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M/s Shailja Polyester P Ltd and Others Versus Commissioner of Central Excise, Customs (Adjudication) -SURAT-II

2015 (10) TMI 495 - CESTAT AHMEDABAD

Improper importation of goods – Purchase of POY without payment – Demand of Duty – Goods of Assesse were seized by Customs Officer and after thorough investigation, it was found that assesse was indulged in purchase of POY without payment of customs duty, without cover of proper document – Show cause notice was issued proposing to confiscate seized goods and to demand customs duty – Held that:- Assesse had not placed any documents that they received goods from brokers except statements –So confi .....

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and circumstances, Director and partner of Assesse-company and M/s Shabnam required to be waived – Demand of duty upheld except demand of Anti Dumping Duty – Confiscation of goods upheld and redemption fine reduced – Decided against Assesses. - Appeal No. : C/40-44,102-104,131/2007 - ORDER No. A/10747-10755/2015 - Dated:- 11-5-2015 - Mr. P.K. Das and Mr. H.K. Thakur, JJ. For The Assessee : Shri Dhaval Shah, Advocate. Shri Mukund Chouhan, Chartered Accountant For The Revenue : Shri J Nair, Author .....

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ound that M/s Shailja received 51,852 kgs of imported Polyester Yarn (POY) through the brokers and 7200 kgs of imported POY from Shabnam Synthetics (in short M/s Shabnam) a 100% EOU, without the cover of any documents and without payment of any duty. The goods were seized by the Customs Officer on 7.6.2002. After thorough investigation, it was found that M/s Shailja indulged in purchase of POY without payment of customs duty, without cover of proper document ie., invoice, Challans, bills etc. Th .....

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OY under Section 111(d) and 111(o) of Customs Act 1962 and as the goods were released provisionally on execution of Bond and Bank Guarantee, imposed redemption fine of ₹ 11,00,000/-. It has also confirmed demand of duty of ₹ 20,88,231/- on 51,582 kgs of POY on M/s Shailja and ₹ 3,07,263/- on 7,200 kgs of POY on M/s Shabnam and as the duty amount already deposited at the time of provisional release by the Shailja which was appropriated against the demand. It has also confirmed t .....

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25,000/- on Shri Alinawaz Y Wagbhakriwala, Authorised Signatory of M/s Shabanam Synthetics e) ₹ 2,00,000/- on Shri Rajkumar S Dayama, Yarn Broker f) ₹ 25,000/- on Shri Abhishek Anil Agarwal, Yarn Broker g) ₹ 2,00,000/- Shri Prashant D Somaiya, Yarn Broker 4. Shri Mukund Chouhan, the Learned Counsel, appearing on behalf of Shailja and its Director, employee and the brokers except Shri Prasant D Somaiya, submits that the imported goods are notified under Section 123 of the Custo .....

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aid by them is to be refunded to M/s Shailja. He particularly submits that the duty was not properly quantified, as the Anti Dumping Duty cannot be sustained in view of the order of the Tribunal in the case of Tonira Pharma Ltd Vs CCE, Surat - 2007(208)ELT.38 (Tri. Mumbai) held that Anti Dumping Duty would not form part of assessable value of goods for the purpose of levy of CVD and SAD. He also submits that POY is not prohibited item and confiscation of POY to the quantity of 51,852 kgs under s .....

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re not sustainable. He relied upon the decision of the Hon ble Gujarat High Court in the case of CCE vs. Amin Chandrakant Bhailalbhai - 2010.258.ELT.36 (Guj.) It has also submitted that the brokers and sub brokers in their statements categorically stated that they have no knowledge of the movements of goods. It is stated that they have just introduced the buyers and sellers. He submits that the Hon ble Gujarat High Court in the case of Commissioner, CCE vs Hanif Hingora - 2010(258)ELT.35 (Guj.) .....

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that the penalty was imposed under Section 112 without specifying the provisions of the sub clause and therefore penalty cannot be sustained as held by the Hon ble Supreme Court in the case of Amrit Foods Vs CC, UP - 2005.190.ELT.433 (SC) as followed by the Honble Madras High Court, in the case of CC, Madurai Vs Fenner (I) Ltd - 2014(313)ELT.3 (MAD). He further submits that the demand is solely based on the statement of the director without corroborating any evidences, cannot be sustained, as h .....

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bunal in the case of Associated Plastics and Rayons Vs CCE Vapi - 2007(215)ELT.309 (Tri. Ahmd). Both the counsels submit that interest cannot be demanded under the Customs Act. 7. On the other hand, the Learned Authorised Representative for the Revenue reiterates the findings of the Commissioner. He particularly drew the attention of the Bench to the relevant portion of the Adjudication order. It is submitted that the Customs officers during the search found shortage of 7200 kgs of imported POY .....

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he records, we find that POY is a notified item under section 123 of the Act 1962 and the burden lies with the appellants. M/s Shailja are not disputing the demand of duty to the quantity of 51582 kgs except 15840 kgs. The Learned Counsel drew the attention of the Bench to the Adjudication order that Shri Tohid Haji Gaffar broker, Surat, had arranged supply of 15840 kgs of POY on 5.6.2002 and 6.6.2002 to M/s Shailja without cover of challan, invoice, Bill of Entry etc., without any payment of du .....

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d from M/s Shabnam, the main contention of the Learned Advocate Shri Dhaval Shah is that it was demanded on the basis of statements. We find from the Adjudication order that the Customs officers during search at the factory premises of M/s Shabnam, found shortage of 7200 kgs of POY imported under Bill of Entry No 7453410 dtd 22.5.2002. Shri Alinawaz Y Wagbakriwala, Authorised Signatory of M/s Shabnam stated that they have cleared the said short quantity of imported POY to M/s Shailja without pay .....

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nd M/s Sabanam, the Learned Advocate submitted that the specific provision of 112 of the Act was not mentioned in the show cause notice. We find that in this case, facts of the case had been narrated in detail for invoking the penal provision, which was not disputed by the appellants and the case laws cannot be applicable in this case. The submissions of the appellant that the quantum of penalty is excessive and harsh required to be considered. 11. The Learned Advocate on behalf of M/s Shailja s .....

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the employees, Director and partners. So, the penalties imposed on the other two appellants are not justified. 12. We find force in the submissions of the Learned Counsel Shri Mukund Chouhan that the quantification of the demand of duty in respect of Anti Dumping Duty would liable to be examined in the light of the decision of the Tribunal in the case of Tonira Pharma Ltd (supra). It has been held that Anti Dumping Duty would not form part of assessable value of goods for the purpose of CVD and .....

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