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TAXAP/450/2009 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 450 of 2009
=========================================
COMMISSIONER
OF CUSTOMS - Appellant(s)
Versus
ROYAL
RECYCLING INDUSTRIES - Opponent(s)
=========================================
Appearance :
MS
AMEE YAJNIK for
Appellant
None for Opponent(s) :
1,
=========================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 31/03/2010
ORAL
ORDER
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
The
appellant-revenue has challenged the order dated 12th
September 2008 made by the Customs, Excise & Service Tax
Appellate Tribunal (the Tribunal), proposing the following two
questions :
[a] Whether
in the facts and circumstances of the present case, the Tribunal was
justified in holding that confiscation of goods under Section 111(m)
and imposition of penalty under Section 112(a) of the Customs Act,
1962 upon the respondent-importer was neither justified nor
warranted despite there being undisputed mis-declaration and
violation of the provisions of the Customs Act, 1962?
[b] whether
in the facts and circumstances of the case, when there was
undisputed mis-declaration and mis-description of the imported goods
in the Bill of Entry filed by the respondent-importer, was the
Tribunal justified in setting aside the confiscation of goods and
imposition of penalty rendered on account of violation of provisions
of the Customs Act, 1962?
The
respondent was registered as a 100% EOU for manufacture and export
of Recycled Metal Scrap Ingots and Metal Alloys etc. The respondent
imported a consignment of 75.950 MTs of old and used transformers
during the year 2004 declaring the same as waste and scrap of
transformers under Bill of Entry dated 6th
January 2004 and claimed exemption from Customs Duty under
Notification No.52/2003 dated 31st
January 2003 and from Special Additional Duty under Notification
No.52/2003 dated 31.01.2003. Upon examination of the goods in
question, the Department was of the view that the imported goods
were not scrap, but old and used transformers, which was also
confirmed by an expert and issued a show cause notice dated 29th
January 2004. The show cause notice came to be adjudicated vide
order dated 30th
January 2004, whereby the adjudicating authority ordered
confiscation of the goods and also imposed penalty under section
112A of the Customs Act, 1962 (the Act). Being aggrieved, the
respondent-importer carried the matter before Commissioner (Appeals)
who dismissed the appeal. The respondent carried the matter further
in appeal before the Tribunal and succeeded.
Ms.
Amee Yajnik, learned Senior Standing Counsel for the
appellant-revenue has supported the order of the adjudicating
authority as well as the order passed by Commissioner (Appeals). It
is submitted that despite the fact that the goods are freely
importable, every importer is bound under law to declare the
description of goods correctly for the purpose of ascertaining its
duty liability.
As
can be seen from the impugned order of the Tribunal, the Tribunal
has placed reliance upon its earlier decision in case of M/s Siyaram
Metals Pvt. Ltd. and has set aside the impugned orders and allowed
the appeal. The Tribunal has recorded that the respondent had been
permitted to import used old and damaged transformers, which was
nothing but transformer scrap; it was not the Revenue’s case that
new transformers or transformers in usable condition were imported
by the respondent; even according to the expert opinion, the same
were old and used; when the Adjudicating Authority had not confirmed
any demand of duty against the respondent inasmuch as the respondent
was eligible to import old/used/damaged transformers, the findings
of mis-declaration
and undervaluation become irrelevant. The Tribunal was, accordingly
of the view that when no duty is payable on the imported
consignment, the charge of undervaluation of the goods cannot be
upheld inasmuch as the respondent assessee was not going to be
benefited from the same.
The
record of the case indicates that the respondent is a 100% Export
Oriented Unit licensed for the manufacture and export of Recycled
Metal Scrap Ingots and Metal Alloys etc. From the findings recorded
by the Tribunal it is apparent that the respondent had imported
used, old and damaged transformers which were nothing but scrap.
According to revenue the goods ought to have been declared as old,
used and damaged transformers and not scrap. However, whether the
goods in question are described as used, old and damaged
transformers or scrap is only a matter of nomenclature. Considering
the nature of business of the respondent, viz., manufacture of
Recycled Metal Scrap, in relation to its business the goods are
nothing but scrap as the same have to be recycled to produce
Recycled Metal Scrap. The respondent has no use for old, used and
damaged transformers in such form, as the same have to be recycled
to produce Metal Scrap. Besides, it is not even the case of the
revenue that the old, used and damaged transformers are being
repaired and used as such. Moreover, as found by the Tribunal, the
adjudicating authority has not confirmed any demand of duty against
the respondent since the respondent was
even otherwise eligible to import old/used/damaged transformers.
That no duty was payable on the imported consignment and as such the
respondent assessee was not going to benefit on account of
undervaluation or mis-declaration.
In
the aforesaid factual matrix, it cannot be stated that the impugned
order of Tribunal gives rise to any legal infirmity so as to warrant
interference. The appeal is, accordingly, dismissed in absence of
any question of law, as proposed or otherwise, much less a
substantial question of law.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
parmar*
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