ORDER
K.S. Venkataramani, Member (T)
1. This appeal is directed against the order dated 28-2-1989 passed by the Collector of Central Excise & Customs, Bhubaneshwar by which he had demanded differential duty of customs amounting to Rs. 57,52,056.40 on a quantity of 4996.635 MT of Steel Billets under Section 28 of Customs Act on the ground that these were not utilised as imports for their project but had been sold to others.
2. The facts in brief are that the appellants after having registered their project import contract under Project Import Regulations, 1986 with Paradeep Customs for import of 5972.090 MT of steel billets cleared the same at the concessional rate of duty as project imports. The Bill of Entry was provisionally assessed and classified under Customs Tariff Heading 9801.00 as project import. Subsequently, the department found that the appellants had sold a quantity of 4996.635 MT of imported steel billets to different outside parties instead of using it in their project. A show cause notice dated 24-11-1988 was issued alleging that they had misused the material imported and cleared at concessional rate as project imports and had unauthorisedly sold them to different parties in violation of the condition under which the project import was permitted to the appellants. They were also asked to show cause as to why differential duty at standard rate of duty applicable under Heading 7207.11 should not be realised under Section 28 of the Customs Act, 1962 on the material so misused. After considering the reply to the show cause notice and hearing the appellants in the matter the Collector passed the impugned order against which the present appeal has been filed.
3. Shri D.N. Mehta, learned counsel for the appellants first addressed arguments on the Misc. application which was to bring on record certain documents which would help in the proper disposal of the case. After hearing the learned counsel and the learned D.R. in the matter it was decided that out of 8 documents listed in the Misc. application there should be no objection to take on record documents at S. No. 1,2,4 & 5 of the application being documents on record. Inclusion of other documents in the record was also not pressed. In the circumstances, the Misc. application is disposed of accordingly.
4. Coming to the merits of the appeal the learned counsel submitted the issue herein is one of rate of duty charged for payment of differential duty. The appellants’ claim is that they are entitled to the exemption under Notification 213/85. The learned counsel pointed out that the appellants had approached the Joint Plant Committee (JPC) for disposal of the material which was surplus to their use to other actual users and which have been cleared by the appellants at concessional rate as project import, and they had been duly granted permission by the JPC for such a disposal. This was in accordance with the provisions in the Import Policy. They had also kept the jurisdiction-al Asstt. Collector informed. As regards the eligibility to Notification 213/85 the learned counsel contended that the carbon content of the billets imported was 0.10/0.23% as seen from the Inspection Certificate of the foreign supplier and the same tallies with the IS Specification No. 2830/75 for carbon steel billets. As such, the goods imported fully conform to the specification of carbon steel billets and they should have been held eligible for exemption under Notification No. 213/85. The learned counsel also assailed the finding of the Collector that Notification 213/85 was a conditional Notification requiring production of end-use certificate, by urging that on a plain reading of the Notification it is clear that the exemption is not linked to any requirement of production of end-use certificate showing that the goods imported were in fact used for the manufacture of bars, rods or light structural as mentioned in the Notification. All that it is to be seen, according to the appellants, is to see whether the goods are capable of such use. In this context, the learned counsel relied upon the case law reported in 1988 (19) ECR 467 (Cegat) Collector of Central Excise, Baroda v. Amber Paints and argued that there is no necessity to prove that the material has been used by the licensee himself. He also relied upon the case of M/s. Rakesh Enterprises v. U.O.I. – 1986 (25) ELT 906 (Bom.) for the proposition that end-use need not be proved where it is not a condition built into the Notification. It was also argued by the learned counsel that there is no ground for Collector to say that the goods are not as per the supplier’s certificate when it is seen that they are tallying with the appellants’ purchase order placed with the suppliers. It was also contended that the Collector has unjustly ignored the Superintendent’s precedent assessment where the benefit of the same Notification had been given by the department to identical material.
5. Shri M.S. Arora, learned D.R. argued that the certificate of inspection produced by the appellants on perusal and comparison with the description of the goods shows that it is not relatable to the goods as described in the Bill of Entry and it also does not tally with the purchase order. He further contended that the certificate itself is of questionable evidentiary value because it has been produced after the goods had been cleared out of Customs charge and in this context he relied upon the CEGAT decision in the case of M/s. Nicco Orissa Ltd. v. Collector of Customs, Calcutta, 1989 (42) ELT 591 (Tribunal) holding that in respect of goods already cleared Bill of Entry and no other document is relevant to establish the identity of the goods, and in the present case the appellants had declared goods in the Bill of Entry as steel billets, and not as carbon steel billets other than forging quality. He also pointed out that the purchase order produced had certain discrepancies as compared to the Inspection Certificate because the purchase order number in the two documents differed. Even if the Inspection Certificates were to be perused the composition as given in the Inspection Certificates also does not fully tally with the IS Specification 2830/75 because the Inspection Certificate shows the presence of silicon which is not there in the IS Specification. The learned D.R. further contended that in order to claim the exemption under Notification it is well settled that it is for the assessee to show that he fulfils the conditions thereof. It was also argued that although the end-use may not be built into the Notification in so many words, it is clearly implied in the terms of Notification 213/85 and in the present case there is no evidence on record to show eligibility of the appellants to the exemption notification claimed by them. Therefore, there is no need to interfere with the Collector’s order, according to the learned D.R.
