TMI Blog2023 (10) TMI 760X X X X Extracts X X X X X X X X Extracts X X X X ..... the records of the case, it is clear that the appellants have produced the Advance Authorisation at the time of import of goods through the notified sea port Mumbai, and executed the Bond for Rs.47,58,98,750/- along with necessary undertaking before the Customs authorities in respect of Advance License No. 0310746001 dated 20.08.2013. There is no case of sale or transfer of advance authorisation in this case. Thus, it is found that prima facie the appellants have fulfilled the conditions (i), (ii), (iv) and (vi). In respect of the conditions (iii) and (v), since the competent authority as per the Notification No.96/2009-Customs is the DGFT, who would issue an export obligation fulfilment or discharge certificate, redemption, regularization certificate upon scrutiny of exports and other relevant details as in ANF 4F document, these conditions will be able to be met upon production of such certificate from DGFT authorities. The appellants were liable to pay customs duty against 12514.22 MTs of unutilised raw material, calculated on prorata basis after deducting the imported raw material used in the exported quantity, as per Annexure-A worksheet of the show cause notice dated 04.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable for confiscation under Sections 111(o) and 143 ibid and that the appellants are liable to penalty for their omission in respect of non-fulfilment of export obligation and non compliance with the conditions of the above notification - Since the appellants have already paid the amounts of Rs.6,46,63,619/- towards differential customs duty and Rs.4,48,80,062/- towards interest thereon before the issuance of show-cause notice, the order of the learned Commissioner in confirming the adjudged demands and appropriating the same to the account of government exchequer is upheld - the impugned order insofar as it has imposed redemption fine and penalty on the appellants is set aside. Appeal allowed in part. - MR. S.K. MOHANTY, MEMBER (JUDICIAL) AND MR. M.M. PARTHIBAN, MEMBER (TECHNICAL) Shri Vishal Agarwal a/w Shri Kartik Dedhia, Advocates for the Appellant Shri Sydney D Silva, Auth. Representative for the Respondent ORDER This appeal has been filed by M/s Namco Industries Private Limited (herein after, referred to as the appellants ) with address at 527, 5th Floor, Nav Vyapar Bhawan, 49, P. D Mello Road, Carnac Bunder, Masjid (East), Mumbai against Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and they had also obtained the same from DGFT. They claimed that there is no violation of the Customs notification or other provisions of the Customs Act, 1962 by citing the decision in the case of Thiagarajar Mills Ltd. Vs. Commissioner of Customs, Trichy reported in 1999 (111) E.L.T. 288 (Tribunal). 4. Learned Authorized Representative (AR) representing the department had reiterated the findings made in the impugned order and stated that inasmuch as the appellants did not fulfil the conditions of the customs notification in respect of export obligation, the impugned order is legally sustainable. 5. Heard both sides and perused the records of the case as well as the submissions made by both the parties. 6. Brief facts of the case are that the appellants had imported prime non alloy steel slabs falling under customs tariff item 7207 1290 vide seven bills of entries during August September, 2013 against Advance Authorisation No. 0310746001 dated 20.08.2013 issued by DGFT, Mumbai under Notification No.96/2009-Customs dated 11.09.2009. As per the said Advance Authorisation, the appellants are permitted to import non-alloy steel slabs for a CIF value of Rs.115,06,44, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that actually applied by the appellants at 1.25% +12% +0% +3% + 4% towards their earlier payment as per DEEC Cell of jurisdictional Customs Commissionerate. Accordingly, the appellants had submitted the required demand draft for Rs.91,15,479/- on 20.12.2018 to the DEEC Cell of Customs. Further, the appellants had also paid an amount of Rs.1,18,16,872/- on 04.02.2019. Again in response to the DEEC Monitoring cell letter dated 19.07.2019 for payment of short paid interest, the appellants have paid Rs.58,464/ through their letter dated 20.09.2019. On the basis of the various payments made for default in fulfilment of export obligation as detailed below, the DGFT had issued the Export Obligation Discharge/ Redemption Certificate in exercise of the provisions under Para 4.49 of Handbook of Procedures 2004-09 in it s file No.03/87/165/00188/AM-19. Amount of duty/interest paid Challan No. and date Rs.91,15,479/- 81 dated 21.12.2018 Rs.58,464/- 302 dated 23.09.2019 Rs.5,55,48,140/- 23 dated 21.09.2018 Rs.3,30,04,72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereupon respectively. d) Penalty