Customs, Excise and Gold Tribunal - Tamil Nadu
Kaanchi Steel Pvt. Ltd. And N.V. Baabu vs Commissioner Of Customs on 13 December, 2006
ORDER P.G. Chacko, Member (J)
1. After examining the records and hearing both sides, we are of the view that the appeals require to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we proceed to deal with the appeals.
2. M/s. Sri Kaanchi Steel Pvt. Ltd. were engaged in the manufacture of MS Ingots etc. prior to December, 1999. In that month, they shut down their induction furnace on account of disconnection of electricity supply by the Electricity Board. Litigation ensued between them and the Electricity Board and ultimately they obtained a favourable order from the High Court. But, though electricity supply was restored to their rolling mill, it was not restored to their induction furnace due to certain objections raised by the Electricity Board. It is submitted by learned Counsel for the appellants that a settlement has been reached between them and the Electricity Board and accordingly electricity supply will be restored to their induction furnace in January, 2007. It is submitted that, after restoration of electricity supply to the furnace, it will be possible for them to run the furnace. The crucial fact taken note of by the lower authorities for the purpose of denying the benefit of Customs Notification No. 17/2001 (S. No. 181 of the Table annexed thereto) to the appellants in respect of High Melting Scrap (HMS) imported by them in 2001 is that their induction furnace is not in operation since December, 1999 and, therefore, the clearance of the above goods at the concessional rate under the Notification had been obtained without bona fide intent to use it for melting purpose. It is submitted by learned Counsel that the goods are still lying with the appellants, who are looking forward to melting the same in the furnace as soon as electricity supply is restored. It is also pointed out that the availability of the scrap in the factory premises is a fact confirmed by Central Excise authorities. In this connection, reference is made to Order-in-Appeal No. 126/2005- M(III) dated 29.12.2005 passed by the Commissioner of Central Excise (Appeals) in Appeal No. 44/2005-M(III). This order of the appellate Commissioner contains a finding to the effect that the imported goods are available in the appellant's factory. It accordingly allowed to the appellants CENVAT credit of CVD paid on the scrap. On this basis, the finding to the contra as to the whereabouts of the scrap, contained in the impugned order, is presently under challenge.
3. It appears from the records that the department has no case that the importer misdeclared the goods or in its value. Their only case is that the end-use certificate required under the Notification was not produced by the importer within the time stipulated therein. Non-production of end-use certificate is a fact admitted by the appellants. However, it is their contention that it was impossible for them to produce such certificate on account of the shut-down of the furnace which was inevitable due to disconnection of power supply by the Electricity Board. It is also pointed out that the jurisdictional Deputy/Assistant Commissioner can extend the time for production of end-use certificate and that application for this purpose will be filed by the appellants as soon as their induction furnace returns to operation.
4. One finding adverse to the appellants, in the impugned order, is that they did not give intimation, to the Central Excise authorities, of the import of scrap. But as rightly pointed out by learned Counsel, this finding cannot be sustained in view of the Central Excise appellate Commissioner's order No. 126/2005 ibid.
5. We have heard learned SDR also, who reiterates the findings of the lower appellate authority. It is submitted that the denial of exemption under the Notification to the importer is due to their own inaction. They did not give due intimation to the Customs authorities of details of the imports and also did not move the Central Excise authorities for issue of end-use certificate.
6. After considering the submissions, we find that all the requisite information regarding the imports were given by the importer to the Customs authorities inasmuch as these authorities have no case that there was any suppression, mis-statement or misdeclaration by the party. As regards the finding of the lower appellate authority regarding intimation to Central Excise authorities, we have already found evidence in favour of the importer. Order-in-Appeal No. 126/2005 passed by the Commissioner of Central Excise (Appeals) is conclusive evidence of the necessary intimation having been given to the Central Excise authorities by the importer as also of the physical availability of the goods in their premises. The appellate Commissioner (Central Excise) also allowed to the party CENVAT credit of the CVD paid on the scrap.
7. As regards the condition under the Notification that end-use certificate issued by the Deputy/Assistant Commissioner of Central Excise be produced within six months or within such extended period as may be granted by the said Officer, in the facts and circumstances already recorded by us, it was impossible for the party to obtain end-use certificate from the Deputy/Assistant Commissioner of Central Excise within 6 months. We also find that, on account of shut-down of the furnace beyond the appellant's control, it was impossible for them to melt the scrap and apply for end-use certificate. This predicament ought to have been taken note of by the lower authorities and accordingly they ought to have given an opportunity to the importer to produce end-use certificate. For the ends of justice, we feel, we should give this opportunity to the party inasmuch as their Counsel has assured us that it would be possible for the company to restart their induction furnace (after obtaining electricity supply from the Electricity Board) by the end of next month and to move the Central Excise authorities for end-use certificate shortly thereafter. It is submitted that, within a period of 3 months, it will be possible for the company to produce the requisite certificate before the Customs authorities. We do not find valid reason to disbelieve these statements of learned Counsel. Contextually, we note that this Tribunal held in the case of SKF Bearing India Ltd. v. Collector 1999 (109) ELT 774 that such certificate can be produced at any stage.
8. In the result, the orders of the lower authorities are set aside and the case is remitted back to the original authority for fresh adjudication after giving the appellants a reasonable opportunity to produce end-use certificate in terms of the Notification as also to be personally heard. It is made clear that the end-use certificates shall be produced within 3 months from today and further that, in the event of their failure to produce the certificates within this period, they will not be entitled to the benefit of this order, in which event the impugned order will stand restored.
9. The appeals stand allowed by way of remand.
(Dictated and pronounced in open court)