| SooperKanoon Citation | sooperkanoon.com/27930 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi |
| Decided On | Apr-03-2002 |
| Judge | A T V.K., P Chacko |
| Reported in | (2003)(85)ECC389 |
| Appellant | H.B. Fibres Ltd. |
| Respondent | Commissioner of Customs |
(ii) M/s. H.B. Fibres Ltd., Ludhiana are liable to pay customs duty amounting to Rs. 35,46,456/- under Section 28(2) of the Customs Act, 1962 and I have held so. The show-cause notice points out that M/s.
H.B. Fibres Ltd. had deposited a sum of Rs. 3,12,982/-at the time of filing Bills of Entry and paid Rs. 12,30,000/- vide Bank Draft No. 641494 dated 19-8-99, Rs. 5,00,000/- vide bankers Cheque No. 079585, dated 11-12-1999, Rs. 3,00,000/- vide case order No. 642098, dated 11-12-1999, Rs. 6,00,000/- vide Cheque No. 315973, dated 5-2-2000 and Rs. 6,04,600/- vide Cheque No. 315975, dated 6-3-2000. Thus a total of Rs. 35,47,582/- (Rupees thirty-five lac forty-seven thousand five hundred and eighty-two only) has been deposited by the noticee towards demand of duty on said goods. I order that the amount of Rs. 35,46,456/-(Rupees thirty-five lac forty-six thousand four hundred and fifty-six only) be appropriated to the Govt.
Account.
(iii) I order that interest for delayed payment of duty be charged/ recovered from M/s. H.B. Fibres Ltd., Ludhiana @ 24% p.a. under Rule 28AB of the Customs Act, 1962 till the date of payment.
(iv) The acrylic fibre weighing 40,545 kgs. valued at Rs. 19,58,414/-are liable to confiscation under Section 111(m) of the Customs Act, 1962 and I have held so. However, the goods are not available for confiscation, having been released provisionally to M/s. H.B. Fibres Ltd. on execution of Bond for Rs. 50 lacs and furnishing of bank guarantee for Rs. 15 lacs. Accordingly, in exercise of powers conferred under Section 125 of the Customs Act, 1962 I permit the goods to be released on payment of redemption fine of Rs. 15,00,000/- (Rupees fifteen lacs only) to M/s. H.B. Fibres Ltd., Ludhiana and order that the amount be recovered by appropriating the Bank Guarantee in terms of the provisions of Bond.
(v) I impose penalty of Rs. 20,000/- (Rupees Twenty thousand only) on M/s. H.B. Fibres Ltd., Ludhiana under Section 112(a) of the Customs Act, 1962.
2. The brief facts of the case are that M/s. H.B. Fibres Ltd., Ludhiana imported two consignments of goods, declared as "wool waste", from M/s.
Bollag International Corporation (USA) and sought to clear the same at CFS, Ludhiana under two Bills of Entry Nos. 1823 and 1824, dated 7-9-98 filed by one Shri D.D. Singh, holding power-of-attorney of one Shri M.L. Sharma, claiming to be a director of M/s. H.B. Fibres Ltd; that the goods were assessed to duty under Customs Tariff Heading 51.03 and the duty was paid by the importer, that on a second check the goods in both the consignments were found to be "acrylic fibre" classifiable under CTH 55.03 attracting (apart from Anti-dumping Duty) higher rates of various duties viz. Basic Customs Duty, Special Customs Duty, Countervailing Duty and Additional Duty under the Additional Duties of Excise (T&TA) Act, 1978; that the Chemical Examiner, CRCL, New Delhi also reported that the samples drawn from the two consignments were acrylic fibres, that the invoiced value of the goods was not found to be acceptable for final assessment and, on determination of the assessable value, the total amount of duty leviable on the goods worked out to Rs. 30,42,927/- as against Rs. 3,12,982/- deposited by the importer; that, on the basis of the results of investigation conducted by the DRI, the department issued a show-cause notice (SCN) to M/s.
H.B. Fibres Ltd. for recovering the differential duty amount of Rs. 27,29,945/- and for confisca-tory and other penal actions under the Customs Act; that, by a corrigendum to the SCN, the department held the goods to be chargeable to duty under Customs Tariff Sub-heading 5503.30, proposed to finalise the provisional assessment on the basis of CIF value @ US $ 1.12 per Kg. demand a total amount of Rs. 35,46,456/- towards duty under Section 28 of the Customs Act and proposed to charge interest on duty under Section 28AB of the Act; that the noticee resisted the proposals; and that the jurisdictional Commissioner who adjudicated the dispute passed the order extracted hereinbefore.
