TMI Blog2023 (2) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... t SION A1833 was applicable to the goods in question. Therefore, the quantity of grits and saw blades which the appellant could have used for manufacture of granite slabs for exports has to be, as per the SION prescribed for the purpose. If it exceeds these norms to the extent they are consumed in excess, they contravene the condition of the Notification. The appellant had executed a bond before the Assistant Commissioner at the time of import, undertaking to pay the duty along with interest if all the conditions are not fulfilled. The steel grits and gang of blades in dispute are consumables in this case and are neither capital goods nor inputs. The appellant claimed the benefit of the exemption Notification No. 52/2003 which must be strictly interpreted because it is available subject to some conditions which will be applicable to all those who claim its benefit. The appellant cannot claim any special waiver from these conditions. One of the conditions is that the appellant gives a bond or legal undertaking to pay the duty along with interest, if any, condition is violated. It needs to be pointed out that in exemption Notifications there may be conditions which must be fulf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 12.10.2009. The penalties imposed under section 112(a) are set aside - The confirmation of duty and interest in the impugned order is upheld and the matter is remanded to the original authority for the limited purpose as calculation of the duty in terms of DGFT Circular read with SION norms - appeal disposed off. - MR. DILIP GUPTA, PRESIDENT AND MR. P V SUBBA RAO, MEMBER (TECHNICAL) Shri Biju Mattam and Shri Shalaj Mridul, Advocate for the Appellant Ms. Jaya Kumari, Authorized Representative for the Department ORDER M/s Pelican Grani Marmo Pvt Ltd. [the Appellant] filed these two appeals to assail the order-in-appeal dated 31.12.2018 passed by the Commissioner (Appeals), Central Excise and Central Goods and Service Tax, Jaipur, whereby he partly allowed two appeals filed the appellant by setting aside the penalty imposed on it under Section 117 of the Customs Act, 1962 [the Act] and reducing the penalties imposed under section 112(a) and rejected the remaining part of the appeal. 2. The undisputed facts of the case are that the appellant is a 100 % Export Oriented Unit [EOU] and holds customs bonded warehouse licence and manufactures and exports g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, Office of The Commissioner, Central Excise Commissionerate, Jodhpur 19/CE/JDR/2015 Additional Commissioner dated 21.08.2015 Rs. 14,68,821/- interest, Penalty Rs. 1468821/-U/S 112 (a) of the Customs Act, 1962 and Rs. 50,000/- U/s 117 FY 2007-08 to 2011-12 2 JD/99/X/15 Additional Commissioner, Office of the Commissioner, Central Excise Commissionerate Jodhpur 20/CE/JDR/2015 Additional Commissioner Dated 21.08.2015 Rs. 713993/-+interest, Penalty Rs. 713993/- U/S 112(a) of the Customs Act, 1962 and Rs. 25,000/-U/s 117 of the Customs Act, 1962 FY 2013-14 4. The original authority confirmed the demand of duty under proviso to section 28 (1) read with B17 Bond and legal undertaking given by the appellant along with interest under section 28 AB. He also imposed penalty equal to the amount of duty under section 112(a) and further imposed a penalty under section 117. Aggrieved, the appellant appealed to the Commissioner (Appeals) who, by the impugned order, set aside the penalty under section 117 and reduced the penalty under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantity Allowed A1833 Unpolished/polished granite slabs 1MT 1. Steel Grits or shorts/Gang saw blades Upto 5% of the FOB value of export (f) A1833 is arbitrary and void and is under challenge by them before the High Court. The demand is barred by limitation. (g) There is an error in calculation of the amount of duty. 8. The appellant prayed that the appeals may be allowed and the impugned order may be set aside. 9. Miscellaneous applications were filed subsequently seeking to place additional grounds. The Customs Miscellaneous application nos. 50050 of 2022 and 50051 of 2022 were allowed vide order dated 18.07.2022 These additional grounds are as follows: (i) Penalty under section 112(a) is not imposable because the goods have neither been confiscated and nor have been held liable to confiscation under section 111; (ii) The amending Notification No. 34/2015-CUS dated 25.05.2015 to the Notification read with Circular No. 12/2008 would imply that the condition does not exist in the Notification itself. SION must be calculated over the period of three years while reckoning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reas the consumables do not get transformed under the final product but get consumed in the process of manufacture. Water, electricity, Welding electrodes, Blades etc., are all consumables as, these are used in the process of manufacture but do not form part of the final products. DGFT prescribed SION for consumables also and specifically, serial no. A 1833 deals with the specific export products of the appellant, namely, granite slabs and specific consumables in dispute, namely, steel grits/ gang saw blades. If that is so, the appellant cannot contend that insofar as it is concerned, steel grits and gang saw blades should be considered as capital goods or spare parts of capital goods. There is nothing on record to show that they are either spare parts or they were capital goods. Capital goods get used again and again over a long period of time and spares are some parts which require replacement in the capital goods. The gang saw blades and steel grits are neither capital goods nor are they spare parts. These are used with the capital goods in the process of manufacture. However, they do not enter the final product but do get consumed in the process of manufacture either in one or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have not held that the imported goods were liable for confiscation. Section 112(a) reads as follows: Section 112(a) 112 Penalty for improper importation of goods, etc. -Any person,- (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, 19. In other words, the confiscation or liability of confiscation of the goods under section 111 is a necessary pre-condition for imposition of penalty under section 112 (a). Since there was no order of confiscation of the goods in the order, no penalty could have been imposed under section 112. The penalty under section 112 needs to be set aside and we do so. 20. Insofar as the appellant s contention that if it had paid the customs duty it would have been entitled to CENVAT credit to the extent of additional duty of customs is concerned, availability of CENVAT Credit does not take away the taxability. Otherwise, no manufacturer ever has to pay additional duty of customs because he would eligible for CENVAT credit of the amount so paid but such is not the scheme of the law. If appellant is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
