Custom, Excise & Service Tax Tribunal
M/S Agarwal Metal Works Pvt. Ltd vs Cce, Delhi-Iii on 15 February, 2008
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH - COURT NO. 1 Customs Appeal No. 735 of 2007 (Arising out of Order-in-Original No. 1/CUS/JM/07 dated 26.09.2007 passed by the Commissioner of Central Excise, Gurgaon). DATE OF HEARING : 15.02.2008 DATE OF DECISION : 15.02.2008 FOR APPROVAL AND SIGNATURE : HONBLE MR. JUSTICE S.N. JHA, 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 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? M/s Agarwal Metal Works Pvt. Ltd. . Appellants (Rep. by Ms. Jyoti Mandiratta, Adv.) VERSUS CCE, Delhi-III . Respondent
(Rep by Sh. B.S Suhag, DR) CORAM : HONBLE MR. JUSTICE S.N. JHA, PRESIDENT ORDER NO._____________________________ PER JUSTICE S.N. JHA :
This appeal by the assessee is directed against the order-in-original of the Commissioner of Central Excise dated 24.09.2007 imposing redemption fine of Rs. 12,50,000/- under Section 125 read with Section 111(d) of the Customs Act, 1962 and penalty of Rs. 2,00,000/- under Section 112(a)(i) of the said Act on the assessee.
2. Facts of the case briefly stated are these : The appellant, a private limited company, is engaged in the sale and manufacture of Copper and Copper Alloys. For the purpose of manufacture of various items, the appellant imports copper and brass scrap. In the instant case, the appellant submitted Bill of Entry dated 06.09.2007 for clearance of goods declared it as 41.535 MT of Copper Scrap Barley with assessable value of US $ 301544.10 equivalent to INR 1259535/-. The import was found to be voilative of Circular of the Central Board of Excise & Customs (CBEC) No. 56/04 dated 18.10.2004. The said Circular laid down conditions to regulate the import of metal scraps. So far as relevant for the purpose of this case, the Circular provided that import and clearance of metal scrap in un-shredded, compressed or loose form could be permitted only at the designated ports/customs stations numbering fifteen, as prescribed therein. Rewari, the place of clearance of the goods in question in the instant case, not being one of the designated ports/customs houses, as aforesaid, action was taken in terms of Section 111(d) of the Customs Act which provides that the goods brought from any place outside India shall be liable to confiscation if the import is contrary to any prohibition imposed by or under the Act or any other law for the time being in force. Finally, by the impugned order, while ordering confiscation of the goods, the Commissioner imposed redemption fine in lieu of confiscation and also imposed penalty, as mentioned above.
3. Ms. Jyoti Mandiratta appearing for the appellant submitted that the said Circular was issued in the light of certain restrictions imposed by the Directorate General of Foreign Trade (DGFT) in the wake of recovery of explosive materials in the scraps at certain places in India. In the instant case, the goods were subjected to 100% check, but no incriminating muchless contraband material was found. It was submitted that there was no suppression or mis-statement on the part of the appellant. As will appear from Pre-Shipment Inspection Certificate issued by the exporter at Dubai, the goods were described as 89 drums of Copper Scrap Barley as per ISRI SPEC packed in second hand steel drums. The fact that the goods i.e the scraps were in un-shredded shape was not known to the appellant until the Pre-Shipment Inspection Certificate was made over to the appellant by the State Bank of Bikaner & Jaipur. There being no suppression or malafide intention on the part of the appellant, there being no recovery of any contraband, the authority committed error in confiscating the goods and imposing redemption fine and penalty in lieu thereof. It was also submitted that, as a matter of fact, there was no violation of the Circular of the DGFT inasmuch as the place of import of goods was Nhava Sheva Mumbai, one of the designated ports, though of course the place of discharge was Rewari. It was submitted that the restriction imposed by the Directorate General of Foreign Trade (DGFT) was in the matter of place of import and not place of discharge or clearance. However, going beyond the scope of DGFT Circular, the Circular of CBEC provided that clearance also could be made only from one of the 15 designated ports.
4. I am inclined to think having regard to the background in which the said Circular dated 18.10.2004 was issued by the CBEC in the light of the Import Policy and in the wake of recovery of explosives in the scrap at Ghaziabad resulting in human casualties that it was administrative and regulatory in nature, and did not have any fiscal implication. I am also inclined to think that in getting the goods cleared/discharged at Rewari, there was no intention on the part of the appellant to deprive the Revenue of the duty. At the same time, I am satisfied that the appellant did violate the Circular of the Board dated 18. 10.2004 in getting the goods cleared at Rewari. The Circular inter alia laid down, in no uncertain terms, that import and clearance of metal scrap in un-shredded, compressed or loose form could be permitted only at the designated customs stations, and as the goods in question were cleared at Rewari, even though the import had taken place at Nhava Sheva, Mumbai, the violation of the Circular was complete. As observed above, Section 111(d) of the Customs Act refers to import of goods in violation of any provision imposed by the Customs Act or any other law for the time being in force. I do not find substance in the plea of the appellant that the appellant was not aware of the fact that import of scrap in un-shredded form was subject to regulation and that it could be imported only at any of the 15 designated ports. I am not inclined to accept the case of the appellant that it was not aware of the fact that the goods i.e scrap were in un-shredded form. In this view of the matter, I am of the opinion that notwithstanding the fact that there was no intention on the part of the appellant to cheat the Government of its revenue, it is not entitled to complete waiver of the redemption fine and/or penalty.
5. My attention was drawn to various orders of this Tribunal and in particular reliance was placed on an order of the Single Member Bench in the case of Mool Chand Steels Pvt. Ltd. vs CC, Kandla, 2006 (206) ELT 793 (T-Del.), wherein the order of confiscation and imposition of penalty etc. was set aside. For the reasons stated above, I am not inclined to follow the said order and grant complete waiver of fine and penalty. I rather find that the facts of the case are somewhat similar to those of Sun Aluminium Extrusions vs CC, Hyderabad, 2006 (206) ELT 521 (T-Bang.). In the facts and circumstances of the case, I am of the view that ends of justice would be served by reducing the amount of redemption fine from Rs. 12.50 lacs to Rs. 2.00 lacs (rupees two lacs only) and that of penalty from Rs. 2.00 lacs to Rs. 50,000/- (rupees fifty thousand only).
6. In the result, the impugned order of the Commissioner is modified to the extent that the appellant is liable to pay redemption fine of Rs. 2 lacs in lieu of confiscation and also penalty of Rs. 50,000/-. The appeal is allowed in the above terms.
(Dictated and pronounced in the open Court on the 15th day of February, 2008) (JUSTICE S.N. JHA) (PRESIDENT) Golay