Custom, Excise & Service Tax Tribunal
C/158, 285 To 287, 291/2009 vs Commissioner Of Customs (Import), ... on 1 March, 2012
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No. C/158, 285 to 287, 291, 428 to 432/2009
(Arising out Order-in-Original No. 191/2008/CAC/CC (I) SR/Gr.VA dated 5.1.2009 passed by the Commissioner of Customs (I), Mumbai)
For approval and signature:
Honble Mr. B.S.V. Murthy, Member (Technical)
Honble Mr. Ashok Jindal, Member (Judicial)
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 authoritative report or not?
3. Whether Their Lordships wish to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
authorities?
C/158, 285 to 287, 291/2009
Patel Engineering Ltd.
Nimish Patel
R.R. Dhar
Ashwin Parmar
Rupen Patel
Appellant
Vs.
Commissioner of Customs (Import), Mumbai
Respondent
C/428 to 432/2009
Commissioner of Customs (Import), Mumbai Appellant Vs. Nimish Patel R.R. Dhar Ashwin Parmar Patel Engineering Ltd.
Rupen Patel Respondent Appearance:
S/Shri V. Sridharan, Prakash Shah, Mihir Deshmukh, Advocates for the appellant Shri Y.K. Agarwal, SDR for the respondent CORAM:
Honble Mr. B.S.V. Murthy, Member (Technical) Honble Mr. Ashok Jindal, Member (Judicial) Date of hearing : 23.12.2011 Date of decision : 01.03.2012 O R D E R No:..
Per: Shri Ashok Jindal, Member (Judicial) By these appeals, the appellants have challenged the impugned order denying the duty exemption granted under Notification 21/02 dated 1.3.2002 and confiscation of the imported capital goods i.e. Payer Finisher which were allowed to be redeemed on payment of Rs.25 lakhs, demanding the duty of Rs.1,30,46,188/- and penalty of Rs. 2.5 lakhs and various penalties on co-appellants. The revenue has challenged the impugned order for enhancement of the penalties.
2. The facts of the case are that the appellant imported writ gen slip form paver finisher model SP 500 for laying concrete payment for accessories (paver finisher) and filed bill of entry declaring the assessable value as Rs.2,56,81,472/- by claiming the exemption at Sr. no. 230 of the Customs Notification no. 21/02 dated 1.3.2002, thereby availed the exemption from payment of duty under said Notification. The appellant filed a copy of contract from MMRDA for construction of Road network strengthening - Santacruz-Chembur link road (SCLR) and undertaking to use the paver finisher exclusively for construction of roads and that it will not sell or dispose of the said paver finisher in any manner for a period of 5 years from the date of import.
3. On intelligence, SIIB import found that the appellant are engaged in the act of evasion of customs duty by diverting the imported goods to other entities which before the completion of the five years from the date of import and thereby have violated the condition of Notification. Therefore, further investigations were conducted and it was found that the said paver finisher was found in Ligiri Pukhari near Jorhat airport in Assam. In investigation, it was found that the model, engine no. of the said paver finisher was of the same paver finisher which was imported by the appellant and it was ascertained that the said paver finisher belonged to M/s. Nicco Corporation Ltd. Further, it was found that M/s. Nicco Corporation Ltd. procured this paver finisher from M/s. United Construction Co., Mumbai for the intended use. On further investigation, the said paver finisher was seized and various statements were recorded. On the basis of investigation, a show-cause notice was issued for wrong availment of benefit of exemption Notification no. 21/02 sr. no. 230 and violating the conditions 7 undertaking given by the appellant that the said paver finisher shall be used in road construction and shall not be disposed of in any manner within a period of 5 years from the date of its import. The said show-cause notice was adjudicated and exemption was denied, demand of duty was confirmed. The paver finisher was confiscated allowed to be redeemed on payment of redemption fine and penalty under Section 112A of the Customs Act, 1962 was also imposed. The said order is in challenge before us.
4. Shri Sridharan, ld. counsel appeared on behalf of the appellant before us and contended as under:-
(a) The Appellants did not contravene either any of the conditions of the notification.
(b) MMRDA is a road construction corporation under the control of the State of Maharashtra and as such was covered by condition 40(a) of the Notification. Condition 40(a)(iii) specifically covers the road construction corporations under the control of state government or union territory.
(c) It is not disputed by the department that MMRDA is not a road construction corporation under the control of the State of Maharashtra. Thus, condition 40(a) is fully complied with in the present case.
