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TMI Blog2021 (10) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... such without undergoing any manufacturing process. 2. The dispute arises from imports of 503.530 MTs of 'aluminium ingots' against bill of entry no. 906942/04.07.2005 and 906943/ 04.07.2005 which the attached invoices described as comprising of not less than 99.7% of aluminium. The said imports effected under 'advance authorization scheme' of the Foreign Trade Policy were entitled to exemption under notification no. 93/2004-Cus dated 10th September 2004 subject to several conditions enumerated therein that were also reflected in the licence issued by Director General of Foreign Trade as well as in the contours of this scheme enunciated as paragraph 4.1 of the Foreign Trade Policy 2004-09 issued in pursuance of the powers conferred under Foreign Trade (Development and Regulation) Act, 1992. 3. The substance of the case is that the appellant had, against purchase order no. 131/04.07.2005 of M/s Diamond Exports Ltd for 200 MTs of 'aluminium alloy ingots', with magnesium and silicon content of not more than 1%, undertaken the said clearances and the test certificates against each invoice indicated aluminium content between 99.732 and 99.838 which, according to the tax authorities, di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that they have not violated any condition of the Notification is not correct. Moreover, at the time of import, they had also executed a bond and a bank guarantee. What is the purpose of the bond? The appellant binds himself for proper fulfilment of the conditions of the Notification. Once the conditions of Notification are not fulfilled, the appellant is liable to pay duty on merit rate. In this case, since the amounts have been adjusted by invoking the bank guarantee, in view of the non-fulfillment of the conditions of the said notification, no illegality has been committed by Revenue. Once the dues have been realized, there is no question of further fulfilling the conditions of the Notification. In view of the case-laws decided by this Bench, the redemption fine and penalty are not sustainable because by invoking the bank guarantee, the duty has already been recovered. Whatever the differential amount has not been recovered, the appellant is liable to pay and we confirm the same. Therefore, we cannot set aside the demand of duty as it is implicit that the appellants are liable to fulfil the conditions of Notification and to the extent that they had imported silk which has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) Since Additional Excise Duty will be paid after such adjustments rendering the 'Unprocessed Nylon Tyrecord Fabrics' duly paid. Thereafter the Processed Dipped Nylon Tyrecord fabrics would stand to be exempt. Therefore no duty demands could be made on the appellants. (d) Since no duty demands could be made on the appellants, there is no question of visiting them with a penalty under the provisions of the Central Excise Rules. In view of the findings the duty demands and penalties are required to be set aside and this appeal allowed.' 6. Relying on the decision of the Tribunal in Titan Industries Ltd v. Commissioner of Central Excise, Chennai [2007 (217) ELT 423 (Tri.-Chennai)] which held that '2. After giving careful consideration to the submissions, we note that there is no serious contest in this appeal against the Commissioner's finding that the goods in question are chargeable to duty of excise on account of the fact that the post-import activity undertaken by the assessee on the goods amounted to 'manufacture'. This finding of learned Commissioner is based on Section 2(f)(iii) of the Central Excise Act and the same is beyond question. However, learned Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alties on the appellant-company and its Managing Director inasmuch as all the actions of the Managing Director were taken in his capacity as Managing Director and once the company had been penalised there was no justification for two penalties, both on the company and the Managing Director. It is also contended that there was no justification for confiscation of the goods inasmuch as the goods were rightly allowed duty-free clearance under a valid notification. Also the goods were not available for confiscation. The further contention of the ld. Counsel is that there was no legal basis for demand of interest on the duty amount inasmuch as the provision relating to interest was incorporated subsequent to the import of the goods.' 8. Learned Authorised Representative asserts that, notwithstanding the several submissions on manufactured goods having been cleared, the utilization of the goods imported against the said exemption notification for purposes other than manufacture of export goods is not tenable in view of condition no. (vii) in notification no. 93/2004-Cus dated 10th September 2004. It is also submitted that the claims of manufacture having been effected is also not tenabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... breach for which the duty liability is the logical corollary as found in the adjudication order. 10. The appellant has claimed entitlement to adjust the duty discharged on clearance of the goods against the duty liability arising from the impugned order; no doubt, the proposition sounds attractive and equitable but, nonetheless duty liability had been discharged under Central Excise Act, 1944 whereas the duty confirmed in the impugned order, including additional duties, are leviable under Customs Act, 1962 and Customs Tariff Act, 1975. In accordance with the provisions of Central Excise Act, 1944, any adjustment of duties paid thereunder is allowable only upon sanction of refund of the same It is not on record that such refund has been sanctioned. There is, therefore, no reason for us to heed this particular submission. 11. In so far as the confiscation of the goods which, admittedly, stand converted into the final product of M/s Diamond Exports Ltd is concerned, it has been settled by the decision of the Hon'ble High Court of Bombay in Commissioner of Customs (Import), Mumbai v. Finesse Creation Inc [2009 (248) ELT 122 (Bom.)] holding that '5. In our opinion, the concept of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be detracted from. Consequently, the penal liability under section 114A of Customs Act, 1962 is sustained. 13. Turning to the penalty on the Director of the company, Mr Hitesh Shah, we note that the finding of '4.5 The goods are diverted by the unit violating the conditions of the license and notification. I find that the allegation in the Show Cause Notice are supported by the evidences like test report indicating the invoice number, the invoices issued to M/s. Diamond Cables, statements of the responsible persons from both the parties etc. I find that the unit has deliberately misdeclared the goods as aluminium alloy ingots in order to hide their original identity as imported aluminum ingots under Advance Authorization. Thus the goods are liable for confiscation under section 111(o) of the Custom Act and unit is liable for the penal action under section 114A of the Act. Shri Hitesh Shah, Director of the company was aware of the diversion of the goods and responsible for evasion of the duties as alleged in the Show Cause Notice hence I find that he is liable for the penalty under section 112(a) of the Act. The party has executed a bond for the relevant license and thus I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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