Customs, Excise and Gold Tribunal - Calcutta
Sun Granite Exports Ltd. vs Commissioner Of Customs, Bhubaneswar on 9 August, 2001
Equivalent citations: 2002(139)ELT124(TRI-KOLKATA)
JUDGMENT
Archana Wadhwa
1. Both the appeals are being disposed of together as they arise out of the same Order-in-Appeal passed by the Commissioner of Customs (Appeals), Calcutta, though the original orders passed by the authorities below are different. Vide the two orders, Orders-in-Original, the Assistant Commissioner of Customs & Central Excise, Bhubaneswar, confirmed the demand of Customs duty of Rs.3,43,128/- (for the period 20.2.96 to 12.4.96) and Rs.1,18,388/- (for the period 13.4.96 to 31.1.97).
2. The appellant Company being a 100% export oriented unit has been granted private bond warehouse licence under Section 58 of the Customs Act, 1962 and they engaged in the manufacture of polished granite decorative slabs. The appellants imported, inter alia, Grooved Saw Blades, Steel Grits and Polishing Abrasives under Notification No.13/81-Cus dated 9.2.1981 issued the same as and when required. During 20.2.96 to 12.4.96, 500 pieces of grooved Saw Blades, 10,000 kgs. of Steel Grits and 2640 pieces of Polishing abrasives were issued from the Bonded Warehouse for manufacture of the impugned goods. Revenue's contention is that the said materials were not utilised for the said purpose inasmuch as the RG-1 register showed 'nil' production. During the period 13.4.96 to 31.1.97, the Revenue noticed that 18410 pieces of polishing abrasives were issued. It was observed that in the production of 10,891.549 square metre of polished slabs (including rejects), the appellants utilised 18,410 pieces of abrasives as against the requirement of 12,470 pieces of abrasives for one square metre of granite. Hence, the above mentioned Customs duty demands were confirmed by the original authority, and upheld by the appellant authority.
3. Shri S.Satpathy, ld.Advocate does not dispute the issue of the said material during 20.2.96 and 12.4.96 but submits emphatically that the same were actually used in the production of the granite slabs which were not entered in the RG-I register for the reason that inspection of the same had remained to be done. He adds that the impugned goods being tools were actually fitted to the machines and were used in the trial production. He refutes the allegation of non-utilisation of the same. As regards the allegation of excessive utilisation of the abrasives during the period from 13.4.96 to 31.1.97, the ld.Advocate submits that it is not always possible to standardise the correlation between input-output during the manufacturing of granites. He clarifies that the norm certified by the Chartered Accountant is in respect of the Orissa material which is softer than the material from South. He submits that during the relevant period, the material from outside Orissa was worked upon and as such more abrasives had to be used. The ld.Advocate, therefore, pleads that there is no justification to demand the said Customs duty amounts from the appellants.
4. Shri V.K. Chaturvedi, ld.SDR appeared for the Revenue and reiterated the reasonings of the authorities below.
5. We have considered the submissions made from both the sides. The authorities below have confirmed the duty against the appellants on the ground that the imported material was not used in the manufacture of the final product. As such, the contention of the appellants is that the entire manufacturing operation was carried out under the physical supervision of the Customs authorities and the allegations of non-utilisation of imported goods were baseless inasmuch as the same were based upon the input output ratio. It is their contention that the correlation of the ratio of input and output, cannot be determined due to various reasons depending on softness and hardness of the stone and on that basis the quantity of abrasives utilised in the manufacture of final product cannot be determined. We find force in the above submissions of the appellants in respect of use of abrasives inasmuch as the same norm which is applicable to soft materials cannot be applied to hard materials. It is further seen that the consumption of the other imported material was during the trial-run and the goods were yet to be inspected and entered in RG I register. On the other hand, there is no evidence by the Revenue that the appellants have disposed of the said imported materials in a manner other than one for which they were imported ie.e. for use in 100% export oriented unit. As such, we hold that the impugned orders are not sustainable. Accordingly, we allow the appeals after setting aside the impugned order.