(d) Further, it is clear from the record (bid document) that availability of Paver was one of the essential criteria to bid for the SCLR project.
(e) The actual use of Paver for SLCR project is also proved by the Appellants through the certificate of consultant to the project.
(f) Thus, the requirement and usage of the Paver imported for the SCLR project was proved beyond reasonable doubt. The said Paver was lying at the SCLR project site for more than three and half years.
(g) The Paver was shifted from the SCLR project site due to stoppage of the work for failure to clear the site by removing the encroachment.
(h) In any event, it is not disputed that the department was fully aware that the Appellants imported the goods against the contract of MMRDA at the time of assessment. The Appellants cannot be held guilty of suppression of contract with MMRDA.
(i) It is submitted that condition 40(a) is a threshold condition. It is not a post importation condition. Section 28 will apply in the event, it is held that there was violation of condition 40(a). Section 12 of the Customs Act, 1962 will not apply in a situation of this nature.
(j) It is submitted that if the department now takes a view that the Appellants did not satisfy the threshold condition, the demand under Section 28 is clearly barred. The department was fully aware of the fact that the imported Paver was against the contract awarded by MMRDA. The Appellants cannot be held guilty of suppression of these facts. Extended period under Section 28 cannot be invoked.
(k) It is submitted that an importer is eligible to the benefit of the notification once he has a contract with the authorities specified in condition 40(a). There is no requirement that goods imported must be used for the project for which the importer has contract with authorities specified in condition 40(a). The only eligibility criteria is that the importer has a contract with one of the authorities specified in condition 40(a).
(l) It is submitted that condition 40(b) of Notification No. 21/02 dated 1 March, 2002 only specifies the execution of bond by the importer to the effect that he shall use the imported goods exclusively for the construction of roads and that he shall not sell or otherwise dispose of the said goods, in any manner, for a period of five years from the date of their importation.
(m) It is submitted that the Appellant has not violated condition 40(b). The Appellants admittedly executed the bond in compliance of the condition 40(b). Once, the Appellants executed the bond conditions 40(b) stands fully satisfied.
(n) Without prejudice to the aforesaid and in any event, it is submitted that Condition 40(b) of Notification 21/02 is not a post-import condition.
(o) It is submitted that condition 40(b) is complied with on the Appellants submitting the bond at the time of assessment of the imported Paver.
(p) It is submitted that the above submission is further supported by some of the other conditions in the notification. For example, condition 46(iii). It reads as under:
(iii) in all cases, the importer furnishes an undertaking to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, to the effect that the imported goods shall be used for the purpose specified above and in the event of his failure to use the goods for the purpose specified, he shall pay an amount equal to the difference between the duty leviable on the said imported goods but for the exemption under this notification and that already paid at the time of importation.
(q) The above submissions are further supported from the decisions of this Honble Tribunal in the case of Commissioner of Customs Versus Sameer Ghelot reported in 2011 (263) ELT 129 (Tri Del) held as under :-
8.?The terms of the undertaking have also been spelt out in the notification itself. The notification has no separate condition that apart from giving an undertaking at the time of import, the importer shall fulfill the terms of the undertaking subsequent to the import. There are numerous other exemption notifications where either an undertaking or a bond is prescribed and in addition, there are also separate conditions which require fulfilment of the terms of the undertaking or bond. For example, in DEEC Notification No. 30/97-Cus., dated 1-4-1997 there is a condition that the importer has to execute a bond under clause (ii) thereof and there is a separate condition under clause (v) to discharge the export obligation. Executing a bond is a pre-import requirement under the first condition, whereas discharging the export obligation is a post-import condition which is a separate condition. Violation of the pre-import condition would result in the denial of the exemption notification at the time of import, whereas violation of the post-import condition would enable the customs authorities to take action under Section 111(o) of the Customs Act, 1962.
9.?There is yet another example of an exemption under EPCG scheme vide Notification No. 49/2000-Cus., dated 27-4-2000. Here again, there is a pre-import condition requiring execution of a bond under paragraph 2(2) and there is a separate condition under 2(3) to show proof of fulfilment of export obligation. The first one is a pre-import condition and the second one is a post-import condition.
