TMI Blog2000 (4) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... ants, and on the basis of information obtained after a visit to the appellants' premises as also the premises of M/s. Steel Tubes of India Ltd., a certain quantity of hot rolled coils of steel were seized. On the basis of further investigation, the present appellants were served with a show cause notice, among others, alleging (1) diversion of the imported material and (2) that the imported material could not have been used in the manufacture of the exported products mentioned under the licences and as per the conditions and limitations prescribed therein and (3) that they had violated para (v) (a) of the Notification No. 203/92 and other conditions in the said Notification as amended by Notification No. 204/92 inasmuch as the appellants had not fulfilled the conditions regarding import of raw materials required for use in the manufacture of export products both in respect of value based advance licences and quantity based advance licences as also non-availability/non-utilisation of Modvat credit in respect of the goods exported under value based advance licences. It was alleged that the appellants had wilfully and knowingly cleared the imported materials duty free against advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer of the Customs had cleared the imported goods after satisfying himself that the goods imported conformed to the description of the goods mentioned in the Certificate. Once the Customs Officer was satisfied that the goods imported came within the description of the goods specified in the Certificate, there was no scope for making an allegation that the appellants had mis-declared or suppressed any relevant facts while claiming the clearance of the material. Further, the Bill of Entry showed the correct description of the imported material which was supported by its chemical analysis as also the corresponding invoice and other relevant documents including the DEEC. There has been no allegation that the said documents were false. It cannot therefore, be alleged that the applicants had indulged in any mis-declaration or suppression of facts which they were bound to disclose. Besides, the basis for imposing penalty under Section 112 of the Customs Act, 1962 apparently was that the conditions of Notification Nos. 203/92 and 204/92 had been violated. However, there has not been any mention of the specific condition which had been violated. Section 111(o) of the Customs Act cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. In the absence of any circumstance bringing out mis-statement/ suppression of facts by the appellants and where the imported material had already been allowed clearance by the proper officer under Section 47, no penal proceedings would lie. 4.Appellants have further contended that inasmuch as the show cause notice was issued on 20-11-98 in relation to the material cleared on 9-1-95 and where no suppression or mis-declaration of facts which the importer was legally bound to disclose had been established, the SCN itself was barred by limitation in terms of proviso to Section 28(1). It was also contended that pursuant to the order passed by the Tribunal (Order No. A/1656/96-NB) dated 28-6-96, the goods imported by the appellants had been released and the bond executed by them was also cancelled. No further proceedings could, therefore, be drawn against the appellants since the Department had accepted that no duty was leviable on the material in question. Further, the recovery of interest at the rate of 24% ordered by the Commissioner would not also sustain for the reason that no such recovery had been proposed in the show cause notice. 5.In support of his contention relating t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, a deliberate suppression of the relevant information by the appellants at the time of import. It was only on subsequent investigation it came to light that no manufacture of the galvanised tubes and pipes of the specifications contracted by the appellants could have taken place with the imported material. Ld. JDR in this connection referred to sub-para (g) of para 4 of the impugned order where the Commissioner had dealt with a very glaring aspect, namely, the thickness of the galvanised pipes exported and the thickness of the imported steel. There was a clear mismatch between thickness of the imported raw material and the export product. Whereas the thickness of export goods varied from 1.60mm to 5mm, the steel imported had a thickness between 2mm and 4.60mm. It was obvious that pipes of a thickness higher than 4.60mm could not have been manufactured from steel coils having a thickness between 2.00mm and 4.60mm without putting it to further processes like cold rolling. There was nothing on record to show that the appellants had carried out the manufacture of galvanised pipes and tubes after carrying out the said processes. The appellants had not also been able to establish a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the manufacture of galvanised pipes of 5mm thickness. 9.The rival submissions have been considered. The Department's case is that duty liability has arisen on account of the goods imported not being eligible for exemption for the reason that the imported material, being of a higher grade, was neither required nor suitable for use in the manufacture of the exported goods namely, galvanised pipes and tubes. In fact as per the information given by the supplier of the raw material, it was suitable for cold rolling for manufacture of automobile parts. Further, the chemical composition of the materials imported also showed that the steel of higher grade which was imported which contained high carbon content and therefore more ductile and tough than the type of material used for manufacture of galvanised pipes which were exported. For this reason the Department has claimed that the conditions of the licence had been contravened at the time of import itself and it was not a case of non-compliance of post-import conditions. The case of the Department for demanding the duty is that the exemption availed of by the appellant under the relevant exemption notification was not allowable for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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