Customs, Excise and Gold Tribunal - Tamil Nadu
Granules India Ltd. vs Commissioner Of Central Excise on 13 January, 2000
Equivalent citations: 2000(69)ECC85
ORDER S.L. Peeran, Member (J)
1. To get this appeal heard, the appellants are required to pre-deposit an amount of Rs. 18,48,597 duty, equivalent amount of penalty Under Section 114A of the Customs Act, 1962. Briefly, the issue concerns the import of two ingredients required for the manufacture of the end product paracetamol under the DEEC scheme against three advance licences. These two ingredients are PNCB and Acetic Anhydride. According to the input output norms in the Exim Policy on the basis of which these advance licences were issued, for one kg. of paracetamol to be manufactured, the appellants were authorised to import 1.55 kg. of PNCB and 0.95 kg. of Acetic Anhydride. The charge in the show cause notice is that the appellants imported excess quantities of both PNCB and Acetic Anhydride to the following extent:
(a) PNCB 93,530 kg. on which excess imports, the Revenue demanded duty of Rs. 29,38,152.
(b) Excess import of Acetic Anhydride (quantity not specified) valued at Rs. 6,37,096 on which the Revenue has demanded duty of Rs. 7,19,918.
2. Heard learned advocate Shri S. Murugappan for the appellants and learned D.R. Shri S.Kannan.
3. The learned advocate submits that the Order-in-Original impugned namely 3/99 dated 31.3.99 passed by the Commissioner of Customs and Central Excise has confirmed the above noted duty and penalty on grounds which are totally different from those proposed in the show cause notice. Therefore, the order impugned is a non-speaking order and it also violates the principles of natural justice having gone beyond the show cause notice. To substantiate this submission, the learned advocate draws our attention to the annexure containing table "A", "B" and "C" to the said order impugned, which, he submits, gives totally different figures than what was proposed in the show cause notice, particularly in para 11 thereof. Secondly, the learned advocate submits that on internal page 24 of the Order-in-Original impugned while dealing with the actual quantity of PNCB imported against two advance licences Nos. 35042 and 35081, the learned Commissioner has found as follows:
I, therefore, do not find any merit in pursuing the actions proposed in the show cause notice for non-fulfilment of export obligation.
However, despite this on page 26 thereof for excess import of PNCB under the said two advance licences noted above, the learned Commissioner has confirmed the differential duty of Rs. 18,48,597 by invoking even the extended period of five years. Thirdly, on internal page 23 of the order impugned, as contrary to his findings on page 24 again confirmed the demand for Rs. 18,48,597 on PNCB. As far as the demand on Acetic Anhydride is concerned, he has found on internal page 25 of the order impugned as follows:
I am, therefore, of the view that there has been no excess import of Acetic Anhydride as alleged in the show cause notice.
The learned advocate therefore, submits that the Order-in-Original impugned is totally contradictory as explained above. Secondly, he submits that an amount of duty confirmed and penalty imposed has no relationship with that proposed in the show cause notice. Thirdly, the learned advocate submits that there is no question of any suppression involved when the advance licences as well as DEEC book were in the custody of the department, which fact has been recorded in the Order-in-Original itself. The department had full information of all imports and the goods imported were cleared only after such a scrutiny. Therefore, invoking of the extended period is also legally not correct.
4. The learned DR, on the other hand, submits that there are both quantitative and value limits imposed by the three advance licences on the import of both these ingredients. Since there is no dispute on the actual quantity of paracetamol exported, therefore, notice has clearly by simple arithmetic proposed action on excess imports of both PNCB and Acetic Anhydride to the extents indicated in the show cause notice. Secondly, he submits that these imports were under these advance licences which have attached condition of export of the final product on the basis of input output norms, therefore, the appellants had breached this condition. The learned DR also submits that there is no contradiction between the issue proposed in the show cause notice and the differential duty quantified out of that by the learned Commissioner in the Order-in-Original. He also submits that since the excess quantity imported was not declared to be imported in excess to the department, therefore, the suppression has correctly been invoked. In this connection, he quotes the learned Commissioner's findings on internal page 23 of the Order-in-Original which reads as follows:
But inspite of such a clear condition the importer has mis-utilised the advance licences. Getting PNCB cleared through Customs in such a manner is blatant violation of the condition prescribed in the licence itself is clearly a deliberate act of wilful mis-statement of facts.
The learned DR, therefore, submits that the Order-in-Original impugned needs to be upheld.
5. We have carefully considered the rival submissions and records of the case and we find substantial force in the submissions of the learned advocate that the impugned order goes beyond the actions proposed in the subject show cause notice. While the subject show cause notice has proposed duty demand of Rs. 29,38,152 on PNCB excess imports and Rs. 7,19,918 on excess imports of Acetic Anhydride, in para 24 of the said order the learned Commissioner has clearly dropped all proceedings in the show cause notice with respect to the alleged excess imports of PNCB. Further, in page 25 of the impugned order, he has dropped all proceedings with respect to excess import alleged of Acetic Anhydride in the show cause notice. Therefore, the net effect of these two findings and orders in the order impugned is that the entire show cause notice has been found to be unsubstantiated. As against this, surprisingly, the learned Commissioner has yet confirmed the demand of duty for Rs. 18,48,597 for suppression of excess imports of PNCB against the same very licences. This has been explained in the order impugned on the basis of a chart enclosed thereto as annexure containing three tables namely table "A", "B" & "C". The table "A" explains the grounds for arriving at this computation. A plain reading shows that the contents of table A is widely different from the show cause notice, therefore, we have no hesitation in coming to our considered opinion that the impugned order is:
(a) contradictory inasmuch as having found that the show cause notices with respect to both the ingredients are not sustainable yet the demand has been confirmed on certain imports;
(b) that this order goes beyond the show cause notice in appending new tables and on the basis of which the duty demand noted above has been confirmed which is amounting to adjudicating a case which is totally different from the case which was made out in the show cause notice. This decision having been taken behind the back of the appellants, as no such information was given to them at the time of show cause notice or the personal hearing, as is contained in the said annexure of the order impugned, this tantamounts to denial of principles of natural justice.
6. In view of the aforesaid findings, we set aside the Order-in-Original impugned and remand the matter for a de novo consideration to the said original authority. The appellants shall be heard in detail by the original authority, who shall then proceed to issue a speaking order in consideration of the charges set out in the said show cause notice. Since the matter lies on a short compass involving principles of natural justice, therefore, this appeal has been considered on merits, after granting waiver and stay of recovery of these amounts.
7. The appeal succeeds by way of remand accordingly.