Custom, Excise & Service Tax Tribunal
Stainox Alloys Pvt Ltd vs Nhava Sheva - Iii on 11 September, 2020
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CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH - COURT NO. I
Customs Appeal No. 89652 of 2018
(Arising out of Order-in-Appeal No. 113 to 115(Adjn(Exp)/CRC-
I/2018/JNCH/Appeal-I dated 18.08.2016 passed by the
Commissioner of Customs (Appeals), Mumbai-II)
M/s Stainox Alloys Pvt. Ltd. .... Appellant
24, C.P. Tank Raod, Mumbai - 400004
Versus
Commissioner of Customs, NS-II .... Respondent
JNCH, Nhava Sheva, Uran, Raigad - 400707
WITH
Customs Appeal No. 89464 of 2018
(Arising out of Order-in-Appeal No. 113 to 115(Adjn(Exp)/CRC-
I/2018/JNCH/Appeal-I dated 18.08.2016 passed by the
Commissioner of Customs (Appeals), Mumbai-II)
M/s Stainox Alloys Pvt. Ltd. .... Appellant
24, C.P. Tank Raod, Mumbai - 400004
Versus
Commissioner of Customs, NS-II .... Respondent
JNCH, Nhava Sheva, Uran, Raigad - 400707
AND
Customs Appeal No. 89657 of 2018
(Arising out of Order-in-Appeal No. 113 to 115(Adjn(Exp)/CRC-
I/2018/JNCH/Appeal-I dated 18.08.2016 passed by the
Commissioner of Customs (Appeals), Mumbai-II)
Shri Ketan Jain .... Appellant
24, C.P. Tank Raod, Mumbai - 400004
Versus
Commissioner of Customs, NS-II .... Respondent
JNCH, Nhava Sheva, Uran, Raigad - 400707
Appearance:
Shri V.M. Doiphode, Advocate for the Appellant
Ms. Trupti Chavan, AC, Authorized Representative for the
Respondent
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CORAM:
HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL)
FINAL ORDER NO. A/85776-85778/2020
Date of Hearing: 12.02.2020
Date of Decision: 11.09.2020
Per: Dr. D.M. Misra
These appeals are filed against respective orders since
involve common issues, hence are taken up together for
disposal.
2. In Appeal No.89652/2018 the facts of the case are that
on the basis of intelligence, investigation was initiated against
the appellants, who had imported Stainless Steel CR Coils
against Bill of Entry No.4624806 dated 13.02.2014 from USA
without payment of appropriate Anti Dumping duty leviable on
such coils as per Notification No. 14 of 2010 dated 20.02.2010
read with Notification No. 86/2011 dated 6.9.2011. It is
alleged that the goods were stuffed in seven containers, and in
three containers weighing around 54.294 MTs Stainless Steel
CR Coils having width less than 1280 mm , hence liable to
Anti Dumping duty amounting to Rs.49,14,756/-.
Consequently, the said consignment was seized by the M&P
wing of the customs department on21.02.2014 and later
released provisionally on execution of Bond for full value and
cash security of Rs.6,92,450/- being 20% of the value.
Further, the appellant have paid the entire amount of duty of
Rs.49,14,756/- on 24.02.2014. On completion of investigation
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a show-cause notice was issued to them for recovery/
appropriation of the said duty, proposed for confiscation of the
goods and penalty on the Appellant company and on Shri
Ketan R Jain Director. On adjudication, the demand was
confirmed and duty paid was appropriated, goods released
provisionally was directed to be confiscated under Sec.111(d)
and 111(o) of CA,1962 with an option to redeem the same on
payment of fine of Rs.4.00 lakhs, penalty of Rs.5.00 lakhs
imposed on the Appellant company under Sec.112(a) & (b) of
CA,1962; penalty of Rs.5.00 lakhs and Rs.1.00 lakh imposed
on the director Shri Ketan Jain under 112(a) &(b) and Section
114AA of CA,1962 respectively. Aggrieved by the said order,
they filed an appeal before the learned Commissioner
(Appeals), who in turn, partly allowed their Appeal by reducing
the redemption fine to Rs.3.00 lakhs, Penalty on the Appellant
company to Rs.1.50 lakhs and Shri Ketan Jain to Rs.1.00
Lakhs under Sec.112 of CA,1962. Hence, the present appeal.
