M/S. Mkn Poly Associates vs Commissioner Of Customs(Import), Cfs, ...

[Arising out of Order-in- Original No. 42/2004/CAC/CC/DSS dtd. 13/4/2004 passed by the Commissioner of Customs, CFS(Mulund), Mumbai]

For approval and signature:

Honble Mr. P.K. Jain, Member(Technical) Honble Mr Ramesh Nair, Member(Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities? =======================================================

M/s. MKN Poly Associates : Appellants

VS

Commissioner of Customs(Import), CFS, Mulund : Respondent

Appearance

Shri. G.B. Yadav, Advocate for the Appellants Shri. Chatru Singh, Asstt. Commissioner(A.R.) for the Respondent

CORAM:

Honble Mr. P.K. Jain, Member (Technical) Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 16/9/2015 Date of decision /2015

ORDER NO.

Per : P.K. Jain

Brief facts of the case are that the appellant imported Copper Scrap of two varieties namely Birch and Dream and filed Bill of Entry. The appellant also claimed concessional rate of duty on the ground that country of origin is Sri Lanka and for the said purpose certificate of country of origin of Sri Lanka were produced. The matter was investigated and it was found that Copper Scrap declared to be Dream variety was infact Copper Scrap of Clove variety which has far higher copper content and is more expensive. It was also found that country of origin certificate produced by the appellant in respect of purported copper scrap Dream variety was not issued by the appropriate authority. In respect of other variety, genuinity of certificate was confirmed. As far as scrap of purported Dream variety is concerned based upon chemical analysis and prevailing price of copper scrap and on the basis of contemporaneous import, assessable value was re-assessed from US$1200/- PMT CIF to US$1378 PMT CIF. Further the benefit of exemption relating to the goods of Sri Lanka origin was denied.

2. The case was adjudicated wherein value of the goods was enhanced, goods were confiscated under 111(d) read with Section 111(m) of the Customs Act, 1962 and redemption fine of Rs. 5 lakhs was imposed, further penalty of Rs. 2 Lakhs was imposed under section 112(a) of the Customs Act, 1962.

3. Ld. Counsel for the appellant submitted that he had imported two varieties of copper scrap and there was no reason to suspect that one of country of origin is correct and other one is fake. It is submitted that if appellant was aware then they would not have produced fake certificate. Manipulation has been done by the supplier of goods/sender of the certificate. Ld. Counsel also submitted that the value of goods is not based upon the contemporaneous import. Ld. Counsel further submitted redemption fine was not imposed on the basis of any market inquiry and has been imposed arbitrarily. He further cited Judgment of Honble Supreme Court in case of Commissioner of Customs, Mumbai Vs. Mansi Impex[2011(270) ELT 631(S.C.)] to support his contention that Redemption fine is to be based upon market survey and not arbitrary. Ld. Counsel further submitted that assessable value enhanced is approximately Rs. 1. 75 lakh and duty involved will the less than Rs. 1 lakh. In view of the said position redemption fine and penalty imposed are very higher.

3. Ld. A.R. appearing on behalf of the Revenue submitted that appellant has mis-declared the description of the goods i.e. instead of describing goods as Clove variety has described the scraps of Dream variety. Not only description was mis-declared but even country of origin certificate submitted was found to be fake. It was also submitted that if the fact that country of origin certificate is fake was not detected, the appellant would have got ineligible benefit of Rs. 5 lakhs in duty. Learned A.R. submitted redemption fine imposed is not on the higher side keeping in view of the value and duty involved in the goods. Even penalty imposed is not higher side for the same reasons.

4. We have considered the rival submissions.

5. It is not under dispute that goods which were declared copper scrap Dream variety were in reality found to be copper scrap Clove variety. It is also not under dispute that variety of scrap found during the examination fetches higher value in the market. In view of the said position there is mis-declaration both in the description and the value. We also note that certificate relating to country of origin was found to be fake as it was confirmed by the Sri Lanka Authorities that the said certificate has not been issued by them. Thus the confiscation of the goods is in order. As far as imposition of redemption fine is concern it should be as per the provision 125 of the Customs Act. Order in original does not indicate if any market inquiry was conducted and the redemption fine imposed is based upon such inquiry. During the course of hearing this bench had inquired from the Ld. Counsel whether he can submit sale price of the goods cleared by them as that would indicate the market price of the goods. Ld. Counsel submitted that matter is very old, it will not be possible to produce sale documents at this stage. Keeping in view fact that matter is old and it will not be possible to go into details of the market inquiry at this stage, we do not find any reason to interfere with the order of the Commissioner as far as imposition of redemption fine is concerned. As far as imposition of penalty is concerned, in our view, penalty imposed is on the higher side in view of duty proposed to be evaded and we reduced the same from Rs. 2 lakhs to Rs. Rs. 50,000/-.

6. Barring above modification in penalty amount, appeal filed by the appellant is dismissed.

(Order pronounced in court on ______________)

Ramesh Nair Member (Judicial) P.K. Jain Member (Technical)

sk

5 C/704/04