10.?The impugned exemption under consideration before us has only pre-import conditions and there is no separate post-import condition. The pre-import conditions requiring an approval from DGCA and an undertaking to be furnished at the time of importation have already been fulfilled and thereafter, the exemption has been granted at the time of import. The respondents, therefore, cannot be charged with violation of a pre-import condition at a later point of time. If the Government wanted that the customs authorities should monitor the subsequent use of the aircraft, then it would have provided a suitable post-import condition in the exemption notification. Of course, the Department can proceed in terms of the undertaking executed for violation of the terms of the undertaking but that has not been done in this case. Rather a show-cause notice has been issued invoking Section 28 of the Customs Act, 1962 vide paragraphs 25 and 27 of the notice. It is settled law that Section 28 can be invoked only in the case of short-levy, non-levy and erroneous refund. Where an exemption has been allowed after the importer has fulfilled the pre-import conditions, such a case cannot be categorised either as a case of short-levy or as a case of non-levy. In the absence of any post-import condition in the exemption notification, action cannot also be taken under Section 111(o) which, in any case, has not been invoked in the show-cause notice..
(r) It is submitted that, with respect, this Honble Tribunal in the case King Rotors and Air Charters Private Limited-2011 (269) E.L.T. 343 (Tri. - Mumbai), could not have distinguished the order of this Honble Tribunal in the case of Sameer Gehlot. It is submitted that the Honble Tribunal in the case King Rotors ought to have referred the matter to the larger bench, in the event the Honble Members were of the view that decision in Sameer Gehlot was not correct.
(s) It is held by the Honble Apex Court in the case of Gammon India Limited-2011 (269) E.L.T. 289 (S.C.) that:
24.?Before parting, we wish to place on record our deep concern on the conduct of the two Benches of the Tribunal deciding appeals in the cases of IVRCL Infrastructures & Projects Ltd. (supra) & Techni Bharathi Ltd. (supra). After noticing the decision of a co-ordinate Bench in the present case, they still thought it fit to proceed to take a view totally contrary to the view taken in the earlier judgment, thereby creating a judicial uncertainty with regard to the declaration of law involved on an identical issue in respect of the same Exemption Notification. It needs to be emphasized that if a Bench of a Tribunal, in identical fact-situation, is permitted to come to a conclusion directly opposed to the conclusion reached by another Bench of the Tribunal on earlier occasion, that will be destructive of the institutional integrity itself. What is important is the Tribunal as an institution and not the personality of the members constituting it. If a Bench of the Tribunal wishes to take a view different from the one taken by the earlier Bench, the propriety demands that it should place the matter before the President of the Tribunal so that the case is referred to a Larger Bench, for which provision exists in the Act itself. In this behalf, the following observations by a three Judge Bench of this Court in Sub-Inspector Rooplal & Anr. v. Lt. Governor & Ors., (2000) 1 SCC 644 are quite apposite :
At the outset, we must express our serious dissatisfaction in regard to the manner in which a Coordinate Bench of the Tribunal has overruled, in effect, an earlier judgment of another Coordinate Bench of the same Tribunal. This is opposed to all principles of judicial discipline. If at all, the subsequent Bench of the Tribunal was of the opinion that the earlier view taken by the Coordinate Bench of the same Tribunal was incorrect, it ought to have referred the matter to a Larger Bench so that the difference of opinion between the two Coordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the judgment of the earlier Bench but knowingly it proceeded to disagree with the said judgment against all known rules of precedents. Precedents which enunciate rules of law form the foundation of administration of justice under our system. This is a fundamental principle which every presiding officer of a judicial forum ought to know, for consistency in interpretation of law alone can lead to public confidence in our judicial system. This Court has laid down time and again that precedent law must be followed by all concerned; deviation from the same should be only on a procedure known to law. A subordinate court is bound by the enunciation of law made by the superior courts. A Coordinate Bench of a Court cannot pronounce judgment contrary to declaration of law made by another Bench. It can only refer it to a Larger Bench if it disagrees with the earlier pronouncement. We respectfully concur with these observations and are confident that all the Courts and various Tribunals in the country shall follow these salutary observations in letter and spirit.
(t) Without prejudice to the aforesaid and in any event, it is submitted that the Serial No. 230 of the Notification 21/02 exempts goods specified in list 18 required for construction of roads.
(u) It is submitted that use of expression required for makes it clear that exemption is available if the imported goods are intended for use in construction of road. Its actual use is not contemplated.
(v) In any event, in the present case the Appellants used the imported Paver for its intended use viz. SCLR project and once it is put to intended use, the conditions of the notification stand fully complied with.
