Custom, Excise & Service Tax Tribunal
M/S. Indian Metals & Ferro Alloys Ltd vs Commissioner Of Central Excise, ... on 14 August, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No.Cus.Ap.195/09
(Arising out of Order-in-Appeal No. 02/CUS/B-I/2009 dated 05.03.2009 passed by the Commissioner(Appeals) of Central Excise, Customs & Service Tax, Bhubaneswar.)
FOR APPROVAL AND SIGNATURE
HON'BLE SHRI S.S. KANG, VICE PRESIDENT
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s. Indian Metals & Ferro Alloys Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar-I
Respondent (s)
Appearance:
Shri S.P. Majumdar, Advocate for the Appellant (s) Shri R.K. Chakraborty, Authorized Representative (JDR) for the Revenue (s) CORAM:
Hon'ble Shri S.S.Kang, Vice President Date of Hearing/Decision :- 14.08.2009 Date of Pronouncement :- 14.08.2009 ORDER NO............................................................................
Per Shri S.S.Kang.
1. Heard both sides.
2. Appellant filed this Appeal against the impugned order whereby the demand is confirmed in respect of the goods found short at the time of receipt in the factory. Appellant made import of 5200 M.T. of Metallurgical Coke. The factory is situated at a distance approx. 500 K.M. from the port of import. The goods were transported in open trucks to the factory and actual weighment was done at factory gate and total receipt in the factory is 4917 MT. The impugned goods are exempted from payment of anti-dumping duty if the same are used in the manufacture of iron. The case of the Revenue is that goods which were not received in the factory are not used for intended purpose therefore are liable for anti-dumping duty.
3. The contention of Appellant is that there was moisture content in the Coke and agreement also indicates presence of moisture and there is a penal clause in case the moisture exceeds the prescribed limit. The contention is that as the goods are transported in open trucks therefore the short is due to moisture loss and handling loss and the Commissioner(Appeals) allowed the loss to the extent of 1%. The Appellant relied upon the decision of Hon'ble Supreme Court in the case of BPL Display Devices Ltd. vs. CCE, Ghaziabad - 2004 (174) E.L.T. Page-5.
4. The contention of the Appellant is that as there is no evidence on record nor even any allegation that the imported Coke was diverted therefore imported goods are intended for use in the manufacture of steel and hence demand of duty is not sustainable.
5. The contention of Revenue is that exemption from anti-dumping duty on Metallurgical Coke is only applied to the import of Coke by a manufacturer of pig iron or steel using a blast furnace. As the quantity of Coke on which duty is being demanded is not used for intended purpose therefore the demand is rightly made. Revenue relied upon Rule 8 of Customs Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods Rules, 1996 and submit that in case the goods imported are not used for intended purpose the duty is leviable.
6. I find that in this case Appellant made import of 5200 MT of Metallurgical Coke and when the weighment was done in the factory it comes to 4917 MT. The case of the Appellant is that as there is a moisture contained in the Coke there are some losses on account of moisture and transportation handling losses. Commissioner(Appeals) in the impugned order allowed the losses to the extent of 1%. The Commissioner(Appeals) held as under:-
From the above it is seen that met coke is hygroscopic in nature and shortages do occur due to this along with handling and transportation. The lower authority has stated that in page 7 of the order that assessee have not submitted any technical authority to explain the loss of moisture, which the above submissions and discussions cover. It is also seen that the sales invoice and agreements also indicate the presence of moisture and penal clauses in case it exceeds the limits. Further, the port survey of such bulk cargo is not an actual weighment but the receipts at factory are on actual physical weighment. However, at the same time it has to be said that there is no conclusive document to prove the loss to the extent of nearly 5% and the loss to the extent of 1% which is the limit set in respect of similar commodities can be condoned.
7. The Hon'ble Supreme Court in the case of BPL Display Devices Ltd. (supra) held that in case the inputs were imported for use in the manufacture of specified goods shortage/leakage/damage for such inputs during transit the exemption is not deniable. The Hon'ble Supreme Court held as under :-
2. It is not in dispute that the appellant had imported parts of picture tubes for manufacture of colour picture tubes. Both the input and the manufactured items are covered by the Notifications. It is also not in dispute that a small percentage of the imported parts were damaged in transit and could not be used to manufacture picture tubes during the year 2000-2001. The appellant claimed the benefit of the aforesaid. Notifications in respect of the entire lot of parts imported relying, inter alia, upon the earlier decision of the Tribunal in National Organic Chemical Indus.Ltd. v. Collector of Customs (Import), Mumbai, 2000 (126) E.L.T. 1072 which had held that the benefit of the Notifications could not be denied in respect of goods which were intended for use for manufacture of the final product but could not be so used due shortage or leakage. The Notifications relied upon in the decision in National Organic Chemical Indus. Ltd. (supra) are substantially similar to the present Notification. The appeal preferred by the Department from the decision of the Tribunal was dismissed by this Court on 20th February, 2002 - Commissioner of Customs v. M/s.National Organic Chemical Indus. Ltd. [C.A. No.6764/99]. The Tribunal, however, relied upon its earlier decision in the case of Commissioner of Central Excise, Meerut v. M/s. BPL Display Devices Ltd. reported in 2002 (147) E.L.T. 912 to hold against the appellant. This Court following the affirmation of the Tribunal's reasoning in National Organic Chemicals Indus. Ltd. (supra) on 20.2.2002, allowed the appellant's appeal. This appeal must therefore be necessarily allowed. We are of the view that no material distinction can be drawn between the loss on account of leakage and loss on account of damage. The words 'for use' used in similar exemption Notifications have also been construed by this Court earlier in the State of Haryana v. Dalmia Dadri Cement Ltd., 1987 (Suppl) SCC 679 to mean 'intended for use'. According to this decision the object of grant of exemption was only to debar those importer/manufacturers from the benefit of the Notifications who had diverted the products imported for other purposes and had no intention to use the same for manufacture of the specified items at any stage.
8. In the present case there is not even an allegation that Coke which was found short was diverted for some other purpose. In absence of such allegation I find that the ratio of the decision of Hon'ble Supreme Court is fully applicable. In view of the above discussion the impugned order is set aside and Appeal is allowed.
(Pronounced and dictated in the open court.) sd/ (S.S.KANG) VICE PRESIDENT sm 5 Appeal No.Cus.Ap.195/09