Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs Represented By Shri J.C.Patel, Adv., ... on 5 December, 2008
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT:
II
Appeal No.C/347/2008
Arising out of OIA No.97/2008/Commr(A)Raj, dt.17.4.08.
Passed by: Commissioner of Central Excise & Customs (Appeals), Rajkot.
For approval and signature:
Honble Mrs. Archana Wadhwa, Member (Judicial)
Honble Mr. B.S.V. Murthy, Member (Technical)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the Yes
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant/s M/s Reliance Petroleum Ltd.
Represented by Shri J.C.Patel, Adv., Shri V.K. Jain, Adv.
Respondent/s CCE Rajkot
Represented by Ms. M.I.J. Micheal, Jt.CDR CORAM:
MRS. ARCHANA WADHWA, MEMBER (JUDICIAL) MR. B.S.V. MURTHY, MEMBER (TECHNICAL) Date of Hearing : 05.12.2008 Date of Decision: 05.12.2008 ORDER No. /WZB/AHD/2008 Per: Mrs. Archana Wadhwa:
Briefly stated facts of the case are that the appellants imported at Sikka Port, a consignment of 10,727 bundles of Weldable Debars from China vide Bill of Entry No.07/06-07, dt.23.5.06 which was assessed by the authorized officer under Rule 29 of the Special Economic Zones Rules, 2006 and transshipment of the consignment was permitted from the Sikka Port for Reliance Special Economic Zone by road; that the said consignment was discharged at Sikka Port and transferred to RSEZ in open trucks/trailers during the period from 29.5.06 to 11.6.06; that no weighment of the consignment was done at Sikka Port as no weighment facility existed there; that the said consignment was transported to RSEZ by trucks/trailers and was examined at the entry gate of RSEZ by Customs officer and allowed entry inside RSEZ during the said period; that it was noticed that, total number of bundles i.e. 10,727 bundles of WEldable Debars as mentioned in the import documents were tallied, whereas the total quantity of goods in terms of weight received was 30,091,650 MT as per weighment slips of the trucks/trailers instead of 30,846.969 MT as declared in the import documents, thus a quantity of 755.319 MT of Weldable Debars appeared to be short received at RSEZ. A show cause notice dt.7.12.06 was issued to the appellants demanding customs duty to the tune of Rs.37,04,397/- on the value of 755.319 MT of Weldable Debars short received at RSEZ, along with interest at the applicable rate under Section 28(b) of the Customs Act, 1962. The said SCN was adjudicated by the Lower Authority vide his impugned OIO dt.30.3.07 wherein he confirmed the demand of Customs duty of Rs.37,40,397/- along with applicable rate of interest.
2. Appeal against the above order was rejected by the Commissioner (Appeals). Hence, the present appeal.
3. The main ground on which the appellants agitated the appeal before Commissioner (Appeals) are that the Assistant Commissioner has erred in arriving at a finding that a portion of the said goods were short received in SEZ merely because of a minor discrepancy to the extent of 2.5% between the weight of the goods as declared in the Bill of Lading and weight as per the weighment slips of the trucks/trailers in which the goods were transported from the Port to the SEZ; that the Assistant Commissioner erred in proceeding on the basis that, the packing list did not specify the number of pieces in the bundles or the total number of pieces shipped; that in absence of any allegation or evidence of tampering or removal/diversion of any pieces from any of the bundle, there can be no question of any short receipt when all the bundles intact have been received in the SEZ unit; there is no evidence to show that the bundles had been re-bundled or re-packed or were not intact; that there has been no diversion of any portion of the goods while in transit from the Port to the SEZ; that the entire operation of discharge of the goods from the vessel into the barges and subsequent transport to the SEZ had been monitored by the Surveyors, J.C. Gupta & Co. P. Ltd. who by their report dt.19.6.06 certified that the entire quantify discharged from the vessel has been received in the SEZ and that there is no shortage whatsoever, that minor discrepancy in weight which was only to the extent of 2.5% is a normal phenomenon attributable to an error/variation in the weighing equipments and carrying out of weighment at two different places, namely one at the foreign suppliers end and the other in India of the trucks/trailers by which the goods were transported from the Port to the SEZ; that the SCN states that no weighment of the goods was done at the port of discharge; that it is incumbent on the department to first establish by evidence what was the weight f the goods discharged at the port before arriving at a findings of short receipt at SEZ; that as per various Tribunals decision mentioned below, where there is no diversion of any portion of the goods while in transit, discrepancy in weight as recorded at the suppliers end and as recorded at the recipients end can be on account of inaccuracies in the weighment equipment/procedure at the two ends. They relied on the Tribunals decisions in the case of (i) Modella Steel & Alloys Ltd. Vs. CC (2005(183) ELT 316 ), (ii) Ispat Industries Ltd Vs. CCE (2004 (175) ELT 113), (iii) Mardia Chemicals Ltd Vs. CCE (2003 (158) ELT 378, (iv) CCE Vs. Coated Steel Ltd. (2000 (125) ELT 578) and (v) Neera Enterprises Vs. CCE (1998 (104) ELT 382).