(w) The Honble Apex Court in its judgment in the case of State of Haryana Vs. Dalmia Dadri Cement Ltd.,-2004 (178) ELT 0013 (SC) held that:
10.?We are unable to accept the submission of Mr. Bana that, in order to get the exemption it must be shown that the goods in question, namely, the cement supplied by the assessee in this case was actually used in the generation or distribution of electrical energy. It must be noted that the important words used in the relevant provisions are goods for use by it in the generation or distribution of such energy (emphasis supplied by us). On a plain reading of the relevant clause it is clear that the expression for use must mean intended for use. If the intention of the legislature was to limit the exemption only to such goods sold as were actually used by the undertaking in the generation and distribution of electrical energy, the phraseology used in the exemption clause would have been different as, for example, goods actually used or goods used.
(x) It has been held by the Apex Court in the judgment of BPL Display Devices Ltd. Vs CCE, Ghaziabad reported in 2004 (174) ELT 5 (SC) as under:-
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 the 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 Tribunals reasoning in National Organic Chemicals Indus. Ltd. (supra) on 20-2-2002, allowed the appellants 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.
(y) It is submitted that record clearly show that imported Paver was taken to SCLR project and used there. The condition of notification is fully complied with. Once, the imported Paver is put to intended use, its subsequent use for other projects does not result in denial of exemption.
(z) It is submitted that the Appellants did not sell or otherwise dispose of the said goods, in any manner, for a period of five years from the date of their importation.
(aa) The Paver imported by the Appellant continues to be owned and possessed by the Appellants.
(bb) It is not the case of the department that the Appellants sold the imported Paver to either United Constructions or Nicco Corporation.
(cc) It is submitted that expression not to sell or otherwise dispose of the said goods, in any manner, for a period of five years from the date of their importation means sell the imported Paver and thereby divested of the Appellants title to the said Paver. The expression otherwise disposed of take the colour from the expression sale.
(dd) In support of the above contention the Appellants rely upon the judgment of the Honble Apex Court in the case of the Deputy Director of Sales Tax (Law), Board of Revenue (Taxes) Versus Thomas Stephen and Company Limited (1988) 2 Supreme Court Cases 264=1988 (34) E.L.T. 412 (S.C.). The relevant portion of the judgment reads as under:
12. Another contention raised before the High Court was that the goods had been disposed of otherwise than by way of sale within the State and, hence, liable to tax by virtue of Section 5A(1)(b) of the Act. The question, therefore, is whether there is any disposal of these goods in any manner otherwise than by way of sale within the State. Disposal means transfer of title in the goods to any other person. The expression dispose means to transfer or alienate. It was formerly an essential word in any conveyance of land. See Jowitt The Dictionary of English Law and also Webster Comprehensive Dictionary (International Edn.) -Vol. 1, page 368. Clause (b) of the section requires that the goods in question should be transferred to some person otherwise than by way of sale. In this case, there was no evidence of any transfer at all, therefore, there was no disposal of the goods as known to law. The High Court records that admittedly there was no transfer of the cashew shells, the lime shells or the consumed stores in this case. These were used by the assessee himself as fuel in the case of cashew shells for the maintenance of kiln. Sub-clause (b) of Section 5A(1) was, therefore, not applicable. In the background of the facts of this case, the High Court, in our opinion, was right.
(ee) It is submitted whenever the Government of India wanted a stringent condition it is so specifically provided.
(ff) For example, Notification No. 47 of 1998, has following condition:
(2) The donee undertakes to observe the procedure, prescribed by the Assistant Commissioner of the Customs having jurisdiction, for transport of the said goods from donor to his premises and such goods shall not be used for commercial purposes, and shall not be sold, disposed of, gifted, loaned, exchanged or parted with without the permission of the said Assistant Commissioner within the five years from the date of the receipt of the said goods to him from the donor.
(gg) Notification No. 258/90 dated 23rd October, 1990, condition (ii) provide as under:
(ii) the importer shall not part with the motor car within a period of 5 years from the date of importation by way of sale, transfer, loan or in any other manner and the importer gives an undertaking to this effect to the Assistant Collector of Customs, Amritsar at the time of clearance of the car;
(hh) In any event and assuming without admitting that the use of the Paver at the ONGC site at Assam is not for construction of road, it is submitted that even going by the statement of Mr. Kajib Nath of M/s. Nicco Corporation, the imported Paver is used for Dry Lean Concrete and Pavement Quality Concrete is for about 8000 square meter.
(ii) It is submitted such use is de minimis. The said use can be ignored for denial of exemption. The said usage was almost at the end of five years period specified in the notification.
(jj) Without prejudice the impugned demand is barred under Section 28.
