Shri Bharat Singh, Authorised ... vs Cc, Jodhpur

IN THE CUSPTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH, NEW DELHI

Date of Hearing/ Decision: 21.01.2016

Appeals Nos.C/53483, 53484 and 53548/2015-CU(SM)

[(Arising out of Order-in-Appeal No.JOD-CUSTM-PRV-49-51-2015 dated 9.6.2015 passed by the Commissioner of Customs & Central Excise (Appeals), Jaipur)]

For approval and signature:

Honble Shri B. Ravichandran, Member (Technical)

1 Whether Press Reporters may be allowed to see 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 of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Shri Bharat Singh, Authorised Signatory ...Appellants

Pankaj P Shah, Managing Director

P.G. Foils Ltd.

Vs.

CC, Jodhpur Respondent

Appearance:

Rep. by Ms. Priyanka Goel, Advocate for the appellant.

Rep. by Shri Vaibhav Bhatnagar, AR for respondent.

Coram: Honble Shri B. Ravichandran, Member (Technical)

Final Order No.53939-53941/2016 Dated:21.01.2016

Per B. Ravichandran:

These three appeals are against the order dated 9.6.2013 of Commissioner (Appeals), Jaipur and are taken up together for disposal. M/s. P.G. Foils Ltd. is the main appellant / assessee and the other two appellants are Shri Pankaj P. Shah, Managing Director of the appellant company and Shri Bharat Singh, Authorised Signatory of the appellant company. The appellants / assessee are engaged in the manufacture of Aluminium Foils, Laminations, etc. They have imported a consignment of 103924.50 kgs of Aluminium Foils and filed bill of entry on 28.08.2009. On examination of the imported consignment, samples were drawn in order to ascertain the thickness of the Aluminum Foils and were sent to Central Revenue Control Laboratory, New Delhi for test. CRCL reported on 17.09.2009 that the Aluminium foils are having average thickness of 14.4 and 7.4 Micron. A show cause notice dated 25.02.2010 was issued to the appellant /assessee for demanding safeguard duty of Rs.49,91,609/- in terms of notification no.71/2009-Cus dated 10.06.2009, as the imported Aluminium Foils are having thickness of 7 or more Micron. Proposals for imposing penalties on the appellants /assessee and the other two appellants herein were also made. The case was adjudicated. The Original Authority vide order dated 5.1.2012 confirmed the demand of safeguard duty as above; held the imported goods valued at Rs.1,66,38,696/ as liable for confiscation and allowed redemption on payment of fine of Rs.41,59,674/-; penalties of Rs.25,00,000/- on the appellant/assessee, Rs.10,00,000/- upon Shri Pankaj P. Shah, Managing Director and Rs.5,00,000/- upon Shri Bharat Singh, Authorised Signatory were also imposed. On appeal, the Commissioner (Appeals) vide the impugned order upheld the Original Authoritys finding on safeguard duty and confiscation. He, however, reduced the penalties to Rs.10,00,000/-, Rs.2,00,000/- and Rs.1,00,000/- respectively on three appellants. Aggrieved by this order, the present appeals are filed.

2. Ld. Counsel for the appellants submitted that 

(a) The CRCL Laboratory tests are not reliable as on a re-test different thickness was reported. The Lower Authorities have not taken into consideration the test reports conducted by the independent Analyst of M/s. Spectro Analytical Labs Ltd. New Delhi, who reported the thickness as 6.7 Micron;

(b) There is no price advantage between 6.5 or 7 Mircon Aluminium Foil. They have been importing regularly from the same exporters and the thickness of the foil has been declared by the appellant/assessee as 6 Micron based on the documents supplied by the exporter, who has been exporting such products for long;

(c) In view of the variation in the outcome of the different test reports, it would have been proper to follow the tolerance level thickness as 8% plus or minus, fixed by the Bureau of Indian Standards for Aluminum Foils. If such tolerance level is adjusted, their product will be considered as having thickness of less than 7 Micron.

(d) The appellant/assessee was not provided an opportunity to cross examine the persons, who gave the test reports and hence, the principles of natural justice was not followed.

3. Ld. AR strongly contested the submissions of the appellants. He submitted that the samples were drawn as per the prescribed procedure and there is no dispute about the method adopted for sampling. These samples were sent to competent approved laboratory of CRCL for testing. When the appellant/assessee wanted the re-test be conducted, the same was also done. On further objection, the samples were tested for the third time by Shriram Institute of Central Research. All these reports indicated the thickness of 7 micron or above for the imported Aluminium Foils. Ld. AR submitted that the Lower Authorities have followed proper procedure in arriving at the conclusions.

4. Heard both the sides and examined the appeal records.

5. The only point for decision is whether or not the Aluminium Foils imported by the appellant/assessee is of thickness of 7 Micron or above in order to attract safeguard duty. The correctness of imposition of penalty on the appellant/assessee and two other individuals is also to be decided.

6. The admitted facts of the case are that the appellant/assesee imported Aluminium Foils from China and declared their thickness as 6 Micron. The samples were drawn and tested by CRCL Laboratory and again re-tested on appellant/assessees request by the same laboratory. Again, as per insistence of the appellant/assessee, the test was done for the third time in another independent laboratory. It is to be noted that all these test reports indicated the thickness of imported Aluminium Foils as 7 micron or above. The appellant/assessee is contesting these findings on the ground that there are variation in different reports and it is not so easy to correctly determine the exact thickness of Aluminium Foil. I find that this argument of the appellant/assessee is not fully convincing. While the thickness in microns is to be ascertained by the accurate scientific methods, it is not contested that the competent labs including a private independent competent lab is not having facility or expertise to conduct such tests. None of the reports indicated any figures nearer to 6 Micron as declared by the appellant/assessee while importing the impugned goods.

7. The appellant /assessee placed a reliance of 8% tolerance limit prescribed by the Bureau of Indian Standards of Aluminium Foil. I find that the standards prescribed are for the quality purpose and have no relevance to determine the correct thickness and thereupon tax liability based on such thickness. Regarding cross-examination of persons, who tested the samples, I find such plea has been made in appellate stage only. It is to be noted that the samples were re-tested twice with a request and concurrence of the appellant/assessee in approved laboratories.

7. When asked specifically as to whether any request for cross-examination has been made before the Original Authority, ld. Counsel for the appellant could not categorically state anything on this. Having considered the facts, as discussed above, there is no valid reasons to interfere with the findings recorded in the impugned order regarding appellant/assessees duty liability and imposition of penalty on them. Similarly, I find no reason to interfere with the findings of the reduced penalty against Shri Pankaj P.Shah, Managing Director of the appellant/assessee. However, I find that the penalty imposed on Shri Bharat Singh is not justifiable being a salaried employee of the appellant/assessee and has been discharging assigned duties as per the direction of the Managing Director. There has been no allegation of personal gain to him in this transaction. He acted as an employee of the assessee company and it is not established that he abetted any offence of the appellant/assessee. As such, I find a penalty imposed on him is not sustainable.

8. In view of the above findings, the appeals filed by M/s. P.G. Foils Ltd. and Shri Pankaj P. Shah, Managing Director are dismissed. The appeal filed by Shri Bharat Singh, Authorised Signatory of the appellant company is allowed.

[Operative portion already pronounced in open court]

( B. Ravichandran )

Member (Technical)

Ckp.

1