TMI Blog2023 (12) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption from CVD is concerned. Exemption notifications applicable to SAD - benefit of exemption notification No 6/2004-Cus dated 08.01.2004 - HELD THAT:- The appellant cannot claim the benefit of a notification applying Section 9A(5) of the Central Excise Rules, 1944 which was not even in existence at the time of the SCN and had already been superseded in 2001 and further in 2002. The appellant claimed that the date of removal was not known in the case and therefore, the benefit of the exemption notification available on the date of the SCN should be extended to it. While it is true that the exact date of removal of goods was not known, they are alleged to have been removed from 7.9.2000 and 4.10.2002. Undisputedly, the exemption notification no. 6/2004-Cus was not available during this entire period. Therefore, the appellant is not entitled to the benefit of the exemption notification not available during any of the dates of the clearance - the issue is found in favour of the Revenue and against the appellant and hold that the benefit of exemption notification no. 6/2004-Cus was not available to the appellant on the SAD to be paid. Entries in the work in progress (WIP) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iving the benefit of Notification No. 6/2002-CE dated 1.3.2002 (S.No. 171) for CVD - there are no reason to interfere with the penalty - appeal allowed in part. - HON'BLE MR. JUSTICE DILIP GUPTA , PRESIDENT And HON'BLE MR. P. V. SUBBA RAO , MEMBER ( TECHNICAL ) For the Appellant : Shri J M Sharma, Consultant and Ms. Pooja Agarwal , Chartered Accountant For the Respondent : Shri S K Rahman , Authorised Representative ( Principal Commissioner ) and Shri Rakesh Kumar , Authorised Representative ORDER P V SUBBA RAO : The Order in Original dated 8.12.2018 Impugned order passed by the Principal Commissioner of Customs Noida in the remand proceedings is assailed in these two appeals. Customs Appeal No. 50642 of 2019 is filed by M/s. Global Diamonds Assessee , and Customs Appeal no. 50643 of 2019 is filed by Shri Anand Srivastava assailing the personal penalty imposed on him. 2. The assessee is a manufacturing unit in the NOIDA export processing zone EPZ which zone has subsequently been converted into NOIDA Special Economic Zone NSEZ . It imports gold duty free and manufactures and exports gold jewellery. Goods manufactured in the EPZ should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the extent of the directions in the remand proceedings. 6. These two appeals assail the impugned order was passed by the Principal Commissioner in pursuance of this Tribunal s final order dated 18.12.2018. 7. We have heard Shri J M Sharma, learned consultant for the appellants and Shri S K Rahman, learned authorised representative for the Revenue and perused the records. 8. We now proceed to examine the submissions with respect to each of the three issues which were the subject matter of dispute in the denovo proceedings before the Principal Commissioner. Exemption notifications applicable to CVD 9. As discussed above, goods cleared from a unit in EPZ to DTA are chargeable to duty of excise equivalent to the duties of Customs leviable on such goods if imported into India. Goods imported into India are chargeable to basic customs duty, additional duty of customs (often loosely referred to a countervailing duty or CVD), special additional duty of customs (SAD), etc. and hence the excise duty on goods removed from a unit in EPZ to DTA should be calculated accordingly. The basic customs duty is to be calculated as per the Customs Tariff read with any Customs exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try no. 44A which it did not claim at all. It reads as follows: (1) (2) (3) (4) (5) (6) 171 71 (I) Articles of- (a)Gold; (b) silver;(c) platinum; (d) Palladium; (e) rhodium; (f) iridium; (g) osmium; or (h) ruthenium; (II) Ornaments and the like articles made of gold or silver or platinum or any one or more of them, whether or not set- (a) With stones or gems (real or artificial), or with pearls (real, cultured or imitation); or (b) With stones and pearls of the kind mentioned at (a) or any combination thereof; (III) (IV) . Explanation:- For the purposes of entries (I), (II) and (III), as the case may be,- (i) ornament means a thing, in any finished form, meant for personal adornments or for the adornment of any idol, deity or any other object of religious worship, made of, or manufactured from, gold, or silver or platinum or any one or more of them, whether or not set with stones or gems (real or artificial) or with pearls (real, cultured or intimati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for ornaments as defined in the notification and not to the diamond studded jewellery which the appellant had manufactured and clandestinely removed. A perusal of the SCN dated 24.11.2004 shows that duty of Rs. 2,48,99,006/- was demanded on studded gold jewellery as detailed in Annexure-D to the SCN. The meanings of jewellery and ornaments given in Oxford Advanced Learner s Dictionary are as follows: Ornament 1. An object that is used as decoration in a room garden/yard, etc. rather than for a particular purpose: a china /glass ornament 2. An object that is worn as jewellery 3. The use of objects, designs, etc. as decoration: The clock is simply for ornament; it does not work anymore. 