(kk) It is submitted that admittedly SCN sought to demand duty by invoking Section 28.
(ll) It is submitted that claim for exemption was allowed by the revenue at the time of assessment and agreement with MMRDA was disclosed to the department.
(mm) It is held by the Honble Orissa High Court in the case of Indian Metals and Ferro Alloys Limited-2000 (123) ELT 337, that
4. ......We are, therefore, of the view that the date on which the duty on the Electrode Paste, if the same had not been used as raw material for the production of Charge Chrome, had become leviable was the date of order of clearance of the goods from the bonded warehouse. According to us, therefore, Section 28 is attracted in the present case and the relevant date was the one on which the order of clearance of the goods was passed. The last date for the same being 15-3-1984, the period of six months expired by 14-9-1984. The notice having been issued on 29-7-1985 was thus beyond the period of six months........
(nn) It is submitted that Section 28 applies in the present case and therefore SCN and the impugned order rightly invoked Section 28.
(oo) It is submitted that show cause notice sought to allege the suppression of fact related to the requirement of paver and the Appellants claimed exemption against a contract which is allotted by MMRDA not listed in the said notification.
(pp) It is submitted that the above allegations are untenable in law. The proper officer at the time of assessment was of the opinion that that the Appellants are entitled to exemption for a contract with MMRDA and extended the benefit of the notification.
(qq) It appears that present SCN is based on changed opinion. In such a case, extended period cannot be invoked.
(rr) It is submitted that imported Paver is not liable to confiscation under Section 111(o).
(ss) It is submitted that under the Notification there was no post import condition. The conditions of the notification were fully complied with at the time of import and therefore Section 111(o) has no application in the facts of the present case.
In any event, no penalty can be imposed in the facts of the present case under Section 112(a) of the Act.
5. Apart from the above contentions, he also relied on CCE vs. Sameer Ghelot 2011 (263) ELT 129 (T-Del) and UOI vs. Rai Bahadur 1969 (1) SCC 91, BSP Display Devices 2004 (174) ELT 5 (SC), Steel Authority of India 1996 (88) ELT 314 (SC), Medieval Hospital and Healthcare 1997 (89) ELT 425 (SC).
6. The contentions of the ld. counsel were strongly opposed by the ld. AR on behalf of the revenue. He contended that as per the condition of the Notification and undertaking filed by the appellant at the time of import of paver finisher it was undertaken that the said paver finisher shall exclusively used for construction of road. As per statement recorded during the course of investigation, Mr. Rajiv Nath, Sr. Manager of M/s. Nicco Corporation Ltd. that the said paver finisher was not used for construction of road. He also strongly opposed the other grounds raised by the ld. advocate but he stressed on the violation of the undertaking given by the appellant themselves. Therefore, the adjudicating authority has rightly denied the exemption. Therefore, impugned order is to be upheld.
7. Heard both sides and recorded the contention of both sides.
8. We find that the paver finisher has been imported by the appellant by claiming the exemption from duty under as per sr. no. 230 of Notification 21/02. For better appreciation, the relevant portion of the said condition is reproduced as under:-
(a) the goods are imported by
(i).
(ii) a person who has been awarded a Contract for the construction of roads in India by or on behalf of the Ministry of Surface Transport, by the National Highway Authority of India, by the Public Works Department of State Govt. or by a road construct corporation under the control of the Govt. of a State or Union Territory; or;
(iii) a person who has been named as sub-contractor in the contract referred to (ii) above for the construction of roads in India by or on behalf of the Ministry of Surface Transport, by the National Highway Authority of India, by the Public Works Department of a State Govt. or by a road construction corporation under the control of the Govt. of a State or Union Territory.
(b) the importer, at the time of importation furnishes an Undertaking to Deputy Commissioner of Customs or the Asstt. Commissioner of Customs or the Asstt. Commissioner of Customs, as the case may be, to the effect that he shall use the imported goods exclusively for the construction of roads and that he shall not sell or otherwise dispose of the said goods, in any manner, for the period of five years from the date of the importation; and
(c) in case of goods at Sr.No.12 & 13 of the list 18, the importer, at the time of importation of such goods, also produces to the Dy. Commissioner of Customs or Asstt. Commissioner of Customs, as the case may be, a certificate from an officer not below the rank of a Dy. Secretary to the Govt. of India in the Ministry of Surface National Highways Authority of India, to the effect that the imported goods are required for construction of roads in India.