3. In Appeal No.89657/2018 it is stated that the appellants
have paid the Anti Dumping duty of Rs.49,14,756/- on
24.2.2014 during investigation and on provisional release
ware housed the same and requested for re-export of the said
goods. The Appellant after obtaining permission from the
Commissioner Customs, JNCH, in May 2014 filed Shipping Bill
on 25.5.2014 for re-export and the said goods were finally re-
exported finally 02.9.2014. After re-export of the goods, the
appellants filed a refund claim on 29.10.2014of the duty of
Rs.49,14,756/- on 24.2.2014, which was rejected by the
adjudicating authority on 04.4.2017 on the ground that the
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same was to be considered under Sec.26A and not under
Sec.27 of CA,1962 as the show-cause notice relating to
proposal for confiscation and penalty was pending
adjudication. Aggrieved by the said order, they filed an appeal
before the learned Commissioner (Appeals). The learned
Commissioner (Appeals) decided both the issue by a common
order, which is under challenge.
4. At the outset, the learned Advocate Shri V.M. Doiphode
for the appellant, has submitted that the issue of applicability
of antidumping duty to the imported goods Stainless Steel CR
Coils having width less than 1280 MM is no more in dispute
since settled by the Supreme Court holding that duty is
leviable. He has submitted that they are presently dispute
confiscation of the goods and imposition of penalty on the
Appellant. He has submitted that the only allegation against
the appellant in the show-cause notice relating to non-
payment of Anti Dumping duty was that they have not
declared the width of 54.294 MTs of Stainless Steel CR Coils in
the Bill of Entry filed, resulting into mi-declaration and
accordingly confiscation was directed under Sec.111(d) &
111(o) of the CA,1962 by the adjudicating authority. It is his
contention that in the packing list as well in the respective
purchase invoices filed along with the Bill of entry the width of
the Stainless Steel CR Coils had been mentioned. Besides, at
the relevant time as per the judgment of the Tribunal in
Mascot International Vs. CC(Exports), Nhava Sheva - 2014
(300) ELT 545(Trb.-Mum.), no antidumping duty was required
to be paid on the Stainless Steel CR Coils having width more
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than 1250mm. It is observed by the Tribunal that demand of
anti-dumping duty on import of stainless steel cold rolled coils
having width 1256 MM to 1259 MM being beyond tolerance
limit prescribed under the said notification, is not sustainable.
In the case of Mascot International, the width was 1251 to
1300 MM. Thus, in view of the above judgement, the
antidumping duty where width was not declared in the bill of
entry, the width was ranging from 1273 to 1278 MM and
therefore antidumping duty was not leviable. Hence, there was
no malafide intention on the part of the appellant not to
declare the width in the bill of entry when the same has been
mentioned in the packing list and purchase invoices filed along
with the bill of entry. He has further submitted that in the case
of Arti C Bhutia Vs CC(Export), Nhava Sheva - 2014 (299) ELT
113 (Tri-Mum), the allegation of the revenue that there was
mis-declaration as the goods were declared as trim edge,
whereas on inspection it was found to be mill edge. But, the H
Tribunal held that when the demand of anti-dumping duty is
set aside the question of confiscation and penalty does not
arise. Even though on merit, the Hon'ble Supreme Court, in
Muscat International's case reversed the judgement of
Tribunal on the issue of levy of anti-dumping duty, but in the
case of Arti C Bhutia's case, held that since the goods have
been re-exported the question of demand of anti-dumping
duty does not arise and therefore the revenue's appeal was
dismissed. Thus, the Hon'ble Apex Court confirmed the view of
Tribunal on the issue of setting aside confiscation and penalty
when the goods are re-exported. Also, he has referred to the
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judgment of the Hon'ble Supreme Court in the case of
Siemens Ltd. Vs. CC 1999 (113) ELT 776 (S.C.).
4.1 He has further submitted that the confiscation was
upheld by the Commissioner (Appeals) erroneously under
Section 111(m) of the Customs Act, 1962, which was neither
alleged in the show-cause notice nor the confiscation was
directed by the adjudicating authority under section 111(m) of
CA,1962. Therefore, the confirmation of confiscation by the
learned Commissioner (Appeals) under section 111 (m) is bad
in law. In support of his contention the Ld. advocate referred
to the judgement of the Hon'ble Supreme Court in the case of
Amrit Foods Vs.CCE,UP 2005 (190) ELT433(SC), wherein
penalty imposed under rule 173 Q of erstwhile Central excise
Rules, 1944 was set aside since the particular clause under
which contravention occurred was not specified in the show
cause notice.
4.2 The Ld. advocate has further submitted that the Ld.
Commissioner (Appeals) invoked section 111(o) of CA,1962 in
upholding the confiscation which is not applicable to the
present case as the anti-dumping duty notification does not
have any post import condition, unlike any other notification
which has specific condition regarding end-use or like in the
case of advance licenses, EPCG licenses etc. The learned
Advocate relied on various judgments in support of the
aforesaid claim that confiscation and penalty against the
appellant cannot be sustained.