should not be imposed on the Licencee under Section 112(a) of the Customs Act, 1962. The impugned order after consideration of the reply of the appellants and after offering them a personal hearing had decided the case against the appellants passing the following order: In view of the above discussion and findings, I pass the following order: (i) I order to confiscate the goods of having assessable value of Rs.33,99,97,340/- (Rupees Thirty Crore Ninety Seven Thousand Three Hundred and Forty only) under Section 111(o) of the Customs Act, 1962 read with conditions of the Bond executed in terms of Section 143 of the Customs Act, 1962 and Notification No. 96/2009-Cus. dated 11.09.2009 as amended and accordingly impose Redemption Fine of Rs.60,00,000/- (Rs. Sixty lakhs only) against the same on M/s Namco Industries Pvt. Ltd. under Section 125 of the Customs Act, 1962. (ii) I order to confirm demand of duty amounting to Rs.6,46,63,619/- (Rs. Six Crore Forty Six Lakh Sixty Three Thousand Six Hundred and Nineteen only) along with applicable interest in terms of conditions of Bond executed under Section 143 of the Customs Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Government, being satisfied that it is necessary in the public interest so to do, hereby exempts materials imported into India against an Advance Authorisation issued in terms of paragraph 4.1.3 of the Foreign Trade Policy (hereinafter referred to as the said authorisation) from the whole of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from the whole of the additional duty, safeguard duty and anti-dumping duty leviable thereon, respectively, under sections 3, 8B and 9A of the said Customs Tariff Act, subject to the following conditions, namely :- (i) that the said authorisation is produced before the proper officer of customs at the time of clearance for debit; (ii) that the said authorisation bears,- (a) the name and address of the importer and the supporting manufacturer in cases where the authorisation has been issued toa merchant exporter; and (b) the shipping bill number(s) and date(s) and description, quantity and value of exports of the resultant product in cases where import takes place after fulfilment of export obligation; or (c) the description and other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of resultant product) or sub-rule (2) of rule 19 of the Central Excise Rules, 2002 or CENVAT credit under CENVAT Credit Rules, 2004 has not been availed and the importer furnishes proof to this effect to the satisfaction of the Deputy Commissioner of Customs or the Assistant Commissioner of Customs as the case maybe, then the imported materials may be cleared without furnishing a bond specified in condition (v); (vii) that the imports and exports are undertaken through seaports at Bedi (including Rozi-Jamnagar), Chennai, Cochin, Dahej, Dharamtar, Haldia (Haldia Dock complex of Kolkata port) Kakinada, Kandla, Kolkata, Krishnapatnam, Magdalla, Mangalore, Marmagoa, Muldwarka, Mumbai, Mundhra, Nagapattinam, Nhava Sheva, Okha, Paradeep, Pipavav, Porbander, Sikka, Tuticorin, Visakhapatnam and Vadinar or through any of the airports at Ahmedabad, Bangalore, Bhubaneswar, Chennai, Cochin, Coimbatore, Dabolim (Goa), Delhi, Hyderabad, Indore, Jaipur, Kolkata, Lucknow (Amausi), Mumbai, Nagpur, Rajasansi (Amritsar), Srinagar, Trivandrum and Varanasi or through any of the Inland Container Depots at Agra, Ahmedabad, Anaparthy (Andhra Pradesh), Babarpur, Bangalore, Bhadohi, Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs or Assistant Commissioner of Customs, as the case may be, may allow; (x) that the said authorisation shall not be transferred and the said materials shall not be transferred or sold; Provided that the said materials may be transferred to a job worker for processing subject to complying with the conditions specified in the relevant Central Excise notifications permitting transfer of materials for job work; Provided further that, no such transfer for purposes of job work shall be effected to the units located in areas eligible for area based exemptions from the levy of excise duty in terms of notification Nos. 49/03-CE and 50/03-CE both dated 10thJune,2003, 32/99-CE dated 8th July,1999, 33/99-CE dated 8th July,1999, 8/04- CE dated 21st January, 2004, 20/07-CEdated 25th April,2007,56/02-CE dated 14th November, 2002,57/02-CE dated 14th November,2002, 71/03-CE dated 9thSeptember,2003, 56/03-CE dated 25th June,2003 and 39/01-CE dated 31st July,2001; (xi) that in relation to the said authorisation issued to a merchant exporter, any bond required to be executed by the importer in terms of this notification shall be executed jointly by the merchant exporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of resultant product; (vi) Specified Chartered Accountant means a statutory auditor or a Chartered Accountant who certifies the importer s financial records under the Companies Act, 1956 (1 of 1956) or the Sales Tax/ Value Added Tax Act of the State Government or the Income Tax Act, 1961 (43 of 1961). 