4. ..to sth a person or thing whose good qualities improve sth: The building is an ornament to the city. Jewellery Objects such as rings and necklaces that people wear as decoration: silvery/gold jewellery 16. Thus, the term ornament has a much wider connotation and includes such objects which are used for decoration of a garden, yard, etc. also in addition to the objects worn as jewellery. Jewellery, on the other hand, means only such objects for decoration as are worn by pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... monds were received in the appellant s premises during the period 2000 to 2002. The case of the department is that the appellant had manufactured diamond studded jewellery using these diamonds and sold them. Neither these books nor the documents indicate the dates on which the goods were removed from the appellant s premises. Since the duty was demanded under Section 11A of the Central Excise Act, 1944, the relevant date for calculating the rate of duty and exemption notification is the date of removal of the goods and since no date is available in this case, as per Rule 9A (5) of the Central Excise Rules, 1944, the date of the SCN is the relevant date which in the case is 24.11.2004 on which date notification no. 6/2004-Cus dated 8.1.2004 was available. 19. Learned authorised representative for the Revenue submitted that the SCN was issued on 24.11.2004 when the Central Excise Rules, 1944 were already superseded by Central Excise (no.2) Rules 2001 and further by Central Excise Rules, 2002. Neither of these two Rules provide for determining the duty applicable on the date of SCN but Rule 5 of both the 2001 Rules and 2002 Rules says that the rate of duty applicable is date of rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks- Priya and Rishu and other documents. With respect to some of these, entries were also found in the WIP register which was the supporting evidence. There is no separate demand based on the entries in the WIP register. The details, according to him are as follows: source Period Diamonds used in manufacturing are studded jewellery in carats Value of studded diamond jewellery I.e. after value addition. Rs Cr Total Duty Rs Cr Annex B to SCN Diamonds utilised for manufacture of studded core jewellery worked out on the basis of delivery challans of MAP diamond division Mumbai 08-05-2001 to 04-10-2002 1264.18 1.93 1.02 Annex C to SCN Diamonds utilised for manufacture of studded core jewellery worked out on the basis of Rishu exercise book and Priya Exercise Book recovered from Shri Subhash Sharma on 05-10 -2002. 07-09-2000 to 21-04-2002 1701.297 2.6 1.37 On the basis of loose paper file, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..out of these 965.585 Carats, 501.407 carats (P-333 to 345 of PB) were returned since these diamonds were not fit for manufacture of jewellery. There are contra entries in WIP register in this regard. In this context, I have carefully gone through page 333 to 345 of paper book III and found that in Annexure B (page 333 to 341 of PB) there is only 6 entries under the column Rejection i. e. 23.9, 2.32, 4.69, 4.36 and 2.36; totaling to 37.63. Moreover, there is no column / entry for rejection of diamond shown in Annexure C (page No. 342 to 345). I also observed that there is no remark or indication in the (P - 333 to 345 of PB) which shows that the rejected quantity (entry for only 37.63 carats was found out of 501.407 carats as claimed by the party in their written submission) returned by the party. In the light of facts narrated above, I observed that the claim of the party that 501.407 carats were returned by them since these diamonds were not fit for manufacture of jewellery, was not supported by any documentary evidence. 28. We find no reason to differ from view taken by the Commissioner as far as the entries are concerned because firstly, entries do not reflect that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The role of Sri Anand Shrivastava was explicitly covered and it was held that he was aware and, in fact, instrumental in unauthorised entry of diamonds in the unit on the strength of Challans of Maharshi Ayurvedic Products (MAP) Mumbai. As per the statements dated 18.08.2003 of Shri Yogesh Shah, Sri Anand Shrivastava requested him to sign on the delivery challans of diamonds as employee of MAP when, in reality, he was not an employee of MAP. As per statement dated 5.10.2002 of Sri GJ Patel, Shri Anand Shrivastava was overall in charge of the unit. Such being his position and responsibility, he must be always aware of the illegal, /unauthorised activities being carried out in the unit and, therefore, responsible for the violations of the prescribed rules and regulations in the unit . No new or additional ground was taken in the de novo proceedings and therefore, there was no need to deal with the grounds which were already dealt with in the first round of proceedings. 31. We have considered the submissions. 32. We find that the role of Shri Anand Shrivastava was dealt with the Order in Original dated 19.7.2006 passed by the Commissioner in the first round of litigation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le remanding the matter. 34. Ideally, in the impugned order, the Commissioner should have recorded the pleading by Shri Shrivastava in the de novo proceedings but the Commissioner did not do so. In fact, the impugned order is not even addressed to Shri Shrivastava at all. However, in his appeal, Shri Shrivastava claimed to have received a copy of this order on 20.12.2018 and filed this appeal assailing it on 11.2.2019. It is thus evident that both sides understood this order to have been passed deciding the de novo proceedings in respect of Shri Shrivastava also and that the penalty against Shri Shrivastava imposed in the original order was affirmed in the impugned order. 35. The ground taken by Shri Shrivastava that, although he was the promoter of the Global Diamonds, he was not concerned with the day-to-day affairs during the relevant period was rejected by the original authority in the original proceedings and such rejection was not interfered with by this Tribunal while remanding the matter for the limited purposes indicated. There is nothing on record to show that the order of the Tribunal was either appealed against or any application for rectification seeking modifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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