4. They further stated that the foreign supplier had loaded the cargo on the basis of theoretical weight only without actual weighment, therefore it can never be alleged on the basis of a discrepancy between such theoretical weight and the weight recorded at the SEZ and there was any short receipt; that it is also an accepted normal phenomenon as held in the decisions referred to above that, a minor discrepancy which was only to the extent of 2.45% is attributable to an error/valuation in weighing equipments and carrying out of weighment at two different places; that the Assistant Commissioner has not accepted the international norm of accepting tolerance of variation in the weight within certain limits; that the Purchase Order, Bill of Lading and Packing List themselves indicate that the weight mentioned therein is subject to variation between -3.5% to +5% and since the discrepancy in their case is of only 2.45%, the same is within the said tolerance limit; that the Bill of Lading/Packing List themselves indicate that the goods are supplied as per BS 4449 standards and as per these standards, the tolerance on mass per mature run for bars of diameter 8 and 10 mm is +6.5% and for diameter 12 above, it is +4.5%; that discrepancy of 2.45% is within the said tolerance limits of BS 4449 as per which the goods were sold; that the decision in the case of Savita Chemicals relied by the lower authority has no application to the facts of their case; that the demand raised in the present case was not tenable in view of the provisions of Rule 29(2)(f) and (g) of the SEZ Rules, 2006; that the Notice issued under Section 28 of the Customs Act, 1962 was not sustainable inasmuch as the assessment of the goods made in the Bill of Entry granting exemption from duty had not been challenged by the department by filing an appeal against the assessment; that the Assistant Commissioner has not followed the decision in the case of CC Vs. Hindustan Gas & Industries Ltd. (2006 (202) ELT 693) and Wipro Ltd. Vs. CC (2005 (189) ELT 289) and the decisions relied by him in the case of Jhoonjhunwala Vanaspati and Sona Casting P. Ltd. are of no relevance with the facts of the present case.
5. Commissioner (Appeals) did not accept the above findings and upheld the impugned order of the original adjudicating authority on the ground that inasmuch as there was shortage in the waste and the appellants have failed to explain the same, duty is required to be confirmed. He relied upon Tribunals decision in case of Savita Chemicals Vs CCE 2004 (176) ELT 239 (Tri-Mumbai) and confirmed the Customs duty on the ground of shortages of the imported goods received at the SEZ unit.
6. We have heard Shri J.C. Patel, Shri V.K. Jain, learned Advocates on behalf of the appellant and also Ms. M.I.J. Micheal, learned Jt.CDR on behalf of the Revenue.
7. As is seen from the impugned order, there is no dispute the bars totally tallied in bundle as well as in numbers. The goods received at the appellants end were examined by the jurisdictional authority as is clear from the certificate given on the Bill of Entry. As per the said noting on the bill of entry, Shri B.L. Meena, Supdtt. RSEZ directed the officers to Please verify the goods with respect to the bill of entry as receipt of the goods. As per the noting of the inspector, the goods were verified and found to be correct. The noting on the said document is Verified the total quantity of the goods as per bill of entry and found all correct. Total 10,727 bundles were received in RSEZ. Further, as per the noting of the superintending officer on the said document, we find that the receipt of 10,727 bundles in the appellants factory stand examined and found to be correct. The report of M/s J.C. & Co. P. Ltd. Cargo Surveyor, also shows the shortages/excesses as Nil. In fact, there is no dispute as regards the receipt of the same numbers/bundles of weldable debars in the appellants factory which were covered by the invoice raised by the foreign supplier and unloaded from the vessel. If that be so, we really fail to understand as to in how minor variation in the total weight of the cargo would make the appellant liable to pay the duty by holding that the discharged cargo does not stand fully received in the appellants factory. We have to keep in the mind the nature of the goods which are weldable debars incapable of being taken out, in part, without disturbing the number. It is not a liquid cargo where it may be possible to take out a portion of the same, thus, reducing the weight of the entire cargo. When the number of the debars are tallying, the minor variation in the weight which in any case stand fully explained by the importer, will not lead to the fact that the entire consignment has not reached the appellants factory. Appellants have produced on record, the technical literature of the bars by British Standard wherein the weight of the individual bars are given subject to tolerance limit. The tolerance limit of the bar of 12 mm and over shows the same to be + 4.5. The variation in the present consignment is within the same tolerance limit. We also note that the entire operation was monitored by the surveyor and no discrepancy was found by him. As such, we find no reason to hold that the goods were less received by the appellant holding it liable to pay the duty especially when there is no dispute about the number of bundles received by the appellant and keeping in view the nature of the goods being solid bars, making it impractical for the assessee to remove a part of the same.
8. In view of the above, we set aside the impugned order and allow the appeal with consequential relief to the appellant.
(Pronounced in Court)
(B.S.V. Murthy) (Archana Wadhwa)
Member (Technical) Member (Judicial)
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