8.2. From the perusal of Notification No.96/2009-Customs dated 11.09.2009 as above, it is clear that the import of goods specified in the Import Authorisation issued by DGFT in the name of the appellants, are exempt from the whole of the duty of customs, additional duty of customs and safeguard duty or anti-dumping duty, if any, leviable on such imported goods. However, the said exemption was subjected to certain conditions specified therein. These are in brief, as follows: (i) the Advance Authorisation shall be produced before the proper officer of customs at the time of clearance of imported goods for making necessary debit entry in such authorisation; (ii) imports and exports shall be undertaken from the notified customs ports mentioned therein; (iii) export obligation as per Advance Authorisation (both in value and quantity terms) shall be discharged with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity of finished product that is required to be exported in fulfilment of export obligation is 40,000 MTs, whereas the actual quantity exported by the appellants within 18 months period was only 1492.353 MTs. Thus, as per SION norms (61/509 mentioned in condition sheet of AA) i.e., 1.1 : 1 decided by the Ministry of Commerce, the appellants had the export liability of 12869.12 MTs (14156.03 X 100 110) of the finished goods, whereas they had actually exported only 1492.353 MTs i.e., 11.6% of actual export obligation (1492.353 12869.12 X 100). Thus, the appellants were liable to pay customs duty against 12514.22 MTs of unutilised raw material, calculated on prorata basis after deducting the imported raw material used in the exported quantity, as per Annexure-A worksheet of the show cause notice dated 04.03.2021, as these were imported by availing the customs duty exemption notification but failed to fulfil the proportionate export obligation. From the records of the case, it is also seen that the appellants had written a letter on 06.02.2018 to the Additional DGFT, Mumbai, i.e., the licensing authority for extension of the export obligation period due to adverse international busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification. Thus, it is clear that the export obligation discharge certificate shall be issued by the DGFT and the same would be submitted by an importer to the Customs authorities for completion of the Advance Authorisation imports and cancellation of bond and undertaking. 11. We further find that the DGFT authorities i.e., office of the Zonal DGFT, Mumbai had issued Redemption cum Regularisation letter dated 19.02.2020 in respect of the Advance Authorisation No. 0310746001 dated 20.08.2013 in the case of appellants. The gist of the approval given by the DGFT indicates as follows: Export obligation met in full value as well as in quantity term, in proportion to import made. Consequently, the case has been redeemed in terms of para 4.49 of Handbook of Procedures 2004-09 Thus we are of the considered view that the appellants have fulfilled the conditions of export obligation at (iii) and (v), after the expiry of the export obligation period but upon payment of an amount of Rs.6,46,63,619/- towards differential customs duty and Rs.4,48,80,062/- towards interest thereon to the government. These payments made by the appellants have been duly taken into account by the DGFT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of show-cause notice, I am inclined to take a lenient view while imposing the redemption fine and penalty. In view of the above discussions and the conclusion arrived at by the learned Commissioner in para 4.31 of the impugned order, we are unable to find any reason to agree with the findings of learned Commissioner that the imported goods have violated the conditions of Customs Notification No.96/2009-Customs dated 11.09.2009 and thus it is liable for confiscation under Sections 111(o) and 143 ibid and that the appellants are liable to penalty for their omission in respect of non-fulfilment of export obligation and non compliance with the conditions of the above notification. 13. We also find that our above views are also concurred in the order of the Co-ordinate Bench of the Tribunal in the case of M/s Thiagarajar Mills Ltd. (supra). The relevant portion of the above order is extracted below: The only ground on which the learned Commissioner has confiscated the goods and imposed penalty is that the appellants had not informed the Custom House and therefore a unilateral decision to relocate these machines. While non-intimation to the Assistant Commissioner of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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