9. It is contended that by the ld. sr. advocate that the condition no. 40A is fully satisfied and there is no dispute. We do agree with the same. It is also contended on behalf of the appellant that condition 40B is also fully satisfied at the time of import by execution of bond by the appellant to the effect that he shall use the imported goods exclusively for construction of roads and he shall not sell or otherwise dispose of the said goods in any manner for a period of 5 years for the date of importation. Therefore they have not violated the condition 40B and have rightly claimed the exemption under the above Notification as the undertaking is a pre-import condition and condition o. 40B is not a post import condition. Therefore the appellant has not violated any condition of the said Notification and for the same he is strongly relied on the decision of Sameer Ghelot (supra).
10. We have examined the case of Sameer Ghelot (supra) and in that case it is clear cut relying by the adjudicating authority that there was no post import contravention and that the impugned exemption has been correctly availed. Therefore, the said decision is not relevant to the facts of this case as in this case the show-cause notice has alleged that the appellant has not fulfilled the obligation undertook by the appellant by executing the bond to that effect. This fact has clarified in the show-cause notice itself in para 32.3 as under 32.3 This act of the importer is in contravention to its undertaking filed by themselves at the time of import clearance before the customs authority in this regard, violating condition no. 40(b) of the Notification. Further, in para 35(b)(ii) the appellant were issued show cause why an amount of customs duty of Rs.1.30.46.188/- leviable on the paver finisher and evaded by the importer M/s Patel Engg. Ltd. should not be demanded and recovered under the proviso to section 28(1) of the Customs Act, 1962 and also by enforcing the Bonds/undertakings executed by them at the time of import.
11. Another argument advanced by the ld. advocate is that the Notification did not contemplate actual use of the imported goods. Without going into this issue, it is a fact that the said paver finisher was found at the site of Nicco Corporation Ltd. and to ascertain the use of paver finisher was found at the site of Nicco Corporation Ltd. and to ascertain the use of paver finisher, the statement of Shri Rajiv Nath, Sr. Manager Project division was recorded and in his statement has submitted that M/s. Nicco Corporation Ltd. undertook engineering project or erection and commissioning of plant like gas plant, oil plant etc. M/s ONGC has given a contract to M/s. Nicco Corporation Ltd. for construction of Pipe storage system with gantry crane and pipe stretching system including road culverts, site levelling works for model like Ligiri, Pukhari site, Assam. The aforesaid contract was for the period 27.3.2007 to 26.1.2008 and the contract work involves concretisation of the ground area of the entire depot and also erection of gantry crane bundle, electric panel and compressor in the said depot. He further stated that the depot which is of the size of 340 Mtr X 140 Mtr i.e. 40,600 sq.mtr and this depot is for purpose of storage of drilling pipe by ONGC. The above mentioned total work in the contract, the later part i.e. engineering erection of rail, gantry crane bundle strip system, electric panel and compressor is being carried out by project division. The paver finisher was used for dry lean concrete for an area of 1200 sq.mtr. initially and thereafter another area of 8000 sq.mtr was also undertaken by said paver finisher.
12. From the statement of Rajiv Nath, we find that the paver finisher was used not for construction of road but for the construction of depot and platform for storage of pipes.
13. As per the condition of the Notification, the undertaking was given by the appellant at the time of import that the impugned paver finisher shall be used only and only for construction of roads for a period of 5 years. From the facts ascertained hereinabove, we find that the paver finisher was not used for the intended purpose as undertaken by the appellant. In view of this finding, the department has rightly issued show-cause notice to the appellant for violation of condition of their undertaking and thereby for denying the exemption under Notification 21/02. As show-cause notice has been rightly issued and in the adjudication order it is also found that the impugned paver finisher was not used for construction of road, therefore they have not fulfilled the condition terms of undertaking/bond at the time of import. As they have violated the terms of condition of their bond/undertaking, therefore they are liable to pay duty as demanded in the impugned order. On limitation, we find that the show-cause notice has been issued for violation of undertaking given at the time of importation for intended use and the fact that the imported paver finisher was not found to be used for intended purpose during investigation which amounts to suppression, therefore, the show-cause notice issued is within limitation.
14. Accordingly, demands confirmed in the impugned order are upheld and we do not find any infirmity in the impugned order.
Therefore, impugned order is upheld, appeals filed by the appellants stand dismissed. Appeals filed by revenue are dismissed as the penalties imposed on the appellants are appropriate in the facts and circumstances of the case.
(Pronounced in Court on .) (B.S.V. Murthy) (Ashok Jindal) Member (Technical) Member (Judicial) SR 30