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4.3 On the second appeal, relating to refund of Anti
Dumping duty of Rs.49,14,756/- paid on 24.02.2014, he has
submitted that on re-export of the goods on 02.9.2004, from
shed to shed, after obtaining permission from the
Commissioner, Customs, JNCH, in May 2014, refund claim was
filed on 31.10.2014 for Rs.49,14,756/-. In their refund claim,
they have stated that the refund of duty paid is sought under
Section 27 of the Customs Act, 1962 on the ground that it
was relating to Anti Dumping duty paid at the insistence of the
department and since the goods were re-exported without
clearance for home consumption, they are eligible to refund of
the duty paid. The learned Assistant Commissioner rejected
the claim holding that refund of anti dumping duty paid is
covered under Section 26A and not under Section 27 of
CA,1962 since offence case show-cause notice issued on the
ground of mis-declaration of the goods at the time of its
import and the same as on the date of claim of refund was
pending adjudication. It is the contention of the appellant is
that in the impugned order, the learned Commissioner
(Appeals) though observed that the provisions of Section 26A
cannot be made applicable to the present refund claim but
Section 27 of the Customs Act, 1962 would apply, however
erroneously held that the appellant are required to file a fresh
refund claim. He submits that even though they were not
required to file fresh refund claim since it was already filed on
31.10.2014, but a fresh application was filed on 26.11.2018.
The said refund claim has been processed by the adjudicating
authority and refund of Rs.49,14,756/- was sanctioned to
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them by the adjudicating authority on 28.02.2019 and refund
Order was issued to them on 01.3.2009.
4.4 The learned Advocate has further submitted that
imposition of personal penalty on Shri Ketan R Jain is
unjustified as nowhere any evidence has been brought on
record alleging his personal involvement in filing the
declaration with an intention to evade payment of duty.
Further, he has contended that since no penalty could be
imposed nor any confiscation be directed against the main
appellant, hence, confirmation of penalty against the director
Sri Ketan R Jain is bad in law.
5. Learned AR for the Revenue reiterates the findings of
the learned Commissioner (Appeals). She has submitted that
on the applicability of Anti Dumping duty of the imports in the
present case the issue is no more res integra and settled by
the Hon'ble Supreme Court in Mascot International's case
(supra). On the issue of confiscation and penalty, she has
submitted that the importer had not declared the correct width
of the stainless steel CR coils at Sr. No. 4 of Bill of Entry
whereas the width of the coils at other serial number has been
mentioned by them. She has submitted that it was done
intentionally to avoid payment of Anti Dumping duty which
was payable on stainless steel CR coils having width less
than 1280 mm being exported from USA. Consequently, the
confiscation upheld by the Ld. Commissioner(Appeals) under
Section 111(m) and 111(o) of the Customs Act, 1962 and
imposition of penalty is fully justified. Further, she has
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submitted that Shri Ketan R. Jain is an active Director of the
appellant-exporter and was involved in day to day activity of
the appellant including filing of the documents namely, Bill of
Entry before the Customs. Therefore, penalty on him also is
correct and justified.
5.1 Rebutting the argument of the learned Advocate that
since the goods were re-exported, hence fine and penalty
cannot be imposed on the appellant, the learned AR referring
to the judgment of the Larger Bench in the case of Hemant
Bhai R Patel Vs. Commissioner of Customs, Ahmedabad -
2003 (153) ELT 226 (Tri-LB) submitted that re-export of the
goods cannot in any manner come on the way of confiscation
and penalty, once the mis-declaration of imported coils is
established.
5.2 Learned AR for the Revenue has further submitted that
non-mentioning of the correct provision while upholding
confiscation and penalty in the notice or in the adjudication
Order cannot be fatal to the case as the facts leading to
violation committed by the appellant has been narrated in the
notice and the same has been repeated in the impugned order
while confirming the confiscation and penalty. In support, she
has referred to the judgment of the Tribunal in the case of AVI
Steel Traders Vs. Commissioner of Central Excise - 2010
(260) ELT 43 (Del) and Commissioner of Customs, Amritsar
Vs. APM International - 2008 (222) ELT 194 (P&H).
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6. Heard both sides and perused the records.
7. The issues in Appeal No.89652/2018 for determination
are: (i) applicability of Anti Dumping duty on the imported
stainless steel CR Coils having width less than 1280 mm; (ii)
confiscability of the goods seized and imposition of penalty,
(iii) imposition of penalty on Shri Ketan R Jain, Director of the
Appellant.
