Customs, Excise and Gold Tribunal - Tamil Nadu
Brindha Enterprises vs Commissioner Of Customs on 15 September, 2006
Equivalent citations: 2007(114)ECC255, 2007ECR255(TRI.-CHENNAI), 2007(207)ELT289(TRI-CHENNAI)
ORDER P. Karthikeyan, Member (T)
1. M/s. Brindha Enterprieses, Chennai filed a Bill of Entry No. 720132 dated 29.11.2004 for clearing 20.18 MTs of "Lead covered Copper cable Scrap 'Relay' ". On examination and testing, it was found that only 12.108 MTs were "Lead covered Copper scrap" and the remaining 8.072 MTs were "Copper scrap 'Druid' ". 'Druid' falling under ITC(HS) 74040019 is restricted for import. Its import is permitted without a licence to units registered with Ministry of Environment and Forests. Proceedings were initiated to confiscate the consignment for misdeclaration of value in respect of the entire consignment and misdeclaration of description and import without licence in respect of 'Druid'. The 8.072 MTs of "Copper scrap 'Druid' " was proposed to be confiscated under Section 111m for misdeclaration of description and value and under Section 111d for import without a specific licence or a Certificate of Registration with Union Ministry of Environment and Forests. As the admissibility of import of similar consignments of "Lead covered Copper scrap (other than Druid)" under Notification No. 32/97 dated 01.04.1997 was pending before the Tribunal, the violations relating to import of 'Druid' were decided by the original authority without considering the applicability of provisions of Notification No. 32/97 dated 01.04.1997. The original authority redetermined the assessable value of both the items comprising the imported consignment and absolutely confiscated 'Druid' under Section 111m and Section 111d for misdeclaration and import without Certificate of Registration from the Ministry of Environment and Forests. "Lead covered Copper scrap" was confiscated under Section 111m with an option to redeem the same on payment of a fine of Rs. 1,70,000/-. A penalty of Rs. 1,00,000/- was imposed on the importer for rendering the consignment liable for confiscation as ordered. In the impugned order, the Commissioner (Appeals) modified the order of the original authority by vacating confiscation of "Lead covered Copper scrap" and reducing the penalty to Rs. 75000/- . He upheld the confiscation of "Copper scrap 'Druid' " under Section 111m and d on account of misdeclaration of description and the violation of the import condition.
2. The learned Counsel appearing for the importer submitted that when the issue was before the lower appellate authority, the decision of the Tribunal on admissibility of import of "Lead covered Copper scrap" for jobbing was available to him. In Final Order No. 1/2006 dated 23.12.2005, the Tribunal had decided that "Lead covered Copper scrap" could be imported for jobbing in terms of Notification No. 32/97 dated 01.04.1997. In view of this decision, Commissioner observed in the impugned order that if 'Druid' was treated to be an item permitted to be imported in terms of Notification No. 32/97, the appellants were eligible to import the item 'Druid' without a licence. The Commissioner had felt that even in that case, the importer should possess a Certificate of Registration with the Ministry of Environment and Forests without which the import of 'Druid' would be in violation of import policy.
3. The learned Counsel invited my attention to ITC (HS) classification, as per which, import of 'Druid' falling under Heading 74040019 is restricted. However, in terms of Licensing Note No. 2 to Chapter 74, import of "Copper scrap 'Druid' " is permitted without a licence to units registered with Ministry of Environment and Forests.
3.1 As per the provisions in para 4.2.7 of Foreign Trade Policy, 2004-09, dealing with jobbing, repairing etc. for re-export, the policy laid down is as follows:
Import of goods, including those mentioned as restricted in ITC(HS) but excluding prohibited items, supplied free of cost, may be permitted for the purpose of jobbing without a licence/certificate/permission as per the terms of notification issued by Department of Revenue from time to time.
Therefore, it was submitted that the Notification No. 32/97 dated 01.04.1997 covered the import of the subject "Copper scrap 'druid'" and its import did not require Certificate of Registration with the Ministry of Environment and Forests. Therefore, confiscation on account of restriction of the subject goods and corresponding penal liabilities imposed in the impugned order had to be vacated. Learned SDR submitted that import of 'Druid' could not be allowed without the importer obtaining a Certificate of Registration from the Ministry of Environment and Forests, Government of India.
4. I have considered the rival submissions and case records. The appellant's challenge is confined to confiscation of 'Druid' under Section 111d and the penalty relatable to the same. The Notification No. 32/97 dated 01.04.1997, provides for duty-free import of specified classes of goods for undertaking job work on them and to re-export the resultant products within 6 months from the date of clearance or within such extended period allowed by the Assistant Commissioner of Customs or Deputy Commissioner of Customs. Jobbing has to be undertaken in accordance with the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. As per Clause (7) of the Notification, goods that are prohibited under ITC (HS) classification of exports and imports are not allowed to be imported under this Notification. The issue to be decided is whether 'Druid' can be allowed to be imported without licence, permit or certificate. As per policy, para 4.2.7, goods imported for jobbing in terms of Notification issued by Department of Revenue do not require a licence/certificate/permission if they are not prohibited.
The para reads as follows:
Import of goods, including those mentioned as restricted in ITC(HS) but excluding prohibited items, supplied free of cost, may be permitted for the purpose of jobbing without a licence/certificate/permission as per the terms of notification issued by Department of Revenue from time to time.
Goods falling under Heading 7400029 as per the ICT(HS) classification are restricted for import and not prohibited. As per the Licencing Note No. 2, such goods are permitted to be imported without a licence by units registered with Ministry of Environments and Forests, Government of India. From the provisions contained in para 4.2.7 of the Foreign Trade Policy, goods imported for jobbing in terms of a Notification do not require a licence, certificate or permission. In the circumstances, confiscation of 'Druid' under Section 111d is not sustainable. As the confiscation of the same item under Section 111m is not challenged, the case is remanded to the Commissioner (Appeals) to readjudicate the fine and penalty in view of the aforesaid finding that the import of 8.072 MTs. of 'Druid' is not restricted or prohibited. The denovo adjudication may be completed within three months of the date of receipt of a copy of this order after affording a reasonable opportunity to the party of being heard. The appeal is thus allowed by way of remand.
(Dictated and pronounced in open Court)