3. The above order of ld. Commissioner appears to have resulted from a set of findings against the appellants which could be summarized as under: (a) It was conceded by the appellants that the imported goods which were declared as "wool waste" in the import documents, were acrylic fibre. The appellants paid the differential amount of duty on the differential value between US $ 1.12 per kg. (at which rate the foreign supplier was found to have actually supplied the goods) and US $ 0.60 per kg. (invoiced price). The amounts paid by the appellants totalling to Rs. 35,46,456/- were liable to be appropriated towards duty on the acrylic fibre (Customs Tariff Sub-heading 5503.30) under Section 28(2) of the Customs Act; (b) The invoice price of US $ 0.60 per kg. of what was described as "wool waste" was not to be accepted as transaction value of acrylic fibre and the same was liable to be rejected under Rule 10A of the Customs Valuation Rules, 1988. The goods were actually sold by the foreign supplier to the appellants @ US $ 1.12 per kg. as evidenced by documents and this fact was not specifically denied by the appellants. Therefore, the goods were liable to be valued, under Rule 8 of the Customs Valuation Rules, @ US $ 1.12 per kg. and assessed to duty accordingly; (c) The appellants did not contest the proposal to charge interest on duty amount under Section 28AB of the Customs Act. They were liable to pay interest on the delayed payments of duty as, by gross misdeclaration of description and value of the goods, they had short-paid duty at the time of clearance of the goods; (d) The charge of misdeclaration of description and value of the goods stood proved. The goods were therefore liable to be confiscated under Section 111 (m) of the Customs Act. However, as the goods (having been provisionally released to the appellants on execution of bond and bank guarantee) were not available for confiscation, a redemption fine was liable to be imposed on the importer under Section 125 of the Customs Act; (e) The appellants were liable to penal action under Section 112 (a) of the Act.
4. We have heard both sides. ld. Advocate for the appellants submitted that, in this appeal, they were not challenging the demand of duty or the imposition of penalty. The challenge is against redemption fine and interest on duty only. Vis-a-vis the redemption fine, the counsel submitted that there was no evidence to show that the appellants were aware of the fact that the goods were liable to confiscation. The misdeclaration and undervaluation were done by Shri Ravi Jagota of M/s.
Youngman Industries Ltd. The appellants had acted in a bona fide manner only. Hence there was no valid reason for imposing on them any redemption fine in lieu of confiscation of the goods. In this connection, Ld. counsel relied on the following case law :Akbar Badruddin Jiwani v. Collector of Customs [1990 (47) E.L.T. 161 (S.C.)]Indian Explosives Ltd v. Collector of Customs [1992 (60) E.L.T. 111 (Cal.)] Relying on the Tribunal's decision in Nirmal Surekha and Ors. v. CC [2001 (132) E.L.T. 597 (T) = 2001 (45) R.L.T. 156], ld. Counsel, alternatively, pleaded for a lenient view as regards the quantum of redemption fine imposed on the appellants. Ld. Counsel, referring to the demand of interest, submitted that no interest was payable under Section 28AB as the duty had been fully discharged before finalisation of the provisional assessment of the goods. It was the date of finalisation of provisional assessment that was even the starting point of limitation for any demand of duty under Section 28 of the Act on the basis of the finalised assessment. He cited the Tribunal's decision in Asha Printery v. CC, Bombay [2000 (116) E.L.T. 474] in support of this contention.
5. Ld. JDR contested the plea of provisional assessment and submitted that it was rather a case of provisional release of goods. The decision in Asha Printery case was, therefore, not applicable to the case. The DR further argued that the plea against redemption fine was also not tenable inasmuch as the ground viz. misdeclaration of description and value of the goods in the import documents, taken for confiscating the goods under Section 111(m) was not rebutted and the non-availability of the goods for confiscation was not disputed. The DR also sought to distinguish the other decisions cited by the counsel.
6. We have examined the submissions. The challenge to demand of duty and imposition of penalty has not been pressed before us. We therefore affirm the demand of duty confirmed by the lower authority and the penalty imposed by it. As we find that the assessment was provisional at the time of clearance of the goods and the duty liability as confirmed by the adjudicating authority was discharged by the assessee prior to finalisation of the assessment, we have to sustain the counsel's challenge to the interest sought to be levied under Section 28AB. The demand of interest is therefore set aside. The confiscability of the goods under Section 111(m) of the Customs Act was conceded by the party when they conceded misdeclaration of description and value of the goods. A penalty under Section 112 of the Act has a direct nexus to the confiscability of the goods under Section 111. The appellants have not pressed their challenge vis-a-vis the penalty. The goods were admittedly not available for confiscation. In these circumstances, a redemption fine was warranted. The case law cited by the counsel would not help his client in the said circumstances. The counsel's argument that such a fine was not liable to be imposed as the appellants were acting bona fide has no force as the plea of bona fides coming from the mouth of a party who has conceded liability to be penalised cannot be accepted. However, in the facts and circumstances of the case, we find that the quantum of the fine imposed by the Commissioner is on the higher side. We reduce it to Rs. ten lakhs.
7. The appellants have, in an application dated 20-7-2002, placed before us the following submission :- That anti dumping duty @ 42.92 per kg. was levied and paid by the appellant. The anti dumping duty was imposed at the relevant time on provisional basis. The Provisional anti dumping duty has since been finalised and anti dumping duty has been finally accepted by the Govt to be levied @ 0.296 US $ per kg. which works out to Rs. 14.42 per kg. The appellant has paid the duty on the basis of provisional assessment and was not aware of the anti dumping duty finalised.
They have also prayed for a direction to the respondent to recompute the anti-dumping duty on the above basis and grant consequential relief to them. On a careful consideration of the submissions, we think, we have got to direct the Commissioner of Customs, in the interest of justice, to examine the above claim and decide thereon after affording the party an opportunity of being heard. We do so.