8. As far as the leviability of Anti Dumping duty on the
imported Stainless Steel CR Coils having width less than 1280
mm is concerned, I find that the issue is no more res integra
and settled by the judgment of Hon'ble Supreme Court in
favor of Revenue in the case of Commissioner of Customs
(Export), Nhava Sheva Vs. Mascot International - 2017 (352)
ELT 3 (SC) setting aside the judgment of the Tribunal in this
regard. Thus, the Stainless Steel CR Coils of 54.298 MT
having width less than 1280 mm are liable to Anti Dumping
duty of Rs.49,14,756/- and the confirmation of the duty by the
authorities below does not suffer from any infirmity. This is
also not disputed by the Appellant during the course of
hearing.
9. Now coming to the issue of confiscation of the goods and
imposition of penalty, the learned Advocate for the appellant
has vehemently argued that there is no mis-declaration of the
goods in the bill of entry even though the appellant had not
specifically mentioned the width of the coil, but the
accompanying commercial invoice, packing list clearly
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indicated the width of the coils. Also, in the panchanama the
width of the coils affixed on the packages has been indicated
to be tallied with the packing list. Besides, the confiscation
directed under sec.111(m) by the Ld. Commissioner (Appeals)
was neither invoked in the show cause notice nor referred by
the adjudicating authority in directing confiscation; also since
the impugned goods were later allowed to be re-exported,
hence directing confiscation of the said goods and imposition
of penalty is bad in law. The learned AR for the Revenue, on
the other hand, submitted that there is mis-declaration of
goods inasmuch as the appellants have not declared the width
stainless steel CR Coils relating to three packages weighing
54.294 MTs in the bill of entry and referring to the judgment
of the Larger Bench of this Tribunal in the case of Hemant Bhai
R Patel (supra) it is submitted that since there has been
violation of the relevant notification while importing stainless
steel CR Coils by not declaring the width as less than 1280
mm, accordingly, the authorities below had rightly directed
confiscation of the goods weighing 54.294 MTs out of the total
quantity of stainless steel CR Coils imported and imposed
penalty accordingly even though the goods were later re-
exported.
10. I find that the adjudicating authority while confirming
the demand of Anti Dumping duty directed confiscation of the
goods observing that the goods are liable to anti dumping duty
and there has been mis-declaration/non-declaration of goods
in the respective Bills of Entry. The confiscation of the goods
was directed under Section 111(d) and 111(o) of the Customs
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Act, 1962 and allowed redemption of the same on payment of
fine of Rs.4.00 lakhs. The relevant provisions read as follows:
CONFISCATION OF GOODS AND CONVEYANCES AND
IMPOSITION OF PENALTIES
SECTION 111. Confiscation of improperly imported goods, etc. -- The
following goods brought from a place outside India shall be liable to confiscation :
--
(a)......................
(b)...............
(c)................
(d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force;
(e)..........................
(f)......................
(g)..............................
(h).....................................
(i)...................................
(j)......................................
(k).......................................
(l)...........................
(m) [any goods which do not correspond in respect of value or in any other particular] with the entry made under this Act or in the case of baggage with the declaration made under section 77 [in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54];
(n)............................................
(o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer;
[(p) ..............................
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11. The learned Commissioner (Appeals) in para 27 of the impugned order observed that the goods are liable to Anti Dumping duty as there was an attempt to evade Anti Dumping duty, which rendered the goods liable for confiscation under Sections 111(m) and 111(o) of the Customs Act, 1962; further he has observed that there is no reason to confiscate the goods under Section 111(d) of the Customs Act, 1962. The contention of the appellant is that since the goods have been exported subsequently, hence, directing confiscation and imposition of penalty is bad in law. The Revenue, countering the said argument, referred to the judgment of the Larger Bench of the Tribunal in Hemant Bhai R Patel's case.
12. I find that in principle there is merit in the contention of the learned AR for the Revenue inasmuch as when the goods were imported, the appellant did not appropriately declare the width of the stainless steel CR coils in the Bills of Entry only in respect of 54.294MTs when the width of other coils having width more than 1280mm declared, resulting into non- payment of Anti Dumping duty. After initiation of investigation, the Anti Dumping duty of Rs.49,14,756/- has been deposited by them. Subsequently, the goods were provisionally released on execution bond and cash security. On their application, the Commissioner of Customs allowed re-export of the goods in May, 2014 and the goods were subsequently re-exported in September, 2014. The act of re-export of the goods subsequent to import by mis-declaring/non-declaring the width cannot obliterate the said act or omission in view of the 14 ratio of the Larger Bench of the Tribunal in Hemant Bhai R Patel's case .
