TMI Blog2002 (11) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... ls viz Isobutyl Benzene, Acetyl Chloride and Sodium Cyanide given in these balance sheet were not tallying with the norms submitted vide applications made for their Advance Licence. Taking the consumption figures from these raw materials given in the balance sheet for the year 1989-90, it appeared that certain quantities of raw material were imported in excess of the requirement and thus mis-utilised in violation of Notification No. 44/87-Cus., dated 19-2-87, 116/88-Cus., dated 30-3-88, 159/90-Cus., dated 30-3-90. Notice alleged that they appeared to have deliberately mis-declared the consumption norms, with a view to evade customs duty of Rs. 2.813 crores and were liable for a penalty under Section 112(a) of the Customs Act and why a duty amounting to Rs. 2.813 crores should not be paid and penalty should not be imposed. 2. The ld. Adjudicator in view of the following findings: - (i) The demand of duty was based on norms of consumption of raw materials, as given in the balance sheets, certificates of Chartered Accountants and applications made by M/s. CDL, for advance licence under the DEEC Schemes, which were at variance with one another. The Commissioner observes that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . But due to the failure of quality in export grade, admittedly, they had converted the same into IP grade meant for home consumption, which was accounted for in different batches. He expressed his inability to furnish account of such conversions and categorically admitted that there was no record to show and identify such conversions and quantify the same. From the above statement it is evident that M/s. CDL have manufactured IP product meant for domestic market, consuming exempt imported raw material and mis-utilised them, in contravention of the Notification No. 44/87, 116/88 and 159/90-Cus., read with the provisions of Para 244 of Import-Export Policy for 1988-89 and Para 250 of Import-Export Policy for 1990-93. It is also clear that there is no account of such conversion/consumption of exempt material and resultant product. Therefore, it may be said that the adjudicating authority had not looked into the aspect of admission of mis-utilisation of 139 MTs of acetyl chloride, the exempted import raw material, in the form of a statement given by the Senior Vice-President of M/s CDL. In view of the above categorical admission, of mis-utilisation of exempt imported raw material an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents in DEEC books and hence there was no suppression of facts and raising demand for duty for the period beyond six months was impermissible. In this context, the adjudicating authority failed to appreciate the fact that there was no condition in any of the three notifications, stipulating the end-use verification of the raw material imported. In absence of any such expressed stipulation, the Customs authorities are not concerned with the end use verification and investigation into the mis-utilisation of raw material at the time of making endorsements in the DEEC books. As per the conditions envisaged in the notification, the importers were bound by a declaration, to pay a demand, an amount equivalent to the duty leviable but for the exemption, on the imported material, in respect of which the conditions of the notifications have not been complied with. In this case, 139 MTs of acetyl chloride was admittedly mis-utilised in the manufacture of IP product, which resulted in disposal of exempt raw material otherwise, as against 208.137 MTs of acetyl chloride, arrived at by the department and alleged as mis-utilised, apart from the remaining raw materials as detailed in the annexu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of the Customs Notifications or the EXIM policy. To a specific question from the Bench, the Ld. DR submitted that the violation is of Para (d) of Notification No. 44/87-Cus. and pari materia provisions in the other notifications, which read as under :- "(d) the exempt materials shall be utilized for the manufacture of resultant products specified in Part 'E' of the said certificate or for export as mandatory spares, and no portion thereof shall be sold, loaned, transferred or disposed off in any other manner : Provided that where such exempt materials are imported for replenishment of materials used in the manufacture of resultant products exported, holder of an advance licence being a manufacturer-exporter may utilize the replenished materials for further production subject to actual user conditions : Provided further that the licensing authority may consider the request of holder of an advance licence not being a manufacturer-exporter for transfer of the replenished materials at landed cost, to the supporting manufacturer concerned, whose name appears in the said Certificate, for further production, subject to actual user condition." We find that in the ter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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