Customs, Excise and Gold Tribunal - Delhi
Zenith Tin Works Ltd. vs Collector Of Customs on 25 April, 1994
Equivalent citations: 1994ECR137(TRI.-DELHI), 1995(75)ELT865(TRI-DEL)
ORDER P.C. Jain, Member (T)
1. Briefly the facts of this case, as set out in the impugned order as follows :-
1.1 The appellants imported a consignment of 44,4409 M. Tons of Tin Plate Prime of thickness 0.19 mm vide Bill of Entry No. 1381/11 dt. 22-6-1992 and claimed the goods under duty exemption scheme in terms of Notification No. 159/90-Cus.
1.2 The appellants produced 6 Advance Licences and DEEC Books, the thickness of the Tin Plate for the manufacture of the resultant product specified, in 3 Advance Licences and DEEC Books is as under :-
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S. No. Advance Licence DEEC Book No. & Thickness of Tinplate for
No. Date the manufacture of
resultant product.
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1. P/L/3468215 045001 0.29 mm & .20 30-7-1991 1-8-1991
2. P/L/3468224 045010 0.22 mm & 0.25 1-8-1991 1-8-1991
3. 0300358 046343 0.18 mm & 0.24 22-10-1991 25-10-1991
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1.3 The importers claimed 34.7438 Mts. of Tin-plate having CIF value of Rs. 7,73,5277- against Advance Licences and DEEC Book listed from S. No. (1) to (3) above. Under all these Advance Licences and DEEC Books, the Export obligation has already been completed and the importers have imported the subject goods as replacement material in terms of Notification 159/90-Cus.
1.4 The lower appellate authority's findings are set out in paras 13 and 14 of the said order which are reproduced below :-
"The appellants have exported the goods, in which they have used Tin Plate with a thickness of 0.29 mm, 0.20 mm, 0.22 mm, 0.25,0.18 mm and 0.24 mm (as per part E of the three of the six Duty Exemption Entitlement Certificates Order). Now, the appellants have imported the goods as replenishment. In terms of Notification No. 159/90-Cus., goods imported for the purpose of replenishment of materials should have identical specifications as those actually used in the manufacture of resultant products exported, in case these goods are to be exempted under the notification. So, the Appellants could have imported Tin Plate of the thickness shown in Part E of the relevant Duty Exemption Entitlement Certificates.
As against above the impugned goods have a thickness of 0.19. Goods with such thickness have not been used in the resultant product and hence are not covered as replenishment material under Notification 159/90-Cus., dated 30-3-1990. There is no tolerance provided under the notification. The goods imported should be identical, so far as specifications are concerned, as those actually used in the manufacture of the resultant product."
2. Shri Kamal Parasrampuria, learned advocate for the appellants has essentially reiterated the submissions made by him before the lower appellate authority.
3. We have also heard the learned SDR, Shri B.K. Singh who has submitted that an identical issue has been decided by the Tribunal recently in the case of Surekha Coated Tubes & Sheets Ltd. v. Collector of Customs, Bombay [Final Order No. C/139/93-B2] and it has been held therein that the goods imported as replenishment material against raw materials components used in the manufacture of goods which have already been exported must be of the identical specifications. However, imported goods are not according to the identical specifications, they are not covered by the advance licence as well as by the exemption notification. In this connection, we reproduce below the following findings of the Tribunal in the case of Surekha Coated Tubes & Sheets as emphasised by the learned SDR :-
"On a plain reading of para 24(1) (as amended) it follows that replenishment can be only by way of import of materials of the same characteristics and technical specifications which are used in export supplies already made. Under these circumstances we are of the view that the imported materials which admittedly are different in terms of technical specifications and other characteristics from the material used by the appellants in the export product have to be held as not covered by Advance Licence held by them."
We also reproduce below para 26 of the said order from Surekha Coated Tubes & Sheets :-
"In view of the above discussion it has to be held that the imported goods which admittedly are different in terms of specification and technical characteristics from the material used in the resultant products exported by the appellants are not eligible for exemption under Notification No. 116/88-Cus. dated 30-3-1988. For the same reason we hold that the goods which have been allowed to clear free of duty under the Notification No. 116/88-Cus. and in respect of which the condition subject to which exemption available under the notification are not capable of being complied with on account of the replenishment material being of different characteristics and specification from the material used in the export product would also be liable for confiscation under Section 111(o) of the Customs Act, 1962. However, on the ratio of the judgment of the Supreme Court in the case of U.O.I. v. Sampatraj Dugar we hold that the goods which have not been cleared after availment of exemption under Notification No. 116/88-Cus. dated 30-3-1988 shall not be liable to confiscation under Section 111(o). The appellants have contended that the goods being strictly in accordance with the licence the order imposing penalty is not sustainable. The appellants' contention has to be rejected in view of our findings that the imported goods having been imported in violation of conditions of the licence and the conditions laid down in the Notification 116/88-Cus. are liable to confiscation under Section 111(d) and 111(o) of the Customs Act, 1962. The appellants have also contended that the Collector's order imposing penalty is not sustainable since the relevant sub-section of Section 112 had not been specified. In this regard we find that relying upon judgment of the Madras High Court in the case of B. Lakshmichand v. UOI reported in 1983 (12) E.L.T. 322, the Tribunal in the case of Shally Thaper v. Collector of Customs, reported in 1993 (64) E.L.T. 31 has held that the order imposing penalty under Section 112 is not quashable because of non-specification of clause (a) or (b) so long as the statement of allegations in the show cause notice gives sufficient details to bring out the ingredients of the charge. On the ratio of these decisions we hold that there is no force in the appellants' contention that the Collector's order imposing penalty is not sustainable on account of non-specification of the relevant sub-clause of Section 112 of the Customs Act, 1962."
4. In the instant case, we notice that the facts are similar to the facts of Surekha Coated Tubes & Sheets. We do not see any reason to differ from the opinion expressed by the Tribunal in Surekha Coated Tubes & Sheets. Accordingly, we uphold the impugned order and hold that the imported tin-plates having thickness of 0.19 mm are not eligible to benefit under Notification 159/90-Cus. as amended.
5. Before parting with this case one point stressed by the learned advocate was regarding tolerances of .02 mm to .03 mm range which would bring the imported goods within the range of materials used in the manufacture of export goods. We do not find much force in this plea of the learned counsel. Question of tolerances would arise only when the goods had been ordered for importation as per the specifications of the goods used in manufacture of export goods and they would have been found to be of slightly different specifications within the tolerances. Such is neither the case of the appellants nor has any evidence been brought on record that this actually is the position. Therefore, the benefit of tolerance so assiduously argued upon by the learned advocate for the appellants cannot be given to the appellants in the instant case.