ASIA METALS AND ORS. Vs. COMMISSIONER OF CENTRAL EXCISE & S.T., AHMEDABAD
LAWS(CE)-2015-3-20
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on March 27,2015

Asia Metals And Ors. Appellant
VERSUS
Commissioner Of Central Excise And S.T., Ahmedabad Respondents

JUDGEMENT

P.K. Das, Member (J) - (1.)THESE appeals are arising out of a common order and therefore, all are taken up together for disposal.
(2.)THE relevant facts of the case, in brief, are that M/s. Asia Metals (hereinafter to referred to as the Assessee), a 100% Export Oriented Unit (EOU), were engaged in the manufacture of various grades of Brass scraps, Brass ingots, Aluminium ingots, Copper ingots and granules etc. out of the imported duty free raw materials i.e. different types of Copper scrap, Aluminium scrap and Brass scraps. On 27/28.04.2005, the Central Excise officers from the Department of Revenue Intelligence (DRI) visited the factory premises of the assessee, conducted stock verification and found shortage of 5.867 MT Zinc Scrap. The said officers also visited the premises of Appellant No. 5 and 7 and recorded the statements of various persons, partner of the assessee, transporters, Shri Kishorbhai Purohit, Manager of M/s. Sai Flipped Coil Pvt. Limited (Appellant No. 8) and Shri Anil Sohanlal Jain, Power of Attorney holder of M/s. Vitrag Impex (Appellant No. 6). A show cause notice dated 30.6.2006 was issued to the assessee proposing demand of Customs duty alongwith interest on 203.428 MT of imported duty free raw materials used in the manufacture of finished goods, which was diverted in the local market and demand of Central Excise duty alongwith interest on 31.537MT and 64.902MT of finished goods cleared to M/s. Sai Flipped Coil Pvt. Limited and M/s. Vitrag Impex, respectively without payment of duty. It has also proposed confiscation of goods and imposition of penalties on the assessee and other appellants. By the impugned order, the adjudicating authority passed the order as under: -
(a) Confiscation of the raw materials weighing 203.428MTs imported duty free and utilised in finished goods removed clandestinely, and as the goods were not available for confiscation, imposed redemption fine of Rs. 15,80,000/ -. It has confirmed the demand of Customs duty of Rs. 24,87,261/ - alongwith interest on the said raw material and imposed penalty of equal amount of duty under Section 114A of the Customs Act, 1962 on the assessee.

(b) Confiscation of finished goods of 96.439MTs (31.537MTs of Aluminium Ingots cleared to M/s. Sai Flipped Coil Pvt. Limited and 64.902MT of finished goods cleared to M/s. Vitrag Impex) manufactured out of duty free raw materials and cleared clandestinely and as the goods were not available for confiscation, imposed a redemption fine of Rs. 8,50,000/ - and also confirmed demand of Central Excise duty of Rs. 8,62,306/ - alongwith interest on the said finished goods and imposed penalty of equal amount of duty under Section 11AC of the Central Excise Act, 1944, on the assessee.

(c) Confiscation of 5.867MTs of Zinc Scrap found short as per Panchnama dated 27/28.04.2005 and as the goods were not available for confiscation imposed redemption fine of Rs. 37,500/ - and also confirmed demand of Central Excise duty of Rs. 51,732/ - alongwith interest on the said goods and imposed penalty of equal amount of duty under Section 11AC of the Act on the assessee. It has appropriated the amount of Rs. 43,251/ - as deposited by the assessee on 28.04.2005 and also directed to enforce the Bond executed by the assessee.

(d) Imposed penalty of Rs. 5,00,000/ - under Rule 26 of the Central Excise Rules, 2002 and Section 112(b) of the Customs Act, 1962 on each of the partners of the assessee being Appellant No. 2, 3 and 4 and also imposed penalty of Rs. 5,00,000/ - under Rule 26 of the Central Excise Rules, 2002 each on Appellant No. 5 and 7 and penalty of Rs. 2,00,000/ - and Rs. 1,00,000/ - each on Appellant No. 6 and 8.

(3.)LEARNED Advocate on behalf of the appellants submits that as per Para 4.1.11 of the Foreign Trade Policy - 2004 -2009, with the permission of Central Excise authorities, the assessee were allowed to supply the goods to the holder of advance license M/s. Sai Flipped Coil Pvt. Limited. Further, as per Para 6.9(b) of the policy, the assessee were permitted to supply in DTA to M/s. Vitrag Impex against the foreign exchange payments received from the Overseas. It is submitted that the appellants paid duty on the supplies in DTA. Learned Advocate drew the attention of the Bench to the relevant paragraphs of the Policy and various documents in respect of permission of the Central Excise authorities and Departmental authorities for supply of the goods to M/s. Sai Flipped Coil Pvt. Limited, Advance Licence holder and M/s. Vitrag Impex in DTA sales. It is contended that both the parties have admitted the receipt of the goods and the demand of Central Excise duty is not sustainable. It is further contended that according to the Department, the raw materials were used in the finished goods, which were diverted in the local market. As the demand of Central Excise duty were raised on the finished goods and therefore, demand of Customs duty on raw materials can not be sustained. He relied upon various decisions, as under: -
(a) CCE vs. Sanjari Twisters, 2009 (235) ELT 116

(b) Commissioner vs. Sanjari Twisters 2010 (255) ELT A15

(c) Vandevi Texturisers Pvt. Ltd. vs. CCE 2007 (220) ELT 289

;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.