6. We have carefully considered the submissions made by the learned counsel and the learned D.R. Admitted fact is that the appellants had cleared the steel billets initially at the concessional rate as project imports under Customs Tariff Act, 1975 Subheading 9801.00. It is also admitted that a quantity of 4996.635 MT of steel billets out of the imported quantity of 5972.90 MT was not utilised by them as project import but they had, with the permission of the JPC, sold the same to other parties. Therefore, clearly on this quantity of 4996.635 MT the concessional rate under the sub-heading 9801.00 as project import is not applicable, and that quantity of steel billets will have to be classified and assessed on merits for which the Customs House has adopted the classification of 7207.11 of Customs Tariff Act. Appellants are now questioning only the extent of exemption granted to them. Their claim is that they are entitled to the exemption available under Notification 213/85, whereas the Collector had held that this Notification is not applicable to the appellants and had extended to them exemption under another Notification 86/86 dated 17-2-1986. Notification 213/85 exempts carbon steel billets other than forging quality and billets for seamless steel tubes ASTME-45 falling within Chapter 72 when imported into India for manufacture of Bars, Rods or light structurals from so much of that portion of duty of Customs leviable thereon which is specified in the same First Schedule as in excess of duty at the rate of 15% Adv. Notification 86/86 provides that the products of Iron or non-Alloy Steel containing less than 0.6% of carbon which includes Blooms, Billets, Slabs etc. should pay duty at the rate of 45% Adv. The appellants’ claim is that in terms of carbon content the steel billets imported by them would be covered by Notification 213/85 because of the carbon content as given in the foreign supplier certificate which tallies with the IS Specification 2805/75- It is also their case that there is no requirement of end-use to be proved for enjoying the exemption. Examining these contentions of the appellants and the department it is seen that the declaration in the Bill of Entry given by the appellants when they cleared the goods as project import was very cryptic as ‘steel billets’ whereas in order to really come within the purview of the exemption Notification 213/85 the appellants ought to have declared firstly that the goods are carbon steel billets; secondly that they are other than forging quality, and thirdly there should also have been an indication that the import is for the manufacture of bars, rods or light structural. Clearly, these conditions were not satisfied by the description of the goods in the Bill of Entry at the time of import and clearance of the ‘ goods when they were cleared as project imports with the description of the items merely as steel billets as referred to above. It was only subsequent to the clearance that the claim regarding the Notification 213/85 was put forth. In fact the claim in this regard has been put forth subsequent to the personal hearing of the case before the Collector in a letter addressed to the Collector dated 17-2-1989. Even if it was to be accepted that the carbon content in the steel billets has been shown to be as prescribed in IS Specification 2805/75 and that therefore, the goods are carbon steel billets, still the appellants ought to produce evidence to further show that the billets are other than forging quality which was also a condition to be fulfilled at the time of import and clearance. As regards the other aspect of the exemption in the Notification 213/85 namely, that the import being for the purpose of manufacture of bars, rods or light structural, the appellants’ stand, that they had sold the surplus materials to others under JPC permission who would have used it and that therefore, the end-use criterion is satisfied, cannot be accepted because Collector had clearly shown that one of them, Orissa Small Industry Corpn. (OSIC), are not themselves users of the material, but had sold it to others who would use them, and that OSIC are not themselves manufacturers. Moreover, as has been rightly pointed out by the learned D.R., when claiming exemption it is essential for the assessee to show that he fulfils the conditions thereto and to provide materials thereof. Hence, it is not for the Collector to go into the aspect of actual use of the material which the appellant had sold and to satisfy himself that the exemption would be available to them or not. A reference had also been made to other clearances of similar material granting the exemption under the same notification. A perusal of some of the Bills of Entry produced in this regard shows that in those Bills of Entry the description steel billets had been expanded by indicating that they are other than forging quality, and also indicated that they are for manufacture of bars and rods. Therefore, those cases are clearly distinguishable. In these circumstances, we find that the Collector’s order is reasonable wherein he had found that although the appellants were not eligible for Notification 213/85 yet had found that another notification which is unconditional for the goods, namely, Notification 86/86 was available for the goods imported, and had extended the benefit of exemption to the goods imported. The Collector had further found that there was no case for proceeding against the appellants for violation of Import Trade Control Policy provisions. In these circumstances, we see no reason to interfere with the order passed by the Collector and the appeal is accordingly rejected. The Cross-objection filed by the department, which is supportive of the Collector’s order, is mis-conceived and is dismissed as such.