INDIAN METALS AND FERRO ALLOYS LTD Vs. COLLECTOR OF C EX AND CUSTOMS
LAWS(CE)-1991-11-4
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on November 27,1991

Appellant
VERSUS
Respondents

JUDGEMENT

T.P. Nambiar, Member (J) - (1.) THIS is an appeal filed by the appellants against the orders passed by the Collector of Central Excise & Customs, Bhubaneswar in Order No. 10/CE/CUS/100% EOU/83/C/7, dated 13-6-1989. In terms of that order he confirmed the demand of duty against the appellant to the tune of Rs. 47,61,761.78 and also imposed a penalty of Rs. 10 lakhs on the appellant.
(2.) The brief facts of the case as alleged by the department are that on scrutiny of the records maintained by the appellants at Therubali for their 100% EOU and also on special stock-taking verification held on 15-4-1984, it was revealed that the total production of charge chrome and charge chrome slag was 4313.560 M.T. and 6329.420 M.T. respectively. Thus the total production of charge chrome and charge chrome slag was 10642.980 M.T. It is the case of the department that on scrutiny of records of another 100% E.O.U. manufacturing charge chrome in the same Collectorate's jurisdiction, it was found that the ratio of charge chrome to slag was 1:1. Thus the case of the department is that when the total production of charge chrome and charge chrome slag by the appellants was 10642.980, then based on the ratio of 1:1 the production of charge chrome should have been shown as 5321.490 M.T. which is just half of the total production. The allegation of the department is that the appellants have thus suppressed the production 1007.30 M.T. (5321.490 - 4313.560) of charge chrome valued at Rs. 1,14,90,402.00. The value and duty of the charge chrome slag were determined at Rs. 1,14,90,402.00 and Rs. 1,52,93,725.06 respectively as per the calculation made by the department. It is further alleged by the department that the stock taking revealed that 3721.140 M.Ts. of charge chrome slag have not been accounted for in 100% EOU premises. Accordingly, the samples of charge chrome slag generated from 100% EOU were sent for test. The test report of the Chemical Examiner of the Customs House, Calcutta revealed that in addition to other ingredients, the slag contained 37.30% chromium. Therefore, as per the discretion of ferro alloys given in the Customs Tariff, the Department was of the opinion that this was nothing but ferro alloys. Accordingly, the value and duty of the so-called ferro alloy of 3721.140 M.Ts. was determined as Rs. 2,17,45,114 and Rs. 2,89,42,746.29 respectively as per calculation.
(3.) ACCORDINGLY, a show cause notice vide C. No. VIII (20) 2-CUS/EOU/SBP/84/Pt. II/2180, dated 18-10-1984 was issued to the appellant by the Assistant Collector of Customs, Sambalpur asking the appellant to show cause as to why - (a) duty amounting to Rs. 1,52,93,725.06 for unauthorised removal of 1007.930 M.Ts. of charge chrome should not be received. (b) duty amounting to Rs. 2,89,42,74.29 for unauthorised and surreptitious removal of 3721.140 M.Ts. of so-called charge chrome slag which are nothing but Ferro alloys should not be recovered from them; (c) Why penalty should not be imposed on them under Section 112 of the Customs Act?;


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