel also. Further, as recorded in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged the duty liability. The Tribunal in the case of Transocean Discoverer 534 LLC (supra) held that where the Bill of Entry/Declarations filed were as given to CHA by their clients and the main companies/importers owned up to their mistake and discharged duty liability with interest, the CHA cannot be considered instrumental in any mis-declaration. Thus we find that the penalty on CHA is not sustainable in law. Therefore, the same is set aside and CHA s appeal is allowed. 5.3 In these circumstances, the redemption fine of ₹ 2,46,00,000/- and penalty of ₹ 5 lakhs on the CHA are set aside and ld. Commissioner s impugned order is modified to that extent. The appeals are disposed of, in the above terms. (Pronounced in Court on ) Sd/- S.K. Gaule Member (Technical) 6 . [Order per : Ashok Jindal, Member (J)]. - I do agree with the conclusion drawn by the ld. Member (Technical) Shri S.K. Gaule that the impugned goods would rightly fall under the category of other alloy steel and not eligible for the benefit of Notification. Before arriving at the conclusion, I want to mention that during the course of arguments, the ld. advocate for the appellants, has t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing order is passed. 8. Redemption fine of ₹ 2,46,00,000/- on the importer and penalty of ₹ 5,00,000/- on the CHA are set aside. The impugned order is modified to that extent. Appeals are disposed of in the above terms. (Order pronounced on .. ) Sd/- (Ashok Jindal) Member (Judicial) DIFFERENCE OF OPINION 9. The following difference of opinion is placed before the Hon ble President, CESTAT in terms of Section 129B(5) of the Customs Act, 1962 :- 1. Whether to qualify as other alloy steel minimum one element in the proportion prescribed in Chapter Note 1(f) of Chapter 72, (in addition to steel), is essential as held by Member (Technical) in para 5.1.2 of the order. or 2. Whether to qualify as other alloy steel not only one element is essential in proportion prescribed but if there are more than one element (in addition to steel) all should be in proportion prescribed in Chapter Note 1(f) of Chapter 72, are essential, as held by the Member (Judicial). (Order pronounced on 17-6-2013) Sd/- S.K. Gaule Member (Technical) Sd/- Ashok Jindal Member (Judicial) THIRD MEMBER ORDER ON DIFFERENCE OF OPINION ..... X X X X Extracts X X X X X X X X Extracts X X X X
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