13. The second line of argument assailing the direction of confiscation and imposition of penalty, advanced on behalf of the appellant is that in the show-cause notice it is proposed to confiscate the goods under Sections 111(d) and 111(o) of the Customs Act, 1962. The adjudicating authority has directed confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962. However, on Appeal by the Appellant before The learned Commissioner (Appeals), though he has observed that Section 111(d) cannot be made applicable and directed confiscation under Sections 111(m) and 111(o) of the Customs Act, 1962. It is the contention of the Appellant that the learned Commissioner (Appeals) has travelled beyond the scope of the adjudication order and hence his order directing confiscation cannot be sustained. Replying the said argument, the learned AR for the Revenue cited various judgments in support of their argument that mere non-mentioning of the correct rule in the notice cannot absolve the noticee from the liability of penalty for any acts or omission resulting to contravention or violation of the provisions of the Act or Rules made there under, when the facts revealing contravention are mentioned in the notice.
14. I do not see merit in the said argument of the Revenue as in the present case, the show-cause notice was issued proposing confiscation under Sections 111(d) and 111(o) of the Customs Act, 1962 and in adjudication the confiscation 15 was directed under the said provisions. Aggrieved by the said Order the Appellant has filed the Appeal and not the Revenue. The learned Commissioner (Appeals), however, without issuing any notice or providing any opportunity to the appellant directed confiscation under Section 111(m) of the Customs Act, 1962. Hence, the principles cited by the learned AR, which is applicable in validating a notice for non citation of the particular provision, in my opinion, cannot be made applicable to the facts of the present case to support the Order of the Ld. Commissioner (Appeals). Therefore, the confiscation of the goods under Section 111(m) as directed by the learned Commissioner (Appeals) cannot be sustained. The Notification 14/2010-Cus dt. 20.2.2010 read with Notification No.86/2011- Cus dt. 06.9.2011 is directed for levy of Anti-dumping duty on the subject goods from subject countries/exporters and not a post-import conditional exemption Notification. Whereas non- fulfillment of any post import condition would attract Section 111(o) of CA,1962. Consequently, the confiscation under Section 111(o) cannot be sustained. In the result, the confiscation of goods and consequent imposition of penalty cannot be sustained.
15. On the issue of penalty on Shri Ketan R Jain, I find that the Department could not bring out any evidence against personal involvement of Shri Ketan R Jain indicating that he has involved actively in non-payment of anti dumping duty by mis-declaring the width of the coil. On the contrary, he has signed the relevant import documents filed with Department in 16 normal course. Accordingly, imposition of penalty on him is unwarranted and the same is accordingly set aside.
16. The second appeal No. 89464/2018 relates to refund of Anti Dumping duty paid when the goods were subsequently re-exported. There is no dispute of the fact that the Department allowed the appellant to re-export the goods but denied to settle the refund claim filed on 31.10.2014 on the ground that notice issued alleging violation of various provisions of Customs Act and proposition for confiscation and penalty for mis-declaration was pending adjudication. Even though the learned Commissioner (Appeals) set aside the findings of the adjudicating authority observing that for allowing refund, Section 27 of the Customs Act, 1962 is the valid provision and not Section 26A, but, he has directed the appellant to file a fresh application.
17. The learned Advocate for the appellant submits that pursuant to the direction of the learned Commissioner (Appeals), they filed a refund application on 26.11.2018. The said refund application was scrutinized by the jurisdictional Assistant Commissioner of Customs and refund was sanctioned to them on 28.02.2019. It is their grievance that the refund application filed on 31.10.2014 was a valid application and they are not required to file another application on 26.11.2018. I do not find merit in the contention of the appellant in as much as the amount of Anti Dumping duty was paid during the course of investigation in February, 2014, which later resulted into issuance of show-cause notice in 17 August, 2014 after completion of the investigation. The said show-cause notice was adjudicated by the Assistant Commissioner in 2017 and the appeal against the said order was finally decided by the learned Commissioner (Appeals) by order dated 19.09.2018.Consequent to the said Order the refund of anti dumping paid during investigation became due to them. Consequently, on their filing of refund claim on 26.11.2018, the Assistant Commissioner after scrutinizing the refund claim from all aspects including unjust enrichment etc., sanctioned the refund to the Appellant. I do not find any discrepancy in the approach of the Department.
18. In view of the above, the Appeal No. 89652/2018 filed by M/s Stainox Alloys Pvt. Ltd. is partly allowed to the extent of setting aside the confiscation and penalty and Appeal No. 89464/2018 is rejected. Appeal No. 89657/2018 filed by Shri Ketan Jain is allowed.
(Pronounced in court on 11.09.2020) (Dr. D.M. Misra) Member (Judicial) Sinha